8th Jul 2020 09:32
(Alliance News) - FirstGroup PLC on Wednesday reported a widened annual pretax loss as operating costs more than offset revenue and finance costs rose following around a 90% drop in March passenger volumes.
Shares in FirstGroup were down 16% at 42.52 pence in London in morning trading.
The Aberdeen-headquartered public transport company posted a GBP299.6 million pretax loss for the year ended March 31, widened from a GBP97.9 million loss the year before.
This was due to operating costs, which rose 11% to GBP7.91 billion from GBP7.12 billion and more than offset FirstGroup's revenue rise of 8.7% to GBP7.75 billion from GBP7.13 billion.
This resulted in a swing to a GBP152.7 million operating loss from a GBP9.8 million profit.
FirstGroup said this swing "reflects charges relating to the North American self-insurance provision, Greyhound impairment charges, restructuring and reorganisation costs and coronavirus-related charges".
Finance costs also increased to GBP149.6 million from GBP110.4 million.
In March, average passenger volumes fell by around 90% by month end amid lockdowns and school closures in North America.
At present the company said it is committed to and engaged in rationalising its portfolio via divestment of its North American businesses.
Given the pandemic, travel volumes have fallen "very substantially" and government guidance limiting travel and recommending social distancing means an likely significant hit to the company's service capacity and its financial performance.
Although the company has "material fiscal and contractual support for running essential services" during the pandemic and committed undrawn liquidity of around GBP850 million as at June end, "material uncertainties" remain as to the consequences of the pandemic on FirstGroup's future.
Chief Executive Matthew Gregory said: "There is no way of predicting with any certainty how the coronavirus pandemic will continue to affect the public transportation sector and the impact it may have on customer trends longer-term. However, as leading operators in each of our markets we are strongly positioned for a recovery in passenger demand and for the opportunities that may emerge from this exceptional period. This will become ever more pertinent as the focus and drive towards zero-carbon public transportation systems inevitably increases, helping to create a better connected and more sustainable world.
"Despite the near-term uncertainty, the long-term fundamentals of our businesses remain sound. We are resolutely committed to delivering our strategy to unlock material value for all shareholders through the sale of our North American divisions at the earliest appropriate opportunity. The importance of public transport to society has never been more clearly demonstrated, and we will continue to take all necessary measures to enable the group to emerge from this unprecedented situation in a robust position."
By Anna Farley; [email protected]
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