Latest Rail News

14.06.16

First Group revenue remains stable despite rail franchise losses

First Group’s overall revenue for March 2015-16 remained stable but suffered losses because of the end of the First Capital Connect and First ScotRail franchises.

The company’s preliminary results from the previous financial year show that its overall revenue was £5.22bn, compared to £5.23bn the year before. However, its report revenue decreased by 13.8%, which the company attributed largely to changes in its rail portfolio.

First Rail group’s revenue decreased from £2.2bn to £1.3bn. In the past year, it has ended its First Capital Connect and First ScotRail franchises, but has begun operating Great Western Railway and was awarded the complete contract for First TransPennine Express.

Tim O’Toole, chief executive of First Group, said: “Overall we have made encouraging progress this year toward a profile of more consistent financial returns for the Group. As we indicated at the start of the year, a smaller rail franchise portfolio and fewer operating days in our school bus business were factors that would make delivering headline growth this year challenging.

“However, by being flexible with our plans we have delivered a comparable adjusted operating profit to last year and a net cash inflow ahead of our expectations.”

He added that despite current financial challenges in its markets, First Group expected to make “strong progress” through “disciplined contract bidding and rigorous cost efficiency programmes”.

First Rail has also been approved to run open access services between London, north east England and Edinburgh and for 10 years further track access for First Hull Trains.

The report said that it had benefited from the record high in passenger numbers, with a 2.9% increase on its services in the past year.

However, it said that it experienced a slowing in passenger demand following the terrorist attacks in Paris and Brussels and the flooding over the winter.

Great Western experienced a small PPM increase in the past year, but First Hull and TransPennine’s PPM declined.

The company’s plans for the future now include £500m investment in improving the First TransPennine Express franchise and alliances with Great Western Railway, Northern and Network Rail to work together on minimising the impact of major impacts.

The report said: “We have secured a longer future for all three of our rail operating companies as well as a new open access opportunity, and this gives us a strong position in First Rail to build on over the medium term.”

 (Image c. Michael Fox)

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