FirstGroup is readying itself for another battle over west coast intercity trains from Scotland to London.
The Aberdeen bus and rail company confirmed yesterday it was preparing a bid to operate the services from April 2018.
It is nearly four years since FirstGroup, which runs trains in the UK and buses on both sides of the Atlantic, was stripped of the right to operate services from Glasgow to London following a legal challenge by Sir Richard Branson’s Virgin Rail Group (VRG).
FirstGroup had been chosen to run the trains for at least 13 years and four months, but the UK Government scrapped that arrangement after flaws were found in the bid evaluation process.
Virgin trains, a joint-venture between VRG and Perth-based Stagecoach Group has operated the trains ever since.
The winner of the new bidding round is expected to be named in November next year, in time for a contract commencing in April 2018.
Confirmation of FirstGroup’s intention to bid came yesterday, just after the company cheered investors with results showing a 7.3% rise in statutory annual profits – boosting prospects of a restored dividend.
Pre-tax profits for the year to March 31 came in at £113.5million, up from £105.8million previously.
Group revenue slumped by nearly 14% to about £5.2billion in the wake of FirstGroup losing some key rail franchises, but the underlying performance was “broadly flat”.
Chief Executive Tim O’Toole said a turnaround plan launched three years ago, when the company scrapped dividends following losses, was bearing fruit.
He added: “We have made encouraging progress this year toward a profile of more consistent financial returns.
“We expect the considerable efforts of our people in recent years to be reflected in a significant improvement in our profile of sustainable returns and cash generation going forward.”
FirstGroup expects “significantly increased” cash generation in 2016/17.
Mr O’Toole said the firm had seen an impact from the oil and gas industry downturn on its bus services in Aberdeen.
But the group was continuing to invest in improvements to its bus fleet in the city, he added.
And Mr O’Toole weighed into the debate over the proposed pedestrianisation of a key Aberdeen street by saying it should remain open to buses.
Plans to close off Broad Street to traffic are being discussed as part of the Aberdeen City Centre masterplan, which is the subject of a public consultation.
Three options have been put forward for Broad Street: maintaining the status quo for full traffic access, introducing full pedestrianisation, or only opening it to buses and bicycles.
“We think it should be open to buses,” said Mr O’Toole. FirstGroup has about 30 buses travelling through Broad Street every hour.
