FirstGroup said a turnaround in the fortunes of its bus business is on its way in the first trading update of the financial year.
Like-for-like commercial revenue is continuing to grow at more than two per cent, but with a decrease in concessionary revenue total revenue is up 1.4% year-on-year. First said changes to local services would stimulate growth, with a re-branded, more frequent service in Leeds launched in the quarter, new smart ticketing in Leicester and Bristol, and 385 low carbon buses on order for delivery in the current year.
The operator told shareholders it was also continuing "to build strong relationships with local authorities in its markets, some of whom may have further powers over transport devolved to them, as highlighted in the Budget".
The contribution to earnings from the group's rail division, with the end of the First Capital Connect and First ScotRail franchises, will be substantially lower in the year, despite like-for-like revenue growth of 6.3%. Chief executive Tim O'Toole said the group remains focused on delivering further progress from its transformation plans.
Shareholders reacted coolly to the statement, with the share price slightly down yesterday, to 118.5p, but higher than the low for the last month of 115.7p.
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