FirstGroup names new chief as it warns over rail division
TRANSPORT GIANT FirstGroup has appointed a new chief executive as it revealed widening halfyear losses and warned over earnings in its rail division.
The group, behind strike-hit line South Western Railway, said interim chief operating officer Matthew Gregory had taken on the top job with immediate effect.
His appointment comes after former boss Tim O’Toole resigned abruptly in May following results showing the group swung to a mammoth full-year loss.
Executive chairman Wolfhart Hauser had taken over at the helm after Mr O’Toole’s departure, but will now revert back to his non-executive chairman role.
Details of the change at the top came as FirstGroup reported interim pre-tax losses widening to £4.6m in the six months to September 30 from £1.9m a year earlier due to restructuring and reorganisation costs from the withdrawal of Greyhound services in Western Canada.
But revenues rose 19.2 per cent to £3.3bn and on an underlying and constant currency basis, FirstGroup saw pre-tax profits jump 63.4 per cent to £42m, while earnings lifted 9.2 per cent to £92.4m.
FirstGroup shares rose 6 per cent in morning trading.
But FirstGroup cautioned its rail arm, which includes the South Western Railway (SWR) and Great Western Railway franchises, would see annual underlying operating profits fall yearon-year.
Half-year underlying rail earnings dropped 5.8 per cent to £29.3m.
On the rail performance, FirstGroup said: “Industry conditions remain very challenging with macroeconomic uncertainty, infrastructure upgrade works across our networks and the industrial action in SWR all affecting our franchise performance levels.”
Due to a postponed winter timetable upgrade, the firm said it was in talks with the Department for Transport “to work through potential commercial and contractual amendments”.
The group’s overall performance has been weighed down by woes at its Greyhound bus service in the US, which has been struggling amid the rising popularity of low-cost airline competition.
Greyhound’s interim underlying operating profits more than halved to £10.2m from £23.5m a year ago.
But the firm said its groupwide performance was “encouraging” in the first half.
Industry conditions remain very challenging. A spokesperson for FirstGroup