(Alliance News) - FirstGroup PLC on Friday said it will launch a share buyback programme, starting on Monday, following the sale of all but two of its US properties for its Greyhound bus service.
The Aberdeen, Scotland-based transport company said it completed the sale of the properties to Twenty Lake Management LLC, an affiliate of US-based real estate investment firm Twenty Lake Holdings LLC, for proceeds of GBP122 million.
FirstGroup added it will use the proceeds as part of its balanced capital allocation policy, including its plans to decarbonise its First Bus fleet, maintain its dividend policy, and to review targeted investment through growth in its UK regional bus operations.
Following the receipt of the proceeds, FirstGroup will launch a share buyback programme to purchase up to GBP75 million in shares. This is just over 75 million shares, or about 10% of its current shares. FirstGroup said this will reduce the issued share capital of the company, as the repurchased shares will be cancelled.
Shares in FirstGroup were up 0.7% to 97.85p on Friday afternoon in London.
Looking ahead, FirstGroup said its legacy Greyhound assets and liabilities are expected to generate around GBP8 million in net cash in financial 2024 and beyond, the company said. In the financial year that ended March 26 2022, FirstGroup reported net cash of GBP65.4 million from operating activities, compared to GBP1.20 billion a year before.
"FirstGroup is in a strong financial position, with a balanced capital allocation policy and a clear strategy. We are well-placed to play a key role in the decarbonisation of public transport, make targeted investments in adjacent UK growth opportunities and to deliver value to our shareholders, including through the share buyback programme we have announced today," Chief Executive Graham Sutherland said.
By Jaskeet Briah, Alliance News reporter
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Firstgroup (FGP)