ScotRail boost for FirstGroup

Published on Thursday 29 September 2005 01:55

SCOTRAIL operator FirstGroup singled out the Scottish rail company's performance yesterday, as it shrugged off what it called "challenging trading conditions" in the transport industry to say it was performing in line with expectations.

The company, which is also Britain's biggest bus company, said it was "particularly pleased with the strong performance" from First ScotRail, and from its First TransPennine Express subsidiary.

Although all transport companies have been hit by surging oil prices, FirstGroup, which is also one of the biggest operators of yellow school buses in the United States, said revenue growth and cost cuts had help to offset the impact at its UK bus division.

The company said it was 100 per cent hedged on fuel for the rest of the current year to end-September 2006 at an average rate of $37 per barrel. That compares with a current oil price of well over $60.

FirstGroup said: "Our UK bus division has continued to show strong revenue growth and we continue to bear down on costs within the division. However, the increase in crude oil prices and subsequent increased fuel costs will, as we anticipated, have an impact on [profit] margins."

Rail passenger growth has buoyed FirstGroup's performance, and FirstGroup, formed from the merger of Grampian Regional Transport and Badgerline in the 1990s, confirmed it had submitted bids for three new rail franchises.

They are Integrated Kent, Thameslink/Great Northern and Greater Western.

The company, which reports first-half results on 9 November, also restated earnings under new IFRS accounting rules which it said would not have a material impact on operating profit.