NEARLY £75 million has been added to the stock market worth of FirstGroup after the Scottish company revealed significant progress in improving the financial performance of its UK bus and North American school transport divisions.
FirstGroup also told the stock market yesterday that like-for-like growth in passenger revenues in its UK rail business in its financial year to March 31 had been at the top end of expectations, estimating this increase at 6.6 per cent.
The Aberdeen-based company has seen the ScotRail franchise pass from its control to that of Dutch-owned Abellio this week. However, it last week announced that it had won an extension to its Great Western franchise south of the Border until at least the spring of 2019.
FirstGroup recently secured a one-year extension to its TransPennine Express franchise, which includes services between Glasgow and Manchester Airport. It has also been shortlisted in the bidding for the next term of the TransPennine franchise, which is scheduled to start in April next year.
Shares in FirstGroup ended the day up 6.2p, or 6.8 per cent, at 97.15p increasing the company's stock market worth from about £1.09bn to around £1.165bn.
FirstGroup said that it expected to have achieved like-for-like passenger volume growth of 1.1 per cent in the year to March 31 in its UK bus business, which includes major operations in Glasgow, "despite the mixed economic conditions across the division".
It cited progress in building profit margins in the UK bus operation, and its expectations of further rises.
The company said that revenue in its North American First Student school bus business, in US dollar terms, was expected to have been up by 1.3 per cent during the year to March 31, "principally benefiting from our successful pricing strategy during the 2014 bid season and modest organic growth".
A company spokesman noted that FirstGroup dealt with school boards in North America in negotiating transport contracts.
FirstGroup said: "We continue to focus on only winning or retaining contracts at prices that deliver an appropriate return on capital employed, and are encouraged by the results we are achieving at this stage of the [2015] bid season."
FirstGroup chief executive Tim O'Toole said that overall trading for the year to March 31 had been in line with the company's expectations.
The City is forecasting that FirstGroup will have made underlying pre-tax profits of about £160m in the year to March 31. FirstGroup made underlying pre-tax profits of £111.9m in the prior 12 months.
About 4,500 FirstGroup employees, out of the company's global workforce of around 110,000, are based in Scotland.
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