US bus division helps FirstGroup to narrow losses

Marion Dakers
AMERICAN buses have fuelled growth at FirstGroup while it works on overhauling its businesses in Britain, the FTSE 250 travel group said yesterday.

FirstGroup narrowed its pre-tax losses to £8m in the six months to the end of September, an improvement on the £20.6m loss it posted a year ago. Revenues were up 1.6 per cent at £3.3bn.

The firm, which is looking for a chairman to replace Martin Gilbert, said turnover at its US school bus business First Student had risen four per cent to £666.4m and First Transit also enjoyed growing revenues and margins.

But its British bus operations saw revenues fall 14.3 per cent on last year to £490.7m, reflecting First’s exit from London and “economic headwinds”.

Rail revenues were up 7.6 per cent to almost £1.4bn.

The company raised £615m in a discounted rights issue in June in order to defend its credit rating in the face of delays to its new rail franchises.

FirstGroup had been awarded a contract to run the West Coast line last November but is now waiting for the process to restart, following a government review of all its franchising decisions.

“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,” said boss Tim O’Toole in a statement.