FirstGroup reports in-line trading as transformation progresses

10th Jul 2014 08:09

Trading since the start of April has been "in line" with its expectations, was the message from transport company FirstGroup on Thursday, which said it had continued to transform the business and was encouraged by its progress so far. The First Transit business delivered a "solid" performance in the financial year-to-date, helped by new business wins. The company anticipates it will deliver good margins for the year as a whole. Greyhound, which is targeting a medium term goal of a 12% margin, saw first-quarter like-for-like (LFL) revenue rise 3.4% against the previous year, lifted by strong demand for its long distance services and Greyhound Express. The group said it expected to see a continued improved performance through the year. UK Bus delivered a 2.7% rise in LFL revenue as it benefitted from its transformation programme, which has progressed well. Admitting there was still "some way to go", the group said it was on track to restore double digit margins to the division by 2017. UK Rail reported a "robust" performance, with LFL revenue rising 6.6%, and said that despite not securing one of the first three franchise competitions that came to market it was confident of delivering on its medium-term targets. FirstGroup is shortlisted for two further competitions during 2014/15 as part of the pipeline of 14 major UK rail franchise opportunities and is also progressing negotiations with the Department for Transport to operate its First TransPennine Express franchise until February 2016. Tim O'Toole, Chief Executive, said: "Trading during the first quarter was in line with our expectations and our transformation programmes are on track. In First Student we are encouraged by the progress we have made to address pricing in our contract portfolio and by our overall retention rate which, to date, is at the upper end of our planning assumptions. "[...] Across the group we are confident that we have the right programmes underway to build on our market-leading positions and improve performance to create sustainable value over the medium-term and beyond."Shares motored 0.48% higher to 126.30p by 08:05.NR