LONDON: First group has hailed continuing growth in revenues in its UK bus business, as it pursues its turnaround plan, and underlined hopes that this growth will help offset the impact of losing key train franchises including ScotRail.
The Aberdeen-based company said that revenues in its UK bus business in its first quarter, which started on April 1, were up by 1.4 per cent on the same period of last year on a like-for-like basis.
It said that commercial passenger revenue in the UK bus division, which includes major operations in Glasgow, continued to grow at an overall year-on-year rate of more than two per cent. It noted this growth had been offset partially by a reduction in concessionary travel revenue.
A FirstGroup spokesman said things were “going pretty well” in the Glasgow bus business, highlighting the company’s opening of the major Caledonia depot on the south side of the city.
FirstGroup underlined scope for further progress from its “transformation programme” and its medium-term aim of achieving double-digit-percentage profit margins in its UK bus business.
The company declared it had made “good progress” in its contract-pricing strategy in its North American school bus business, First Student. FirstGroup added that it was achieving average price increases of more than five per cent, and a contract retention rate in excess of 80 per cent.
However, it also highlighted the continuing impact of lower oil prices on its Greyhound bus business in North America. FirstGroup said that revenues in the Greyhound business in the first quarter were down by 5.7 per cent on the same period of last year on a like-for-like basis, with lower prices at the pump making car travel cheaper for motorists.
The company also noted reduced demand for shuttle services operated by its First Transit division in the Canadian oil sands region.
Tim O’Toole, chief executive of FirstGroup, said: “Overall trading for the group during the first quarter was in line with our expectations, and we remain focused on delivering further progress from our transformation plans.
With three-quarters of the current bid season concluded, First Student continues to achieve slightly higher average price increases than the prior year. UK Bus delivered further growth, with concessionary revenues moderating continued commercial passenger revenue growth, and we continue to take action to improve our cost-efficiency on a market-by-market basis.”
