FirstGroup slows in Britain and the US

Shares in FirstGroup plunged to a three-year low today as the credit crunch bit on both sides of the Atlantic.

The group, which runs Great Western train services out of Paddington and the FirstCapitalConnect network, admitted the expected London commuter downturn saw its growth on the railways pegged sharply back to 7.2% in the Christmas quarter against growth of nearly 10% in the spring and summer.

More spectacular was the slump at Greyhound, the US bus company that FirstGroup acquired 18 months ago.

In the last three months, which included the usually busy Thanksgiving and Christmas periods, Greyhound revenues crashed 4.5%, reversing a growth rate of 5% reported earlier in the year.

The collapse in business at Greyhound is galling for FirstGroup chief executive Sir Moir Lockhead as it was acquired as part of the £1.9 billion 2007 acquisition of US school bus business Laidlaw. Lockhead has admitted he was persuaded to keep Greyhound despite his instincts to sell.