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"Red warning lights flash after First Group reverse"
First Group has warned that it may not be able to meet its debts over the next few months and that “material uncertainties” hang over the company after it fell to a third straight annual loss:
https://www.thetimes.co.uk/article/red-warning-lights-flash-after-first-group-reverse-607w7mkz7
FTSE gone below 6,000 again, first time since May. Looks like sentiment is turning downwards in the wider market also!
Price action is clear.... holders are dumping, trying to get out.
Absolutely and the management know this, they will be activey looking at offloading the US operations, just like Stagecoach did. They will have seen how Stagecoach share price recovered over 40 fold within months!!!
That's why FGP is a steal at current price..Will no doubt have gaps to fill above 80p..only news of interest in US disposals will see this more then double on that day alone.
Can't see why this cannot be managed better going forward, remembering this was a Ftse100 company few years ago.
Completely agree, this could double in no time if US business is sold, actually it does not need to be sold for the share price to double, just give us some speculation media news and the share price will fly!!!
Simple process..sell all businesses in the US..same as what Stagecoach did when they were in trouble..look at what happened to Stagecoach share price!!!
Only wait for the news of sale of US assets & businesses..this will double in a blink to 80p before Liberium price target to over £1.20 beckons.
FGP have some interesting II's, Coast capital being one with approx 15%. They have as yet not sold or the others as we have had no RNS, it maybe in the post. I await with anticipation Coasts next move as they have been strong advocates for selling off the US assets. The other interesting thing re PI's is thre are a lot of employees and ex employees who own shares purchased via the share purchase scheme. Not all churned for a quick profit some held as their nest eggs. Not sure how many but I know at least 3.
FGP are definitely trying to influence the Govt to extend support, bit like the arts community in last few weeks and what did they get, support till next year. If they get it they are not out of the woods as yes they have debt issues, hence desire to sell US assets, the timing if which and value acheived are key. FGP are under pressure but game not lost yet.
The real question is .... if these results were this bad and 95% pre covid (they were up to March 2020), then what happens to the balance sheet when we factor in covid. The going concern statements make total sense.
The big boys are as expected dumping into the rise. This will gravitate towards 52 weeks Davde
The strategy since last year was to only have the UK bus and rail as the core businesses. Covid may affect the timing and the value attained for the NA assets. The level of revenue will be determined by the level of government support going forward hence the going concern issue. If govt support withdrawn then yes FGP are in real trouble but as yet nobody actually knows if it will be extended or not. We will find out in coming month or so.
Material uncertainty relates to:
the uncertainty regarding the levels of fiscal financial and contractual support which may be provided beyond the period for which that funding and contractual support is currently being provided;
whether passenger volumes recover to the levels necessary to sustain the business without the current fiscal financial and contractual support;
the ability of the Group to obtain covenant waivers from debt providers if required;
the ability of the Group to draw down on c. £550m of the currently available but uncommitted facilities throughout the going concern period if required; and
the timing of cash flows, including movements in working capital and the timing of receipts of contractual and fiscal support that may impact debt levels at covenant test dates.
micky - because the data isn't being correctly collated that's why. If the degree of buying was that high the price wouldn't have dropped over 20%. Once again on the open all these tiny buy prints are being used by the big boys to try and suck PIs in!
What some need to remember is that Jefferies EBIT drop of 81% for FY21 isn't profit.... the business will be loss making and is anticipated to be until at least 2022.
Whilst disposal of assets is the only way to survive ... selling your best (the North American ones) leaves you with a business that has little to excite shareholders about. It's all dismal setup here.
I am not a big fan of looking at daily trades as they are not always indicative, but agree with the point made and the volume was less than 1% of issued shares.
4.9 mill sold 5.3 bought if FirstGroup you say could cease trading why 5.3 mill bought ??? if it was that bad would be lot more sell less buys any one educate me pls
Yes it does look a bit grim, however most of the losses last year were exceptional items clearing the decks for NA asset sales. In terms of the going concern issue, the board have quite rightly said there is a potential issue, revenue at present mainly comes via government support in the UK so if that goes they have a problem. Revenues in US are circa think it was 60% but we do not what costs have been cut. This will put pressure on Govt to extend support for infrastructure or will they be happy for all services FGP provide to cease. If they went into admin who would buy without revenue guarantees or govt could nationalise! I will be watching and we will find out if Govt will extend support soon until then game not over.
Some key points are being missed here. These disaster results only include a month or so of the covid pandemic ... they up are up to March! What does that mean ... future results and leverage ratios are only going to get worse! That’s why a broker cut ebit by 81% for the year ahead! The company had a call today and it’s clear now that the disposal of the american businesses aren’t going to happen any time soon. Why? Corona has again stalled this process too. Totally makes sense ... american schools being closed, uncertainty about wave 2, there’s no pressure for any buyer to rush in and FGP can’t afford a fire sale. Then on top of that , the board have made it absolutely clear (in no uncertain terms) that there’s a material uncertainty ahead .... just check all the articles in the media today. The chance of a dividend returning any time soon has now evaporated (so the income funds will leave) And net debt is only going to increase rapidly ... again remember these results were only up to March. This opened in auction this morning which should have given a few the clues they needed, the big boys are now offloading as it’s the wrong sector to be in and the risk of a future default cannot be ruled out. These will slide a lot further in due course and as said will head towards 52 week lows as the risk has become to great to buy and hold...
and no one is going to be under any pressure to buy assets in this depressed climate when there's so much uncertainty re when things get back to the norm again.
Today the long lasting RSI support at 30 lost was lost which should be no surprise... the update was shocking. It'll go a lot lower tomorrow.... irrespective of ramps or deramps.
They valued the sale of the NA Assets to be around USD 4 Billion but that was before covid restrictions . I wouldn’t hold my breath on a sale as the greyhound sale has been over 2 years. Crap CEO , decent Chairman , worth the risk at this SP . Been holding this stock since 2012, it’s akin to actually taking the bus from London to Russia
Once UBER gets its feet well in the hole, the likes of FirstGroup etc will be hit hard, sad reality for investors. Can see this heading into 20s tomorrow.
All imvho.
What this could be worth in $$$ if FGP offloads the US operations? Does Director know that there could be a buyers for the US businesses?? Guardian-First still aims to offload all its US bus operations but has yet to find a buyer, having finally put them up for sale in March just as the impact of coronavirus was becoming apparent.
Papers are not making it up, but speculating on behalf hedge funds!!! All or most of the transport companies should cease trading then, as most of them are massively in debt... Sure this is risky to hold, but today's Director purchase shares of £41,000 surely director knows better than any paper speculation who probably got paid from shorters/hedge funds?
Indeed Mobily, when you have a company that could cease trading it's normally called a SELL signal !!!
So glad I out at 47p this morning, at a loss but can see this going all the way to the bottom.