Transport operator First Group (LON:FGP) reported a mixed set of results on Tuesday, with a slowdown in its UK services being offset by a strong performance in the US.
Group revenue increased by 12.8 percent in the third quarter, largely down to favourable currency translation. First benefitted from a 4 per cent rise in revenues in the three quarters to December at its First Transit subsidiary, which runs bus services in America. First Student, which runs American school buses, also saw revenues edge up by 0.5 per cent. Greyhound revenue rose 2.5 percent in the year to date.
However with the UK figures added in, bus passenger revenue fell 1.1 percent in the year to date, partially offset by a 0.8 percent increase in rail passenger revenue increased by 0.8. In the UK, First Rail owns the Great Western Railway and TransPennine Express franchises. Without the sterling boost the group’s revenues were “flat”, it said.
FirstGroup Chief Executive Tim O’Toole said conditions continued to be “tough” in the UK, despite “substantial North American operations are delivering encouraging performances and are benefiting from currency tailwinds”.
“Industry-wide market conditions continue to be challenging for First Bus, with mixed Christmas trading for the UK high street and ongoing congestion issues in several local markets”, O’Toole added.
The company gave no real update on the tram crash in Croydon, in which seven people died. First Group, who operate the Tramlink system, are currently being sued by survivors of the accident.
The group said: “We continue to work closely with Transport for London and others to assist those affected by the tragic Tramlink incident which occurred in November 2016, and to support the ongoing investigations.”
Investors were impressed by the results, despite the mixed figures, sending shares up 4.44 percent to 108.62 (0935GMT).
“We remain focused on disciplined execution to deliver significantly increased cash generation for the full year,” O’Toole concluded.