FirstGroup shares rose today after the group revealed it had agreed to snap up Essex-based bus company Ensignbus for an undisclosed sum.
The deal will provide ‘a number of synergies’ and value accretive growth opportunities in the business-to-business and bus vehicle dealership markets, as well as enhancing FirstGroup’s local commercial bus operations in Essex, the FTSE 250 group said.
FirstGroup described Ensignbus as a high-performing business with strong positions in B2B and regional commercial bus operations in Essex. It also operates a vehicle refurbishment and re-sale operation, and a ‘high value’ depot.
Deal: FirstGroup shares rose today after the group revealed it has agreed to snap up Essex-based bus company Ensignbus
FirstGroup shares were up 5.14 per cent or 5.60p to 114.50p, having risen over 10 per cent in the past year. The group is among the FTSE 250 index’s top risers today.
Ensignbus’ commercial bus business has a young vehicle fleet of 55 buses that will require limited capital expenditure for several years.
The company’s specialist heritage fleet is excluded from the transaction.
FirstGroup’s chief executive, Graham Sutherland, said: ‘The acquisition of Ensignbus, a long-established, high-performing business, will allow us not only to grow our B2B offering but to also enhance our operational footprint in Essex, and we look forward to welcoming Ensignbus employees to the group.
‘This is a strategically and financially accretive growth opportunity for us, and one that is fully aligned to our balanced capital allocation policy.’
In November, FirstGroup posted a hefty fall in revenues and profitability for the six months to the end of September.
The coach and rail operator posted a near 29 per cent drop in revenues on a statutory basis to reach £2,215million, while pre-tax profits slumped by around 98 per cent to £8.7million. Meanwhile, the group’s net debt swelled from £234.2million in FY 2022 to £1.48billion.
In November, the group declared an interim dividend of 0.9p, against none for the equivalent period the previous year.
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