Aircoach owner suffers €333m loss on coronavirus and US Greyhound unit
FirstGroup warns of ‘material uncertainty’ about ability to survive nect year
Aircoach parent FirstGroup reported a €333 million loss and withdrew its dividend for the year to March in results announced on Wednesday. Photograph: Frank Miller
Aircoach parent FirstGroup reported a £300 million (€333 million) loss and withdrew its dividend for the year to March, as the transport operator was weighed down by its troubled US Greyhound bus business and coronavirus in the final month of the reporting period.
The rail and bus company warned that there was “material uncertainty” as to whether it could continue as a going concern over the next year because of a lack of clarity over state support schemes and the pace of a recovery in public transport use.
The slump from losses of £98 million (€109 million) a year earlier, was deepened by a £21.5 million (€23.8 million) coronavirus writedown, with passenger numbers plummeting 90 per cent in March as countries went into lockdowns to stop the spread of the virus.
It was also hobbled by a £141.3 million (€156.9 million) provision on North American insurance and £58.2 million (€64.6 million) of restructuring costs.
The group recorded a hefty £186.9 million (€207.6 million) impairment charge on Greyhound, which it has been struggling to sell since May last year after pressure from activist investors.
To deal with the blow from the pandemic, FirstGroup has tapped the UK’s coronavirus corporate financing facility for £300 million (€333 million). It expects the US government to support its Greyhound service.
“The funding and support we have received from governments and our customers to sustain critical transport services is testament to their importance now and for the future,” said Matthew Gregory, chief executive.
However, he added that “there is no way of predicting with any certainty how the coronavirus pandemic will continue to affect the public transportation sector and the impact it may have on customer trends longer term”.
FirstGroup did not offer guidance for the year to March 2021 and it had committed undrawn liquidity of £850 million (€944 million) as of the end of June.
The sale of its North American businesses – which include First Student, the biggest provider of school transport in the US, and First Transit, a North American bus company, as well as Greyhound – remains an objective, because it would help to pay down debt. But the speed of any deal has been slowed by coronavirus, it said.
Shares in the group fell as much as 6 per cent in early morning trading on Wednesday.
– Copyright The Financial Times Limited 2020