FirstGroup H1 profit down 44%

4th Nov 2009 07:52

Bus and rail company FirstGroup said first half profit dropped 44% as it was hit by higher fuel costs and sluggish sales at its North American Greyhound bus business. Pre-tax profit for the six months to 30 September declined to £30.3m from £54.4m the year before. Revenue rose to £2.90bn from £2.77bn. Chief executive Moir Lockhead said he remained confident in the underlying strength and resilience of its business. "While the current economic environment presents a number of challenges for the transport industry, the board remains confident in the underlying strength and resilience of the group."FirstGroup added that measures taken to reduce costs will help the group be well placed to benefit from future economic recovery. The group is hoping to reach £200m in cost savings this year after cutting 2,700 jobs in the last six months."The group has a robust and efficient base from which to continue to deliver long-term value for shareholders," it said. Like for like passenger revenue growth at its UK bus unit was 2.4%. Its rail units grew 1.7%. Greyhound however saw revenue fall to £309.4m from £326m a year before. FirstGroup has recommended a dividend payment of 6.65p, up 10% from last year.