8th Oct 2014 06:23
LONDON (Alliance News) - Transport operator FirstGroup PLC confirmed Wednesday that it has not been awarded the new ScotRail Franchise by the UK government, although it stressed that this does not alter its medium-term targets.
FirstGroup will continue to operate First ScotRail until the new franchise begins on April 1, 2015, and said it will deliver further enhancements to trains and stations until that time, including introducing further free Wi-Fi, extending smart ticketing across the whole country and opening Borders Railway next year.
The company expressed disappointment that it will "not have the opportunity to implement the credible plans we submitted". However, the company is "actively participating in franchise competitions with the objective of achieving earnings on a par with the last round of franchising."
FirstGroup is in negotiations with the UK Department for Transport to operate the First TransPennine Express franchise until February 2016, and is continuing discussions with it over a longer direct award to operate its largest franchise First Great Western.
Separately FirstGroup said that its trading in the first half to end-September had been in line with its expectations, and expressed confidence in seeing an improved performance in its second half.
The company said it had continued to make progress with its UK bus transformation plans in the first half. Early pricing improvements on its First Student contract portfolio were maintained through the whole bid season, and it said it saw contract retention towards the top of its expectations.
FirstGroup said that the slow pace of economic recovery for its core Greyhound customers in the US, and in some of its local UK Bus markets, is offset by contract pricing and cost reduction progress in its First Student bus service in the US and good performances in First Transit and its UK Rail operations.
"Despite the variable trading conditions across our markets, we are confident that our financial performance will continue to improve during the second half and for the full year, and that the multi-year plans we are executing across the group will return us to a profile of sustainable cash generation and value creation in the medium term," said Chief Executive Tim O'Toole in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Firstgroup