FirstGroup Preparing to Bid on West Coast Rail Franchise

The Press and Journal reports that FirstGroup is readying itself for another battle over west coast intercity trains from Scotland to London. The Aberdeen bus and rail company confirmed yesterday it was preparing a bid to operate the services from April 2018.

It is nearly four years since FirstGroup, which runs trains in the UK and buses on both sides of the Atlantic, was stripped of the right to operate services from Glasgow to London following a legal challenge by Sir Richard Branson’s Virgin Rail Group (VRG). FirstGroup had been chosen to run the trains for at least 13 years and four months, but the UK Government scrapped that arrangement after flaws were found in the bid evaluation process.

Confirmation of FirstGroup’s intention to bid came yesterday, just after the company cheered investors with results showing a 7.3% rise in statutory annual profits – boosting prospects of a restored dividend.

Pre-tax profits for the year to March 31 came in at £113.5million, up from £105.8million previously. Group revenue slumped by nearly 14% to about £5.2billion in the wake of FirstGroup losing some key rail franchises, but the underlying performance was “broadly flat”. Chief Executive Tim O’Toole said a turnaround plan launched three years ago, when the company scrapped dividends following losses, was bearing fruit.

FirstGroup expects “significantly increased” cash generation in 2016/17.