Member Info for Qwerty101

Recently bought some shares and have previously worked for Mobico when it was NX, I now work for First Group and am hoping Mobico shares will perform in a similar fashion. It's interesting both companies who are predominantly bus operators are following a similar path having had the same CEO at one point in time who adopted the same strategy in both companies. FGP bought Laidlaw expanding the company hugely but incurring a lot of debt, Mobico did the same buying Alsa. FGP had to sell the US arm of their company and since doing so the share price has improved massively, debt is lower and profitability has improved in many areas. Mobico are now going through a similar process, I'm hoping history will repeat itself and may take some time but nothing is guaranteed!!!!

Probably a combination that a half year loss (41m) was announced late last year due to one off £142m pension bill and that the share buy back scheme will be drawing to a close in the coming weeks.

Got just under £65m left to spend

Worth pointing out that when they started the buy back the share price was around 1.00 in late December 2022 and it took until late July to spend the £75m. Not sure how much is left of the second phase of £115m but its possible to work out if you have the time an inclination, each day its published on firstgroupplc.com how much was spent and the number of shares that were purchased. I suspect it will be towards the end of the calendar year as the amount of shares varies hugely from day to day.

They are currently held in treasury but may be cancelled in due course but I'm sure the markets have already taken this into account

I think there is away to go yet, the share buy back is in 2 phases £75m which started in Dec 22 and finished in summer 23 then another £115m which is ongoing. So far 89.6m shares have been bought and many of those were bought below £1.50 per share.

Shouldn't make any difference all revenue and cost risk sits with Department for Transport.

Sorry, left out they key bit its the Great Western contract thats been confirmed

First Group have also just had confirmation from DfT of their new national rail contract which will run until summer 2025 with the potential for an extension.

Agree with last post, the nature of the new National Rail Contracts is the DfT take all the risk on revenue and costs with FGP being paid a fixed fee for implementing DfT objectives. Ticket pricing is set by DfT and all revenue goes directly to them, the train companies simply collect it on their behalf. Ultimately only the DfT can resolve this dispute as they sign off all costs.

The £25m relates to track access charges for access to the HS1 part of the Southeastern network. Usually all track access charges (a toll charge for using the track) are levied by Network Rail who own most of the uk rail network. The HS1 section is privately owned and they levy their own version of the track access charge. As part of the franchise agreement DfT agreed to contribute a fixed amount towards the charge however if the actual charges were less than the agreed amount (they ran less trains) Southeastern were to return the surplus to DfT which they didn't. As a result its a situation unique to the Southeastern franchise but as others have said its the reputation damage thats key.

There are other opportunities within these contracts, who for example will supply the buses/coaches when engineering work shuts the line. Currently FGP have First Rail Support who provide all the vehicles for GWR,TPE,Avanti & GWR.

Agree with pyueck just highlighting what Gov could do if they want to renationalise rail. All the train franchises are currently in an emergency measures agreement with dft. DfT meet all operator costs and take all revenue with operatore being paid a fee. Frannchises are htemporarily suspended until September when in theory things either return to normal or the EMA is extended in some form. As Pyueck says an agreement will need to be reached as journeys are still very low, if no agreement is reached many franchisees will walk away as potential losses will be too great just like East Coast. I think funding will continue and then DfT/operators will renegotiate franchise terms and operate services for a fee going forward

No loss of shares but maybe drop in value of shares depending on your view point. The government will let franchises run their course and the wont renew if they want to renationalise as there will be no cost. Reality is that government does not want to run Railway and would appoint consultant to do it on their behalf just like East Coast. Might as well do this with First or any other transport operator asking them to operate train services for a fee rather than a franchise.

WorldGoRound, I think your big issues are with government (DfT) as they set the parameters for the franchise that the operators run. The DfT are very specific with their terms in the franchises including the timetable which covers first and last trains and their frequencies. Hitachi have a government underwritten lease agreement to provide the new trains which you talk about for the next 27 years on both the Paddington and Kings Cross routes. DfT also set the prices of tickets and the costs which the operators must pay to Network Rail ( another part of DfT) for the rent of the stations, access to the track to run trains and even the cost of electricity through the overhead lines to power the trains. Even the staff are part of the franchise who are simply transferred from one operator to another. If First Group or any other operator either went bust overnight, the franchise expired or they were stripped of their franchise everything simply reverts back to government operation (even the pension scheme) until another operator is found (this has recently happened with Virgin/Stagecoach) on the east coast route. Until the government change the way in which they let franchises things will remain largely the same with operators running the operation as per the franchise and taking a level of profit which is regulated by the DfT.It’s worth going on the DfT website as all the franchise agreements are published and you can see what the train operators have agreed to and what they can get in return.

I work for first group and SAYE scheme is the same no interst on savings though which is not an issue. It’s a no lose gamble have your money back at the end or take the shares if they increase in value.