Shares digital

Bus and train operator FirstGroup hopes to meet UK government demands to improve the performance of its controversial train franchise First Great Western.

First said it was on course to achieve targets set by the Department for Transport (DfT) for FGW, which has faced heavy criticism for the poor reliability of its train services from London to Wales and the West Country.

The DfT issued FGW with a breach notice and remedial plan after the franchise misreported cancellation figures and exceeded a threshold for cancellations in the second half of last year.

The plan involved introducing more staff and rolling stock above levels that the government originally specified for the franchise. Some industry observers have blamed ministers for partly causing the problems by not allocating enough rolling stock.

Under the plan, the bus and train operator will also fund a £29 million package of passenger benefits, including a doubling of passenger compensation rates, more discounted tickets, extra trains on the Cardiff-Portsmouth route and station and commuter train upgrades.

'We have committed to a programme of investment to address the performance issues at FGW and we are on course to achieve the performance improvements we have agreed with the DfT,' FirstGroup said in a trading statement.

The group said it had continued to deliver a strong trading performance throughout the second half of the year and expects to announce full year results in line with management expectations.

It said its rail division had performed strongly with full year passenger revenue growth in excess of 10%. The group's other three rail franchises, First Capital Connect (FCC), First Transpennine Express and First Scotrail, all achieved strong performance with more than 90% punctuality.

It said that during the year, it progressed its revenue protection programme for FCC and has now almost completed installing automatic ticket gates at key stations across the network, as well as beginning the installation of gates on further FGW platforms at London Paddington.

First said all the operating divisions of its US division FirstGroup America are performing in line with management expectations.

In North America, it said it had made excellent progress in integrating Laidlaw with FirstGroup America operations.

It also said it was making good progress in achieving substantial synergies and is on track to achieve its synergy target of $100 million per year.

The company's share price rose 4% to 567.5p.