FirstGroup secures London Cable Car contract with TfL

(Sharecast News) - FirstGroup announced on Thursday that it has secured the contract from Transport for London (TfL) to operate the London Cable Car between the Greenwich Peninsula and the Royal Docks area along the River Thames. The FTSE 250 passenger transport operator said the contract, set to start on 28 June, had an initial five-year term with an option for a further three years.

Expecting revenues of around approximately £60m over the eight-year span, FirstGroup said it would assume minimal patronage risk under the deal, with TfL shouldering that burden.

The contract also demanded limited capital expenditure and contingent capital from FirstGroup.

Throughout the duration, FirstGroup said it would assist TfL in elevating the cable car's status within London's leisure market.

Plans were underway to enhance service quality while fostering educational outreach initiatives and offering work placements to school students from Greenwich and Newham boroughs.

"We are delighted to have been awarded the contract to operate the London cable car, the only urban cable car in the UK," said chief executive officer Graham Sutherland.

"We are looking forward to working with Transport for London in order to develop the customer proposition for this iconic London experience and landmark and place the service at the heart of its local community.

"We are actively pursuing opportunities to grow and diversify our portfolio and earnings through further opportunities in the UK, including participating in TfL tenders such as this."

At 0848 GMT, shares in FirstGroup were up 1.76% at 184.9p.

Reporting by Josh White for Sharecast.com.