FirstGroup profits fall amid tough rail and bus market

Transport giant FirstGroup has seen its half-year profits slip as tough conditions in the UK bus and rail sector offset 'encouraging' trading in North America.

FirstGroup saw revenues fall at its UK bus business. Picture: Lisa Ferguson

The Aberdeen-based group also said it was providing “full support” to the ongoing investigation into last week’s tram derailment in Croydon, south London, in which seven people were killed.

FirstGroup operates the Tramlink network on behalf of Transport for London, and chief executive Tim O’Toole said: “I am shocked and saddened by the incident on Tramlink last week.

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“On behalf of everyone at FirstGroup I would like to express our condolences to the bereaved families and friends and to those injured in this incident. We are working with Transport for London and the authorities to provide assistance in any way possible to those who have been affected and to the ongoing investigation.”

His comments came as FirstGroup reported an adjusted pre-tax profit of £21.9 million for the six months to the end of September, down from £22.4m a year earlier, despite revenues rising 5.1 per cent to almost £2.6 billion.

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The firm said that “encouraging performances” at its North American operations, which include the Greyhound coach business and yellow school bus services, had been “partially offset by more challenging trading conditions” in the UK.

Revenues at its First Bus arm reversed by 2.9 per cent to £426.1m, which the group said reflected “ongoing industry-wide demand challenges”, while revenues at First Rail fell 2.2 per cent to £595.8m as passengers were tempted back to their cars by “sustained lower fuel prices”.

O’Toole added: “We continue to expect good progress for the group in the current year, recognising we will likely benefit from currency tailwinds from our substantial North American operations but will also face uncertain economic conditions in the UK for the foreseeable future.

“Our cash performance in the first half affirms our confidence in generating significantly increased cash flow for the full year.”