May 21, 2014 / 6:21 AM / 3 years ago

FirstGroup FY profit higher, says U.S. student unit turnaround slow

LONDON, May 21 (Reuters) - British bus and rail operator FirstGroup reported a 23 percent rise in annual profit, in line with analyst forecasts, and said a turnaround plan at its school bus unit in the U.S. was taking longer than expected.

The company said it would not be paying a final dividend for this financial year, scrapping a plan announced last year to reinstate payouts after it pulled last year’s final dividend and this year’s interim dividend.

FirstGroup’s pretax profit in the twelve months to March 31 came in at 112 million pounds ($189 million) compared with the 91 million it made in the year earlier period, and against a Thomson Reuters consensus forecast of 114.7 million pounds from a poll of 14 analysts.

It cited slower than expected progress in turnaround plans its First Student business in the U.S. and in its UK bus business.

The performance of First Student, which operates yellow school bus services, and First Group’s Greyhound bus unit were affected by prolonged snow storms and bad winter weather in the U.S. The Scotland-based company warned in April that it would take a 14 million pound hit to annual profits from the weather.

$1 = 0.5935 British Pounds Reporting by Sarah Young; editing by Kate Holton

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