UK Markets closed

Bus passengers turning to contactless in record numbers, says FirstGroup

By Simon Neville, PA City Editor

More bus passengers paid with contactless and mobile apps rather than cash on FirstGroup’s local bus routes for the first time in its history, the company has revealed.

According to bosses, 43% of payments were made by cash, with 45% made through non-cash methods, in the latest push towards a cashless society.

The remainder came from ticket sales via third parties.

The detail came as FirstGroup said it sank to a £187.1 million pretax loss in the six months to September 30 due to ongoing problems in its US Greyhound coach business.

On the company’s preferred underlying basis, which excludes one-off costs, it recorded a pretax profit of £28.7 million.

The company is in the process of selling the Greyhound division and chief executive Matthew Gregory said several interested parties have come forward, with management talking in detail with a handful of suitors.

He added: “We’ve had huge amounts of interest in the process. Everyone knows the business very well, so this is not an unknown technology or small technology that people understand.

“We expected a lot of people to have a look at it and the best people get to the front. As always, these things are never done until they’re done.”

But before selling the business, FirstGroup wrote down £124.4 million from the value of Greyhound, and booked a £59.3 million charge due to the “continued change in claims environment”.

Despite the issues in the US, FirstGroup said its UK bus and rail divisions are performing well, with bosses gearing up for taking over the West Coast Main Line from Virgin Trains next month.

Overall, the rail businesses saw revenues increase 8.1% to £1.32 billion for the six months to September 30, with like-for-like growth of 4.9%.

Profit margins also increased from 2.4% to 3.7%.

This was primarily driven by its Great Western Railway franchise, with strikes hitting its South Western Railway division, and ongoing timetable problems for TransPennine Express.

But despite the problems, FirstGroup has been successful in winning franchises as rivals have been blocked from bidding due to large pension deficits.

From December it will run the lucrative West Coast Main Line as part of a joint venture with Italian-owned Trenitalia – although the deal is subject to a competition investigation, with 17 routes identified as being only operated by First Trenitalia and TransPennine Express.

Asked whether he has any concerns that the Labour Party has said it plans to nationalise the railways if it wins the upcoming General Election, Mr Gregory said: “We’ve worked with many governments both nationally and locally for many years and had successful relationships with all of them.”