Statement re covenant amendment and liquidity u...

FirstGroup plc
Statement re: Covenant amendment and liquidity update

As previously indicated in the trading update of 15 September 2020, FirstGroup plc (‘FirstGroup’ or the ‘Group’) expects to report a small adjusted operating profit for the seasonally weaker first half of the current financial year. This result would be ahead of the base case scenario outlined in the full year results announcement earlier this summer. As also previously stated the 30 September 2020 covenant tests are expected to be comfortably met when the accounts for the period are finalised. However, whilst the Board is confident that the balance sheet is now robust in a range of downside scenarios, as a matter of prudence the Group determined that it is an appropriate point to secure enhanced financial flexibility from its lenders for the next two covenant testing dates, covering the typical period of twelve months.

The Group has therefore agreed covenant amendments for the 31 March 2021 and 30 September 2021 tests with its lending banks and USPP investors on similar terms. The net debt:EBITDA covenant has been amended to less than 5.5 times and then 4.5 times for the March and September tests respectively (compared to 3.75 times normally). At both testing dates the fixed charge covenant has also been amended to greater than 1.0 times (compared to 1.4 times normally). The Group has agreed that net debt including rail ring-fenced cash will not exceed £2.0bn and minimum liquidity levels of £150m will be maintained during this period.

The Group’s free cash (before rail ring-fenced cash) and undrawn committed revolving banking facilities has remained broadly stable at c.£810m as at 6 November 2020. The Group has ‘investment grade’ long-term issuer credit ratings from both Fitch Ratings and S&P Global Ratings.

The Group will continue to take all prudent and appropriate action to ensure that it emerges from the pandemic in the most robust position possible in order to best serve our communities and deliver on our strategic plans.

Contacts at FirstGroup:
Faisal Tabbah, Head of Investor Relations
Stuart Butchers, Group Head of Communications
[e-mail]
Tel: [phone]

Contacts at Brunswick PR:
Andrew Porter / Simone Selzer, Tel: [phone]

Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 6 Annex 1R: 3.1.

Figures presented in this announcement are not audited. Certain statements included or incorporated by reference within this announcement may constitute ‘forward-looking statements’ with respect to the business, strategy and plans of the Group and our current goals, assumptions and expectations relating to our future financial condition, performance and results. By their nature, forward-looking statements involve known and unknown risks, assumptions, uncertainties and other factors that cause actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Shareholders are cautioned not to place undue reliance on the forward-looking statements. Except as required by the UK Listing Rules and applicable law, the Group does not undertake any obligation to update or change any forward-looking statements to reflect events occurring after the date of this announcement.

About FirstGroup
FirstGroup plc (LSE: FGP.L) is a leading provider of transport services in the UK and North America. With £7.8 billion in revenue in 2020 and around 100,000 employees, we transported 2.1 billion passengers. 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 1.4 million passengers a day in 2020, and First Rail is one of the country's most experienced rail operators, carrying 340 million passengers in the year. Visit our website at www.firstgroupplc.com and follow us @firstgroupplc on Twitter.