O’Toole says FirstGroup recovery on course
However, the former London Underground boss – who last year admitted that running the Aberdeen-based group had been harder than he expected – said it was on track to meet its full-year targets.
O’Toole told The Scotsman: “We’re starting to make progress and we can see things turning. For example, the fact that our UK bus business has volume growth is something that didn’t exist for ten years.
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Hide Ad“That’s encouraging, but we still have a huge way to go. We are seeing change in the direction we want to see it.”
His comments came as FirstGroup, which last year raised £615 million through a rights issue to defend its credit rating, posted a pre-tax profit of £33.3m for the six months to 30 September, up from £19.6m a year ago.
The rise in earnings came despite an 11 per cent decline in revenues to £2.9 billion, partly as a result of its withdrawal from the London bus market.
In recent months FirstGroup has lost its ScotRail network to Dutch operator Abellio, seen outsourcer Serco win the Caledonian Sleeper franchise, failed in its bid to win the Essex Thameside – retained by National Express – and had its Capital Connect contract in London swallowed up as part of the larger Thameslink franchise, which was awarded to Govia.
Last month, it said it would enter talks with the Department of Transport over the award of a three-and-a-half year contract for its largest franchise, the Great Western service, with the possibility of an extra 12 months at the DoT’s discretion. Its next big bid is for the East Coast route, due to be awarded this month.
Analysts at JP Morgan Cazenove lifted full-year operating profit forecast by 2 per cent to £293m. Gerald Khoo at Liberum said: “Delivering on full-year expectations would give clear evidence of progress in the turnaround programme, while the East Coast rail franchise competition could be an additional short-term catalyst.”
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