Profits up at FirstGroup

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Adjusted profit before tax was £33.3m compared to £19.6m in 2013 for the six months to September 30 says FirstGroup.

Reported Group revenue decreased by 10.9% in the period to £2,941.1m principally reflecting the end of revenue support in First Great Western and First Capital Connect, a reduction in First ScotRail subsidy, non-recurring revenues from UK Bus operations sold or closed in the prior period and foreign exchange translation.

Average price increases achieved on First Student contracts in America were approximately 4.5%, that set against a retention rate of 90% on those contracts up for bid. Revenue at First Transit was $687.7m, 9% higher in US dollar terms reflecting a number of contract start-ups. At Greyhound it was up 2.7% at $527m “at the lower end of our range of expectations.”

Talking about UK Bus the statements says: “In the first half, like-for-like passenger volumes increased by 2.1% as a result of our efforts to stimulate volume growth in part through selected fare rebasing and improved quality of service.” It makes the point: “The UK Bus transformation programme continues to move forward in line with our step by step programme to restore double digit margins over the medium term.” Operating profit increased to £16.9m and operating margin increased to 3.8% despite £1.8m of restructuring costs taken to adjusted operating profit in the first half which is not expected to recur.

“Now that the major network redesigns and selected fare rebased actions have taken place in UK Bus, we are in a better position to cover off cost inflation through annual price increases, underpinned by continued cost efficiencies,” says FirstGroup.