£20m pension fund blow for First Manchester

BUS operator First Manchester has revealed a huge fall in the value of its pension assets, leaving the company with liabilities of nearly £17m.

The Oldham-based company, which employs more than 2,200 staff, operates bus and coach services in and around the Greater Manchester area.

It saw pension assets fall in value by £19.8m, for the year to April 2009, recently filed accounts show. This impacted on shareholder funds, which fell from a £3.9m to a liability of £16.9m.

The directors’ report said the company can continue as a going concern with the support of its parent company First Group Plc, which provided a letter confirming it will make available the required funds until the end of January 2011.

First Manchester declined to comment on its financial situation when contacted by TheBusinessDesk.

Turnover for the year increased 3.4% to £102.2m, while operating costs increased to £95.7m from £90m. Pre-tax profit fell 45% to £6.2m from £11.3m a year earlier.

The company paid an interim dividend of £5.5m (2008: £11.5m).

The directors’ report said the trading environment for the current financial year to April 2010 would continue to be challenging, but that they were confident of a “satisfactory” result.

It said: “In spite of this, the directors remain optimistic about the current and future opportunities to grow the business, with innovative ideas, improved service quality and reliability while retaining a tight control on costs.”