First profit in line with expectations
FirstGroup has reported operating profits in line with expectations in to a pre-close of trading update for the financial year ended 31 March 2014. In its UK Bus operations, like-for-like passenger revenue growth is expected to be 1.8% for the year, with good passenger volume growth. It said this ‘encouraging performance’ is despite the continued challenges posed by economic conditions in some of its local markets. It is continuing with its step-by-step plan to reposition the business through network design and fares structure improvements, further cost optimisation and investment in fleets and technology. Over the medium term, it believes this repositioning will allow it to raise margins to double digit levels.
Chief Executive, Tim O’Toole, said, ‘We have made satisfactory progress on our key priorities in the year, with good performances in four of our divisions partially offset by slower progress in First Student, where we have a detailed programme underway to reposition the contract portfolio, increase returns and drive further cost efficiencies. We will deliver earnings growth this year, albeit suppressed by the historically severe weather, particularly in North America. We are broadly on track to achieve our medium term targets and while we are encouraged by the progress made so far, there remains a significant amount of work ahead. Our priorities are clear and plans are underway to build on our market-leading positions and ensure the Group delivers sustainable cash generation and value creation over the plan period and beyond.’