FirstGroup PLC (LSE:FGP) has set its sights on operating two fully electric fleets outside of London by March next year, announcing a £25.3mln investment to purchase 117 buses on Thursday.
The new buses will be rolled out to its York and Norwich fleets, where it will operate fully electric depots by next year, as well as to Portsmouth and Leicester, it said in a statement.
some 42% of the funding for the new vehicles will come from the government’s Zero Emission Bus Regional Scheme, bringing the total combined investment in the electrification of the FTSE 250-listed operator's services to £145mln.
Northern Ireland-based Wrightbus will supply the “new British-built zero-emission buses” to First, helping to “support hundreds of high-quality manufacturing jobs,” road minister Richard Holden commented.
"We are rapidly transforming our business with zero-emission bus fleets and will continue to work closely with [the] government across the UK to deliver our decarbonisation plans,” First managing director Janette Bell said.
Shore Capital analysts reiterated a ‘buy’ rating for FirstGroup following the news, setting its price target at 165p, 50% higher than its Thursday-afternoon value of 107p
The bank added First was “using its balance sheet flexibility to make the most of government financial support […] while it is available.”
First’s shares were up 2% on Thursday afternoon.
First competitor National Express released better-than-expected full-year results on Thursday, suggesting demand for public transport should "expand" in the coming years.