FirstGroup is now a rail company that also runs buses, chief executive Moir Lockhead claimed recently, distancing it from its roots. Critics of the big transport groups point out that, while this may be true in terms of turnover, buses still provide the bulk of their profits, despite a much-improved return from First's North American bus division. Some local authorities criticise First and other groups as using buses as a cash cow to fund adventures into other business areas. Rail now accounts for almost ￡1 billion of First's annual turnover while buses manage a little over ￡850 million. The bus business, however, delivered profits of ￡111 million last year, double that of the rail operations, which may be receiving declining subsidies, but are still attractively secure, low risk, long-term businesses that earn a respectable margin.
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