THE cost of pay packages for directors of Lothian Buses jumped by more than 20 per cent last year as the council-owned company recorded a rise in revenue but a fall in passengers.
Profits before tax fell from £10m to £2.3m. But the dividend the company will deliver to its shareholders - Edinburgh City Council and the other three Lothian local authorities - is up from £6.8m to £7.7m.
Annual accounts published today show directors' remuneration totalled £608,000 in 2018 compared with £496,000 the previous year.
The company said the reason for the increase was that it did not have a finance director in 2017, but it was noe back to full strength with six directors.
The accounts also show the highest paid director - not named, but assumed to be managing director Richard Hall - saw his total pay package rise from £211,000 in 2017 to £218,000.
Lothian Buses' overall revenue was up from £152m to £160m, but passenger numbers fell by around 1.5 per cent from 121.1m to 119.2m.
The company blamed increasing congestion. The commentary in the accounts said: "Overall customer patronage has decreased 1.9m year on year driven by decreasing journey speeds because of the impact of congestion across the city region as well as changes to travel patterns by customers."
Complaints were down - from 7.7 to 7.6 per 100,000 passenger journeys, although "blameworthy incidents" increased from 3.8 to 4.2 per 100,000 miles.
Lothian Buses said the drop in profits was due to major investments and cutting the depreciation term for buses from 15 years to 12 because of rapidly changing emissions regulations.
The company said it had invested £11.4m, including the acquisition of 91 new buses, adding around 10 per cent to the size of its total fleet.
Company chairman Jim McFarlane said: “Lothian continues to contribute to the local and wider economy, creating new job opportunities and investing heavily in the newest technology and vehicles for the benefit of our customers.
“I’m really pleased that our annual accounts released today demonstrate that we are continuing to grow our revenues, whilst also investing in the development and expansion of our business.
“Our performance during 2018 and effective management of increasing cost pressures also mean that we can return a £7.7m dividend to our shareholders.”
Lothian Buses is currently involved in a "bus wars" with private sector rival First Bus, which has seen the two companies encroaching on each other's traditional territory - Lothian launching new routes in West Lothian and First planning a new open-top bus tour operation.
Managing director Richard Hall said: “We have continued to adapt and develop our business by reviewing new opportunities and how we evolve both our current and future public transport offerings.
“Our results for the year are in line with our forecasted expectations and significantly show an overall revenue increase of 5.1 per cent over the previous year driven by the exploitation of growth opportunities, delivering a profit before tax of £2.3m.
“Lothian has faced significant operating and cost pressures driven by economic change and inflation. We anticipate that these cost pressures will not only remain but also increase in the future and we continue to work proactively to address and mitigate the impact of these in order to maintain our required investment and returns."
The company said over the last 10 years it had generated revenues of over £1.3 billion, and returned a dividend of £46.3 million to its local authority shareholders. During this period it also carried over 1.1 billion passengers.
