11th Mar 2020 09:21
(Alliance News) - FirstGroup PLC on Wednesday said it has made "good progress" since September as it announced the start of a process to sell its North American contract businesses.
The stock was trading 1.4% higher at 102.70 pence each on Wednesday morning in London.
The FTSE 250-listed public transport operator said revenue has increased by 7.5% since the end of September with constant currency revenue including the Avanti West Coast rail franchise up 6.0%.
First Student revenue was up 4.0% from September's end to the end of February, with First Transit recording a 5.7% increase. First Bus like-for-like passenger revenue was up 2.0% while First Rail like-for-like passenger revenue was up 3.8%. Greyhound like-for-like revenue went down by 9.2%.
Adjusted operating profit in constant currency for its current year ending March is expected to be in line with expectations.
"Our businesses have attractive long-term prospects and during the period we have continued to execute the clear commercial strategies that will capture their potential and create value, underpinned by our comprehensive cost efficiency programmes. Notwithstanding the challenging trading environment, we have made good progress towards our objectives to improve services for customers and unlock the inherent value within the group," said Chief Executive Matthew Gregory.
Separately, FirstGroup said it has commenced the formal process to sell First Student and First Transit, adding "significant" interest has been expressed by potential buyers.
In December, FirstGroup said it was conducting a strategic review of First Student and First Transit, saying it would "formally explore all options" including a potential sale.
For the financial year to the end of March 2019, First Student and First Transit reported combined revenue of USD3.8 billion, and combined earnings before interest, taxation, depreciation, and amortisation of USD558 million.
"On conclusion of the North American divestments, the group will become a UK-based transportation provider with bus and rail operations at the core of its business. Accordingly, there are no further plans to pursue a separation or sale of First Bus."
FirstGroup also said the coronavirus outbreak has not hurt business.
By Ife Taiwo; [email protected]
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