First Group drives on with bus sell-off as shares rise
Greyhound bus operator First
Group told shareholders yesterday it was ‘ examining all appropriate means’ to create value – management code for ‘get ready for a sell-off’.
The transport group held its first AGM since turning down what it described as an ‘ opportunistic’ takeover approach.
The troubled business’s shares had shot up after the April offer from private equity firm Apollo, before crashing when the suitor walked away and falling even further in May when First Group ousted its chief executive over the fumbled deal.
But shares climbed again yesterday by 2.7pc, or 2.3p, to 87p as investors began to regain confidence and the chairman said progress was being made in flogging off parts of Greyhound, the uS bus firm.
First Group’s executive chairman Wolfhart hauser said: ‘In July we were able to begin the process of withdrawing from most of Greyhound Canada’s operations in the west of the country, which will address some of the long-standing issues in that part of the business.’
In the uK, First Group operates Great Western railway, South Western railway and the TransPennine express. It has not paid a dividend since 2013.
The FTSE 100 ended the day up 0.34pc, or 25.88 points, at 7626.3 despite pub group Greene King taking a slide. Greene King was the FTSe 250’s biggest faller after broker Berenberg said the business was a ‘value trap’ and accused it of using debt refinancing, which was destroying shareholder value to make profits appear better. Its shares fell 5.8pc, or 33p, to 535.4p. The blue- chip index was balanced out by property developer Berkeley Group, which built up a rise of 2.5pc, or 91p, to end the day at 3685p.
Improved sentiment in the housebuilding sector helped lift Berkeley from the slump it had wallowed in since warning on the property market in June.
Some of that positive sentiment rubbed off from Galliford Try, which was also making gains despite noting its construction division had swung into the red due to costs associated with a troubled Aberdeen bypass.
Galliford had been working on the bypass with Balfour Beatty and Carillion. however, Carillion’s downfall meant it had to take on further costs.
The sums remaining should be lower than the £25m charge it was lumped with in the first half of the year, it said. despite the Aberdeen drama, Galliford’s regeneration arm and Linden homes housebuilding businesses were performing well. Full-year results were expected to be on track. Shares climbed 4pc, or 33p, to 866.5p.
russ Mould, investment director at AJ Bell, warned: ‘Investors must hope the Aberdeen Western Peripheral route is the last of several troublesome legacy construction projects and the company at least has the controls in place now to avoid the large- scale, fixedprice contracts that have been the problem in the past.’
earlier this week, fund manager neil Woodford revealed his firm had built a 5pc stake in Galliford’s housebuilding peer Taylor Wimpey, up 0.4pc, or 0.75p, to 175.6p.
SSP Group, the business behind the train station bakery upper Crust, gave investors a taste of success as revenue increased by 7.3pc. Like-for-like sales were up 2.7pc, and SSP sounded confident of its growth prospects.
Though uBS analysts gave the business a ‘sell’ rating, and said that the share price could come under pressure due to ‘softer’ trading in the rail sector, SSP’s shares rose by 3.1pc, or 20.3p, to 678.4p.
Cyber security firm NCC Group also pulled its shares up by 9.3pc, or 18.8p, to 220p as revenue rose by 8.3pc to £233.2m.