YELLOW Buses has revealed a loss of almost £2million last year – but says it was investing to attract more passengers.

Accounts for 2018 show the Bournemouth business made a pre-tax loss of £1.97million – after a £1.8m loss the year before.

Revenue fell by 3.2 per cent to £18.7m.

But the company’s boss David Squire – who led a management buyout earlier this year – said the business was being turned around.

He said: “Clearly these are disappointing results, but we have turned the corner.

“In the year ending December 2018 we invested heavily by bringing in 20 newer buses, installing contactless payment on the buses and introducing free Wi-fi across the fleet. Our network was revamped and simplified to make it easier to use.

“And we are now starting to see the fruits of our labour with steady passenger growth this year.

“We have also introduced new services, including the extension to New Milton on 1A and to Wimborne on 6, together with an increasing night bus service, now on two routes, which are increasing the number of passengers we are carrying.”

The buyout by three company managers – all experienced bus drivers – brought Yellow Buses back into local hands after a spell in the ownership of French business RATP Dev.

Mr Squire said: “With the company now back under local ownership we have every confidence that Yellow Buses will be profitable again in the coming years.

“It is always worth noting that during 2018 we were up against high levels of congestion, together with the effect of the A338 roadworks, and a changing retail landscape that meant fewer people were visiting the town centre.”

In his annual report, Mr Squire said he expected the company to “generate a satisfactory result in the next financial period”.

“Significant network changes actioned in 2018 and in early 2019 are now having a positive impact on the business,” he said.

“A potential upside in revenue is anticipated for stay at home holidays – hotels are reporting advance bookings up 20 per cent year on year.”

Fourteen per cent of staff were nationals of other EU countries – down from the previous year.

Finding staff was challenging, he said, adding: “A no deal Brexit will push up the price and availability of spare parts as Volvo and Scania are built in Sweden within the EU.”

He voiced support for BCP Council’s bid for money from the government’s Transforming Cities funds for beating congestion.

“In Birmingham, every increase of 1mph in bus speeds equates to one per cent additional passengers. We see this fund as a once in a lifetime opportunity to fix the congestion issues and increase passenger numbers,” he said.