Strong US school bus performance boosts FirstGroup profits to £207m
Transport giant FirstGroup warned of ongoing economic uncertainty in the UK as it posted a jump in annual profits despite tough trading in its bus and rail businesses.
The firm saw underlying pre-tax profits rise 23% to £207 million thanks to a stronger performance in its First Student school bus operation in north America, which is now the group's largest division.
But the profits haul comes after a year marred by the tragic crash on its Croydon Tramlink line last November, which killed seven people and injured more than 50 others.
Chief executive Tim O'Toole said the group remains "focused on understanding the exact cause of this incident and will continue to provide our full support to the ongoing investigations".
He added that the results of investigations may still not be known "for many months".
FirstGroup saw a boost from the weak pound, which flattered sales in its American arm and helped increase revenues by 8.3% and operating profits by 12.7% over the year to March 31.
With the impact of the pound stripped out, revenues dipped 0.5% and operating profits rose by a more muted 2.3%.
But the pound's impact on fuel costs left it nursing a £19.8 million profits hit across its UK bus and rail arm, despite action to trim costs elsewhere.
Underlying operating profits in its bus arm fell 29% to £37 million, while rail earnings dropped 26% to £53.8 million.
The group also saw bus passenger revenues fall 0.6% on a like-for-like basis after being hit by falling numbers of shoppers on the high street and ongoing woes with traffic congestion in some areas.
It said like-for-like passenger revenues rose by 1.3% in its rail business, which includes the Great Western and TransPennine Express UK rail franchises and Hull Trains, but growth was held back by a slowdown across the industry.
Group-wide earnings were pulled up by a 52% surge in First Student underlying earnings to £171.1 million, with strong growth also in its Greyhound business and First Transit outsourced transit management operation in the US.
FirstGroup said trading conditions would continue to be uneven across the group.
"The group faces a mixed trading environment with opportunities for steady progress in the North American divisions but continued economic uncertainty in the UK," it said.