FirstGroup plc TransPennine Express

Transcription

1 FirstGroup plc TransPennine Express Rail franchise award Wednesday 9 December 2015

2 TransPennine Express awarded to FirstGroup FirstGroup is delighted to be selected by the Department for Transport (DfT) to continue to operate TransPennine Express until at least 2023 The new franchise award allows us to build on our outstanding track record of delivery since 2004 More than 500m of investment in capacity and other improvements in the new franchise will allow us to maintain the unparalleled trajectory of growth and innovation we set through the last decade Our network, timetables and rolling stock plans are designed to complete the transformation into a true intercity express network for the North of England and into Scotland By working in close partnership with Rail North, Transport Scotland, the city regions and local authorities, TransPennine Express will play a key part in delivery of the Government's vision for a Northern Powerhouse We are investing in our customers' needs: improved reliability through new partnership with Network Rail; simpler, smarter ticketing; more customer information; better on-board and station services Improved value for money for taxpayers with premiums being paid to Government for the first time Providing an appropriate economic return for shareholders by unlocking continued growth 2

3 Building on our outstanding track record First TransPennine Express has achieved industry leading revenue growth since 2004, even through the recession. Passenger revenue increased from 60m in 2003/04 to 213m in 2014/15, a CAGR of 12% More than doubled customer journeys from 13m to 28m particularly from growth in leisure travellers through service expansion, improved yield management, marketing and customer service excellence Successfully delivered more than 350m of investment in improvements for customers since 2004 increased customer satisfaction scores from 74% to 84% Annual taxpayer subsidy reduced by 65% since 2004 European Intercity Rail Operator of the Year (2013) and UK National Rail Awards Passenger Train Operator of the Year (2010) Service performance during the current short direct award has begun to be challenged by lack of capacity 3

4 New TransPennine Express Overall capacity to more than double during the core franchise period: Redesigned network / timetable to become true intercity network for the Northern Powerhouse 500m investment in new rolling stock and other service improvements Some routes transferring to Northern franchise Franchise key facts: Serves major cities in the north of England and Scotland including Manchester, Leeds, Sheffield, Liverpool, Newcastle, Edinburgh and Glasgow Passenger revenue: 213m (2014/15) 28m passenger journeys (2014/15) 58 stations, facility owner of 19 1,200 employees A new timetable from December 2017 December trains an hour between Manchester and Leeds Extend Manchester Airport York service to Newcastle December 2018 Operate direct Liverpool Glasgow service December 2019 Extend Liverpool Newcastle service to Edinburgh Improved evening and weekend service on all routes 4

5 Delivering for our customers New and improved trains: 44 new intercity trains, 220 new carriages by 2019 fleet size increases by two thirds, with over 70% of it new More capacity: 13 million more seats a year including an 80% peak capacity increase into the largest Northern cities by 2019 New or better connections: Newcastle Manchester Airport, Liverpool Glasgow, Newcastle Edinburgh, Glasgow & Edinburgh Manchester, Manchester Leeds, 13 new destinations. More early and late trains; more weekend trains; more integration with local rail, bus and light rail services Reliability: Improved reliability underpinned by new trains and partnership with Network Rail Making more of your travel time: Free Wi-Fi progressively rolled out on all train fleets by July 2018 together with on-board entertainment, improved catering, real-time passenger information Simpler fares and ticketing: mobile and smart ticketing, wider range of multi-modal fares, discounted tickets for year olds and job-seekers, delay repay for registered customers Better stations, more community investment, tougher environmental impact targets 5

6 Financial overview Operates from 1 April 2016 for seven years with two-year extension option at the DfT s discretion Total premium of 303m NPV in real terms* to Government Transitions in 2017/18 from being a subsidised railway to one delivering a premium to taxpayers Full revenue risk franchise; profit share arrangements with DfT above pre-specified thresholds Revenue growth to benefit from over 500m in investment to more than double capacity Parent company support: Up to 189m subordinated contingent loan facilities, of which 84m bonded. Not expecting to be materially drawn 15m performance bond Up to 3m season ticket bond * Net present value of forecast premium payments over the core franchise period to 31 March 2023, expressed in 2015/16 prices and discounted using the DfT's 'real' discount rate of 3.5% 6

7 Summary Pleased to be awarded TransPennine Express franchise for another seven years opportunity to continue to build on outstanding track record of delivery since 2004 More than 500m investment in capacity and innovation will drive further growth for the benefit of passengers, taxpayers, shareholders, and the wider economy in the region FirstGroup's position in the UK rail industry secured out to at least 2023, with a solid platform to continue to build on Our rail growth strategy aims to support our wider strategic objectives through further ambitious but deliverable bids, at an acceptable level of risk 7

8 Disclaimer Certain statements included or incorporated by reference within this presentation may constitute forward looking statements" in respect of FirstGroup plc's operations, performance, prospects and/or financial condition. Such statements are based on our current expectations and beliefs concerning future events and are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements. Such statements are also based on numerous assumptions regarding our present and future strategy and the environment in which we operate, which may not transpire. We undertake no obligation to update any forward looking statements contained in this presentation or any other forward looking statements we may make. Nothing in this presentation should be construed as a profit forecast. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotions in the UK Financial Services and Markets Act In making this presentation available, FirstGroup plc makes no recommendation to buy, sell or otherwise deal in shares of FirstGroup plc or in any other securities or investments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity. 8