FirstGroup on track as UK rail and bus margins improve

Tim O'Toole, chief executive of FirstGroup.

Tim O'Toole, chief executive of FirstGroup. - Credit: Archant

Bus and train operator FirstGroup today reported annual results in line with expectations as it hailed a successful year for its plans to improve margins.

First, which is a major operator of bus services in Essex, Suffolk and Norfolk and is one of three bidders in the running for the new regional rail franchise for East Anglia, said group-wide revenue for the year to March 31 rose 4.1% on an underlying basis.

The reported revenue figure was 9.9% lower at £6.05bn, largely reflecting the end of its ScotRail and Capital Connect rail franchises, but the rail division’s operating margin improved from 1.9% to 3.4% and that for its UK bus division from 4.8% to 5.8%.

In North America, the operating margin for its First Student school buses improved from 6.4% to 7.8%, although those for its smaller First Transit bus and Greyhound coach businesses fell from 7.4% to 7.1% and 7.4% to 6.8% respectively.

Group pre-tax profit jumped by 80.9% on a statutory basis to £105million, helped by reduced finance costs, and the adjusted pre-tax total was 46.5% higher at £163.9m.

Chief executive Tim O’Toole said: “Overall trading for the year is in line with our expectations and our transformation plan is beginning to deliver improving financial performance, though clearly much hard work remains ahead of us.”