FirstGroup PLC (LON:FGP) should come up with a new solution for its North American assets as the strategic plan presented in May has “no value” for its investors, according to activist shareholder Coast Capital.
Shares in the FTSE 250-listed group plunged 20% on Thursday after it posted larger losses in its full-year results, although it confirmed previous guidance.
READ: FirstGroup plunges as losses and borrowings widen
A write-down to the North American Greyhound coach division ahead of its planned sale caused the firm's statutory loss before tax to widen 40-fold to £187mln year-on-year.
The Aberdeen-headquartered transport group said the formal sale of the North American bus network is “well advanced” since the disposal announcement in May, but has now written off £124mln of the value of the asset.
Coast Capital, which owns 10% shares in the firm, said that the firm’s North American and UK assets “do not belong together” and “will thrive only under different and local ownership with the requisite experience, industry know-how and capital.”
“We are pleased that FirstGroup’s newly appointed chairman, David Martin, has arrived at the same conclusion,” the fund said in a statement seen by Proactive on Friday.
Coast Capital, which has been pressuring the firm to focus on UK business, now wants to hear on the strategy for the other North American businesses, namely First Student and First Transit.
Shares in FirstGroup picked up on Friday at noon, rising 3% to 109p, having lost 20% on Thursday at close.