The COVID-19 Bus Service Support Grant programme formally ended on 1 September, and since that time delivery of local bus services across England has been reinforced by the Department for Transport's £226.5mln bus recovery funding package that will expire in April 2022.
The FTSE 250 group is working with the DfT to sign contracts relating to the West Coast Partnership's National Rail Contract, GWR and West Coast Partnership.
Passenger mileage in the non-core Greyhound operation has been just over half of pre-pandemic levels recently, supported in part by federal schemes. Overall trading has been in line with expectations.
After selling off the North American businesses, the transport firm is looking to return £500mln to shareholders via a tender offer.
Qualifying shareholders will be invited to tender some or all of their shares in the group at a price per share that will be announced at the time of launch.
“Next on the agenda is a sale of the non-core Greyhound intercity bus franchise and management is under pressure thanks to activist investor Coast Capital’s sizeable stake in the business. This pressure is unlikely to let up too much despite the departure this month of FirstGroup chief executive Matthew Gregory,” said AJ Bell investment director Russ Mould.
“A more streamlined business might interest bidders after FirstGroup fought off interest from private equity firm Apollo in 2018.”
“In the meantime, the company is pushing its ESG credentials hard, gaining an endorsement of sorts through the recent agreement of a sustainability-linked credit facility and aiming to bolster its green credentials further with its new Lumo London-to-Edinburgh rail service. This is being pitched as the lower cost alternative to flying with plant-based food on the menu and carbon calculations published for passengers.”
Shares advanced 3% to 89.35p on Monday late morning.