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    FGP   GB0003452173

FIRSTGROUP PLC

(FGP)
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FirstGroup : chief quits day after top investor calls for his exit

07/27/2021 | 02:35am EDT

* Gregory says resignation not linked to Coast Capital's demands

* Coast welcomes 'long overdue' resignation

* FirstGroup names Chairman Martin as interim executive chairman

* FY adjusted operating profit up 46% to 101.9 million pounds

July 27 (Reuters) - FirstGroup Chief Executive Matthew Gregory plans to step down in September, the British transport company said Tuesday, a day after its biggest shareholder called for his resignation in the wake of a contentious asset sale.

U.S. fund Coast Capital, which owns a roughly 15% stake in FirstGroup, had opposed the recently completed sale of the company's U.S.-based FirstStudent and FirstTransit businesses to Swedish group EQT, arguing the price was too low.

Gregory said his resignation wasn't linked to Coast Capital's demands. "We've delivered this transaction ... so I think it's a new chapter in FirstGroup's history, and I think its the right time for me to move on," he told Reuters.

Founding partner at New York-based Coast James Rasteh said: "We welcome his long overdue resignation and look forward to many other necessary changes."

FirstGroup named Chairman David Martin - who was nominated to the company's board by Coast in 2019 - as interim executive chairman until Gregory's replacement is found.

FirstGroup also announced higher annual adjusted operating profit of 101.9 million pounds ($141 million), helped by cost cuts. The figures reflect only its remaining UK bus and train businesses and the U.S. Greyhound bus service.

Peel Hunt analyst Alexander Paterson said the results beat his expectations, driven by outperformance at Greyhound, where losses have narrowed.

FirstGroup, which has put up Greyhound for sale, remains in talks with potential bidders but the process has been affected by the pandemic as the service is running at around half its normal levels, Gregory said.

The group said it expects passenger numbers to recover to between 80% and 90% of pre-pandemic levels, from the current 60%, during the first year after the end of social distancing restrictions on public transport.

"We're expecting that after the summer the economy will begin to reopen and people will get back to a more normal way of life," Gregory added.

Shares in the company, a member of the FTSE 250 index of UK mid-range stocks, reversed course to trade up 1.3% by 1004 GMT.

($1 = 0.7245 pounds) (Reporting by Yadarisa Shabong in Bengaluru Additional reporting by Sarah Young in London Editing by Kirsten Donovan and David Holmes)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
EQT AB (PUBL) 3.16% 407.6 Delayed Quote.87.79%
FIRSTGROUP PLC 0.94% 85.75 Delayed Quote.14.80%
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Analyst Recommendations on FIRSTGROUP PLC
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Financials
Sales 2022 5 710 M 7 869 M 7 869 M
Net income 2022 2,64 M 3,64 M 3,64 M
Net Debt 2022 1 625 M 2 239 M 2 239 M
P/E ratio 2022 383x
Yield 2022 7,97%
Capitalization 1 026 M 1 420 M 1 414 M
EV / Sales 2022 0,46x
EV / Sales 2023 0,43x
Nbr of Employees 100 807
Free-Float 98,1%
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Technical analysis trends FIRSTGROUP PLC
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 9
Last Close Price 84,95 GBX
Average target price 89,25 GBX
Spread / Average Target 5,06%
EPS Revisions
Managers and Directors
Matthew Gregory Chief Executive Officer, COO & Executive Director
Ryan Dirk Mangold Chief Financial Officer & Executive Director
David Robert Martin Non-Executive Chairman
Warwick Brady Independent Non-Executive Director
Martha Poulter Independent Non-Executive Director
Sector and Competitors