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.'