FirstGroup nets gain despite performance slippage: Times

FirstGroup Plc, the UK train and bus operator whose board is facing a call to quit, reaped £159mn ($206mn) in dividends from its Great Western Railway franchise over four years, even with a slippage in service quality, the Sunday Times reported, citing an account filing for the most recent fiscal year.

The amount far exceeded the £68mn FirstGroup pledged to give the government between September 2015 and April 2019 in its franchise accord, the newspaper reported, without saying where it got the information. The deal is also thought to include a share of profits, the Times said.

Newly filed accounts showed Great Western earned Aberdeen, Scotland-based FirstGroup £40mn last year despite the route’ s passenger-performance score declining to 82.7% recently from 88.4% in March 2017, the newspaper said. It cited FirstGroup as saying that, because the franchise is its largest, “it follows that GWR was the largest segment of profits in our rail division” for fiscal 2018.

In addition to Great Western Railway, which links London with England’s West Country and Wales, FirstGroup also operates the South Western Railway, which serves routes between the UK capital and the coastal towns of Portsmouth and Southampton.

Under the franchising model, which is being reviewed by the UK government as part of a rail strategy overhaul, companies bid to run trains on specific lines or networks. FirstGroup has a contract with the Transport Department to operate GWR on an uncontested basis.