First Group says it may not survive as passenger numbers dive
British bus and train operator First Group warned on Wednesday it might not survive as a going concern after a collapse in passenger numbers led to a £153m loss in the year to March, sending its shares down 15 per cent.
But the company, which owns the US Greyhound network and school bus services in the United States and Canada, said it had adequate resources to continue operations for the next year despite the “material uncertainty” facing its business.
First Group said it still planned to sell its North American operations, a move announced in March under pressure from its main shareholder, but did not say when they expected the sales to be completed.
Chief executive Matthew Gregory told reporters on a call the Greyhound sale, which it previously said was in advanced stages, had slowed due to the coronavirus crisis.
“We need a little bit more clarity but absolutely we’re ready to press on and resume that process as soon as we see how and when the schools get back,” he said.
The company reported charges worth a total £408m. They were a £187m impairment for Greyhound, a charge of £141.3m related to a self-insurance provision for its North America operations and a £21.5m charge due to the coronavirus crisis.
It said passenger numbers fell as much as 90 per cent during lockdowns in its markets.
“There are material uncertainties as to how rapidly demand will increase, the rate at which fiscal support tapers and the duration of social distancing rules, as well as the timing of North American schools reopening,” the company said.
First Group has received state aid in Britain and the United States.