StockMarketWire.com
FirstGroup said Thursday that CEO Tim O'Toole resigned from his position as CEO as the company revealed its annual results showing adjusted profit before tax fell 4.8% to £197m for the year to the end of March despite a 13.2% jump in revenue.

Adjusted operating profit fell 10.4% excluding SWR and 53rd week.

The firm blamed the poor performance on Greyhound long haul challenges, severe weather effects on both sides of the Atlantic in the final quarter and ongoing US driver shortages. This was partially offset by good performances in UK divisions, the company said.

Greyhound like-for-like revenue fell 0.7%, as 7.7% growth in express (short haul) growth was insufficient to offset long haul demand challenges from intensifying airline competition, which saw the adjusted margin fall to 3.6%

'In the year, our largest division First Student was broadly stable and First Bus took an encouraging step forward in its margin improvement plans,' the company said.

'This was offset by the cost challenges experienced by First Transit in the first half and by Greyhounds inability to overcome the structural shift taking place in its long haul markets, as ultra low cost airlines significantly increase capacity and extend into new markets.'

The company reported a statutory loss before tax of £326.9m for the year compared with a profit of £152.6m last year, reflecting £277.3m Greyhound goodwill and other asset impairments, £106.3m TPE onerous contract provision and other adjusting items.

The company also said it expected an overall improvement in road margins and returns, would be offset by a smaller contribution from the First Rail portfolio, resulting in broadly stable group earnings in constant currency.

Deutsche Bank today reaffirms its hold investment rating on FirstGroup PLC (LON:FGP) and cut its price target to 83p (from 90p).

Liberum Capital today reaffirms its buy investment rating on FirstGroup PLC (LON:FGP) and cut its price target to 110p (from 125p).

Possible interest of FGP being aquired:
https://www.bloomberg.com/news/articles/2018-09-06/firstgroup-is-said-to-draw-private-equity-interest-including-cvc

StockMarketWire.com
Transport services company FirstGroup said Tuesday it had appointed Matthew Gregory as Chief Executive after but warned that rail profits would moderate.

The company maintained its full year outlook, and continued to expect broadly stable group operating earnings in constant currency for the full year, with improvement in the road divisions and a smaller rail contribution.

For the six months to 30 September, adjusted profit before tax rose 37.7% to £42m and revenues rose 19.2% to 3.30bn.

The uptick in revenue was supported by strong performance in First Rail, which saw like-for-like passenger revenue 5.5%, with solid financial contribution driven by First Greater Western (GWR) despite ongoing infrastructure issues.

First rail revenues grew 80.7% to £1.22bn during the first half of the year.

The statutory loss before tax widened to £4.6m from £1.9m a year earlier, reflecting restructuring and reorganisation costs from withdrawal of Greyhound services in Western Canada, the company said.

Challenges in Greyhound's long haul journeys continued, though the company stressed its commitment to turning around Greyhound's financial performance, targeting at least mid-single digit margins for the division in the medium term.

'We have made good progress in the first half delivering on our plans to strengthen the Group, generating sustained cash flow to further reduce leverage and deploy to targeted growth. First Student's bid season success will see our largest business return to growth as planned, while maintaining our disciplined approach to pricing, said Chief Executive Matthew Gregory.

'In September, First Bus completed the rollout of contactless payment across the UK on schedule, becoming the first of the UK's principal bus operators to do so. Together with other revenue and cost actions this helped First Bus to achieve strong margin improvement in the period.'

'Meanwhile our First Rail operations continued to focus on improving services for our passengers while maintaining overall profitability in a more challenging industry environment during the period.'