More First Group woes

[jay38a]

Hi all

First Groups share price dropped after it was revealed that profits were down and the actual debt problem First actually have. They have a £2 billion worth of debt, most which have come from the North American business. There seems to be a trend of UK transport businesses getting into trouble in North American with Stagecoach and National Express having the same fate.

The link to the guardian article from yesterday is here: www.guardian.co.uk/business/2013/may/20/firstgroup-shares-plunge-rights-issue

[Deleted]

I think First Group should sell all of the North American business and start concentrating on the transport services in Europe.

[snoggle]

May 21, 2013 15:40:09 GMT @freebbc said:

I think First Group should sell all of the North American business and start concentrating on the transport services in Europe.

Why? The American businesses make money (£200m profit) and contribute huge revenues (£3bn revenue). First has next to no business outside of the UK and USA so if you sell off the US you halve the size of the company. That seems rather pointless and would not please the markets.

First have problems as a result of paying too much for the Laidlaw business in the States but they are now trying to recover. It is worth bearing in mind that Stagecoach made a similar error when Mike Kinkski was in charge of the firm. Companies can make mistakes just like people!

[john]

It's a large level of debt BUT can be easily decreased with the right financial planning. As long as the company are still able to pay the debts on time and at the correct payment, just as any person with a loan, then the debt won't hinder how they operate.