FirstGroup's new chairman has said it will be a long time before the company is able to pay a dividend as the first financial results of his tenure were released.

John McFarlane, who has replaced many of FirstGroup's non-executive directors, said turning around its First Student business, which runs school buses, and the UK bus arm, are top priorities for the firm.

Improving the performance of these two struggling areas of the company would enable the company to increase shareholder returns, he added.

Mr McFarlane, who joined FirstGroup in January, said: "It will take some time before the group is able to deliver a profile of consistent surplus cash that can be distributed to shareholders."

As a result of solid performance at the Greyhound, UK rail and First Transit businesses, full year operating profit adjusted for one-off items rose 5.5 per cent to £268 million.     

Debt fell to £1.3 billion, most of which remains from the firm's 2007 acquisition of US-based Laidlaw, the owner of Greyhound coaches and yellow school buses.