The UK-based FirstGroup PLC, which operates First Student, the largest provider of student transportation in North America, reported favorable growth for its half-yearly results.
In its semi-annual financial report, FirstGroup saw a revenue increase of 5.1 percent for First Student and First Transit, the company’s North American public transit management and contracting sector.
"Our overall trading performance as outlined at the start of the financial year continued during the first half, with encouraging performances by our North American business,” FirstGroup Chief Executive Tim O'Toole said in an investor call.
He added that this first-half cash performance supports the company’s objective to significantly increase free cash generation for the 2016/17 financial year.
“We continue to expect good progress for the group in the current year, recognizing we will likely benefit from currency tailwinds from our substantial North American operations, but will also face uncertain economic conditions in the UK for the foreseeable future,” O’Toole said.
That uncertainty followed the recent "Brexit" vote that called for the UK to withdrawal from the European Union. The passage of the referendum rattled markets around the globe, making financial forecasts unclear.
However, O’Toole said he remains positive. Following a successful school year start up, First Student reported a robust bid season with 7.3-percent average price increases and solid contract retention.
“We concluded this year's bid season with higher average price increases than in the prior year, and while acute driver shortages remain a significant ongoing challenge for the industry, we are now better positioned to manage the issue,” he added.
Due to this margin improvement, O’Toole reported that the company should have a successful year ahead.
“Our cash performance in the first half affirms our confidence in generating significantly increased cash flow for the full year,” he said.