Trouble at FirstGroup's bus division has hogged the headlines, so it's a relief to hear that the transport group is doing better elsewhere. Both its rail operations and American coach service Greyhound beat expectations and management remain committed to dividend growth of 7 per cent. Still, plenty of banana skins litter both tarmac and track.
Falling profits at First Student and UK Bus, and an extra £32m for fuel, cut adjusted operating profit by six per cent to £428m. Higher bus fares failed to offset rising fuel costs, weakness in its northern heartland and lower government subsidies. FirstGroup must sell assets here, and, to be fair, it's had some success.
It's not easy making money from US school buses either, yet margins appear to have stabilised and annual costs savings should now be $100m (£64m) rather than $65m. US shuttle service Transit met forecasts, but Greyhound stole the show; its Express routes driving dollar profit up 30 per cent on like for like revenue up 4.1 per cent.
Making the shortlist for four rail franchises, meanwhile, underpinned optimism in UK Rail where revenue rose 10 per cent to £2.5bn and profits edged up 2 per cent to £110m. Still, investors should brace themselves for another year of sliding underlying profits with broker Investec expecting current year adjusted pre-tax profit of £203m and EPS of 29.2p (2012: £271m and 40p).
FIRSTGROUP (FGP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 214p | MARKET VALUE: | £ 1.03bn | |
| TOUCH: | 214-214.2p | 12-MONTH HIGH: | 375p | LOW: 189p |
| DIVIDEND YIELD: | 11.1% | PE RATIO: | 5 | |
| NET ASSET VALUE | 178p* | NET DEBT: | 209% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 4.71 | 152 | 27.7 | 17.05 |
| 2009 | 6.19 | 200 | 30.2 | 18.75 |
| 2010 | 6.26 | 175 | 26.9 | 20.65 |
| 2011 | 6.42 | 127 | 20.0 | 22.12 |
| 2012 | 6.68 | 280 | 42.7 | 23.67 |
| % change | +4 | +121 | +114 | +7 |
Ex-div: 11 Jul Payment: 17 Aug *Includes intangible assets of £1.9bn, or 398p per share | ||||
