Bus and train operator FirstGroup has warned that its UK business is likely to be hit by weakening consumer confidence after the decision to exit the EU.
Underlying revenues at the group’s bus division slipped 1.4% in the three months to 27 June as the number of visitors to UK high streets fell while congestion hit services in some areas. The company said it was merging and closing bus depots in a bid to cut costs.
Underlying revenues at the company’s rail division rose 2.3%, a slowdown from the previous quarter, as engineering work affected the company’s Great Western Railway subsidiary.
FirstGroup said it was not clear how the EU referendum would affect its business as a whole. Its UK-based bus and rail operations would be affected by “trends in the wider economy, including factors such as weakening economic growth and lower consumer confidence”.
Two-thirds of the company’s operating profit was generated in north America last year, and FirstGroup said the weakening of the pound against the dollar might boost profits once converted into sterling.
However, underlying revenues at the company’s north American bus firm Greyhound slid 5% in the first quarter.
FirstGroup is trying to get back on track after losing several major UK rail franchises last year, including the East Coast line to Virgin and Stagecoach. This pushed it into the red in the first six months of 2015.
It retained the TransPennine Express franchise in December and also runs the Great Western Railway operation.
Annual results released last month showed revenues at FirstGroup’s rail business plunged by 40.7% to £1.3bn because it failed to keep hold of the Thameslink and ScotRail franchises.
