FirstGroup holds out for long-term train contract

BRITISH transport operator FirstGroup has said it will not take up the option to extend its First Great Western franchise for three years beyond 2013 so it can bid for a longer-term deal.

“We have made the commercial decision not to take up the option to extend the First Great Western franchise for a further three years,” FirstGroup’s chief executive Tim O'Toole said yesterday.

“With our unique knowledge of the franchise we believe we are best placed to manage these projects and capture the benefits through a longer-term franchise.”

The company said it would continue to operate its key franchise, which runs into central London from Wales and the west of England, until March 2013.

The bus and rail operator , which has a work force of 130,000 employees, reported pre-tax profit for the fiscal year fell 27 per cent to £127.2m from £175.3m a year earlier, even though revenue edged up 2.7 per cent to £6.43bn from £6.26bn. Net profit fell to £103.2m from £132.1m.

It increased the final divided by 7.1 per cent to 15p and said the outlook was positive despite fragile consumer confidence.

“Looking ahead the economic outlook remains uncertain,” said O’Toole. “But the group has good prospects in all of its key markets to continue to deliver long-term value for shareholders,” he said.

Shares in FirstGroup, which have risen eight per cent in the last month, closed up 2.2 per cent at 351.8p yesterday, valuing the company at around £1.6bn.