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STG profits threatened

17th May 1974, Page 25
17th May 1974
Page 25
Page 25, 17th May 1974 — STG profits threatened
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Which of the following most accurately describes the problem?

WARNINGS that-the future profitability of the Scottish Transport Group is threatened are given in its annual report and accounts for 1973.

The Group's total profit last year was £1.8m compared with just over £2m in 1972.

STG bus companies made a profit of £1.9m — a decline of £0.2m on the previous year.

While the results were "reasonably satisfactory" in the face of mounting inflation "only if future costs can be contained within reasonable limits, matching fare adjustments obtained simultaneously and the standard of services maintained can the Group project future viability with any degree of optimism," the report said.

"If the cost of wages, fuel and other commodities used in the daily operation of its business continues to escalate at the present inflationary rate, then this factor will play the major role in determining whether or not the Group can maintain a proper financial return as required under the Transport Act, 1968.

"Recent severe cost escalations have seriously.

threatened continuing viability."

The Group complains that procedural formalities under the counter-inflation policy have delayed the go-ahead for fares and charges to be increased.

Recovery from such "slippage" was extremely difficult to achieve, the report points out.

The Group says that while it would welcome support under the new pattern oi transport planning and operation, in its endeavours to remain viable, "reference to subsidy should be the last resort".

Subsidies created "very great problems" of their own, it argues.

During the year the Group's road passenger services carried 456.3m passengers over 147.2m vehicle miles.

Vehicles employed by the Group numbered 4,531 and staff employed stood at 14,877.

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