LONDON (Reuters) - Britain's FirstGroup (L:FGP) said it had been informed by the government that a key train contract would be extended, giving it reassurance on a major remaining part of its UK rail business after a string of disappointments.
News of the extension comes days after FirstGroup lost out on the chance to continue running a rail contract in Scotland, and after it was beaten in a competition to continue running rail services on the Thameslink network in southern England in May.
The Department for Transport on Friday published an updated timetable for its rail franchising programme showing that it intended to directly award a three-and-a-half year contract on the Great Western route in western England which is run by FirstGroup.
On most rail routes, the government runs competitive processes rather than issuing direct awards.
Last year the Great Western route accounted for around a third of FirstGroup's rail division's 2.87 billion pound revenues, or 15 percent of annual group revenues.
"We are very pleased that, after a consultation process in which the Department for Transport (DfT) sought the views of stakeholders and user groups across the line of route, the DfT intend to negotiate a direct award with us," FirstGroup Chief Executive Tim O'Toole said in a statement.
Since losing the Thameslink contract in May, FirstGroup's stock has lost about 20 percent of its value. Shares in the company were off 0.4 percent at 107.7 pence at 10:56 a.m. BST against Britain's midcap index (FTMC) which was off 1.6 percent.
(Reporting by Sarah Young; editing by Kate Holton)