Aberdeen-based transport company FirstGroup appears to have turned the corner after announcing that it expected full-year growth across all UK activities.
The transport giant that grew out of the Granite City’s bus service failed to win a number of important contracts during a difficult few years.
These included the loss of the ScotRail contract to Dutch operator Abellio, who began services on the Scottish rail network on Wednesday, and its failure to win the new East Coast franchise.
The company’s refocus on UK bus and rail operations is improving its trading performance, however.
Recent successes came with the First TransPennine Express franchise for another year and the First Great Western rail franchise to 2019.
The train and bus operator said it expects full-year growth across all its UK offerings, in line with expectations.
The UK Bus transformation programme is delivering like-for-like passenger volume growth which is expected to increase by 1.1% for the year, despite the mixed economic conditions.
Plans are focused on driving commercial passenger volume expected to grow by 2.6% within the context of expected overall like-for-like revenue growth of 2.3%.
Strong demand continues to drive passenger volume and revenue growth for UK Rail, the company continued, with rail revenue expected to increase by 6.6% and at the highest end of the company’s predicted range.
In the other divisions, US dollar revenue in First Student is expected to be 1.3% higher for the year and First Transit achieved organic growth on existing contracts in the second half towards the top half of the planning range.
Greyhound’s like-for-like US dollar revenues are expected to decrease by 5.5% due in part to lower fuel prices improving the affordability of other forms of transport.
FirstGroup expects a total cash outflow for the current year of up to £100 million, and a net cashflow for the next financial year to be broadly flat excluding an outflow of approximately £60m for the end of the ScotRail franchise.
Chief executive Tim O’Toole said: “Overall trading for the year is in line with our expectations and we continue to make progress with our multi-year transformation plans, which will improve the group’s financial performance and ensure we deliver sustainable value creation in the medium term.”
Wolfhart Hauser will join the board in May and will become chairman following the annual general meeting in July.
Presently head of product testing giant Intertek, he will take over the role from John McFarlane in July. Full-year results are due on June 10.