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Bus and rail company First Group reported performance ahead of its expectations after reporting narrower first-half losses.
The company also said it was in talks with the government over new contracts for its South Western Railway and Avanti businesses after agreeing a termination fee for the pre-existing franchise agreements that were put in place to provide rail transport during the pandemic.
For the six months to 30 September, pre-tax losses narrowed to £100.1 million from £187.1 million year-on-year, while revenue fell to £3.10 billion from £3.53 billion.
Revenue was hurt by reduced passenger activity, but that was offset by lower costs.
The company flagged an overall charge of £26.8m, down from £207.0m, driven by a lower Greyhound impairment of nil versus £124.4m a year earlier. 'Greyhound passenger volumes have been broadly in line with our cautious assumptions ...,' the company said. 'The division is currently operating c.45% of its pre-pandemic mileage and generating c.41% of pre-pandemic revenue expectations in the US.'
'Whilst the outlook remains uncertain due to the pandemic, we performed ahead of our expectations in the first half, have taken prudent action to reinforce the balance sheet and are confident in the resilience of the group,' it added.
Separately, the company said its South Western Rail division and Avanti franchise agreed termination sums of £33.2m and nil respectively with the government.
The company also said it was negotiating new directly awarded management contracts with the government. The new contracts, if agreed, could last to 1 April 2023 for South West Railway and 1 April 2026 for Avanti, each with extension periods of up to two further years at the government's discretion.
At 8:10am: (LON:FGP) Firstgroup PLC share price was 0p at 58.5p