Profits up but train operator warns of uncertainty

THE operator of the Great Western train franchise warned of ongoing economic uncertainty in the UK as it posted a jump in annual profits despite tough trading in its bus and rail businesses.

Transport giant FirstGroup saw underlying pre-tax profits rise 23% to £207m thanks to a stronger performance in its First Student school bus operation in North America, which is now the group’s largest division.

But the profits haul comes after a year marred by the tragic crash on its Croydon Tramlink line last November, which killed seven people and injured more than 50 others.

Chief executive Tim O’Toole said the group remains “focused on understanding the exact cause of this incident and will continue to provide our full support to the ongoing investigations”.

FirstGroup saw a boost from the weak pound, which flattered sales in its American arm and helped increase revenues by 8.3% and operating profits by 12.7% over the year to March 31.

With the impact of the pound stripped out, revenues dipped 0.5% and operating profits rose by a more muted 2.3%.

But the pound’s impact on fuel costs left it nursing a £19.8m profits hit across its UK bus and rail arm, despite action to trim costs elsewhere.

Underlying operating profits in its bus arm fell 29% to £37m, while rail earnings dropped 26% to £53.8m.

The group also saw bus passenger revenues fall 0.6% on a likefor-like basis after being hit by falling numbers of shoppers on the high street and ongoing woes with traffic congestion in some areas.

It said like-for-like passenger revenues rose by 1.3% in its rail business, which includes the Great Western and TransPennine Express UK rail franchises and Hull Trains.