The tracks have been clear for FirstGroup shares in 2019. After a rather wild 2018 – at least in the first half of the year – the company has broadly been on the up and up.
Starting at 83.10p, just about its worst price in 9 months, it trod water for much of the first quarter, before shooting higher in early April. FirstGroup shares eventually hit a one year peak of £1.17 in mid-May, before falling to a current trading price of £1.08.
The main reason for its rise is speculation that the firm could be broken up.
Coast Capital Management are trying to force change at the company with a list of demands, top of which being the separation of its US assets – which includes Greyhound, First Transit and First Student busses, alongside the A-Train – to generate £3 billion in re-investable capital.
It also thinks FirstGroup should remove itself from the British railway arena, a move that would effectively hand the West Coast Mainline to a consortium led by the Chinese state-owned Guangshen Railway Company. Coast Capital also wants a serious shake-up at the top.
As for FirstGroup’s financial performance, its last update came in February, where-to-date reported revenue growth jumped 13.7%. First Rail like-for-like passenger revenue was up 5%, but slowed to 4.2% for the 4 months to January, with First Bus like-for-likes rising 1.4%. Only Greyhound went the other way, with comparable revenue down 0.4%. Its outlook for the full year was unchanged.
Investors will want word, if it hasn’t arrived beforehand, of when the rescheduled general meeting requested by Coast Capital will happen.
FirstGroup shares have a consensus rating of ‘Hold’ alongside an average target price of £1.06.
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