28th Jan 2016 09:21
LONDON (Alliance News) - FirstGroup PLC said on Thursday it was lowering its outlook for operating profit in the current financial year, after a difficult third quarter across divisions.
The FTSE 250-listed transport operator said its group revenue in the third quarter to the end of November were down 9.5% on a constant currency basis, after its sales were hit by the number of First Student operating days this year, due to the timing of the school calendar, and changes to its rail franchise portfolio.
Trading across its divisions was hit by market trends, with its First Bus revenue down after wet weather and flooding impaired services in the Christmas period and First Rail was hit by a drop in demand in the wake of the Paris terror attacks in November.
The company said its First Transit continued to be affected by reduced oil prices, which has encouraged more people to use their own cars and eschew public transport, and its Greyhound service saw a drop in like-for-like revenue in the third quarter, down 5.2%, reflecting the declining demand for coach travel. It said it was mitigating this by "flexing its cost base".
However, the company said it was confident its transformation plans would drive cash generation over the medium term as planned.
"While these issues have slightly moderated our trading performance in the period they are not of a magnitude to materially affect our multi-year transformation plans, which we expect to deliver significantly improved cash generation in our next financial year as planned," said Chief Executive Tim O'Toole.
Shares in FirstGroup were down 5.7% to 96.4 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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