Aberdeen-headquartered FirstGroup to update on hunt for new CEO

Bus and train operator FirstGroup will this week update on its search for a new chief executive as it also reveals early progress on its Lumo rail service between Edinburgh and London.

The Aberdeen-headquartered group saw its previous chief executive Matthew Gregory step down after its annual general meeting (AGM) in September after fewer than three years in the post.

The move came in the wake of demands for his resignation from the group's biggest shareholder Coast Capital although Mr Gregory denied his departure was linked.

David Martin, a former chief executive of rival transport group Arriva, is currently interim executive chairman and the company said at its AGM that a “comprehensive” search process was under way for a new chief executive.

Aberdeen's FirstGroup will provide an early update on progress with its newly launched Lumo train service between Edinburgh and London. Picture: contributed.

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With FirstGroup reporting first-half results on Thursday, analysts will also be keen to find out the response so far to the group’s launch of its Lumo service that is looking woo airline passengers between Edinburgh and London capitals with cut-price fares.

The service aims to make money by running shorter, but fuller trains than rival London North Eastern Railway (LNER), although will initially run only two daily return services compared to LNER's departures every half hour.

Lumo, which hopes to attract a million passengers a year, aims to set itself apart with novelties like a reading light on seat backs above fold-down tables, while it will also offer free films and TV programmes streamed via the LumoGo app, which is similar to former operator Virgin Trains East Coast's BEAM service, which LNER scrapped when it took over in 2018.

In October, FirstGroup sealed a £125 million deal to sell its US Greyhound Lines business to Germany's FlixMobility more than two years after putting the operation up for sale.

It came as part of FirstGroup's move to focus on its UK transport business, having already offloaded its US school and public service bus operations First Student and First Transit.

Knock

The Scots group had been looking to sell the iconic Greyhound business since spring 2019 amid pressure from activist investors, but the process was impacted after the division took a knock from falling demand during the pandemic.

FirstGroup will retain Greyhound’s properties and lease them back to Greyhound, with plans to sell them after the next three to five years.

In an update at its AGM, FirstGroup said trading in its continuing businesses in the new financial year to date has been in line and there has been no change to management's expectations for the current financial year.

Bus passenger volumes had reached 65 per cent of pre-pandemic levels on average in recent weeks and it said it expected this to increase further as the autumn terms for schools and then universities get fully under way.

Since the end of its financial year, the Department for Transport (DfT) has formally approved the management and performance-based fees to First Rail's contracted rail operations for the year to the end of March, which were in line with the amounts accrued. The DfT has extended the current GWR and West Coast Partnership agreements by six months to June and October 2022 respectively.

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