Profits down at FirstGroup

Profits down at FirstGroup

British transport organisation FirstGroup has seen profits fall over the financial year, as a tough economic climate puts pressure on its American operations.

Reporting its results for the year to March 31st, the Aberdeen-based group said adjusted profit before tax fell to £264 million from £326.4 million in 2009.

The fall is partially attributed to the group’s Greyhound operations in the United States, which saw profits fall to £23.9 million from £48.5 million in 2009.

However, passenger revenue on the intercity bus network increased on a like-for-like basis during quarter four, suggesting easing financial constraints may improve performance in the present financial year. 

“Through rigorous management of the network and targeted mileage reductions we maintained revenue per mile which is now ahead of prior year despite the difficult trading environment,” explained FirstGroup.

Net debt at FirstGroup fell to £2.3 billion from £2.5 billion over the course of the year.

“Our clear strategy to lead the group through this tough trading environment enabled us to take prompt and decisive action to mitigate the impact of the recession on trading,” explained Moir Lockhead, FirstGroup’s chief executive.

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“We have a strong track record in cost management and the actions we have implemented during the year have delivered annual savings of over £200m.

“Rigorous management of our networks on a route by route basis has ensured that service provision closely matched changing demand and revenue per mile was maintained.”

FirstGroup saw like-for-like passenger revenue on its UK bus network grow by 1.9 per cent over the period, mirrored by 2.3 per cent growth on its UK rail network.

“Looking ahead we anticipate the new financial year will remain challenging,” continued Mr Lockhead.

“While we are encouraged by improving revenue trends in parts of our business, consistent with economic recovery, the global economic outlook remains uncertain and we expect the pressure on public spending in North America to continue.

“Despite these challenges we are confident that the group will return to earnings growth in the coming year.

“The group will continue to benefit from a diverse portfolio of businesses providing strength and resilience as they continue to trade robustly through the economic cycle,” he concluded.