First trading stronger than expected
First Group has reported a stronger than expected financial performance in its trading update for the period between 1 April and 31 August 2020. The news follows its operating loss for its last financial year and mentions of ‘material uncertainty’ at the Group. It has benefited from government funding to help continue bus operations in the UK.
With schools and universities restarting, First Bus has recorded what it describes as an encouraging acceleration in the rate of patronage recovery in recent weeks. Passenger volumes across the division have increased from around 10% of pre-pandemic levels at the low point to more than 50% in the week before the report. The division has recently increased operated mileage to almost 90% of pre-pandemic levels to provide more capacity as demand increases, even as social distancing restrictions remain in place.
In England, the Group has benefited from the UK Government’s extension of funding for bus operators in August. The COVID-19 Bus Service Support Grant Restart (CBSSG Restart) programme is now in place on a rolling basis until such time as it is no longer needed, with an eight-week notice period.
Its divisions have delivered better revenue recovery and strong cost control in the period and the Group is now expecting to generate a small adjusted operating profit in the seasonally weaker first half of the financial year. This anticipated result is ahead of its expectations earlier this summer.
FirstGroup Chief Executive, Matthew Gregory, said: “Although the ongoing impact of the pandemic on the Group continues to evolve, clarity is improving over time. We continue to take all necessary action to protect the business and to ensure the Group is in the most robust position possible to deliver on our strategic plans.
“As we head into the autumn, our priorities are to continue delivering safe, reliable transport services that meet the changing needs of our customers and communities, and to execute the sale of the North American businesses as expediently as possible and in the best interests of all shareholders.”