Thu, 24 May 2012 | DIVISION SALE
FirstGroup has decided to sell off another chunk of its underperforming UK bus operations due to the effects of public spending cuts and increasing fuel costs.
Business has been particularly slow in the North and Scotland, where two-thirds of its sales are generated, with a distinct lack of customers waiting at bus stops. The increase in costs, however, has been reflected in the rise in ticket prices, with customers in Bath and Weston-super-Mare, for example, suffering a 70 per cent increase in January.
Its US business Greyhound Express, which runs intercity coaches and a school bus service, has seen tremendous growth on the other hand.
Aberdeen-based FirstGroup runs about 8,000 buses in 40 towns and cities throughout the UK. The UK operations were the only part of the group not to have matched expectations. Operating profit fell by almost 10 per cent to £134.4 million.
Despite the disappointing financial results chief executive Tim O’Toole is confident that the sale will attract interest. He told the Guardian: “We were surprised in January by our very poor yield after higher fares. We’ll be selling certain operations – based on the depots we’ve sold this year we think there is an appetite for this.”
The firm has already sold off its business in North Devon and King’s Lynn and a large London depot in order to remain in profits.
Previous story - Stagecoach purchase of FirstGroup comes under spotlight
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