Firstgroup shares stuck in reverse gear
Market report Scott Reid
Shares in transport giant Firstgroup hit the buffers after the group warned over profits as it grapples with fierce weather conditions and stiff competition from airlines.
The Aberdeen-headquartered bus and rail operator closed down 12.1 per cent at 84.4p with the outlook for annual earnings per share expected to be “slightly reduced”.
Firstgroup, which operates America’s Greyhound bus service, said its three US divisions had been confronted by “extremely challenging” weather in January while airline competition had “intensified”.
The AA saw its shares plunge 28.1 per cent to 83.58p after it warned over earnings and reined in shareholder payouts as the breakdown recovery and car insurance firm ramps up “vital” investments in the business.
Thefirmsaidincreasedspendingwouldknock underlying earnings for 2019, now expected to come in between £335 million and £345m. That would mark a significant drop from 2018, when underlying earnings are forecast to come in at between £390m and £395m.
David Madden, market analyst at CMC Markets UK, said: “The FTSE 100 ended the day on a positive note, and it was helped along by strong earnings from Lloyds and Glencore.”
Lloyds added 2.8 per cent to 69.72p following its annual results. The benchmark FTSE100 Index gained 34.8 points or 0.5 per cent to finish at 7,281.57. Shares in the Glasgow-based bio materials firm got a shot in the arm after the group unveiled positive results for a study on one of its products. The group will deliver lowerthan-expected annual earnings as it ramps up business investments “vital” to its longterm success.