The bus operator that covers a substantial swathe of the West Country will not pay a dividend for the second consecutive year.
FirstGroup, which operates buses in Bristol, Bath and Somerset, plus parts of South Gloucestershire, Wiltshire and Dorset, will not pay a dividend to shareholders for the second year running after admitting it needs more time to revive its UK Bus operation.
The Aberdeen-based group said the business and its FirstStudent arm, which transports six million students in North America every day, were performing well short of their potential and delivering lower margins than rivals.
Better trading in UK rail helped group profits for the year to March 31 to rise 23 per cent to £111.9 million but ongoing turnaround costs and the need to reduce its debt burden mean the company will not pay a dividend.
The pay-out was scrapped last year after the botched bidding process surrounding the West Coast mainline rail franchise scuppered its turnaround plans.
It said at the time that it might restore the dividend this year but those hopes were dashed yesterday by new chairman John McFarlane, who asked for shareholder patience while the group works to revive UK Bus and FirstStudent.
He said: "Although both divisions have faced challenging economic conditions in their respective markets, we cannot escape that we should have managed them better.
"Progress has been made in addressing the performance of these two divisions, with headway being made in UK Bus in particular, but there remains much to do still."
Profits in the division, which has a fleet of 7,400 buses carrying around 2.3 million passengers every day, fell to £44.4 million from £50.8 million.
While the operation is facing further reductions in public funding, passenger numbers rose for the first time in several years due to network changes, fare reviews and significant investment in fleet and service during the year.
Bristol commuters now experience some lower fares thanks to a fares review – following passenger protests – last year. A similar consultation has been taking place in Bath, though the outcome has yet to be announced.
Mr McFarlane added: "UK Bus, while still working through its transformation programme, is beginning to show it is on the right track."