FirstGroup turnaround ‘on track’ as UK revenues rise

Bus and rail operator FirstGroup today insisted that its turnaround strategy is “on track” as it reported rising revenues in the UK.

However, the Aberdeen-based group said first-half operating profits at its First Student yellow school bus division in the US will be lower than a year ago, due to the later arrival of Easter.

Since its new financial year started on 1 April, like-for-like revenues at its UK bus arm have risen 2.7 per cent, with passenger numbers up by the same margin following an effort to make fares more competitive.

Rail revenues rose by a “robust” 6.6 per cent and chief executive Tim O’Toole said the firm is on the shortlist of bidders for two further franchises this year, having missed out on three recent contracts.

O’Toole, whose pay deal has attracted criticism from activist shareholder Tom Sandell, added: “Trading during the first quarter was in line with our expectations and our transformation programmes are on track.

“Across the group we are confident that we have the right programmes underway to build on our market-leading positions and improve performance to create sustainable value over the medium term and beyond.”

O’Toole saw his total pay package almost double to £2 million last year – a period that saw FirstGroup launch a deeply-discounted rights issue to defend its credit rating.