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FirstGroup sticks to guidance despite recent slowdown

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FirstGroup reported a slowdown in the recovery of its bus business from the depths of the Covid-19 pandemic in recent weeks, as fears of a new variant emerged.

Passenger numbers were 71% of 2019 levels on average on First Bus services in recent weeks, the business said.

The company said it “represents a slowdown in the rate of improvement, with pandemic-related restrictions varying by UK region”.

But the company held onto its financial guidance for the year, despite warning about the problems.

“While some uncertainty remains around pace of recovery in light of the evolving circumstances of the pandemic, there is no change to management’s expectations for the 2022 financial year: expect to build operational momentum in the current financial year, providing a solid foundation for delivering financial framework objectives – including commencing regular dividends within the next 12 months,” it said.

It comes as the business recently launched a new London to Newcastle and Edinburgh route called Lumo, which promises cheaper train tickets to its leisure travellers.

The new route, and another new FirstGroup venture, will cost around £20 million in losses this year, before contributing to profit from next year.

Lumo saw “strong passenger bookings”, the company said.

“With a well-capitalised balance sheet and an operating model that supports our intention to begin regular dividends to shareholders within the next 12 months, FirstGroup is now a more resilient and flexible business,” said executive chairman David Martin.

“I am confident that we are well-placed to create long-term, sustainable value from the opportunities ahead, underpinned by the UK policy backdrop which places public transport at the centre of the economic recovery, decarbonisation and levelling up agendas.”

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