THE UK’s largest rail operator FirstGroup said it was on track yesterday to hit its earnings and cash targets for the year, with 2010 results in line with expectations.
The upbeat outlook comes despite the company’s statement that snow disruption to its UK bus and rail networks made a £7m dent in profits in December.
Both of FirstGroup’s UK operations saw like-for-like sales in passenger revenue grow during the third quarter, with UK Rail up 5.2 per cent and UK Bus rising by 2.1 per cent.
Though FirstGroup said it was continuing measures to increase efficiency and cut costs, profits on bus services could be hit from April this year when new guidance is released on concessionary fare reimbursement, and again next year when the Bus Service Operators’ Grant is cut by 20 per cent.
The group’s US figures were not so positive, knocked by Greyhound coaches business posting a revenue fall of 2.5 per cent. The company blamed the poor figures on the effect of high unemployment on consumer confidence.
FirstGroup’s US operations make up 50 per cent of its business, including First Transit, which provides transport and management services to operators, and First Student, which runs school bus routes.
The school’s business has been hit by cuts to US education budgets, with First Student’s expected to post a reduced passenger revenue at year close. First Transit’s figures are likely to be on target, said the company.
Shares in FirstGroup closed 0.22 per cent down at 399.9p yesterday following the trading statement.