FirstGroup on track to fix its bus business

Marion Dakers
TRANSPORT company FirstGroup reassured investors yesterday with a steady trading update and the £80m disposal of some of its bus depots.

The FTSE 250 component said it is making progress with plans to turn around the bus business, including the sale of eight depots in London to Transit Systems Group and Metroline.

Like-for-like passenger revenues are expected to be up 2.4 per cent over the year to the end of March. The firm will report its full-year figures in May.

First’s dividend remains under review until then, while the company awaits the Department for Transport’s next moves on the delayed rail franchising programme, which was axed in October.

The firm’s rail business, which includes the First Great Western and First Capital Connect routes, is set to post like-for-like revenues up 7.4 per cent. The company remains in talks with the government over the terms of its extensions to these franchises until it can make a formal bid to keep the contracts.

In the US, First’s Greyhound business is feeling the effects of the patchy economic recovery, with like-for-like revenues expected to rise just 1.1 per cent.

“Although there remains significant work still to be done, we are satisfied with the progress made so far,” said chief executive Tim O’Toole.

“While remaining cautious in respect of continued challenging economic conditions, we are confident the actions we are taking will position the business to generate sustainable growth and improved returns.”