Shares in FTSE 250 transport operator FirstGroup (FGP) gained 1.35% to 75p as it booked a profit of $100 million after selling three major properties in North America.
The company sold three facilities from its Greyhound property portfolio for a combined $137 million, or £102 million, as it seeks to downsize the portfolio.
It comes as embattled FirstGroup looks to sell the Greyhound business. The company has been looking to sell the division for some time and wants to offload it to help pay down its reported net debt of £2.9 billion.
Earlier this month, FirstGroup reported a pre-tax loss of £100 million in the six months to 30 September, though this was lower than the £187 million in the same period last year. Revenues slipped 12% to £3.1 billion.
DOWNSIZING
FirstGroup sold Greyhound’s oversized legacy garage and customer terminal facility in the downtown arts district of Los Angeles, California to a subsidiary of logistics real estate business Prologis for $88 million net.
Greyhound will lease back the site from Prologis for two years, during which time it will complete the moves of its terminal to a more convenient location for customers and of its garage operations to a more appropriately-sized site elsewhere.
The other two property disposals announced were facilities in Denver, Colorado for net proceeds at the end of December of $37 million and in Ottawa, Ontario for net proceeds of $7 million.
In total, all three properties’ book value was $24 million as at 30 September 2020, resulting in a total profit for all three transactions of approximately $100 million, the company said, adding that the cash will be used for ‘general corporate purposes’.
It added, ‘These transactions are a further step in the group’s rationalisation of the Greyhound property portfolio for value, reducing the operational footprint by moving operations to intermodal transport hubs or new facilities better tailored to customers’ needs.’
FirstGroup said a number of other property sale processes are also underway.
