FirstGroup loses Scotrail franchise "to Abellio" - UPDATE

8th Oct 2014 07:10

Bus and train operator FirstGroup has failed to keep its Scotrail franchise but said first half trading was in line with management's expectations and it was continuing to make progress with an overhaul of its bus business.FirstGroup said it "noted" the announcement by Transport Scotland that it had lost the right to run Scotrail from 1 April next year.The group has already lost its First Capital Connect London commuter franchise and failed in a bid to run London-Scotland sleeper trains.Transport Scotland declined to comment on who had won it but said it would make an announcement later on Wednesday.Reports said that the UK arm of Dutch state railway Nederlandse Spoorwegen, Abellio - which already runs the Greater Anglia franchise - had won the new Scotrail deal.FirstGroup said the failure of its bid did not alter its stated medium term targets."As one of the most experienced rail operators, we are actively participating in a range of rail franchise competitions with the objective of achieving earnings on a par with the last round of franchising, at an acceptable level of risk," it said in a trading update.FirstGroup said its US student bus business had had encouraging results from its contract portfolio pricing strategy during the 2014/15 bid season. Its US commuter transport business First Transit:had a good financial performance with modest capital requirements while revenue growth in its Greyhound US long-haul coach operation continued despite ongoing economic woe facing passengers. Its UK bus business increased revenue and margins in line with hopes, underpinned by measures to increase passenger volumes, such as focusing on more profitable routes and cutting ticket prices. UK Rail had robust passenger revenue growth and strong operating performance. Chief executive Tim O'Toole said: "Trading during the first half has been in line with our expectations for the group and we continue to make progress with our transformation plans."As usual, the second half of our financial year will make a larger contribution to full year profits than the first half, principally due to the seasonal nature of First Student's business. Despite the variable trading conditions across our markets, we're confident our financial performance will continue to improve during the second half and for the full year."