FIRSTGROUP PLC
Agreement to Acquire Ensign bus company
Agreement to purchase Ensign Bus Company Limited (‘Ensignbus’)
Ensignbus is a high-performing business with strong positions in business-to-business (‘B2B’) and regional commercial bus operations in Essex, with a vehicle refurbishment and re-sale operation, and a high value depot
Completion of the acquisition is anticipated in the next few months subject to customary regulatory review
FirstGroup plc (‘FirstGroup’ or the ‘Group’) today announces that it has signed an agreement to purchase Ensign Bus Company Limited. The acquisition of the Ensignbus business will not only provide a number of synergies and value accretive growth opportunities in the B2B and bus vehicle dealership markets, but it will also enhance the Group’s local commercial bus operations in Essex.
Ensignbus’ commercial bus operations comprise two B2B segments that include rail replacement and private hire contract operations and a local bus route network complementary to First Bus’s operations in Essex. The business has a young vehicle fleet of 55 buses that will require limited capital expenditure for several years. The Ensignbus specialist heritage fleet is excluded from the transaction.
In addition to its commercial operations, Ensignbus has a vehicle refurbishment and re-sale business that purchases used vehicles and refurbishes to modern standards before re-selling. This will benefit First Bus and the wider UK bus industry as the oldest, most polluting diesel buses are taken out of service. It is anticipated that the market for the resale of lower emission used diesel vehicles will continue to remain robust in the medium term, followed by the emergence of a similar market for the resale of zero emission vehicles.
If the acquisition completes before the Group’s FY 2023 year end, the Group anticipates a year end adjusted net cash position (pre IFRS16 and excluding ring fenced cash) of £70-80m, reflecting the ongoing buyback programme and the timing of net capital expenditure and working capital flows.
Graham Sutherland, FirstGroup Chief Executive Officer, said:
“The acquisition of Ensignbus, a long-established, high-performing business, will allow us not only to grow our B2B offering but to also enhance our operational footprint in Essex, and we look forward to welcoming Ensignbus employees to the Group. This is a strategically and financially accretive growth opportunity for us, and one that is fully aligned to our balanced capital allocation policy.”
Peter Newman, Ensignbus Chairman, said:
“I want to thank all of our employees at Ensignbus for their ongoing hard work to deliver great service for our passengers across all of our communities in Essex, and we will be supporting them fully as they move to their new employer. We’re pleased that First Bus, with their reputation for customer service, innovation and sustainability, will take the Ensignbus business forward as a going concern and we wish them a successful future. We will continue to serve our communities and operate our network as usual until the completion date.”
Contacts at FirstGroup:
Marianna Bowes, Head of Investor Relations
Stuart Butchers, Head of Corporate Communications
[email protected]
Tel: +44 (0) 20 7725 3354 Contacts at Brunswick PR:
Andrew Porter / Simone Selzer
Tel: +44 (0) 20 7404 5959
Contacts at Liberum Capital Limited:
Nicholas How / John Fishley / William Hall
Tel: +44 (0) 20 3100 2000
Contacts at RBC Europe Limited:
James Agnew / Jonathan Hardy / Jack Wood
Tel: +44 (0) 20 7653 4000
Forward-looking statements
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. No statement in this announcement should be construed as a profit forecast for any period. 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.
