Transport group reports pre-tax profits doubled in 2011 to £279.9 million
Transport giant FirstGroup saw profits more than double last year.
The transport group has today reported a 121 per cent rise in pre-tax profits for the 2011 year to £279.9 million against £126.5 million a year ago.
However the bulk of the profit gains came as a result of a revision of a £147.8 million loss reported last year on “one-off items”, without which, pre-tax profits for the year rose by £5.7 million.
Group revenue for the year to March 31, 2012 rose 4.1 per cent for the year to March 31 2012 to £6.67 billion.
Aberdeen-based FirstGroup said its UK bus division will struggle to meet revenue and profit targets this year.
The group said four of its five core divisions were preforming in line with expectations though the cut in government subsidies linked to its UK bus division had been “more acute than expected”.
Operating profits from the UK bus division dropped 9.7 per cent last year to £134.4 million despite a 1.6 per cent rise in passenger revenue for the year.
First said its UK bus division had been “significantly affected by deteriorating economic conditions particularly in the North of England and Scotland”.
In April FirstGroup announced plans to cut around 200 Scottish jobs folling its decision to discontinue the bulk of its bus operation in East and Midlothian.
The cut in bus subsidies and the rise in fuel costs is expected to reflect further in profits from that division this year, though disposals of some UK bus businesses are expected to add to cashflow, but not enough to offset the subsidy reductions.
FirstGroup said in a market update today; “In response we are accelerating a comprehensive plan that will deliver sustainable growth in revenue and patronage and improved returns.
“This includes repositioning our UK Bus portfolio through a programme of business and asset disposals to focus on those areas where the greatest potential for growth exists”.
FirstGroup revenues from its UK bus division rose 1.7 per cent to £1.15 billion for the 2011 year while revenues from its UK rail division rose by 10 per cent to £2.5 billion.
Its rail division, which includes First Great Western and First Capital Connect, reported an 8.4 per cent rise in passenger growth year-on-year.
However First said UK rail was currently in a “period of transition” though is the only operator to date for the rail franchises InterCity West Coast, Great Western, Thameslink and Essex Thameside.
The US bus division, First Student saw revenues dip slightly to £1.56 billion, though revenues from its Greyhound bus division rose 3.5 per cent to £657.2 million.
First Transit, another division of FirstGroup America, which provides public bus transport and shuttle services in cities across North America, posted a one per cent rise in revenue to £778.6 million.
FirstGroup said the weak dollar compared to sterling had impacted on US revenues, though 2011 full year results had also benefited from an extra weeks trading compared with last year.