Firstgroup voices fears for the future

Firstgroup has warned “material uncertainties” over the future of public transport threaten its survival.

Announcing annual results yesterday, the Aberdeen-based bus and rail operator said it was unclear if post-lockdown passenger volumes can recover to levels necessary to sustain the business without government financial and contractual support.

There is also uncertainty surrounding the group’s ability to obtain covenant waivers from debt providers and draw down on about £550 million of “available but uncommitted” funds.

Firstgroup said these unknowns “may cast significant doubt” on its ability to continue as a going concern.

But chief executive Matthew Gregory insisted the long-term fundamentals of the business were “sound”.

He added: “We will continue to take all necessary measures to enable the group to emerge from this unprecedented situation in a robust position.”

Covid-19 helped send the company deeper into the red during the 12 months to March 31, with pre-tax losses widening to £299.6m from £97.9m a year earlier.

Charges relating to the group’s North American self-insurance, write-offs at its iconic Greyhound intercity coach business in the US and Canada, and restructuring and reorganisation costs also hit performance.

Revenue grew to £7.75 billion, from £7.13bn previously, despite Covid-19 sending passenger numbers plummeting by around 90% in March.

Firstgroup is trying to sell Greyhound and its two other North American businesses, First Student and First Transit, to focus on UK operations.

But the onset of the pandemic and “all its attendant uncertainties for potential buyers and their finance providers” has hampered this process, Firstgroup said.

“Clearly the state of financing markets and the availability of capital, as well as greater visibility on the pace and profile of the resumption of services, will be important factors for buyers to be able to make an informed assessment of the divisions’ prospects,” the firm added.

Picture: Shutterstock. The Aberdeen-based bus and rail operator announced annual results yesterday.