UK transport company FirstGroup PLC (LON:FGP) lowered its full-year earnings guidance after its US coach and bus services were hit by severe snowstorms in January and tough competition.
The group said its outlook for adjusted earnings per share (EPS) is “slightly reduced” but there is no change to expectations for “substantial” cash generation for the year.
Competition from airlines affected the performance of its Greyhound business services while snowstorms in January and driver shortages dragged on its school bus unit.
Shares fell 3.4% to 92.95p in morning trading.
Mixed trading
Like-for-like (LFL) revenue at Greyhound fell 2.8% in the quarter to January and dropped 0.4% in the year to date.
US public transport business First Transit saw revenue drop 0.1% over the quarter but rise 2.6% in the year to date.
First Student, the US school bus unit, posted a 0.3% increase in revenue for the quarter but a 0.9% decline in the year to date.
In the UK, the First Rail LFL revenue increased 1.4% over the quarter and grew 3.2% in the year to date despite ongoing infrastructure challenges at Great Western Railway and the South Western Railway franchises.
First Bus in the UK delivered a 1.4% rise in LFL revenue over the quarter and a 0.9% gain in the year to date.
SWR, which was launched last summer, has also been affected by a disruption from labour strikes.
FirstGroup refinances debt
During the period, the company started to refinance its debt. It has raised US$275mln through US private placement notes. The issue closed on February 15 and the proceeds will be received by the group on March 27.
The refinancing activities will incur an exceptional charge of £11mln in the current financial year, and interest savings of £14mln per year from the following financial year.
"We reached an important milestone in the period with our long-dated bond portfolio beginning to mature, allowing us to significantly reduce our interest burden by starting to refinance and rebalance the group's debt,” said chief executive Tim O'Toole.