UK: FirstGroup Wary Over Bus Demand

FirstGroup today said profits from its rail division surged but warned that demand for bus travel is being hit by the worsening economy.

Operating profits at the group's rail division, which runs First Great Western, TransPennine Express, First Capital Connect and Scotrail, increased 15% to £55.7 million in the six months to September 30.

Passenger revenues rose 9% after it benefited from higher prices and increased demand as people ditched their cars due to rising petrol prices.

And its bus division, which operates one in five buses in the UK, said profits increased 7% to £59.4 million despite a slight decline in revenues as the economy weakened.

It warned that the trading conditions for its bus network will ''remain challenging as a result of lower economic activity in the major urban areas where we operate''.

Across the group, which also operates Greyhound coach and school bus services in North America, operating profits rose 25% to £216.3 million.

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