FirstGroup profit up as rail and bus growth continues

FirstGroup, whose rail business includes the Great Western franchise running into central London, today reported an adjusted pre tax profit of 77.7m on sales four per cent higher at 3.07bn in the six months to the end of September.

It raised the interim dividend by 7.1 per cent to 7.12 pence.

Chief executive Tim O'Toole said: "We are encouraged by improving trends in some of our markets."

"However, while the economic outlook remains uncertain, we continue to focus on opportunities to maximise growth and yield as well as delivering efficiencies."

FirstGroup said underlying ticket sales at its British rail business grew 4.4 per cent during the six month period, while British bus revenues rose 1.3 per cent and accelerated in the second quarter.

FirstGroup's American Greyhound bus network grew like-for-like sales by 1.9 per cent, shrugging off a tough US trading environment.

The company also increased its full year cash generation target to 180m from 150m and said it was confident of cutting its 2.19bn debt pile further.

Shares in FirstGroup, which have risen 10 per cent in the last three months, closed at 351.40 pence yesterday, valuing the company at around 2bn.