Rail revenues on right track

Oct 2 2007 by Iain Laing, The Journal

BUS and trains operator FirstGroup has said strong rail revenues had helped the firm make a “good start” to its financial year.

The Aberdeen-based group, which holds the First Great Western, First ScotRail, First Capital Connect, First TransPennine Express and Hull Trains franchises, said like-for-like passenger revenues had grown 9% in the six months to September 30.

First, which carries nearly 260 million rail passengers a year, added that it was confident of further growth in the business after completing the refurbishment of its high-speed train fleet early next year.

The company said: “The group has made a good start in the first half of the year, in line with management expectations.”

FirstGroup will also close its deal to buy US group Laidlaw – the yellow school bus giant and owner of trans American bus company Greyhound – for around £1.66bn after reaching agreement with US anti-trust authorities.

Following the US review of the Laidlaw deal, First has agreed to a package of measures including the sale of around 800 of the company’s 62,000-strong fleet of yellow buses, although the outcome was “significantly less onerous” than expected by FirstGroup when the move was unveiled in February.

The group said the acquisition had been cheaper than expected due to strong cashflows within Laidlaw and FirstGroup, lowering the levels of debt needed to fund the deal.

FirstGroup also boasted a strong performance from its bus business, which is the UK’s largest operator. The division operates more than one in five of all local buses, carrying nearly three million passengers a day in more than 40 major towns and cities.