Shares of FirstGroup Plc (FGP.L,FGROF.PK,FGROY.PK) rose about 6 percent on London Stock Exchange after the UK-based transport operator reported a significantly higher pre-tax profit for the fiscal year, despite lower performance in First Student and UK Bus operations. The company said it plans to restructure its UK Bus portfolio through a programme of business and asset disposals. In its UK Bus division, FirstGroup saw further deterioration of economic conditions particularly in urban operations in Scotland and the North of England and does not expect revenue growth and cost efficiencies in 2012/13.
Tim O'Toole, chief executive of the company said, "The combined effect of the outlook for trading together with the actions to reposition the UK Bus portfolio is expected to result in the Group's net cash flow being broadly neutral in 2012/13."
Announcing its preliminary results for the fiscal ended March 31, the company said overall trading was in line with its expectations. In First Student, operating margin declined to 6.8 percent from 8 percent and UK Bus posted operating margin of 11.6 percent, down from 13.1 percent last year.
The company's profit before tax for the year surged to 279.9 million pounds from 126.5 million pounds in the previous year. Meanwhile, adjusted pre-tax profit declined to 271.4 million pounds from 274.3 million pounds a year ago.
Excluding items, adjusted earnings also declined to 39.8 pence. FirstGroup said it has restated its prior-year results.
The company noted that for all of its businesses excluding UK Rail, the current year includes 53 weeks, compared to 52 weeks last year.
Annual revenues grew 4.1 percent to 6.68 billion pounds. Revenues improved 2.9 percent, excluding the extra week of trading. Total Group operating margin was 6.4 percent, down from 7.1 percent a year earlier.
The board has proposed a final dividend of 16.05 pence, up 7 percent from last year, to shareholders of record on July 13, 2012, payable on August 17. This will make the full-year dividend to 23.67 pence, higher than 22.12 pence last year.
The company said its board also remains committed to its current policy of dividend growth of 7 percent through to the end of the financial year 2012/13.
FGP.L is currently trading at 214.1 pence, up 9.2 pence or 4.49 percent, on a volume of 1.88 million shares on the LSE.
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