Wednesday 25 July 2012
FIRSTGROUP PLC
AGM STATEMENT AND INTERIM MANAGEMENT STATEMENT
FirstGroup ("the Group") will provide the following update on trading during
the first quarter period ("the period" or "Q1") from 1 April to 30 June 2012 at
the Group's Annual General Meeting in Aberdeen today.
Commenting, Tim O'Toole, Chief Executive, said:
"I am pleased to report that trading during the first quarter of the new
financial year is in line with our expectations. As previously stated, 2012/13
is a year of transition for the Group. We remain encouraged by the progress in
our North American operations. In UK Rail we continue to see strong passenger
and revenue growth and are focusing on service quality and delivery, whilst
developing future opportunities. In UK Bus we are executing our plan to reform
the operating model and achieve sustainable growth. Notwithstanding the steady
performance during the period we have accelerated our programme to reposition
the portfolio and place the business on a firm footing to achieve sustainable
growth in patronage and revenue. We are looking forward to the London 2012
Games where we are proud that our UK Bus division will be a major provider of
spectator transport.
"The combined effect of the outlook for trading together with the actions to
reposition the UK Bus portfolio is expected to result in the Group's net cash
flow being broadly neutral in 2012/13. We have leading positions in a sector
that is a key enabler of economic growth and we are confident that the actions
we are taking will strengthen the business for the future. Therefore,
reflecting its longer term view, the Board remains committed to its current
policy of dividend growth of 7.0% through to the end of the financial year 2012
/13."
First Student
In First Student, which has faced substantial pressure on its operating margin
driven by constraints on school board budgets, good progress has been made in
addressing performance and strengthening the operating model. The business is
now set on the path to recovery and, although there remains work to be done, we
are pleased that performance is in line with our expectations. During the
current bid season we have focused on retention and reducing contract churn
within our portfolio and we are on track to achieve our target retention rate
of around 90%. We are also pleased to have secured new contracts to operate
over 800 buses, including eight contracts converted from the public sector,
with a number of further bids still active.
First Transit
Our Transit division continues to perform well with trading in line with our
expectations. The business is generating good returns from a typically low
capital requirement as we continue developing opportunities and encourage the
conversion of further contracts to the outsourced market. During the period we
were pleased to commence operation of a new transit management contract in
Escambia, Florida.
Greyhound
We remain encouraged by Greyhound's performance with like-for-like revenue
increased by 2.8%, with the slight reduction in the growth rate from the
previous quarter reflecting lower fuel pump prices. Greyhound's US services
maintained a strong performance and in particular our successful Greyhound
Express product continues to achieve higher growth. We see significant
potential to continue to develop these non-stop, enhanced bus services. During
May we began operating Greyhound Express in California and also increased our
services in Texas bringing the offering to nearly 70 key markets across North
America.
UK Bus
Despite challenging economic conditions that continue to impact a number of our
urban operations, our UK Bus division delivered a steady performance in
like-for-like passenger revenue which increased by 2.2%. During the period we
saw an improvement in revenue trends from our Scotland and North of England
businesses, whereas in keeping with industry trends, our businesses in the
South have experienced a reduction in concessionary volumes.
We have a clear direction and are executing a detailed plan to recover
performance and equip the business to achieve increased revenue and patronage
growth and have seen some early positive signs in some of our markets. The
majority of our UK Bus operations generate good returns with opportunities to
improve further. However there is, as previously reported, scope to reposition
our portfolio through a programme of selected asset and business disposals, to
focus on those markets that offer the greatest potential for growth. Our
strategy remains to bring those businesses to the market in select tranches to
ensure stability for our employees and operations. We are confident of the
opportunities to progress our disposal programme with potential purchasers with
limited competitive overlaps.
UK Rail
Our UK Rail division saw another strong performance during the period with
like-for-like passenger revenue increased by 8.2%. As the UK's largest rail
operator with a diversified portfolio of long distance, regional and commuter
services, we are pleased to be shortlisted for all four franchises currently
out for tender. We remain focused on ensuring the quality of our existing
services while continuing to develop opportunities from the re-franchising
programme.
Contacts FirstGroup plc:
Nick Chevis, Acting Finance Director
Rachael Borthwick, Group Corporate Communications Director
Stuart Butchers, Group Corporate Communications Manager
Tel: +44 7771 945432/ + 44 20 7291 0512
Brunswick PR:
Michael Harrison/Andrew Porter
Tel: +44 20 7396 7406
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.