FirstGroup to raise £100 million through disposals

Scottish bus firm FirstGroup has placed part of its operations on the market with the aim of generating £100 million in cash.

The move is part of a strategy to “significantly reposition" its business after announcing falling profits due to a decrease in passenger numbers in Scotland and the North of England. Its operations in these areas of the UK account for 60 per cent of its overall turnover and a third of its operating profits.

The parts of the group that are to be sold off were not revealed, but analysts estimate that they bring in between £130 million and £140 million for FirstGroup, representing 11.7 per cent of its total £1.2 billion of sales.

FirstGroup operates 8,000 buses across 40 locations in the UK. Its stronger areas in the South have reported a 3.3 per cent increase in passenger numbers, with a 0.4 per cent rise in Scotland and North England.

With cash-strapped customers still deciding to stay at home rather than visit the shops in the weaker performing regions, FirstGroup says neither cost cuts or fare hikes would counterbalance the effects of higher petrol bills and lower government subsidies, Scotsman.com reported.

FirstGroup began its disposals last year with the sale of its German unit to Marwyn European Transport for £4.8 million, while this year Stagecoach is due to shortly take over its North Devon bus arm for £2.8 million.

In separate news, FirstGroup is in the bidding process to operate the Thameslink, Great Western and Essex Thameside rail franchises.

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