FirstGroup Lets Greyhound off the Leash

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Thursday, May 30: Indices opened higher in London following gains in oil majors for the FTSE 100(+0.46%), despite risk-off sentiment prevailing in the US late yesterday and overnight across Asia. Shell & BP benefited from rising oil prices on Thursday, after an industry report indicated a larger than anticipated decline in crude inventories in the US.

FirstGroup(+3.62%) benefited from a relief rally as it announced the disposal of US coach service, Greyhound and its UK bus arm First Bus, after eventually succumbing to shareholder pressure from activist Coast Capital Management. The Group also announced fiscal year 2019 results, where group revenue increased to £7.13bn versus £6.40bn in the prior year, as pretax losses narrowed to £97.7m from £326.9m a year earlier. After adjusting for exceptional and other one-off items, adjusted pretax profit came in at £226.3m, compared with £197m in 2018. Coast Capital also took issue with First’s UK rail business, operating with wafer thin margins of just 2.7% and has called for an extraordinary general meeting at which it is vowing to replace six of eleven company directors.

European equities were higher at the close, with the FTSE 100 +0.46%, the CAC 40 +0.51% and the DAX 30 +0.54%.

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