Despite doubling its debts on the same period last year, FirstGroup is trading ‘in line with expectations’ according to its latest half-year results, which were released on 14 November.
Compared to the same period last year (the six months to 30 September), statutory revenue rose 6.9% from £3.303bn to £3.531bn. However, while in 2018 the firm made a £46.3m operating profit, this year it made a £118.1m loss. This translates to a total £187.1m loss before tax. Net debt increased from £1.047bn last year to £2.084bn.
Like-for-like First Bus passenger revenue rose 1.6% however, with the operator confident it will be able to further optimise the network and improve its efficiency in time for the next half-year results.
Chief Executive Matthew Gregory explained the performance: “In the first half we continued to execute the clear commercial strategies in each of our divisions to ensure they deliver future progress and growth. In particular, we were pleased to have delivered another strong bid season and two complementary acquisitions in our largest business First Student, as well as the award of the West Coast Partnership to our rail venture with Trenitalia.
“We are, however, disappointed with the further deterioration in the US motor claims environment which has required an increase in insurance costs for our North American businesses. As ever, first half trading mainly reflects the highly seasonal nature of the Group’s operations, given the timing of the North American school holidays in our First Student business. Based on current trends and underpinned by our activities to reduce the cost base further, we are confident in delivering our trading expectations for the full year.
“We are focused on rationalising our portfolio and are progressing through the detailed work to prepare for separation. We have taken a number of important steps since our announcement in May including the sale process for Greyhound, future UK Bus pension scheme funding and the strengthening of our rail portfolio. We are intent on realising value for shareholders and will actively manage our entire portfolio by all appropriate means. We look forward to reporting on further progress in the second half.”