Revenues accelerate at bus firm First
Bus and train operator FirstGroup saw its revenues speed ahead in the first half of this year.
The transport firm, which runs three rail franchises in the UK, saw sales rise by 8% to £2.8 billion in part due to favourable currency exchange rates.
However, the global operator – which runs the Greyhound brand in the US – saw its costs rise in tandem and the group recorded a £1.9m loss for the six months to September 30.
Pre-tax profit for the first half of last year was £11.1m, which benefited from a one-off property disposal.
The group is continuing to pay down its debt, which fell to £1.2bn from £1.5bn the previous year.
North American hurricanes impacted on the group’s three contracts in Puerto Rico at an estimated cost of £6m.
First Rail revenues increased significantly, reflecting the inclusion of the South Western Railway franchise for the first time, as well as passenger revenue growth.
Chief executive Tim O’Toole said he expected the company to deliver “substantial” free cash generation for the full year.
He said: “The overall trading performance and significantly increased free cash generation of the group in the first half was consistent with the plans we outlined at the start of the financial year.
“Solid performances from most of our businesses are partially obscured by the impact of the recent severe hurricane on our operations in Puerto Rico.
“In the second half we will benefit from our normal seasonal bias, our ongoing focus on cost efficiencies and from additional business which commenced in the period, including the South Western Railway franchise.
“We expect to make further progress and deliver substantial free cash generation for the year as a whole.”
Greyhound revenue was up by 1.2% with fuel and cost savings partially offsetting higher inflation and maintenance costs.
First Bus delivered “encouraging” like-for-like passenger revenue growth for the period, the company said.
Without the favourable exchange rate and the new South Western Railway franchise, revenue was up by 0.9%.
The company has no immediate plans to reinstate a dividend to shareholders, which it last paid in 2013.
The bus and train operator managed to reduce its net debt by £300 million over the past year.