The interim boss of troubled transport company First Group has said he will accept a bid for all or part of the company after its chief executive Tim O’Toole was sacked and the firm swung to a major loss.
Wolfhart Hauser, who has become executive chairman, said if an offer created value for shareholders, it was something he would consider.
“We have evaluated all opportunities, which also refers to bids for the whole company,” he said.
“If it creates value for shareholders, we are open to that. We have never said we are not flexible to part of the group [being bid for] or an overall bid but it must create value.”
Mr Hauser was speaking as the Aberdeen-based bus and rail group plunged to a £327m pre-tax loss for the year to March 31 compared to a £152.6m profit the prior year. Sales rose to £6.4bn, or 13.2pc, but only because of the recent South Western rail contract win and a 53rd week in the numbers. The biggest blows came from a £277m write-down of the value of its Greyhound business and a provision for an expected £106m loss on its TransPennine Express rail franchise, which runs until March 2023. The company also pointed to “cost challenges” in its First Transit business, where it lost two key Canadian oil industry contracts.
The executive chairman added the company would not be disclosing the details of the approaches by US private equity firm Apollo, which it rejected to the annoyance of some investors.
Activist West Face Capital, now a top 20 investor, has also agitated for change calling for bits of the company to be sold.
Mr Hauser acknowledged a full review of its Greyhound business was being undertaken by external advisers and the outcome should be revealed at the company’s half-year results. While Greyhound’s short-haul business prospered, profits slumped 39pc to £25.5m, which it blamed on heightened competition from low-cost airlines against its long-haul routes.
Mr Hauser said Mr O’Toole had “said he wanted to go” and that while it might look “a little bit unexpected or fast” the now former boss had achieved things that shareholders should not forget, including improving the amount of cash the company generates and reducing its debt.
Details of Mr O’Toole’s severance package are set to be released in the coming days, Mr Hauser said. The company’s 2017 annual report showed Mr O’Toole’s salary from April 1 last year was £845,625, flat on the prior year. It also outlined a potential annual bonus of 120pc of salary based on certain performance metrics, half of which is deferred for three years.
The shock of Mr O’Toole’s departure and the poor results led to the company leading the FTSE All Share’s fallers, with the stock down more than 14pc to 94.6p.
BY
Bradley Gerrard and
Ayesha Javed
31st MAY 2018 • 4:05PM
