First Group: General Discussion

[markie73]

The new Stagecoach services to Camp Hill, Shelfleys and Kings Heath, duplicating the First routes that cease on June 6th, are now up and running. Already some passengers seem to have switched. There're some timetables and maps here - http://www.stagecoachbus.com/serviceupdatedetails.aspx?Id=7254

Still no new information on Stagecoach website regarding the extended 16/17 service which starts on the 10th June, neither has there been anything from Stagecoach advertising the new service on any of the bus stops on our estate - I would have thought that they would have been keen to promote the new service as it starts in a few weeks.

 

[overthewater]

http://andysbusblog.blogspot.co.uk/2013/05/ex-jersey-darts-in-great-yarmouth.html

This is a strange one, Cornwall? Deven? not Great Yarmouth of all places for those Ex jersey dart, why? But Worcester get 10.

 

[BuhSnarf]

Noticed that there is at least one new livery bus in Leicester now....

Sent via Tapatalk HD on an Ainol NovoTab Hero 10.1

 

[WatcherZero]

Sky News is saying that First will announce a £500m share issue next week to raise cash and put a dent in their £2bn debt (partly because of set backs in rail franchising and partly failure to raise much from asset sales), Martin Gilbert Chairman of First Group since 1995 will also announce his resignation. Its a change in policy from the previous strategy of trying to maximise share holder dividends.

Sky probably have an inside track on this as Martin Gilbert also works for Sky.

 

[mbonwick]

That would tie in with the rumours doing the rounds that a further disposal or two is to be announced in the near future....

 

[SuffolkRaider]

We are confused too over here in "endoftheworld land" The first ex Jersey dart went into service yesterday http://www.norwichbuspage.com/2013/05/jersey-dart-enters-service.html Zak is right they are replacing B7's 41 odd seaters and the routes are hellishy busy morning and evening, it's not as if they are even new-ish they are taking the place of stuff as old as 97/98 which is only 4-5 years older than than they are. Typical First I suppose perhaps a name change to "It's ok they're running aren't they" bus co lol

 

[winston270twm]

Sky News is saying that First will announce a £500m share issue next week to raise cash and put a dent in their £2bn debt (partly because of set backs in rail franchising and partly failure to raise much from asset sales), Martin Gilbert Chairman of First Group since 1995 will also announce his resignation. Its a change in policy from the previous strategy of trying to maximise share holder dividends.

Sky probably have an inside track on this as Martin Gilbert also works for Sky.

Its highly unlikely that Martin Gilbert will be allowed to disclose anything to Sky before it is announced by First Group to the stock market, he would be the first person the board will point the finger at working for Sky as well

It will be interesting to see how First share price responds if the cash call is announced, and / or a cut in dividend

http://news.sky.com/story/1092481/firstgroup-plots-route-to-500m-rights-issue

The Telegraph has picked up the story, looks set to be a £600million rights issue / dividend cut in half, Martin Gilbert to resign to be announced with final results on Wed 22nd May. The article doesn't mention the possibility of any further disposals

http://www.telegraph.co.uk/finance/...ert-set-to-resign-amid-600m-rights-issue.html
--- old post above --- --- new post below ---

That would tie in with the rumours doing the rounds that a further disposal or two is to be announced in the near future....

Is there any hint on what may be disposed of / the size of any more disposals?

 

[ivanhoe]

Rights issue and mounting debts. The very future of First is in doubt because if dividends are cut, then there is no logical reason to hold shares in First. If I had shares in First, I'd cut my losses now. Company needs to re-assess where it is going. Buses are its future and it will have to invest in quality. Simply, it will have to become smaller to survive, and start to rebuild its reputation as a market leader in bus travel. Partnerships with ITA,s and perhaps regional companies may be its future.

 

[radamfi]

The dividend is bound to be cut. They pay 23.67p per share each year so at the current share price of 223.8p the yield is a ridiculously high 9.46%. So everyone is expecting a dividend cut and undoubtedly a dividend cut is priced in the current share price. Even a 50% dividend cut would still make it a better yield than most FTSE250 shares. Arguably, shareholders would be scratching their heads if a dividend cut doesn't happen.

So the question is, not whether the dividend is cut, but by how much.

 

[winston270twm]

Rights issue and mounting debts. The very future of First is in doubt because if dividends are cut, then there is no logical reason to hold shares in First. If I had shares in First, I'd cut my losses now. Company needs to re-assess where it is going. Buses are its future and it will have to invest in quality. Simply, it will have to become smaller to survive, and start to rebuild its reputation as a market leader in bus travel. Partnerships with ITA,s and perhaps regional companies may be its future.

Once the balance sheet issues are addressed via a rights issue, even with the cut in dividend 'First Group' shares will be bought on the back of them potentially becoming a recover play, the dividend is insignificant if the share price doubles over time, back to the around £4/share level

 

[overthewater]

That would tie in with the rumours doing the rounds that a further disposal or two is to be announced in the near future....

Rights issue and mounting debts. The very future of First is in doubt because if dividends are cut, then there is no logical reason to hold shares in First. If I had shares in First, I'd cut my losses now. Company needs to re-assess where it is going. Buses are its future and it will have to invest in quality. Simply, it will have to become smaller to survive, and start to rebuild its reputation as a market leader in bus travel. Partnerships with ITA,s and perhaps regional companies may be its future.

It may have to become smaller but unless there do something about the debt ridden companies it will never sort anything out. What good is raising all this money, if it has to go to wards paying of debt in places like Cornwall of Edinburgh?

I take it the debt would get reduced by a 1/3 if the share issues goes ahead?

How many old guard people are still on the broad at first? would this be a good time for Mr Giles and Tim to rest out to the back garden aswell? You cant say people should get rid of the share, look at stagecoach back in 2000/2001, pennies and now look at them.

I've had my doubt and first has never formal press release it all over; something will will need to give...

First Edinburgh:
* Livingston and or Musselburgh: EVENS
* Livingston, Falkirk and Stirling: 5/2

Irish Aircoach
Other Details of the current situation read Page 65. Accounts are not good reading, Could first hold tight in a hope Eire will pick up? will there be able to improve the leasing problems?
Or will a buying to found?

* 11/8

First Cornwall
with its 9.3% loses over the past Financial year. I can't understand why the loses are that big Even after gaining new new council work or did first really undercut? and got its sums so very very wrong?

* Evans: close down a depot
* 6/4: whole lot to go.

First Ipswich Or Leicester

* 11/4

 

[robertclark125]

I wonder if perhaps Berkshire could be put up for sale. The only basis I have for that is that, currently, those oeprations are managed from London, dating back to the days when Centrewest, then still an independent firm, bought Bee Line. With the London disposals, it's unclear where management of Berkshire will revert to.

Also, I know that the discussion on here recently has said that First is a rail operator which also happens to run buses, but I just wonder, if Hull Trains could be sold?

 

[Volvodart]

First Edinburgh:
* Livingston and or Musselburgh: EVENS
* Livingston, Falkirk and Stirling: 5/2

Irish Aircoach
Other Details of the current situation read Page 65. Accounts are not good reading, Could first hold tight in a hope Eire will pick up? will there be able to improve the leasing problems?
Or will a buying to found?

* 11/8

First Cornwall
with its 9.3% loses over the past Financial year. I can't understand why the loses are that big Even after gaining new new council work or did first really undercut? and got its sums so very very wrong?

* Evans: close down a depot
* 6/4: whole lot to go.

First Ipswich Or Leicester

* 11/4

What about Dagenham?

 

[overthewater]

I wonder if perhaps Berkshire could be put up for sale. The only basis I have for that is that, currently, those oeprations are managed from London, dating back to the days when Centrewest, then still an independent firm, bought Bee Line. With the London disposals, it's unclear where management of Berkshire will revert to.

Also, I know that the discussion on here recently has said that First is a rail operator which also happens to run buses, but I just wonder, if Hull Trains could be sold?

Berkshire could be managed by Hampshire, I have suggested myself about it being sold but new buses are appearing soon.

What about Dagenham?

Im lead to believe that place still makes money, but the limited operation what is in it that is worth selling?

 

[WatcherZero]

Well last year I mentioned talk of them having to raise £200m for debt refinancing this year, if their talking £500/600m then something has obviously got worse.

 

[Volvodart]

Berkshire could be managed by Hampshire, I have suggested myself about it being sold but new buses are appearing soon.

First is re-structuring its operations in the South West of England and Wales and one of the four business units is Hampshire, Dorset & Berkshire.

 

[winston270twm]

Its highly unlikely that Martin Gilbert will be allowed to disclose anything to Sky before it is announced by First Group to the stock market, he would be the first person the board will point the finger at working for Sky as well

It will be interesting to see how First share price responds if the cash call is announced, and / or a cut in dividend

http://news.sky.com/story/1092481/firstgroup-plots-route-to-500m-rights-issue

The Telegraph has picked up the story, looks set to be a £600million rights issue / dividend cut in half, Martin Gilbert to resign to be announced with final results on Wed 22nd May. The article doesn't mention the possibility of any further disposals

http://www.telegraph.co.uk/finance/...ert-set-to-resign-amid-600m-rights-issue.html
--- old post above --- --- new post below ---


Is there any hint on what may be disposed of / the size of any more disposals?

http://www.ft.com/cms/s/0/5bf7e2ec-c083-11e2-8c63-00144feab7de.html#axzz2TlndOAnc

The Times seems to think that First could bring forwards its full year results & rights issue/dividend cut announcement by two days to tomorrow morning

 

[WatcherZero]

From the FT article

It is understood concerns over a credit ratings downgrade has convinced management to push for the rights issue, which is expected to be fully underwritten by JPMorgan, Bank of America Merrill Lynch and Goldman Sachs.

One top 20 shareholder in the company said the cash call “looked a bit like desperation”, adding: “There is a feeling that Gilbert has taken his eye off the ball because he is juggling with too much and is more focused on his asset management group, Aberdeen.

“The group needs a chairman that can concentrate more of his or her energy on First Group.”

Mr Gilbert has been chairman of FirstGroup and its predecessor companies for 27 years.

Seems astonishing now when you realise Gilbert was one of the founders of the company with a management buyout of £5m that secured them one depot and 6 buses. How much the groups grown in 25 years.

 

[overthewater]

full statement which can be read with for free reg

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/5bf7e2ec-c083-11e2-8c63-00144feab7de.html#ixzz2TmDHhLgq

FirstGroup is expected to announce that chairman Martin Gilbert is set to step down in a bid to placate investors as it unveils plans for a £600m rights issue and cuts the dividend.
The world’s largest listed bus and rail operator by revenue has come under increasing pressure from investors to act as it struggled to pay down a £2bn net debt burden.

Confirmation of the board shake-up and cash call could come as early as Monday, with FirstGroup likely to bring forward the announcement of its full-year results – originally scheduled for Wednesday – by two days.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/5bf7e2ec-c083-11e2-8c63-00144feab7de.html#ixzz2TmD9mucC

Mr Gilbert first faced calls from investors to step back a year ago amid concerns that, as chief executive of Aberdeen Asset Management, the fast-growing FTSE 100 fund manager, he had overstretched himself.
Mr Gilbert is also a director of BSkyB.
“There does need to be some blood on the carpet,” said one person close to the company.
FirstGroup has struggled to pay down its debt load, largely a result of the acquisition of Laidlaw, the US bus business in 2007, just before the downturn.
Tim O’Toole, chief executive, and Chris Surch, who took over as chief financial officer last year, have previously insisted that the group had enough liquidity and headroom on its banking covenants to avoid a cash call.
The group signalled at its interims in November that it was rethinking its aggressive dividend policy in the wake of the West Coast rail fiasco, which saw the government reverse its decision to award FirstGroup with the highly cash-generative rail franchise.
It held the interim dividend and is expected to announce that it is axing the full-year dividend, a move that is likely to anger income funds.
FirstGroup’s shares closed at 223.8p on Friday, little changed from where they were a year ago, and the stock has underperformed the FTSE 250 index by about 25 per cent.

It is understood concerns over a credit ratings downgrade has convinced management to push for the rights issue, which is expected to be fully underwritten by JPMorgan, Bank of America Merrill Lynch and Goldman Sachs.
One top 20 shareholder in the company said the cash call “looked a bit like desperation”, adding: “There is a feeling that Gilbert has taken his eye off the ball because he is juggling with too much and is more focused on his asset management group, Aberdeen.
“The group needs a chairman that can concentrate more of his or her energy on First Group.”
Mr Gilbert has been chairman of FirstGroup and its predecessor companies for 27 years.
He was part of the original £5m management buyout of a small bus operator in Aberdeen with one depot and six buses. He is expected to stay on and help identify a successor before resigning.

FirstGroup and Mr Gilbert declined to comment.

 

[mbonwick]

Alternatively, just copy & paste the title of the article into google news and you'll be able to read it without registering

 

[winston270twm]

First Group have announced the following this morning:

- Heavily discounted 3 for 2 rights issue to raise £615 Million - the issue price is 85p/share

- Martin Gilbert is stepping down after the fund raising has been completed / a replacement has been sourced

- Final dividend has been scrapped, as has the interim dividend for 2014. A transitional dividend will be paid following the full year results for 2013/14

-Pre-tax profits are down 36.5% to £172 Million

-Plans to invest £1.6 Billion across its five divisions over the next 4 years

- Results don't hint of any further UK bus disposals

First Group shares are currently down 21% @ 177p

 

[WatcherZero]

Also debt up 7.7% to 1.98bn.

 

[overthewater]

First Group have announced the following this morning:

- Heavily discounted 3 for 2 rights issue to raise £615 Million - the issue price is 85p/share

- Martin Gilbert is stepping down after the fund raising has been completed / a replacement has been sourced

- Final dividend has been scrapped, as has the interim dividend for 2014. A transitional dividend will be paid following the full year results for 2013/14

-Pre-tax profits are down 36.5% to £172 Million

-Plans to invest £1.6 Billion across its five divisions over the next 4 years

- Results don't hint of any further UK bus disposals

First Group shares are currently down 21% @ 177p

With results like that I would not hint at disposals, as it would make people think there could buy them cheap.

 

[robertclark125]

Could First be the target of a takeover bid? RATP springs to mind as a candidate.

 

[F Great Eastern]

What caused the second crash in share price?
http://www.firstgroup.com/corporate..._client_id=2899&ir_option=SS_GRAPHS&period=1D

Dropped heavily from around 220p to 172p between 8am and 10am as you'd expect after those results, but then started to recover slowly over the next 4 hours and peaked at around 186p at 2pm.

Then they dropped into freefall over the next two hours hitting a rock bottom low of 155p. What set off that second major decline when it was climbing slowly back up?

 

[overthewater]

Weird what is happening with the shares.

Dropped heavily from around 220p to 172p between 8am and 10am as you'd expect after those results, but then started to recover slowly over the next 4 hours and peaked at around 186p at 2pm.

Then they dropped into freefall over the next two hours hitting a rock bottom low of 155p. What set off that second major decline when it was climbing slowly back up?

Two reason:

* People buying up cheap shares, Its does happen, and that push the price back up.

* A number of other people could have been spooked by that drop and started to sell fast, which caused the free fall.

I dare say if its falls a bit further some others will start buying...

 

[winston270twm]

Could First be the target of a takeover bid? RATP springs to mind as a candidate.

It's always possible, at 155/share First group are valued at £750 million + £2 Billion debt = £2.750 Billion. A bid of £2+/share plus might swing it, but how many investors would be break even/in profit at those levels, therefore an accepted bid may be unlikely

National Express was on the receiving end of cheeky bids from CVC / Cosmen's initially & then from Stagecoach directly once the initial takeover bid collapsed, this was around the same time that NX announced its rights issue. Neither takeover bid succeeded in the end and NX proceeded down the Rights Issue route to pay down debt, the Stagecoach merger came close. The problem for First Group is that they are so large & carry so much debt, Stagecoach or Arriva's parent (Deutsche Bahn) couldn't bid due to the combined businesses controlling too much of the UK bus market. Neither NX or Go-Ahead Group have the finances to be able to buy First Group. The only option for a takeover bid, could either come from a European Transport Group or a private equity group that would bid to buy up First Group / break it up & sell off the individual divisions in smaller chunks to make them attractive, as with NX back then, the individual assets would no doubt be worth more than them combined as a group

 

[overthewater]

It's always possible, at 155/share First group are valued at £750 million + £2 Billion debt = £2.750 Billion. A bid of £2+/share plus might swing it, but how many investors would be break even/in profit at those levels, therefore an accepted bid may be unlikely

National Express was on the receiving end of cheeky bids from CVC / Cosmen's initially & then from Stagecoach directly once the initial takeover bid collapsed, this was around the same time that NX announced its rights issue. Neither takeover bid succeeded in the end and NX proceeded down the Rights Issue route to pay down debt, the Stagecoach merger came close. The problem for First Group is that they are so large & carry so much debt, Stagecoach or Arriva's parent (Deutsche Bahn) couldn't bid due to the combined businesses controlling too much of the UK bus market. Neither NX or Go-Ahead Group have the finances to be able to buy First Group. The only option for a takeover bid, could either come from a European Transport Group or a private equity group that would bid to buy up First Group / break it up & sell off the individual divisions in smaller chunks to make them attractive, as with NX back then, the individual assets would no doubt be worth more than them combined as a group

But a three way split could do it.....

 

[winston270twm]

What caused the second crash in share price?
http://www.firstgroup.com/corporate..._client_id=2899&ir_option=SS_GRAPHS&period=1D

Dropped heavily from around 220p to 172p between 8am and 10am as you'd expect after those results, but then started to recover slowly over the next 4 hours and peaked at around 186p at 2pm.

Then they dropped into freefall over the next two hours hitting a rock bottom low of 155p. What set off that second major decline when it was climbing slowly back up?

That kind of shareprice movement does happen quite frequently with such a big fall, the price will initially bottom, the day traders move in looking to profit from a bounce, then the sell off continues after lunch as analysts have had time to digested the results / news & the day traders bank profit for the morning bounce.

It’s not uncommon after a big fall like this for the price to continue to fall over the next few days before the price eventually bounces as the bargain hunter’s move if looking for a rebound on the back of recovery hopes. You may find more sale pressure coming from funds which buy for dividends, those funds may now either reduce holdings or sell out completely due to the 12 month dividend suspension
--- old post above --- --- new post below ---

But a three way split could do it.....

The only way that would happen, would be for a private equity group to buy up First Group and do side deals with the other big groups to buy parts of the business, as happened with NX. The Comsens wanted Spain back, CVC capital partners provided the finance and a side deal was agreed with Stagecoach to buy NX's UK business on the deal going ahead

Stagecoach is currently valued at £1.8 Billion, but I doubt Stagecoach would even consider trying to pull of a deal of that size in the current climate

 

[Sandy Drew]

The telegraph article is quite an interesting one...

http://www.telegraph.co.uk/finance/...as-been-haunted-by-a-deal-agreed-in-2007.html