First UK Bus expects revenue growth of 2.3%, with passenger numbers on the rise
FirstGroup has published a financial update in respect of trading for the financial year ended March 31 2015, ahead of preliminary results due to be announced on June 10, 2015.
Chief Executive Tim O’Toole said: “The pricing improvements we made in the 2014 bid season together with further cost savings mean we expect to make solid margin progress in First Student for the year, and we are also encouraged by the results achieved at this stage in the 2015 bid season. In UK Bus we continue to deliver passenger volume growth, positive yield and further cost efficiencies.
“Greyhound has flexed mileage, timetables and pricing in response to the rapid reduction in passenger demand from lower fuel prices and is on track with the yield management programme, while our First Transit and UK Rail businesses have maintained the good growth momentum and margins achieved throughout the year.”
The UK Bus transformation programme continues to deliver like-for-like passenger volume growth, expected to increase by 1.1% for the year. Commercial passenger volume growth is expected to increase by 2.6% on a like-for-like basis for the year. Like-for-like revenue growth is expected to be 2.3% for the year. This growth, coupled with the cost efficiency programmes, is expected to result in margin progress of approximately 1% for the year.
US Dollar revenue in First Student is expected to be 1.3% higher for the year. The Group expects to deliver margins of approximately 7.5% for the year, and is confident of delivering its double digit margin target in the medium term.
First Transit has achieved organic growth on existing contracts in the second half that was towards the top of the Group’s planning range. As a result US Dollar revenue growth for the year is expected to be 5.5%. The Group continues to expect margins of around 7% for the year and into the medium term in this low capital intensity business.
In the fourth quarter, Greyhound’s like-for-like US Dollar revenues are expected to decrease by 5.5%. US dollar revenue for the year is expected to be flat. Greyhound Express revenues have been more resilient, with like-for-like US dollar revenues expected to increase by 3.0% for the year. The company remains confident of achieving its 12% margin target.
FirstGroup expects a total cash outflow for the current financial year of up to £100m, which is principally due to the cash outflow of approximately £70m associated with the end of the First Capital Connect franchise in September 2014.
