Financial News

  • 6 December 2013, 13:10

Aviva Boss Lands In FirstGroup Driving Seat

The head of Aviva will on Friday be named as the next chairman of FirstGroup, the transport operator behind Greyhound buses and the First Capital Connect rail franchise.

Sky News has learnt that John McFarlane will be appointed to the role following a six-month search to replace Martin Gilbert, the rail and bus company's founder and long-serving chairman.

The changing of the guard at the top of FirstGroup comes as it recovers from a difficult period, during which it controversially lost out on the West Coast mainline rail operation.

Earlier this year, the company tapped shareholders for 500m in new funds to cut its roughly 2bn of debts.

Mr Gilbert, a respected City figure who runs Aberdeen Asset Management and is also a non-executive director of BSkyB, the owner of Sky News, has chaired FirstGroup since it was founded in 1995.

His successor is also regarded as a heavyweight City figure, having served as a non-executive director of Royal Bank of Scotland before being parachuted into Aviva.

Aberdeen-based FirstGroup was hit by the uncertainty prompted by last year's decision to award it a long-term contract to run the West Coast mainline, one of Britain's key rail routes, only for this to be rescinded it after errors were discovered in the bidding process.

Several Whitehall officials lost their jobs, while Virgin, the incumbent operator, was awarded a 23-month extension and City analysts were forced to hastily revise their forecasts for FirstGroup's financial performance.

Carrying more than 2.5billion passengers annually across its international operations, FirstGroup has risen from humble beginnings in Aberdeen to become one of the world's biggest surface transport operators.

It operates rail franchises in the UK such as First TransPennine Express, First ScotRail and First Great Western, and is Britain's biggest bus operator, with a fleet of more than 8,000 vehicles.

In recent years it has expanded its overseas operations aggressively and now operates 54,000 school buses in the US and Canada, which carry more than six million students every day.

Since its rights issue, its UK bus operations have returned to growth for the first time in six years and City analysts have become broadly positive about its prospects.

FirstGroup, which now has a market value of just over 1.35bn, was unavailable for comment on Thursday.