FirstGroup shares fall as Greyhound revenues slip

Transport giant FirstGroup has warned of a drop in expected profits, sparking a 13% drop in its share price.

In an update on trading since September, the firm reported challenges in its North American operations.

Revenues from its Greyhound long-haul coaches were down nearly 3% as it struggled to compete with airlines.

It also cited problems in recruiting drivers for both its Greyhound and school bus operations in North America, due to the strong labour market.

Eastern seaboard services were also hard hit by severe snowstorms and cold weather in January.

The Aberdeen-based group's rail operations in Britain, including Great Western and Trans-Pennine Express, saw passenger numbers up by 3.2%.

Passenger numbers also picked up in its UK bus division, helped by a focus on providing services for students and the use of contactless payments.

Chief executive Tim O'Toole said: "Our First Rail franchise portfolio continues to generate value for the group despite infrastructure challenges.

"First Student's momentum continues to be tempered by the strength of the US employment market, with no easing of the driver shortages experienced in recent years.

"Although Greyhound's point-to-point business continues to grow, this was more than offset by significant reductions in long-haul volumes."

By midday on Wednesday, FirstGroup's share price was down by more than 13.5%, at 83.05p