Delayed arrival

30 May 2019 By Karen Kwok Follow @KarenKKwok

Under pressure from an activist, Britain’s FirstGroup is selling the iconic U.S. coach group and spinning off its UK bus unit. Simplifying the $1.8 bln group should unlock value. But uncertainty over timing and liabilities means investors are miles away from their destination.

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Britain’s FirstGroup on May 30 announced plans to separate its UK bus business and sell its Greyhound subsidiary as part of a plan to focus on student and commuter buses in the United States.

“Greyhound has limited synergies with our other, predominantly contract-based, North American businesses and we believe that value for shareholders can best be delivered by seeking new owners," FirstGroup said in a statement.

FirstGroup, which also operates UK rail franchises, reported an operating profit of 9.8 million pounds for the year to March 2019, compared with a 196 million pound loss in the previous year. Revenue rose 11% to 7.1 billion pounds.

Adjusted operating profit, which excludes insurance charges, restructuring costs and other expenses, was 333 million pounds, up 5%.

Coast Capital, FirstGroup’s second-largest shareholder with a 9.8% stake, is seeking to replace six of the company’s 11 directors at its upcoming annual meeting.

FirstGroup shares were up 4.4% at 116 pence by 1400 GMT on May 30.

Context News

Britain’s FirstGroup on May 30 announced plans to separate its UK bus business and sell its Greyhound subsidiary as part of a plan to focus on student and commuter buses in the United States.

Adjusted operating profit, which excludes insurance charges, restructuring costs and other expenses, was 333 million pounds, up 5%.

Coast Capital, FirstGroup’s second-largest shareholder with a 9.8% stake, is seeking to replace six of the company’s 11 directors at its upcoming annual meeting.

FirstGroup shares were up 4.4% at 116 pence by 1400 GMT on May 30.

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