Firstgroup's Greyhound revenue falls amid low-cost airline competition

The company said all three of its North American divisions encountered extremely challenging weather conditions in January, and added that its outlook for adjusted EPS fell.

The company also said that its bond refinancing was underway with $275m raised in US private placement market, and added that it expects its September 2018 bond to be redeemed before financial year end which could bring approximately £14m in interest savings from next year.

The company reported revenue growth in its First Student division while Greyhound and First Transit came under pressure during the period.

First Student's revenue rise 0.3% in the period amid price increases introduced during last summer' bid season, but this was partially offset by the school days cancelled due to the severe snowstorms in early January.

First Transit's revenue fell 0.1% in the period following further reductions in service volumes in the Canadian oil sands region.

Greyhound's like-for-like revenue declined by 2.8% in the period, as strong growth in the shorter point-to-point markets was more than offset by intensifying challenges in the larger long-haul segment amid low-cost airline competition

First Bus delivered like-for-like passenger revenue growth of 1.4% with like-for-like passenger volumes rising 0.1% in the period.

First Rail's like-for-like passenger revenue growth was 3.2% in the period.

The group said it expects US tax changes to reduce its effective tax rate to mid-20's percentage.

FirstGroup Chief Executive Tim O'Toole said: 'We reached an important milestone in the period with our long-dated bond portfolio beginning to mature, allowing us to significantly reduce our interest burden by starting to refinance and rebalance the Group's debt.'

'We are pleased by the support shown in the credit market for our improved financial profile and disciplined strategy.'

'In the period First Bus has made encouraging margin progress as we benefit from our cost efficiency actions and revenue growth, while our First Rail franchise portfolio continues to generate value for the group despite infrastructure challenges'

'First Student's momentum continues to be tempered by the strength of the US employment market, with no easing of the driver shortages experienced in recent years, while First Transit has taken a number of actions to help restore margins in the second half as planned. Although Greyhound's point-to-point business continues to grow, this was more than offset by significant reductions in long-haul volumes in the period.'