Investment Column: FirstGroup can travel further
Tuesday 02 June 1998
The City is enthusiastic for two main reasons. First, the group has made a series of rapid acquisitions in the last 12 months. Ditching its old identity as First Bus, the company has bought its way into becoming an integrated transport company. In December, it bought a 51 per cent stake in Bristol International Airport. In March, it spent pounds 105m on the whole of the Great Western Railway franchise, to add to its existing North West Trains operation. FirstGroup has entered a joint venture with Hong Kong's New World Development Company to run 88 bus routes in the former colony. And yesterday it announced the pounds 29.7m purchase of Mainline, a south Yorkshire company which runs 700 buses.
After initial scepticism, shareholders have endorsed the idea of the integrated transport group. That image has also been reinforced by the Government's imminent White Paper on transport which is expected to contain proposals to stimulate public demand and reward the combined use of trains, planes and buses.
The trendy nature of the stock, is, of course, already reflected in the price. Profits last year were up 42 per cent to pounds 72.5m. But a pounds 17m restructuring charge on the newly acquired businesses is forecast to depress earnings to just pounds 95m in the coming year. That puts the shares, which slid 2p to 431.5p yesterday, on a forward earnings multiple of 20, which is not expensive compared to FirstGroup's peers. Hold for the long term.
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
'Sickening, deluded and unforgivable': Bloody attack brings terror to capital’s streets
German chancellor Angela Merkel named most powerful woman in the world by Forbes - again
World news in pictures
Eyewitness gives extraordinary account of her confrontation with Woolwich attackers
- 1 'Sickening, deluded and unforgivable': Bloody attack brings terror to capital’s streets
- 2 Mothers' diets may harm IQs in two-thirds of babies
- 3 Far-right French historian, 78-year-old Dominique Venner, commits suicide in Notre Dame in protest against gay marriage
- 4 Eyewitness gives extraordinary account of her confrontation with Woolwich attackers
- 5 Woolwich attack: The EDL might have a sinister plan as a soldier is murdered in suspected Islamic terrorist attack
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.