FirstGroup snapping up Essex-based bus group Ensignbus
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FirstGroup shares rise as FTSE 250 transport group agrees to acquire Essex-based bus company Ensignbus
- FirstGroup said Ensignbus was a high-performing company with a solid B2B role
- FirstGroup saw its shares top the FTSE 250 index rise list earlier today
Shares of FirstGroup rose today after the group revealed it had agreed to a takeover Essex-based bus operator Ensignbus for an undisclosed sum.
The deal will provide “a number of synergies” and value-added growth opportunities in the business-to-business and bus dealer markets, as well as strengthen FirstGroup’s local commercial bus business in Essex, the FTSE 250 group said.
FirstGroup described Ensignbus as a high performing company with strong positions in B2B and regional commercial bus operations in Essex. It also operates a vehicle refurbishment and resale operation and a ‘high value’ depot.
Deal: FirstGroup shares rose today after the group announced it has agreed to acquire Essex-based bus company Ensignbus
FirstGroup Shares rose 5.14 percent or 5.60 pence to 114.50 pence, after rising more than 10 percent in the past year. The group is today among the top climbers of the FTSE 250 index.
The Ensignbus commercial bus company has a young fleet of 55 buses that will require limited investment in the coming years.
The company’s specialized heritage fleet is excluded from the transaction.
FirstGroup’s chief executive, Graham Sutherland, said: “The acquisition of Ensignbus, a long-established, high-performing company, not only enables us to expand our B2B offering, but also to increase our operating footprint in Essex. welcoming Ensignbus employees to the group.
“This is a strategically and financially stimulating growth opportunity for us, and one that is fully aligned with our balanced capital allocation policy.”
In November FirstGroup posted a significant decline in sales and profitability for the six months to the end of September.
TThe bus and rail company posted a revenue drop of nearly 29 per cent on a statutory basis to £2,215 million, while pre-tax profits fell by around 98 per cent to £8.7 million. Meanwhile, the group’s net debt grew £234.2m in FY 2022 to £1.48bn.
In November, the group announced an interim dividend of 0.9 pence, up from nothing for the same period last year.