News Column

FirstGroup Posts Full-Year Pretax Profit; Will Not Reintroduce Dividend

May 21, 2014

Alice Attwood

LONDON (Alliance News) - FirstGroup PLC said Wednesday that trading during its full-year was in line with expectations and recorded an improved statutory pretax profit, despite poor weather conditions hitting profits in its First Student and Greyhound businesses in its final quarter.

In its preliminary results for the year to March 31, 2014, FirstGroup said its statutory pretax profit for the year was GBP58.5 million, up from a GBP28.9 million loss the previous year. On an adjusted basis, before amortisation and exceptional charges, pretax profit rose 23.1% to GBP111.9 million from GBP90.9 million last year.

Revenue came in at GBP6.7 billion, down 2.7% from the GBP6.9 billion recorded for 2013.

The bus and rail company said that overall trading for the year was in line with expectations with a 5.5% rise in adjusted operating profit to GBP268 million from GBP254.1 million, attributed to improved underlying operating performances in four of its divisions, although this was partially offset it said, noting a GBP14 million impact on its operating profit due to unprecedented weather conditions and slower progress in its First Student and Greyhound divisions in the fourth quarter.

FirstGroup refrained from reintroducing a dividend payment for the full-year, due to its current stage in its turnaround programme and its commitment to its capital programme, said the firm.

On a divisional basis, the company said First Transit maintained its record of good growth and margin performance, the UK Bus step-by-step transformation plan is progressing and is delivering sustainable improvements in key metrics, and the UK Rail division is delivering solid revenue growth underpinned by continued passenger volume increases and operational delivery. The improvement in demand trends and the profitable expansion of Greyhound Express was partially offset by weather disruption to the network in FirstGroup's Greyhound business.

"We have made satisfactory progress on our key priorities in the year, delivering earnings growth despite the historically severe weather in North America. We saw good performances in four of our divisions partially offset by slower progress in First Student, where driving forward our detailed recovery plan is a key priority. Although part way through the current bid season, our programme to address contract portfolio pricing has made encouraging progress, though we recognise that we still have some way to go," said FirstGroup's Chief Executive, Tim O'Toole.

Looking ahead, O'Toole said the group is broadly on track to achieve its medium-term targets, though stated that "while we are encouraged by progress so far, there remains a significant amount of work ahead. We are confident that we have the right plans underway to build on our market leading positions, strengthen the resilience of the Group, and return to a profile of sustainable cash generation and value creation for the long term."

FirstGroup shares were trading 2.12% lower at 129.4 pence per share Wednesday morning, one opf the biggest fallers on the FTSE 250.

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Source: Alliance News

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