Sat, 08 Jun 2019 | BUSINESS SALE
FirstGroup plc, the multinational transport group, has announced its plans to sell its regional bus company, First West of England.
First West of England began its life as a horse drawn carriage service in 1875 and today has six depots providing bus services in Somerset, Bath, Bristol, Weston-super-Mare, West Wiltshire and South Gloucestershire.
The parent company has been under fire for delivering returns well below the sector average and maintaining high debt levels. Leading shareholders have for some time been making calls for the company to sell off assets.
First Group owns South Western Railway and Great Western Railway in the UK and also the Greyhound bus business in the United States, which it bought in 2007 for $3.6bn as part of Laidlaw.
Since then, the company’s shares have dived around 80 per cent.
Having said that, the company’s revenues are set for a 10 per cent gain this year to £7.1bn with profits are expected to be up nearly 3 per cent to £711 million.
But this is no thanks to the lacklustre performance of the UK businesses, particularly the train lines which have been beset with problems and are running on operating margins of just 2.9 per cent.
Compare that with First Student, the company’s student bus provider in the US (the biggest in the country), which has margins of 8.8 per cent.
The business up for sale, First West of England, has 1800 employees and serves around 70 million passenger journeys each year, growing at around 10 per cent annually.
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