Transport firm FirstGroup have confirmed that a boost from the Brexit-induced weak pound has helped revenues boost in the final quarter of 2016.
The company runs buses throughout the UK, Ireland, Canada and the US, as well as rail operations across England, Scotland, and the US. The pound’s slump against the US dollar meant that there was a 12.8% increase in revenues for October, November and December. If the currency changes were not taken into account, the revenues would remain flat.
First have, however, warned of challenging conditions for transport providers, and admitting that they had “mixed trading” across the festive period and continue to be frustrated by congestion in some areas. Like-for-like bus passenger revenues fell by 0.6%, but this is a slower decline than the company had seen earlier on in the year. Rail passenger revenues rose by 1.1%.
Chief Executive Tim O’Toole said “Our substantial North American operations are delivering encouraging performances and are benefiting from currency tailwinds, but we continue to experience tough trading conditions for our First Bus and First Rail operations in what remains an uncertain UK macroeconomic environment”. This statement saw the company’s shares rise my 4%.
Analysts at Shore Capital said FirstGroup had delivered a “strong” trading statement and praised the performance of the North American arm, which accounts for around 80 per cent of operating profit.
This is an interesting development post-Brexit, when many international companies remain unsure of how their trading position will stand in the future. Will you be taking to the buses or trains; or will you be trying Liftshare instead?
Author Lex Barber