Public transport provider FirstGroup has warned that full-year earnings would be “suppressed” after taking a £14 million hit from severe weather on the other side of the Atlantic.
The Aberdeen-based group said its First Student and Greyhound operations in the US had both been impacted by the “abnormal” winter conditions which left huge swathes of the country snowbound.
Its US-based operations had been dealt a £14m blow in the fourth quarter of the year to March 31 as a result of the poor weather.
Chief executive Tim O’Toole said the firm had made satisfactory progress on its key priorities during the year, but the “good performance” of four of its five divisions had been partially offset by the difficulties faced by First Student.
Operating margins in the division were expected to come in 1% lower than previously indicated as revenues fell 1.8% following a period in which its student bus services were severely hit by 4,000 weather-related lost school days.
“We will deliver earnings growth this year, albeit suppressed by the historically severe weather, particularly in North America,” Mr O’Toole said.
“We are broadly on track to achieve our medium-term targets and, while we are encouraged by the progress made so far, there remains a significant amount of work ahead.”
First said its core UK bus arm was expected to deliver like-for-like passenger revenue growth of 1.8% for the year despite “continued challenges posed by economic conditions in some of our local markets”.
The company said it is making progress with its restructuring of the division a plan that involves changes to network and fare structures, cost efficiencies and new investment to modernise the fleet and margins are expected to increase into the double-digit range in the medium term.
The firm’s UK Rail operation which includes the ScotRail franchise north of the border performed well, with like-for-like passenger revenue on track for a 5.9% rise, underpinned by strong demand for train travel across its operating companies.
First confirmed it is in discussions with the Department for Transport over a longer direct award for the First Great Western franchise which it operates.
Shares in the company closed the day down 1.70p at 137.30p.
The firm will report its interim results on May 21.