Go-Ahead signals interest in FirstGroup UK bus division

The chief executive of Newcastle-based bus and rail giant Go-Ahead Group has signalled potential interest in Aberdeen-based FirstGroup’s under-review UK bus division.

Speaking to the Press Association, Go-Ahead chief executive David Brown said his firm looks “at all opportunities that come along” and is in the market for buying bus businesses that need turning around.

While FirstGroup has not decided if it will sell its UK bus business, it has confirmed aims to separate out the division and is reviewing options for “structural alternatives”, including a sale.

Asked if Go-Ahead would be interested in FirstGroup’s bus business, Brown told the Press Association: “We consider all opportunities.

“We are in the business of buying businesses on the bus side that we can turn around.”

The news came as FirstGroup revealed results for the year to June 29 showing revenue rose 10% to £3.8 billion but profit before tax fell 33% to £97 million.

On the results, CEO David Brown said: “I’m pleased to report full year results slightly ahead of our expectations in both bus and rail divisions.

“Strong performance in our London & International bus division more than offset a lower result in our regional bus business.

“Rail operating profit was slightly ahead of expectations, driven by strong performance at Southeastern, but was lower than the prior year which included a part year of operating the London Midland franchise.

“Our commitment to provide better services for our customers has delivered improvements in reliability and satisfaction in our bus and rail businesses, many of which reached record levels during the year.

“In rail, Southern’s customer satisfaction increased by 12 percentage points to 81 per cent while our regional bus business, once again, topped the league tables with an industry record of 92 per cent satisfaction.

“Also in regional bus, we were pleased to drive up our passenger journey growth of 3.3 per cent in a challenging UK market.

“Bus travel brings great benefits to the economy, society and the environment and we are calling for a national bus strategy to maximise these benefits.

“During the year, we began contracts in three new countries and won four more international contracts.

“Our continual focus on innovation resulted in the introduction of the UK’s first air-filtering bus and passenger benefits being developed through our Billion Journey Project incubator.

“Our balance sheet remains strong and we have maintained our dividend.

“We are disappointed that the DfT took the decision to terminate the new South Eastern franchise competition.

“We submitted a strong bid designed to provide value for passengers and taxpayers and to build on the significant improvements we have delivered in our 13 years of operating the franchise.

“We will continue to focus on delivering excellent service for our customers as we operate the contract under an extension up until 1 April 2020, and we are engaging with the DfT regarding the future of the franchise beyond this point.

“Overall for 2020, we are confident that the group will deliver another robust performance in line with our expectations as we continue to execute our clear and well-defined strategy; strengthening our core business, diversifying into international markets and developing new ways of responding to a changing world.”