TheGrandWazoo
Veteran Member
Remember that Matthew Gregory did highlight that the pensions deficit meant that breaking the group wasn’t that straightforward.
Think it’s a little premature to guess what may happen with this appointment.
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First Group: General Discussion
- Thread starter overthewater
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Remember that Matthew Gregory did highlight that the pensions deficit meant that breaking the group wasn’t that straightforward.
Think it’s a little premature to guess what may happen with this appointment.
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Pretty safe bet that they won't double profits everywhere! - Mind you, if you are only making 1%, not such a huge challenge to increase it to 2%!!
Pension fund deficit - they can 'kick that Can down the road' for sometime yet, plenty of other companies in the same boat with that one.
Hate to defend Firstbus but there is some investment going on - Glasgow, Bristol etc.
Personally I hope that they will sell more bus operating companies (Will have to be some of the slightly better performers not the long term loss makers) using the proceeds to pay down debt/fund the Pension schemes.
If I was a shareholder I would want to retain the North American businesses and scale back in the UK, Maybe the reverse of this is a more pragmatic strategy (sell North America).
WatcherZero
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First Rail is also a catch 22 for First Group, it generates a huge turnover which helps make their debt look smaller, but it doesn't actually generate a high profit margin and requires a lot of capitalisation, removing it would free resources for a possible better return elsewhere but would also probably lead to them becoming insolvent as they could no longer finance their debt pile.
overthewater
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I think something is afoot, why bring someone like that into the company unless you have a plan of action OR you believe he could in fact bring forward an major overhaul plan?
"Someone to get board numbers up " damn wish I'd known, at that salary I could have made myself available for a couple of years
overthewater
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He’s got proven history of selling off large parts of a business to produce a return. That appears to be First group strategy to offload parts of the business to produce a return.
I would think which parts to be sold have already been considered by the existing board. He’ll almost certainly be arriving with such a brief to offload x, y & z
I would think which parts to be sold have already been considered by the existing board. He’ll almost certainly be arriving with such a brief to offload x, y & z
winston270twm
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"Someone to get board numbers up " damn wish I'd known, at that salary I could have made myself available for a couple of years
Your input in the First's West Lothian business is far too crucial for your to be considered for the CFO position...
Robertj21a
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Let's just hope he gets on with it. This has all dragged on for far too long.
TheGrandWazoo
Veteran Member
There are a range of options that they could pursue so it’s kinda difficult to really know what could happen.
What I suspect has caught someone’s attention is his selling off of TW’s North American ops; therefore, that’s why he’s been employed - to do the same; “stands to reason, Dave” as they say in the local! That might be what happens but he’s probably got a much wider brief to improve the balance sheet and sort out the pensions deficit.
The latter may be a structured plan to both reduce the exposure and also contribute some more; one of my old employers has done the same but it isn’t a fast process.
There could even be a view taken on U.K. rail especially, as InFocus can explain in more detail, with the impact on balance sheets of the changes to accounting law in respect of leases and it’s impact on the balance sheet. And that’s before the issues surrounding the shortfalls in TPE.
Then the question of disposals - do they sell off Greyhound? To who? Is there a U.K./US split? Or is it on product rather than geographical lines? Would the US ops be sold as one entity? If so, a private sale or an IPO?
I agree that something fundamental is on the cards but as you can see, there are many different avenues they can explore but their room for manoeuvre is constrained by the issue of pensions liabilities.
winston270twm
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Totally agree! If First were in better shape financially they *may* have been in a position to take part in the Arriva sale by DB, potentially their European Ops, to diversify their portfolio further. Even BP managed to turn themselves around & get their house in order in half the time FGP have being faffing around to date, and BP are a massive 'super tanker'.
I believe FGP should retain their First Student / Transit business, especially with them being the most profitable division, they could try and do a deal with Flixbus to dispose of Greyhound. Potentially look a bolt-on acquisitions for First UK buses to strengthen their exiting portfolio / improve financial contributions.
I also think FGP should ditch UK Rail, the risks now far outweigh the rewards.
One thing Taylor Wimpey & FGP do have in common, they both struggle to do business in the snow....
Coast Capital have now increased their stake to 8.79% from 7.59%
https://www.insider.co.uk/news/american-activist-investor-ups-stake-14991670American activist investor ups stake in FirstGroup
Coast Capital's third increase in a month puts pressure Aberdeen transport firm
FirstGroup reported increased revenue from customers despite fall in volumes
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The US-based activist investor which has been pressing for the break-up of Aberdeen-based transport group FirstGroup has further increased its stake in the company.
New York-based Coast Capital has bought around 14 million shares to up its holding in the group to just under 8.8%, worth £120 million.
It is the third time in a month the US has increased its holding, suggesting it could be preparing to renew pressure on the FirstGroup board.
Read MoreLate last year Coast Capital wrote to the company, which operates bus and rail services across the UK and the Greyhound bus operation in the US, urging it to implement measures to improve its performance, including splitting up its UK and North American assets.
It also criticised the company's rejection of a takeover approach from American buyout firm Apollo and urged the company to reinstate its dividend. At the time the company rejected the criticisms.
In a winter trading update in February, FirstGroup said a “subdued” Christmas on the high street had hit passenger numbers on its UK buses.
The group said like-for-like passenger volumes had fallen by 1.9% since September, which it also blamed on network restructuring. However, the group said the fall in passenger numbers was offset by growth in revenues from passengers of 1.3%.
Yesterday, FirstGroup named Ryan Mangold, former group finance director of homebuilder Taylor Wimpey, as its new £450,000-a-year finance boss as part of a raft of boardroom changes. Former General Motors vice president Julia Steyn was also appointed as a non-executive director.
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Cheers I would have included it on my CVYour input in the First's West Lothian business is far too crucial for your to be considered for the CFO position...
winston270twm
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Cheers I would have included it on my CV
Too right, your WL knowledge is invaluable....
Could be the deciding factor in accepting that near Half a million pa salary ....Too right, your WL knowledge is invaluable....
winston270twm
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Could be the deciding factor in accepting that near Half a million pa salary ....
Surely, you'd be worth far more...
You would think so ,wouldn't you ?Surely, you'd be worth far more...
overthewater
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Can we move on, from this love fest
TGW is correct, that major overhaul is part of the reason why I think something fundamental is on the cards at first why else get that man in? Any another useless prat could have been wheeled in to clap like a seal. Not In Focus cause of course. So this new guy has been headhunter for a reason.
It's going to be interesting few months to see what happens, but as there say "Fasten your seat belts, it's going to be a bumpy night"
TGW is correct, that major overhaul is part of the reason why I think something fundamental is on the cards at first why else get that man in? Any another useless prat could have been wheeled in to clap like a seal. Not In Focus cause of course. So this new guy has been headhunter for a reason.
It's going to be interesting few months to see what happens, but as there say "Fasten your seat belts, it's going to be a bumpy night"
TheGrandWazoo
Veteran Member
Can we move on, from this love fest
TGW is correct, that major overhaul is part of the reason why I think something fundamental is on the cards at first why else get that man in? Any another useless prat could have been wheeled in to clap like a seal. Not In Focus cause of course. So this new guy has been headhunter for a reason.
It's going to be interesting few months to see what happens, but as there say "Fasten your seat belts, it's going to be a bumpy night"
It’s gonna be even more interesting given the DB/Arriva divestment.
Looking forward to getting my dividends... (this from someone who had Carillion AND Debenhams shares)
winston270twm
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Can we move on, from this love fest
TGW is correct, that major overhaul is part of the reason why I think something fundamental is on the cards at first why else get that man in? Any another useless prat could have been wheeled in to clap like a seal. Not In Focus cause of course. So this new guy has been headhunter for a reason.
It's going to be interesting few months to see what happens, but as there say "Fasten your seat belts, it's going to be a bumpy night"
There's no love fest, as you put it...
As Coast Capital have increased their holding again in the past couple of days, I expect they may well end up disrupting any plans Matt Gregory has for new the CFO.
As FGP don't do anything in a rush, it's highly unlikely one new CFO will re-invent First Group within in a couple of months, it will still take years to plug all the holes / revitalize the business portfolio.
I suspect any potential divestment to other UK groups will leave First Group even more vulnerable than currently, I don't see how First will be able to take part in any divestment.
Ouch, don't pin your hopes on FGP dividends.... those aren't the sort of investments you expect to go to the wall....
Remind me not to invest in anyone you’ve got shares in!
TheGrandWazoo
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winston270twm
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Steer well clear of First Group as well in that case.
I will second that post...
I had a letter inviting to share save... it’ll go one of two ways. This new finance officer will achieve the goals, and they’ll soar, or it will crash.
winston270twm
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I just can't see this new CFO doing anything quickly / drastic to change First Groups fortunes, it will still be a long haul / gradual process. Look how long it took for Taylor Wimpey to recover. Also, don't forget CEO Matthew Gregory was formally the CFO previously, what's this new CFO going to do that hasn't already been suggested / looked in to? There's no magic pill or quick fix, just a long hard slog. I suspect the shareprice will be range bound as it has been for a good while to come.
overthewater
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However someone must have an idea in the direction the company need to go and one would hope hit the ground running to get things started.
Jordan Adam
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Is going in circles for 11 years regarded as a direction?
overthewater
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Seems so, to bar fair a number of outside factors come into play, Lets just say First bus always betted on Red, alas every single time it come up black, the cards are always against them. Some good people in First but maybe in a different timeline things worked out better? isn't some of the EU route Arriva operate under london type system? maybe First should start bidding?