FirstGroup posts flat growth figures but optimistic of year ahead

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FirstGroup’s revenue was down 13.8% at £5,218.1m (2015: £6,050.7m) – according to its preliminary results for the year ended March 31, 2016. However, when taking into account changes to the First Rail franchise portfolio and written on a constant currency basis, the decrease was a much lower 0.3%.

Operating profit increased marginally to £246.3m, £245.8m in 2015. The group’s adjusted operating profit margin improved from 5.0% to 5.8%.

Profit before tax rose to £113.5m, an increase of 7.3% on £105.8m in 2015, while earnings per share increased to 7.5p (2015: 6.2p). Net debt increased slightly from £1,407.3m to £1,410.2m.

Tim O’Toole, FirstGroup CEO, commented: “Overall we have made encouraging progress this year toward a profile of more consistent financial returns for the Group.

“As we indicated at the start of the year, a smaller rail franchise portfolio and fewer operating days in our school bus business were factors that would make delivering headline growth this year challenging. However, by being flexible with our plans we have delivered a comparable adjusted operating profit to last year and a net cash inflow ahead of our expectations.

“The Group expects to make strong progress in the year ahead despite a challenging trading environment in several of our markets. This will come from our continued focus on disciplined contract bidding and rigorous cost efficiency programmes, as well as lower fuel costs and more First Student operating days compared with the year just ended.

“Following several years of reinvestment we expect to deliver a significant increase in net cash generation. Overall, we expect the considerable efforts of our people in recent years to be reflected in a significant improvement in our profile of sustainable returns and cash generation going forward.”