First Group reports half-year loss as travel restrictions continue
Bus operator First Group has reported a half-year loss after lockdown restrictions placed pressure on its rail and bus divisions.
First Group said adjusted pretax loss was £73.3m for the six months ending 30 Deptember, down from a profit of £19.9m a year ago.
Revenue fell 23.8 per cnet to £3.1bn in the period after reduced passenger activity, although this was somewhat offset by government procurement of services to help with socially distanced travel.
The company reported that its First Student service had 59 per cnet of busses operating after a recent surge in coronavirus cases, while its transit division was delivering 86 per cent of expected revenue pre-pandemic.
“Whilst the outlook remains uncertain due to the pandemic, we performed ahead of our expectations in the first half, have taken prudent action to reinforce the balance sheet and are confident in the resilience of the Group,” said chief executive Matthew Gregory.
“Looking ahead, we will continue to work with our customers and communities to deliver safe, reliable and increasingly sustainable transportation as societies begin to look beyond the crisis and passengers return,” he added.
The firm said it would become a “more focused UK-based transportation provider with substantial regional bus operations” following its North American divestments.
“First Group’s UK bus business, unlike its US student transport division, bears a revenue risk,” said Jack Winchester, analyst at Third Bridge. “This is because First Group is compensated by ticket revenues rather than routes.”
“During the pandemic, First Group’s UK bus business, like its peers, has been propped up by government support. Two rounds of bailout funding were given, one in March and the other in August. If tiered lockdown restrictions persist, there will surely be pressure from operators asking for the current support arrangements to continue.”
Shares climbed 2.54 per cent in early trading.