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Simon English: FirstGroup protests – and shareholders suffer

 

Simon English
Thursday 08 November 2012 01:00 GMT
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FirstGroup protests – and shareholders suffer

Like FirstGroup, I am annoyed with the government. Unlike the train company, I haven't decided to show my annoyance by depriving my shareholders of £3m.

The travel business's decision to freeze its interim shareholder dividend comes after the company was declared the winner of the pitch for the West Coast Main Line, then undeclared it shortly afterwards.

There were "irregularities in the tendering process", so the divi will now be held at 7.62p – a move that seems to call into question the all-important full-year payout.

This might be a minor thing, except FirstGroup, under Tim O'Toole, had previously committed to raising the payment it makes to shareholders by an annual rate of 7 per cent a year for three years. They take such things seriously in the City.

The £3m extra it might have paid is neither here nor there, so clearly it is trying to make a point.

Perhaps it is making that point to the wrong people.

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