GWR announces National Rail Contract amid positive FirstGroup financial results

Great Western Railway (GWR) has announced it has been awarded a National Rail Contract by the Department for Transport (DfT).

These contracts have been set up to replace emergency recovery measures put in place by the UK Government to shield operators from the worst economic effects of COVID-19.

The new contract will run until at least 21 June 2025, and it is possible that the secretary of state could extend this for another three years.

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In line with the contract, GWR is committed to attracting people back to the railway by continuing to deliver improvements in customer experience, while focusing investment on sustainable services, and providing better value for money for customers and the taxpayer.

Since taking over the Great Western franchise in 2015, GWR says that it has seen satisfaction levels among customers rise from 81% to 91%. It attributes this to factors including the introduction of its high-speed Intercity Express Trains and a major timetable change in December 2019.

GWR managing director Mark Hopwood said: “We are delighted to have been awarded a National Rail Contract by the Department for Transport, which is a sign of its confidence in GWR as a trusted operator, and means we can continue to build on welcoming more people back to the railway.

“We look forward to working with our rail partners to develop services designed to meet changing customer needs, and putting passengers at the heart of an updated, modern railway.”

Rail Minister Wendy Morton said: “We’re delighted to continue our partnership with Great Western Railway, and excited by its plans to deliver more benefits for local communities.

“During the pandemic, GWR was instrumental in keeping critical services moving and this new contract will see it continue to deliver our ambitious Plan for Rail and provide a fantastic service for passengers.”

FirstGroup financials

The contract was announced as parent company FirstGroup Plc issued its financials for the 2021-2022 year (to March 26, 2022).

The groups adjusted operating profit increased by £6.6m (with rail at £106.7 million) as pandemic effects on travel begin to recede and passenger volumes increased.

It added trading overall was in line with expectations, with “significant further progress” anticipated in the 2023 financial year. Its report gave a similar outlook on its First Rail business, which is delivering in line with expectations. It said leisure would play a part in driving positive contribution next year.

Executive chairman, David Martin, said: “We have delivered on our commitments this year to refocus the business, de-risk the balance sheet and unlock value for shareholders. As a cash generative business with a strong balance sheet, FirstGroup is well placed to invest in the services our passengers want, to sustain our path to a zero-emission bus fleet, and to actively consider additional value creation opportunities to leverage our market leading public transport expertise. The Board’s confidence in the prospects for the Group is reflected in the decision to commence dividend payments.”

Chief Executive Officer, Graham Sutherland, said: “The transformed Group has momentum and we expect to make significant further progress in the year to March 2023. With leading positions in bus and rail, a strong balance sheet and a clear purpose, FirstGroup has many opportunities ahead to deliver sustainable shareholder value creation while delivering the vital services that are key to achieving society’s sustainability and economic goals.”

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