Firstgroup bus passengers still not benefiting from upturn

5th Nov 2014 07:48

Bus and train operator Firstgroup said Britain's much-vaunted economic upturn was still not filtering through to local bus travellers as it reported a hit to first half revenue from currency headwinds.Firstgroup said some local UK bus markets and its core US Greyhound long distance bus customers were not yet benefiting from economic improvements."Although the US economy is now growing overall, Greyhound's core customers continue to see negligible real wage growth, and despite improvements in headline employment, underemployment remains a significant factor in this demographic," First said.It added that UK like-for-like bus passenger volumes and revenue rose 2.1% as it cut fares and improved services, but there was no net yield growth for the division overall.The company reported a 10.9% fall in revenue to £2.9bn in the six months to 30 September due partly to foreign exchange volatility, prior period revenue from UK bus operations now sold or closed and structural changes in rail revenue that were not significant in terms of their impact on operating profit.Adjusted pre-tax earnings before interest, depreciation and amortisation fell 2.8% to £253.3m, but operating profit lifted 2.4% to £103.6m.Pre-tax profit increased 70% to £33.3m and attributable profit more than doubled to £21.6m.Chief executive Tim O'Toole said the group was on track to meet full year targets and said its profits were always weighted to the second half due to the timing of the US school year.The group had a good performance in UK rail despite losing its FirstCapitalConnect and Scotrail franchises and failing to win other potential contracts.O'Toole said: "First half trading was in line with our expectations for the group and our transformation programmes continue to make progress as planned. We are on track to meet our expectations for the full year."Shares fell 0.3p to 114.8p at 08:12 in London.