First 2015/6 results announced
In its preliminary results for the year to 31 March 2016, First Group reported trading in line with their fourth quarter trading update. Allowing for a smaller rail portfolio and a challenging trading environment in a number of businesses, overall operating profit at £300.8m was in line with the previous year although revenue showed a reduction of 13.8%. Statutory operating profit increased by 0.2%.
In the UK, First Bus reported revenues of £870.9m (2015: £896.1m) for the year, with like-for-like passenger revenue (excluding the contribution from closure and disposal of businesses) increasing by 0.3%. Revenues in the second half of the year were adversely affected by lower than expected passenger volumes, driven by lower high street retail footfall, exceptionally wet weather, flooding and congestion impairing services in several areas. Weakening concessionary revenues have reduced the impact of like-for-like commercial passenger revenues increasing by 1.1% where the south of the UK continue to see more positive trends.
During the year, First Bus offset the challenging market backdrop by merging or closing a number of depots and reducing administrative overheads delivering cost efficiencies of over £20m. It delivered an adjusted operating profit of £52.0m (2015: £51.8m) and an adjusted operating margin at 6.0% (2015: 5.8%), after restructuring costs of £3.8m (2015: £1.4m).
Key successes for First Bus in the year were new services for York, West of England and Swansea Universities as well as Bristol’s Southmead and Glasgow’s Queen Elizabeth University Hospitals. A five year car park contract was secured at Dublin Airport, Leeds Park and Ride commenced and the contract for TfGM’s Vantage BRT system was awarded. In pursuit of efficiencies, depots at Parkhead, Newcastle under Lyme, Bracknell and Hereford were closed during the year and the remaining operations in south Devon were disposed of.
In the year, the business saw capital investment of £91.3m. It took delivery of 385 new low emission vehicles and placed orders for a further 305 for delivery from 2016. First Bus also committed to the development of smart ticketing and the introduction of contactless payment across its operations.
In his first end of year report following his appointment in July 2015, Chairman, Wolfhart Hauser, concluded with a positive outlook for First Group, ‘With a clear strategy for delivering improved financial performance and a growing focus on attracting new customers to our services, the Group is well placed to deliver more sustainable cash generation and returns going forward. Notwithstanding a number of headwinds in some markets, the Board is confident that the Group’s increasing ability to deliver the innovative, efficient and reliable transport solutions that customers and communities need to flourish will allow FirstGroup to drive increasing shareholder value in the future.’