FIRSTGROUP’S sale of its US Greyhound buses arm is gathering pace but the process has led to the reporting of a six-month loss of £187 million against a £46m profit for the same period last year.

Shares were down as much as 20 per cent following the news of the Aberdeen-based firm’s pre-tax loss in the six months to September 30 after the write-down in the US Greyhound coach business.

On the company’s preferred underlying basis, which excludes one-off costs, it recorded a pre-tax profit of £28.7m.

The company is in the process of selling the Greyhound division and chief executive Matthew Gregory said several interested parties have come forward, with management talking in detail with a handful of suitors.

He said: “We’ve had huge amounts of interest in the process. Everyone knows the business very well, so this is not an unknown technology or small technology that people understand.

“We expected a lot of people to have a look at it and the best people get to the front. As always, these things are never done until they’re done.”

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Before moving to sell the business, FirstGroup wrote down £124.4m from the value of Greyhound, and separately booked a £59.3m charge due to the “continued change in claims environment”.

A spokesman said the Greyhound cost is a “non-cash accounting charge based on current view of profitability” and that Greyhound generates cash and made an adjusted operating profit in the half-year.

In the second quarter, immigration-related demand in the southern US border states slowed to a five-year low.

The spokesman said: “Greyhound saw a good first quarter of the year, but a poor second quarter in part due to slower passenger flows in the southern US.

“Although we have taken a number of steps in recent years including the implementation of airline-style yield management and real-time pricing, up-to-date booking and ticketing options and improved customer communications channels, it’s a challenging market with increased competition particularly against ultra-low cost airlines.”

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FirstGroup said its UK bus and rail divisions are performing well, with executives gearing up for taking over the West Coast Main Line from Virgin Trains next month.

Overall, the rail businesses saw revenues increase 8.1% to £1.32 billion for the six months, with like-for-like growth of 4.9%.

Profit margins also increased from 2.4% to 3.7%.

This was primarily driven by its Great Western Railway franchise, with strikes hitting its South Western Railway division, and ongoing timetable issues for TransPennine Express.

Despite the issues, FirstGroup has been successful in winning franchises as rivals have been blocked from bidding due to large pension deficits.

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From December it will run the West Coast Main Line as part of a joint venture with Italian-owned Trenitalia, although the deal is subject to a competition investigation, with 17 routes identified as being only operated by First Trenitalia and TransPennine Express.

In North America, First Student is the largest provider of home-to-school student transportation with a fleet of 43,000 yellow school buses, First Transit is one of the largest providers of outsourced transit management and contracting services, and Greyhound is the only nationwide operator of scheduled intercity coaches. In the UK, First Bus carries 1.6 million passengers a day, and First Rail carried 345 million passengers last year.

The firm said more of its bus passengers paid with contactless and mobile apps rather than cash on FirstGroup’s local bus routes for the first time in its history.

It said 43% of payments were made by cash, with 45% made through non-cash methods. The remainder came from ticket sales via third parties.

Mr Gregory said: “In particular, we were pleased to have delivered another strong bid season and two complementary acquisitions in our largest business First Student, as well as the award of the West Coast Partnership to our rail venture with Trenitalia. “

Asked whether he has any concerns that the Labour Party has said it plans to nationalise the railways if it wins the upcoming General Election, Mr Gregory said: “We’ve worked with many governments both nationally and locally for many years and had successful relationships with all of them.”