First trading as expected
FirstGroup is trading in line with its management’s expectations, according to its half yearly results for the six months to 30 September 2013. At Group level, its revenue amounted to £3,300.7m (H1 2012: £3,250m), a rise of 1.6%. Its EBITDA was up 2.6% to £269.2m (H1 2012: £262.3m) and its operating profit was £109.9m (H1 2012: £99.8m), up 10.1%.
In its UK Bus division, revenue was £490.7m (2012: £572.9m) during the period, although adjusting for the disposals of its London businesses and the Olympics, passenger revenues on a like-for-like basis increased by 1.7%. As anticipated, its operating profit decreased to £17.3m (H1 2012: £21m) and operating margin went down to 3.5% (H1 2012: 3.7%). Its plans to return its bus business back to achieving double figures includes further cost optimisation, a market-by-market reassessment of its network designs and fares, as well as further investments in its fleet. Its £76m order for 464 new buses is to be delivered during the current financial year and is on track, helping to reduce maintenance expenses.
FirstGroup’s Chief Executive, Tim O’Toole, said, ‘Over the past six months, we have worked hard to ensure we are positioned to deliver on our potential. We have strengthened our balance sheet through the rights issue, continued to drive the significant number of incremental operational enhancements required to yield better financial returns, and are making disciplined investments to benefit from the opportunities we see in our markets. We are focused on the task of meeting our medium term financial objectives including our revenue, margin and return on capital targets, while continuing to improve these services we deliver for our customers. We remain confident that the trends toward increased urbanisation and greater congestion will generate significant opportunities for our business, and that we are returning to the strength necessary to drive sustainable, long term growth and increased shareholder value. Although it is early days in our multi-year plan to improve our returns, resilience and growth prospects, we are seeing clear indications that we are making progress. While there remains a significant amount to be done, we believe the foundations are now in place to deliver on our market-leading potential.’