Leading transport operator FirstGroup has announced a 13% rise in profits, buoyed by improvements in its US and UK bus services.
The Aberdeen-based company has reported a 13.3% rise in full year operating profits to £303.6m for the 12 months to 31 March, with an improved performance from its First Student and UK bus businesses and new contract wins in America.
As a result shares in the transport group are up around 5% to 125p, this is despite some tough losses in its rail sector. Although reported revenue fell 9.9% to £6.05bn, but underlying revenue was up 4.1%.
In a statement the operator said: ‘We currently anticipate strong progression in our non-rail businesses, driven mainly by the ongoing turnarounds of First Student and UK Bus, to largely offset the substantially lower contribution from UK Rail as a result of the end of the First ScotRail and First Capital Connect franchises.’
The bus operations are also set to benefit from a recently announced £77.7m investment in 385 new buses.
The firm is in the middle of a multi-year turnaround programme to raise financial returns.
Chief executive Tim O'Toole said: ‘Overall trading for the year is in line with our expectations and our transformation plan is beginning to deliver improving financial performance, though clearly much hard work remains ahead of us.
‘We intend to deliver further progress from our multi-year transformation plans in our 2015/16 financial year. We currently anticipate strong progression in our non-rail businesses, driven mainly by the ongoing turnarounds of First Student and UK Bus, to largely offset the substantially lower contribution from UK Rail as a result of the end of the First ScotRail and First Capital Connect franchises.’
He added: ‘We were awarded a contract to operate First Great Western for up to four-and-a-half more years, and will continue to work closely with the Department for Transport and Network Rail to deliver the £7.5bn Great Western Mainline modernisation programme to at least March 2019. ‘We have also signed an agreement to run First TransPennine Express through to 1 April 2016, and recently submitted our bid to operate the franchise beyond that date.’
FirstGroup also announced that group finance director Chris Surch had decided to retire from the company in January next year ‘for personal reasons’.