FirstGroup: it is remarkable what a load of subsidies and a bit of cost control can do
By Chris Bailey | Tuesday 15 September 2020
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Back in July I concluded about bus and train operator FirstGroup (FGP) that ‘councils and governments appear supportive but shareholders always have to worry when a subsidy game is propping a company up materially’. Today’s AGM trading update exhibits similar themes…but also slips in a surprise profit running ahead of expectations (‘small adjusted operating profit for the seasonally weaker first half of the financial year’) comment. Hello a near 10% share price rise (although not yet a return of the share price to levels seen throughout the second quarter). So what is going on?…
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