Firstgroup's headline figures were impacted by a raft of exceptional costs mainly relating to the restructuring of its North American businesses. On an underlying basis, operating profits still fell 9 per cent and, with the outlook for public spending tough in the UK and US, the focus has sensibly been on paying down a hefty debt pile.
In North America, the group's contract businesses - comprising Yellow School Buses (First Student) and a private and public sector transport operator, First Transit - was hit by budgetary pressures, higher fuel hedging costs and an unusually harsh winter. Revenues dipped to $3.7bn (£2.3bn) while operating profits fell 7 per cent to $365m. And Firstgroup's iconic Greyhound division has been badly hit by the recession, with underlying revenues down almost 14 per cent and profits plunging 57 per cent to $39.6m. A pick-up in fourth-quarter like-for-like passenger sales may point to improvement, though.
Profits also came under pressure in the UK despite the bus operation reporting like-for-like passenger sales growth of 1.9 per cent. Operating profits fell 7 per cent to £125m, reflecting depressed economic activity in key towns and increased fuel hedge costs.
KBC Peel Hunt forecasts adjusted 2011 pre-tax profits of £288m and EPS of 41.9p (£264m and 39.3p for 2010).
FIRSTGROUP (FGP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 384p | MARKET VALUE: | £1.85bn | |
| TOUCH: | 383-384p | 12-MONTH HIGH: | 449p | LOW: 323p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 186p* | NET DEBT: | 250% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 3.03 | 157 | 27.4 | 14.10 |
| 2007 | 3.71 | 140 | 23.1 | 15.50 |
| 2008 | 4.71 | 152 | 27.7 | 17.05 |
| 2009 | 6.19 | 200 | 30.2 | 18.75 |
| 2010 | 6.32 | 179 | 27.5 | 20.65 |
| % change | +2 | -11 | -9 | +10 |
Ex-div:14 Jul Payment:20 Aug *Includes intangible assets of £2.17bn or 451p a share | ||||
