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FirstGroup says in advanced talks for Greyhound sale, posts bigger loss

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By Reuters
FirstGroup says in advanced talks for Greyhound sale, posts bigger loss
FILE PHOTO: A greyhound bus in a station in Tucson, Arizona, U.S., December 6, 2018. REUTERS/Nicole Neri   -   Copyright  NICOLE NERI(Reuters)

(Reuters) – FirstGroup Plc <FGP.L> is in advanced talks with bidders for the sale of its Greyhound bus line, the British transport operator said on Thursday as it posted a bigger loss for the first half of the year due to a charge related to the business.

The Aberdeen-based company put Greyhound, a household name in North America, for sale earlier this year as the bus line struggled amidst growing pressure from low cost airlines.

FirstGroup, which ferries millions of passengers in buses and trains, posted pretax loss of £187.1 million for the six months ended Sept. 30, compared with a loss of £4.6 million a year earlier.

The company said it booked an impairment charge of £124.4 million related to the Greyhound business in the first half of the year.

Greyhound, however, reported like-for-like revenue growth of 0.7% in the first half, aided by growth in immigration at the Southern U.S. border in the first quarter.

The company’s adjusted pretax profit for the first half of the year dropped 31.7% to £28.7 million, chiefly due to the adoption of a new reporting standard, it said.

FirstGroup, which is set to take over the West Coast rail franchise that links London, Manchester and Glasgow next month, said it raised its 2019-20 outlook to reflect a part-year contribution from the award. However, the adoption of the new reporting standard would weigh on the outlook, it added.

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Saumyadeb Chakrabarty)