First Group’s chief executive Matthew Gregory has this morning announced he will leave the company after the firm’s AGM, a day after the company’s biggest shareholder demanded his resignation.
The announcement came as the FTSE 250 transport operator announced that its profit had shrunk about a fifth over the last financial year.
Gregory’s resignation comes after the completion of the sale of First Group’s US operations to infrastructure fund EQT for £3.3bn, a deal which shareholder Coast Capital vehemently opposed.
Yesterday the New York-based hedge fund, which owns 14 per cent of First Group, said Gregory and two other board members should step down having “failed for long enough”.
In a statement today, Gregory, who took over the top job in 2018, said: “Having delivered the substantial portfolio rationalisation strategy and with First Group now position to emerge from the pandemic as a resilient and robust business, I have decided the time is right for me to move on to new opportunities.”
Despite the damage of the pandemic, the firm said that profit had only fallen from £256.8m to £209.4m over the last financial year.
This was despite a decline in revenue of nearly £1bn over the year, the firm said, as total earnings dropped to £6.85bn.
As a result of the successful sale of First Transit and First Student, the firm has already promised investors £500m in payouts – 41p per share – to commence in the autumn.
Shares in the firm fell 1.5 per cent in the first hour of trading.
Commenting on the results, chairman David Martin, who will become executive chair while the search for a new chief exec goes on, said:
“This has been a very active and significant year in the Group’s evolution. We achieved the key strategic objective, set out when I joined as Chairman in 2019, to unlock value through the sale of our US contract businesses.
“Built on a solid foundation of a well-capitalised balance sheet and a new lower risk model, the ongoing Group will be cash generative and support a return to shareholder dividends.”