First Group reduces cash generation targets

Shares in transport firm First Group fell on news the company now expects net cash generation to be in the range of £100m to £115m for 2011/12 due to fewer disposals as a result of the economic and regulatory climate.

The firm, which had been targeting an inflow of £150m for the period, said the economic problems had affected "the realisation of appropriate value and timing."

In the three months to December 31st, the group traded in line with management's expectations, and made good progress in its First Student business recovery plan.

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First Transit continued in line with expectations, while revenue growth at Greyhound accelerate, with like-for-like passenger revenue increasing by 5.9% during the period.

In the UK Bus business, like-for-like passenger revenue increased by 1.8% during the period, although the weak economic environment continued to present challenging trading conditions, particularly in Scotland and the North of England, where a significant portion of the group's urban operations are concentrated.

The firm is consequently achieving lower growth rates in these areas as it sees a widening north-south divide.

In UK Rail, the firm saw another strong performance with like-for-like passenger revenue increased by 8.0%.

The share price fell by 1.04% to 323.1p by 08:45.

NR