BATTERING

Shares in Firstgroup headed into reverse yesterday after the Scottish transport operator cautioned over profits.

The Aberdeen-based rail and bus group said the outlook for annual earnings per share expected to be “slightly reduced”.

Firstgroup, which operates America’s Greyhound bus service, said its three US divisions had been confronted by “extremely challenging” weather in January while airline competition had “intensified”.

Sweeping tax reforms enforced by US President Donald Trump impacted the business, helping to drive down its tax rate to the “mid-20s”.

The firm said it would also rake in £14 million a year in interest rate savings thanks to a $275m (£197.3 million) bond refinancing.

Chief executive Tim O’toole told investors: “We reached an important milestone in the period with our long-dated bond portfolio beginning to mature, allowing us to significantly reduce our interest burden by starting to refi-

0 Like-for-like passenger volumes at First Bus edged up 0.1% in the period

TIM O’TOOLE, CEO nance and rebalance the group’s debt.”

Reported group revenues climbed 10.7 per cent for the year to date, boosted by likefor-like passenger revenues at First Rail and First Bus, which rose 3.2 per cent and 0.9 per cent respectively. Stripping out exchange rate movements and the South West Rail franchise, group revenues lifted by 1.1 per cent over the period.

O’toole added: “Although Greyhound’s point-to-point business continues to grow, this was more than offset by significant reductions in longhaul volumes in the period.

“Our North American businesses were also tested by the severe snowstorms which affected the Atlantic seaboard from Nova Scotia down to Florida in January 2018.

“Notwithstanding the mixed trading picture in the period we continue to expect substantial cash generation for the year as a whole.”

The group said its First Bus division had delivered an “encouraging acceleration” in like-for-like passenger revenue

“Our North American businesses were tested by the severe snowstorms which affected the Atlantic seaboard from Nova Scotiadowntoflorida.”