Britain’s biggest bus operator FirstGroup has announced that they will witness decline in the revenue this year and also announced about the £100 million sell-off. The news spread like jungle fire in the market, which severely affected its shares.
Shares of FirstGroup were down by 15%, said sources known to the matter. The authorities concerned were of the view that their main source of income comes from North. However, for some time a controversy is going on North-South divide, this has squeezed their revenue.
As per official data, FirstGroup earns 60% of passenger revenue from the North, but currently their revenue has declined by 12%, which is a major cut in the revenue being generated by the company. It seems that the company has suffered greater loss than expected as they have to sell their Northumberland Park depot which was in north-east London. They sold it for £14 million in March and are trying to raise £100 million by selling more parts of buss business.
“Hitherto most UK regional bus companies had appeared confident in their ability to offset higher costs/reduction of various subsidies with higher fares in the year ahead”, said Goldman Sachs, who is an analyst.
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