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| First Group rail plans suffer after West Coast fiasco | First Group rail plans suffer after West Coast fiasco |
| (about 2 hours later) | |
| First Group, the bus, coach, and rail company, has decided to freeze its interim shareholder dividend in the wake of uncertainty following cancellation of the Intercity West Coast franchise competition. | First Group, the bus, coach, and rail company, has decided to freeze its interim shareholder dividend in the wake of uncertainty following cancellation of the Intercity West Coast franchise competition. |
| The Aberdeen-based transport group had been announced as the winning bidder. | The Aberdeen-based transport group had been announced as the winning bidder. |
| But then the government scrapped the competition after irregularities in the tendering process came to light. | But then the government scrapped the competition after irregularities in the tendering process came to light. |
| The uncertainty has led the board to keep the dividend unchanged at 7.62p. | The uncertainty has led the board to keep the dividend unchanged at 7.62p. |
| It has also raised questions about the the level of the full-year dividend, which the company said it would consider in May next year. | |
| "By that time, we expect the prospects for our rail division to be clearer, following independent reviews into the cancellation of the West Coast competition and the future of rail franchising," it said in a statement. | |
| The announcement came as First Group reported a disappointing first half trading statement for the six months to 30 September 2012. | |
| While group revenues rose 2% to £3.25bn, pre-tax profits slumped to £8.4m, down 93.4% from £127.8m for the same period last year. | While group revenues rose 2% to £3.25bn, pre-tax profits slumped to £8.4m, down 93.4% from £127.8m for the same period last year. |
| The company said the particularly sharp fall in pre-tax profits was down to a charge for exceptional items in the first half and a one-off gain of £73.3m in 2011 following the restructuring of its UK Bus pension scheme. | The company said the particularly sharp fall in pre-tax profits was down to a charge for exceptional items in the first half and a one-off gain of £73.3m in 2011 following the restructuring of its UK Bus pension scheme. |
| And a fall in underlying profits from £163m to £128.7m did little to brighten a gloomy picture. | And a fall in underlying profits from £163m to £128.7m did little to brighten a gloomy picture. |
| First Group chief executive Tim O'Toole said: "In the short term we have to contend with the uncertainty around future rail franchises created by the Department for Transport's decision to cancel the InterCity West Coast contract and pause the current franchise competitions, following its discovery of flaws in the way it conducted its process." | First Group chief executive Tim O'Toole said: "In the short term we have to contend with the uncertainty around future rail franchises created by the Department for Transport's decision to cancel the InterCity West Coast contract and pause the current franchise competitions, following its discovery of flaws in the way it conducted its process." |
| First Group, which runs the First Transit, Greyhound, UK Bus subsidiaries as well as its rail division, had been shortlisted for three other franchise competitions, so the government pause has cast a cloud of uncertainty over the group's rail strategy. | First Group, which runs the First Transit, Greyhound, UK Bus subsidiaries as well as its rail division, had been shortlisted for three other franchise competitions, so the government pause has cast a cloud of uncertainty over the group's rail strategy. |
| Chairman Martin Gilbert said: "It has been an exceptionally difficult period in rail", adding that the company was "extremely disappointed and frustrated that our employees and our shareholders have had to endure this extraordinary series of events". | Chairman Martin Gilbert said: "It has been an exceptionally difficult period in rail", adding that the company was "extremely disappointed and frustrated that our employees and our shareholders have had to endure this extraordinary series of events". |
| First Group's total UK bidding costs reached £12.3m. | First Group's total UK bidding costs reached £12.3m. |
| The Department for Transport has said it will repay the estimated £40m costs to the four groups involved in the flawed bid process. | The Department for Transport has said it will repay the estimated £40m costs to the four groups involved in the flawed bid process. |
| First Group said it was in discussions with government over its bid bill. | First Group said it was in discussions with government over its bid bill. |
| The company's shares fell 2.68% in morning trading and have dropped nearly 40% over the year. | The company's shares fell 2.68% in morning trading and have dropped nearly 40% over the year. |