FirstGroup has released an update on trading since its 2015 half-yearly results.
Group revenues in the third quarter decreased by 9.5% on a constant currency basis. The group attributed this to changes to the rail franchise portfolio and the number of First Student operating days this year due to the timing of school calendar. Excluding these effects, group revenues increased by 0.9%.
First claimed that continued progress of its transformation plans in the third quarter was mitigated by a challenging trading environment. First Bus revenues were affected by lower than forecast high street retail footfall, with exceptionally wet weather and flooding in some markets, while First Student experienced higher costs related to acute driver shortages in certain locations as a result of the tightening US employment market.
Outlook for operating profit was slightly lowered by trading in the period, though the group remained confident that the transformation plans would improve underlying performance.
First was awarded the TransPennine Express rail franchise in December, increasing the duration of the First Rail portfolio to at least 2023.
First Bus saw flat like-for-like revenues in the period, with commercial passenger revenue growth of 0.9% and ongoing weakness in concessionary revenues.
FirstGroup Chief Executive Tim O’Toole said: “Our transformation plans continue to make headway despite a challenging third quarter trading period in our markets, with disappointing retail footfall and the terrible weather affecting First Bus, and our largest division First Student experiencing acute driver recruitment and retention challenges in certain locations.
“While these issues have slightly moderated our trading performance in the period they are not of a magnitude to materially affect our multi-year transformation plans, which we expect to deliver significantly improved cash generation in our next financial year as planned.”
The Group is scheduled to announce its results for the year to March 31, 2016 on Tuesday June 14, 2016.
