Bus and rail 'challenging'
US trading offsets weaker UK for FirstGroup
Reporting a 23% rise in annual pre-tax profits to £207m the FTSE 250 company said its US businesses, which include the Greyhound long-distance buses, have performed well.
Revenues for the year to March 31 slipped 0.5% on a constant currency basis, but the weaker pound meant they were 8.3% higher than the previous year in statutory terms, at £5.7bn. Reported profit before tax jumped 34.4% to £153m.
Firstgroup said there are “opportunities for steady progress in the North American divisions but continued economic uncertainty in the UK”.
It expects “further progress” from its road divisions, but profit margins will decline in its rail arm. Despite the difficulties in the UK, Firstgroup has recently made a number of bids to extend its UK train services.
It again expressed its regret and apologised for the fatal crash of one of its trams in Croydon last year.
Chief Executive Tim O’Toole said the Croydon tram accident last November “shocked and saddened us all”.
He added: “We are profoundly sorry that such an incident could take place aboard a service we operate. We are focused on understanding the exact cause of this incident and will continue to provide our full support to the ongoing investigations. Our thoughts remain with the families and friends grieving for the seven people who lost their lives, and those who were injured and affected by this terrible event.”
Turning to the figures, he said: “We are encouraged by this year’s improved financial results, with our largest division First Student delivering a significant margin improvement despite continued driver recruitment challenges, while our First Bus and First Rail operations have faced more challenging market conditions this year.
“Through rigorous focus on sustainable operational and capital efficiencies, we were also able to generate substantially improved net cash inflow of £147m.
“In the year we have maintained our consistent and disciplined approach to bidding for future business throughout the Group, with the recent award of the South Western rail franchise being a good example of our focus on the service quality improvements our customers and communities tell us they want.
“Meanwhile, we continue to increase our use of technology across the Group to make it easier for passengers to use our services, and to deepen our understanding of our customers’ evolving needs.
“Looking ahead, our financial objectives are to make further progress while maintaining our focus on cash generation, despite the mixed trading environment in our markets. Overall this year’s results demonstrate the progress we have made in repositioning FirstGroup to deliver for our customers while creating value for our shareholders, commensurate with our leading market positions and scale.”