FirstGroup board under pressure ahead of AGM

The board at FirstGroup, the Aberdeen-headquartered bus and rail giant, is this week expected to issue a robust defence of its performance as it faces growing pressure from an activist investor calling for changes at the group.

First Bus

US hedge fund Coast Capital has urged the business to split its UK and US interests and is pressing for an overhaul of the board.

In recent weeks Coast Capital has increased its stake in the business to just under 10 per cent and has requisitioned a shareholder meeting in a bid to remove six of the current 11 directors and appoint seven of its choice.

FirstGroup is planning to write to investors regarding the requisition but is also likely to address Coast Capital’s concerns when it announces full-year figures on Thursday.

Coast Capital argues that a restructuring of the business could free up cash to reduce debts and invest.

It has previously criticised FirstGroup’s rejection of a takeover approach by American buyout firm Apollo and urged the company to reinstate its dividend.

The group is expected to report figures in line with expectations despite a subdued Christmas on the high street hitting passenger numbers on its UK buses.

In a trading update in February the group said the fall in passenger numbers was offset by growth in revenues. It said it was also seeing good progress in its US school bus division and UK bus operations.

However, in its rail division, like-for-like passenger revenue growth slowed in the period, “principally reflecting significant infrastructure challenges”.