14th Jun 2016 06:22
LONDON (Alliance News) - Transport operator FirstGroup PLC on Tuesday said pretax profit pushed higher in the year to the end of March, despite changes to its rail portfolio knocking revenue.
The FTSE 250-listed bus and rail services provider said its pretax profit grew to GBP113.5 million in the year to the end of March, though revenue was down 14% to GBP5.22 billion from GBP6.05 billion, reflecting the end of the First Capital Connect and First ScotRail franchises.
Stripping out the impact of the end of those two franchises, underlying revenue declined 0.3% to GBP5.22 billion from GBP5.23 billion.
FirstGroup said its First Bus arm performed well in the year despite disappointing passenger volume trends across the industry, while the business took a flexible approach to pricing in its Greyhound coach business in the US to try to lure back customers who had been deciding to drive their own cars instead due to lower fuel costs.
The First Transit business in the US, which transports workers on behalf of companies, has suffered from weakness in the Canadian oil sands region, where forest fires hurt production.
First Rail had a strong year, including winning the seven-year TransPennine Express contract.
FirstGroup said it made solid progress over the course of the year and anticipates a stronger performance in the current financial year. The group said it has continued to be disciplined on bidding for new contracts and should benefit from lower fuel costs and additional operating days for its First Student bus business in the current year.
"Overall we have made encouraging progress this year toward a profile of more consistent financial returns for the group. As we indicated at the start of the year, a smaller rail franchise portfolio and fewer operating days in our school bus business were factors that would make delivering headline growth this year challenging," said Tim O'Toole, FirstGroup's chief executive.
"The Group expects to make strong progress in the year ahead despite a challenging trading environment in several of our markets," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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