FirstGroup: Restructuring and Survival.

F Great Eastern

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Aircoach said to be losing money hand over fist in Ireland. Absolutely hemorrhaging money. Talk about laying all staff off for at least six weeks

Not unexpected though when your 70 strong fleet and 200 or so staff have their whole operation focused around airports.
 
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TheGrandWazoo

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That proviso was based on projected traffic, it has now dropped through the floor in common with most operators. The question is the ability to survive in this climate. The risk is the commercial operations where all projections are dead
Yes but said they were already struggling.

My point is that they’d already taken the medicine so now, their travails are the same as every other franchise. All will be struggling irrespective of past performance.
 

Volvodart

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Ordinarily but in these days, the government may not insist on a PCG or bond. The government have enough to do with other matters and the GWR franchise is up next week.
From today's update:-

https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1381077&cid=858

We welcome and have accepted the comprehensive response of the UK Government who have acted swiftly to provide support for the country’s vital rail networks. These measures provide continuity and certainty for all of the Group’s rail franchises through Emergency Measures Agreements which will last six months or longer if required. For the duration of the Agreements, the Government will waive our revenue, cost and contingent capital risk. During this time our train operating companies will be paid a fixed management fee, which varies according to the individual profile of the franchise, and have the potential for a small performance-based fee.
 

TheGrandWazoo

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That proviso was based on projected traffic, it has now dropped through the floor in common with most operators. The question is the ability to survive in this climate. The risk is the commercial operations where all projections are dead
....and that's why all franchises have now been suspended. In fact, if this continues past 6 months (and there's a fair chance of that happening), this might actually benefit First Group on those two loss making franchises.
 

Goldfish62

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....and that's why all franchises have now been suspended. In fact, if this continues past 6 months (and there's a fair chance of that happening), this might actually benefit First Group on those two loss making franchises.
Overnight the recommendations of the yet to be published Williams Report have been implemented in one go!
 

bussnapperwm

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First closed UP at 51p a share today.

Personally I brought 101 shares at an average of 39.5p a share so I'm happy (better performance than Wednesday when it was 28p a share at close of play!)
 

DragonEast

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It's an ill wind ...

I wouldn't have wished it on my worst enemy; but a by-product of Coronavirus is that we've achieved in one fell swoop the two things necessary (but hitherto impossible) to make the Essex network manageable: halving both the general level of traffic and the fleet on the network.

Whether it's enough is a different question, and perhaps one we will continue to argue about for an eternity. (Probably too whether Coronavirus gives us an opportunity to stop and think, or just react . . . and panic).
 
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Robertj21a

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I guess a high proportion of many fleets, all over the UK, are going to be laid up for some weeks now. Many operators have put savage timetable cuts in place, with a dramatic reduction in their pvr.
 

Goldfish62

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I guess a high proportion of many fleets, all over the UK, are going to be laid up for some weeks now. Many operators have put savage timetable cuts in place, with a dramatic reduction in their pvr.
Yes indeed and many places which have had regular daily bus services now have absolutely nothing.

It's a necessity with next to no revenue coming in.
 

BBC

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I guess a high proportion of many fleets, all over the UK, are going to be laid up for some weeks now. Many operators have put savage timetable cuts in place, with a dramatic reduction in their pvr.
You’re probably looking at 75% ish if the fleet in Bristol will be laid up.
 

winston270twm

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I guess a high proportion of many fleets, all over the UK, are going to be laid up for some weeks now. Many operators have put savage timetable cuts in place, with a dramatic reduction in their pvr.
I think high proportions of fleets being laid up for weeks is being optimistic, I personally think it will more likely be months.

I not sure some of the smaller businesses that were only marginally profitable or even loss making will be able to survive long enough for any government support payments to kick in.
 

winston270twm

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Our emergency staff roster is set in plan for 12 weeks.
All the initial mortgage payment holiday / government support packages are also already set up to provide support for an initial 3 months. But most of the support to pay 80% of salaries don't start kicking in until end of April (even though back dated), support for the self employed will be later than that & portals to register aren't even up & running yet.

How long this all lasts will be dictated by how things unfold over the next couple of weeks. Stay safe & well everyone!
 

Volvodart

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Interesting that Firstgroup has gained a somewhat longer direct award for GWR.

https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1382816&cid=858

Further direct award for GWR
Released : 30.03.2020

FIRSTGROUP SIGNS NEW AGREEMENT TO

ENSURE CONTINUITY OF GWR SERVICES

FirstGroup plc (‘FirstGroup’ or ‘the Group’) has signed a Direct Award (the ‘agreement’) with the Department for Transport (‘DfT’) to continue operating Great Western Railway (‘GWR’) services from 1 April 2020, when the Direct Award under which services are currently being operated comes to an end.

The agreement runs until 31 March 2023, with a possible extension of up to one further year at the DfT’s discretion. The agreement ensures continuity of operation and will run concurrently with the DfT’s previously announced Emergency Measures Agreement (‘EMA’) for at least the first six months. FirstGroup’s experience of managing the route over many years will be crucial to restoring the service to full operation once the immediate crisis has abated, and will facilitate the ongoing transformation of GWR, through the biggest changes to the network in a generation.

Today’s announcement provides continuity for customers, employees and other stakeholders beyond the period of emergency measures currently proposed, as well as an appropriate balance of risk and reward between FirstGroup and the Government, supported by a contractual Forecast Revenue Mechanism (‘FRM’) which eliminates the majority of the revenue risk. GWR will build on the improvements it has delivered to services over the past five years, with a focus on connecting people and local communities looking to restore normality when the present restrictions on travel due to the coronavirus pandemic are over.

The agreement has a strong emphasis on improving regional connectivity, helping customers return to the railway by making rail a more convenient and environmentally-friendly way to travel. As part of this, GWR will bring additional trains into service to provide thousands of extra seats on regional routes across the network.

There will also be increased funding to improve services for local communities and at stations, and the introduction of a combination of new flexible ticket products for customers who do not commute to work every day, such as discounted part-time season tickets and the extension of paperless pay-as-you-go schemes.

Since 2015, GWR has successfully delivered new fleets of modern intercity and local trains comprising 785 new carriages, and introduced faster, more frequent services for customers across the network through the successful introduction of the largest timetable change in decades last December. GWR recently posted some of its highest ever passenger satisfaction scores and delivered the most improved punctuality scores in the UK last year.

Commenting, Matthew Gregory, FirstGroup Chief Executive, said:

“Whilst the immediate focus of GWR is to ensure that key workers, vital to the country’s response to coronavirus, can get to where they need to go, continuity of rail services will also be critical to a restoration of normal life when the present uncertain and difficult situation is overcome. In the longer term this new agreement will mean that customers can return to rail as their preferred choice of travel; with more seats, more services, better stations and more flexible ticketing to help reconnect the people and communities we serve.

“When the present emergency measures agreed with Government come to an end, today’s agreement will ensure that GWR will continue to deliver sustainable benefits for customers and an appropriate balance of risk and reward for our shareholders and the Government. We are proud of GWR’s achievements over the last few years, working with industry partners to transform the experience for passengers with new, faster and more environmentally friendly trains and a timetable offering record fast journey times to the major towns and cities on the route.”

Contacts at FirstGroup:

Faisal Tabbah, Head of Investor Relations

Stuart Butchers, Group Head of Communications

Tel: 020 7725 3354
corporate.comms@firstgroup.com

Contacts at GWR:

Dan Panes, Head of Communications

Tel: 0845 410 4444

Contacts at Brunswick PR:

Andrew Porter / Simone Selzer, Tel: +44 (0) 20 7404 5959
There are more details here of the revenue risk sharing agreement:-

https://www.firstgroupplc.com/news-and-media/latest-news/2020/30-03-2020.aspx
 
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richw

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That is a good plan, personally I think it will be Sept to October before any pubs or restaurants open and as for a tourist season not many will have the money to take a holiday after this
if it clears soon enough I wonder if a lot will stay at home and explore their local areas. Maybe a bumper later part of summer for staycations
 

overthewater

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Don't forget Germany, USA (Disney will be shut for months), parts of Asia, land of OZ, etc.

No-one is going to be accepting tourists anytime soon.
 
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if it clears soon enough I wonder if a lot will stay at home and explore their local areas. Maybe a bumper later part of summer for staycations
I agree however the problem is whether people will have the money. We deal w I the self employed clients who fear the worst financially and even those companies where they are furloughing people, we are still waiting for the hmrc system to claim the job retention grant. For a company like First they can generally wait a while but our small businesses like pubs and restaurants are panicking badly, they don't want to take on loans but have already admitted that the 2020 tourist season will not happen. The marine and fishing industry is also hurting badly and if as locals we Can buy More fish it might help the fishing industry who normally enjoy good restaurant sales to survive. In fact honestly the more we can buy from local businesses who buy directly from farmers and local producers the better.
 

Busaholic

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I agree however the problem is whether people will have the money. We deal w I the self employed clients who fear the worst financially and even those companies where they are furloughing people, we are still waiting for the hmrc system to claim the job retention grant. For a company like First they can generally wait a while but our small businesses like pubs and restaurants are panicking badly, they don't want to take on loans but have already admitted that the 2020 tourist season will not happen. The marine and fishing industry is also hurting badly and if as locals we Can buy More fish it might help the fishing industry who normally enjoy good restaurant sales to survive. In fact honestly the more we can buy from local businesses who buy directly from farmers and local producers the better.
Some Cornwall businesses received a letter from the Council today stating that if they confirmed certain details by email by 6th April, payments of £10,000 (small business rate relief claimants) or £25,000 (hospitality/food business claimants) would go out on 9th April. As for fish, my little local fishmonger closed down a month ago, and I'm now expected to pay almost double the price from a larger one even though fish prices have collapsed at Newlyn! The fishing industry down here has ALWAYS been its own worst enemy, vying with DEFRA's incompetence and intransigence, which takes some doing.
 

richw

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. In fact honestly the more we can buy from local businesses who buy directly from farmers and local producers the better.
Whilst Morrisons have had poor stocks, I’ve been using veg box fresh from Saltash for veg deliveries, they claim to source mainly from local farmers. My meat is coming from Brays in landrake who are also doing deliveries.
The quality is miles above that of supermarket meat and veg and not a lot dearer. I’d recommend both.

somewhat ironically First have the highest cash reserves for such a downturn. quoted by media as £400m, compared to stagecoach at £250m. The rail TOC support should also do first group good at this time too.

Go ahead have told their staff their finances are critical with sufficient reserves to survive 4-6 weeks. They’ve turned their WiFi off at various opcos as they can’t afford the bill for it! this corona seems to have turned all on its head! GA might have been reporting good accounts year on year. But putting away little reserves for tough times
 
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Whilst Morrisons have had poor stocks, I’ve been using veg box fresh from Saltash for veg deliveries, they claim to source mainly from local farmers. My meat is coming from Brays in landrake who are also doing deliveries.
The quality is miles above that of supermarket meat and veg and not a lot dearer. I’d recommend both.

somewhat ironically First have the highest cash reserves for such a downturn. quoted by media as £400m, compared to stagecoach at £250m. The rail TOC support should also do first group good at this time too.

Go ahead have told their staff their finances are critical with sufficient reserves to survive 4-6 weeks. They’ve turned their WiFi off at various opcos as they can’t afford the bill for it! this corona seems to have turned all on its head! GA might have been reporting good accounts year on year. But putting away little reserves for tough times
We will have to see what happens really
 

overthewater

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Some Cornwall businesses received a letter from the Council today stating that if they confirmed certain details by email by 6th April, payments of £10,000 (small business rate relief claimants) or £25,000 (hospitality/food business claimants) would go out on 9th April. As for fish, my little local fishmonger closed down a month ago, and I'm now expected to pay almost double the price from a larger one even though fish prices have collapsed at Newlyn! The fishing industry down here has ALWAYS been its own worst enemy, vying with DEFRA's incompetence and intransigence, which takes some doing.
Could these people not work in the fields?
 

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