FirstGroup trading in line with expectations

Transport group FirstGroup said it was trading in line with management's expectations following a number of contract wins.

Transport group FirstGroup said it was trading in line with management's expectations following a number of contract wins.

In a trading statement ahead of its results for the year to March 31st 2013, the company reported a strong performance across its bus and rail divisions in the UK, US and North America.

Its public transport unit First Transit scored contracts, including a $48m fixed deal in Phoenix, Arizona, a $22m paratransit contract in Washington DC and a $22m paratransit agreement in Maryland.

The First Student arm, which runs school bus routes, was hit by the effect of Hurricane Sandy in the US. Revenues are expected to be reduced by 2.9% on a like-for-like basis and underlying margin performance to remain unchanged.

The firm's Greyhound buses,on the other hand, is estimated report a 1.1% increase in like-for-like revenue during the period. Greyhound Express was expanded to new markets in British Columbia, Florida, Illinois, Kentucky and Tennessee.

The UK Bus business achieved steady growth with like-for-like passenger revenue expected to increase by 2.4% and operating margin to be 8.0%.

During the period, the group sold eight UK bus depots in London for £80m.

FirstGroup's UK Rail unit continued to benefit from strong passenger growth across all franchises with like-for-like revenue expected to increase by

7.4%.

In January the Department for Transport (DfT) announced its intention to extend its contract with First Capital Connect and First Great Western franchises.

Chief Executive, Tim O'Toole, said: "Trading during the period is in line with our expectations. Although there remains significant work still to be done, we are satisfied with the progress made so far.

"While remaining cautious in respect of continued challenging economic conditions, we are confident the actions we are taking will position the business to generate sustainable growth and improved returns."

RD

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