FirstGroup plummets as UK Bus flounders in the north

29th Mar 2012 07:40

Transport firm FirstGroup says lower economic activity in the north of England is putting pressure on its UK Bus business but North American operations are progressing.The group says like-for-like revenues in UK Bus, in the 12 months to the end of March, will be 1.5% ahead of 2010-2011. The North of England and Scotland however are seeing "considerably lower" growth rates and that's where 60% of revenues are generated. This is clearly a concern for the firm, which says it will also be hit by reduced government subsidies and increased fuel costs. Margins are predicted to fall to 8% in 2012-2013.The US school bus service, which had been struggling, is now described as "on the path to recovery" although revenues will fall 1.4% compared with the prior year.The transit division will see revenues grow 1.5%, while Greyhound, the famous coach service, is performing "well" with revenues growing 4.2%.UK Rail is also delivering: like-for-like revenues will rise 8.3% by the year's end says FirstGroup. It has also qualified to bid for three new rail franchises: Great Western; Thameslink; and Essex Thameside.The warning on UK Bus, however, has really dented the stock in early trading, at 08:11 FirstGroup shares had fallen 15.7%.BS