First Group 2019 full year results and strategy update.

[whole diary]

[Henry]

 Interesting article, showing concerns regarding Rail Franchise maybe ?

 In the UK^▸ (United Kingdom), we will continue to operate our First Rail businesses in accordance with their contractual terms. First Rail’s goal remains to add value through our expertise and strong industry relationships. Although our rail franchise portfolio has delivered significant returns for the Group over the last five years, we have concerns with the current balance of risk and reward being offered. We await the outcome of the Government’s review as it seeks to address these industry issues.

 

There is considerable uncertainty about a number of factors affecting the performance of our SWR^» (South Western Railway - about) franchise, including infrastructure reliability, timetabling delays and industrial action, and we remain in negotiations with the Government regarding potential commercial and contractual remedies. As a result, we have taken the decision to set aside an amount of £102m in respect of our share of potential future losses. We will continue to deliver our plans for SWR, which are the right ones for our customers and include a new fleet of suburban trains.

[Timmer]

Hi Henry

Are you able to provide a link to the article?

Thanks

[martyjon]

Both of todays regulatory announcements today ;-

Final Results ;-
https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1271437&cid=858

Strategic Policy -;
https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1271427&cid=858

[chuffed]

The 0800 news on Radio 4 said First were looking to sell their First bus operations in the UK^▸ (United Kingdom). I seem to remember that this was also proposed in 2012 and First Manchester didn't sell up until earlier this year.

[Lee]

Yep - https://www.bristolpost.co.uk/news/bristol-news/first-bus-sale-bristol-traffic-2922296

[grahame]

BBC^» (British Broadcasting Corporation - home page) - https://www.bbc.co.uk/news/business-48456840

FirstGroup to sell Greyhound buses in US

FirstGroup signalled it is considering breaking itself up by seeking a buyer for its Greyhound buses in the US.

The Aberdeen-based company, under fire from an activist investor, is also looking at spinning off its UK^▸ (United Kingdom) buses arm, First Bus.

Matthew Gregory, chief executive since November, indicated the group's train franchises could be reviewed and its focus now would be on North America.

The group's annual loss was £97.9m, narrower than £327m a year earlier.

The company is facing pressure from one of its investors to boost returns to shareholders in the business, which also operates the distinctive yellow school buses in the US.

Its shares jumped 12% as Mr Gregory announced the overhaul of the business which currently operates a fifth of all local bus services outside London.

[stuving]

This may well not need to go here - or even on the forum - but it does kind of parallel this thread's topic.
From the BBC^» (British Broadcasting Corporation - home page):

Alexander Dennis sold to Canadian firm for £320m
Image copyright Alexander Dennis

Alexander Dennis has been owned by group of Scottish investors since 2004

One of Scotland's biggest manufacturers has been sold to a Canadian firm for £320m.

Alexander Dennis, the world's largest producer of double-decker buses, was acquired by a group of Scottish investors in 2004.

Stagecoach founders Sir Brian Souter and Dame Ann Gloag owned more than half the Falkirk-based company.

Alexander Dennis will now become part of the NFI Group, which makes buses for the North American market.

The firm employs 2,500 workers, most of them in Falkirk but also in Guildford and Scarborough.

Note this is not strictly to do with Stagecoach itself, just that 55% of ADL was owned by the Gloags. And it's not the first time the business (or Alexander's at least) has been taken over; in the past it's been bought out again. This is the announcement from NFI.

[stuving]

Another statement from First Group, saying they will look at selling the North American school bus business. So, after a review of strategy by the new chairman, they would like to sell some more American buses (the last announcement was about selling Greyhound).

Following this review and having further validated whether the monetisation of these businesses would deliver material value enhancement for all shareholders, the Board has appointed advisors to formally explore all options in respect of our North American contract businesses, First Student and First Transit, including a potential disposal.

At our recent half-year results the Group updated on progress including the strengthening of its Rail business with the addition of West Coast Partnership, progressing the sale of Greyhound and the development of a framework for the First Bus pension scheme. We are actively addressing the cost base of First Bus through a comprehensive efficiency programme, the results of which will be substantially more evident in the second half of the year and beyond. Therefore, the Board determined that greater value will be achieved by delivering this margin enhancement prior to any launch of a formal sale process.

[grahame]

At our recent half-year results the Group updated on progress including the strengthening of its Rail business with the addition of West Coast Partnership, progressing the sale of Greyhound and the development of a framework for the First Bus pension scheme.

"We're reasonably happy with the way UK^▸ (United Kingdom) rail is working, looking to get rid of Greyhound as soon as we can and working out what the **** to do about bus pensions"

We are actively addressing the cost base of First Bus through a comprehensive efficiency programme, the results of which will be substantially more evident in the second half of the year and beyond. Therefore, the Board determined that greater value will be achieved by delivering this margin enhancement prior to any launch of a formal sale process.

"We're not looking to sell the UK buses very quickly any more.  Instead, we're squeezing them to save money in the short term so that we can sell them later when they have a better bottom line".     They're a commercial company and their stated objective is to enhance value for shareholders, it says nothing about quantity or quality of service, or the effect on the wider economy or the lives of customers that the "efficiency program" has already started to bring and seems set to continue ("and beyond").