FirstGroup Profit Up 11%, Laidlaw Deal on Track

Britain's biggest bus service company, FirstGroup, reported an 11% increase in underlying yearly profit on Wednesday, and said the new financial year had started well.

Chief Executive Moir Lockhead said progress was being made in talks with U.S. antitrust authorities over FirstGroup's proposed $2.8 billion acquisition of Laidlaw International, the company that runs Greyhound buses.

He said authorities seemed to be focusing on the enlarged group's school bus division, which would operate 63,000 out of the 450,000 school buses in the United States.

"As far as we can see, its going according to plan," he told reporters.

Profit before tax and exceptional items was 195.8 million pounds ($387.2 million) in the year to March 31, compared with 176.4 million a year earlier.

"I am pleased to report that trading in the new financial year has started well and is in line with our expectations," said Lockhead.

Operating profit was up 36.7% to 108.8 million pounds in the group's UK rail division, and up 5% to 103 million in its UK bus division.

"The focus on climate change is accelerating the move towards better public transport, and we're in a good position," said Lockhead.

"We've got some good partnerships coming along in Sheffield and Glasgow, where there's a commitment to getting cars off the road," he added.

FirstGroup's North America division, which currently runs about 22,000 yellow school buses, was hit by the weak dollar and rising fuel costs, and operating profit remained broadly flat at 68.2 million pounds.

Finance Director Dean Finch said the group was fully hedged for fuel in the UK for the new financial year and expected to be fully hedged in the United States by the half year.

The total dividend was increased 10% to 15.5 pence a share.