FirstGroup trading as expected as chairman steps down

26th Jul 2024 10:23

(Sharecast News) - FirstGroup said in an update on Friday that its trading in the financial year-to-date remained in line with the expectations set out in its full-year results in June, as it also announced the retirement of chairman David Martin.

The FTSE 250 passenger transport operator, which was holding its annual general meeting, said it successfully started the operation of the London Cable Car for Transport for London (TfL) as of 28 June.

It said the contract, initially set for five years with a potential three-year extension, was projected to generate around £60m in revenue over the eight-year span.

The group said it aimed to enhance the service, positioning it as a key player in London's leisure sector.

Financially, FirstGroup highlighted the near-completion of its £115m share buyback programme, with just under £2m outstanding as of 25 July.

The group said it maintained a robust balance sheet, facilitating investments in decarbonisation, portfolio growth, and potential capital returns to shareholders.

A significant milestone was achieved on 16 July, when FirstGroup finalised terms to eliminate remaining liabilities of the Greyhound US pension plan, resulting in a $6m contribution and the removal of $155m in liabilities from the balance sheet.

That move was expected to yield a settlement gain of around £5m and potentially a small cash surplus in future years.

The transaction completed the group's disengagement from legacy Greyhound liabilities more favourably than previously expected.

In environmental, social, and governance (ESG) efforts, FirstGroup said it achieved the highest AAA rating from MSCI in June, reflecting its substantial progress in greenhouse gas reduction and leading corporate governance practices.

"2024 was another successful year for FirstGroup as we continue to transform and grow our leading bus and rail businesses," said chief executive officer Graham Sutherland.

"We remain focused on working in partnership with government and all our stakeholders to deliver for our customers and employees, lead in environmental and social sustainability and support the delivery of wider economic goals."

In a leadership update, FirstGroup announced that David Martin, its chairman since August 2019, intended to retire.

His tenure included a strategic shift and significant value realisation for shareholders through the sale of North American assets, reduction in pension liabilities, and reinstatement of dividends.

Peter Lynas, senior independent director, would lead the search for Martin's successor.

"I am proud of the progress that we have made at FirstGroup over the last five years under my chairmanship," David Martin commented.

"I will enjoy continuing to work with the team until my retirement from the board.

"I wish the team the very best for the future."

FirstGroup said it would announce its interim results for the six months to the end of September on 14 November.

At 0958 BST, shares in FirstGroup were down 1.52% at 167.9p.

Reporting by Josh White for Sharecast.com.