Strategic update – North American contract businesses
The Board of FirstGroup (‘FirstGroup’ or the ‘Group’) has been clear that its intent is to realise value for shareholders and that it will actively manage the entire portfolio by all appropriate means.
Since his appointment as Chairman four months ago, David Martin has been actively engaged across the entire portfolio, working with management and supported by independent advisors, to review the various strategic options.
Following this review and having further validated whether the monetisation of these businesses would deliver material value enhancement for all shareholders, the Board has appointed advisors to formally explore all options in respect of our North American contract businesses, First Student and First Transit, including a potential disposal.
At our recent half-year results the Group updated on progress including the strengthening of its Rail business with the addition of West Coast Partnership, progressing the sale of Greyhound and the development of a framework for the First Bus pension scheme. We are actively addressing the cost base of First Bus through a comprehensive efficiency programme, the results of which will be substantially more evident in the second half of the year and beyond. Therefore, the Board determined that greater value will be achieved by delivering this margin enhancement prior to any launch of a formal sale process.
In the meantime, we continue to focus on the individual plans for each of our businesses, ensuring that customer commitments, investments, as well as growth and margin improvement plans are delivered.
We will keep the market updated on progress as appropriate.
Commenting, Matthew Gregory, Chief Executive said:
‘We have taken a number of important steps that will enable a rationalisation of the Group’s portfolio. Today’s announcement to formally explore all options to maximise value from our North American businesses reflects the resolute focus of the entire Board on realising value for all shareholders.’
Contacts at FirstGroup:
Faisal Tabbah, Head of Investor Relations
Stuart Butchers, Group Head of Communications
Tel: +44 (0) 20 7725 3354
Contacts at Brunswick PR:
Andrew Porter / Simone Selzer, Tel: +44 (0) 20 7404 5959
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 6 Annex 1R: 3.1.
FirstGroup plc (LSE: FGP.L) is a leading provider of transport services in the UK and North America. With £7.1 billion in revenue and around 100,000 employees, we transported 2.2 billion passengers last year. Whether for business, education, health, social or recreation – we get our customers where they want to be, when they want to be there. We create solutions that reduce complexity, making travel smoother and life easier.
We provide easy and convenient mobility, improving quality of life by connecting people and communities.
Each of our five divisions is a leader in its field: In North America, First Student is the largest provider of home-to-school student transportation with a fleet of 43,000 yellow school buses, First Transit is one of the largest providers of outsourced transit management and contracting services, while Greyhound is the only nationwide operator of scheduled intercity coaches. In the UK, First Bus is one of Britain's largest bus companies with 1.6 million passengers a day, and First Rail is one of the country's largest and most experienced rail operators, carrying 345 million passengers last year.
Visit our website at www.firstgroupplc.com and follow us @firstgroupplc on Twitter.