FirstGroup ends year ahead of previous guidance
By Josh White
Date: Tuesday 15 Apr 2025
(Sharecast News) - FirstGroup said in an update on Tuesday that it expects full-year adjusted operating profit and earnings per share for the financial year just ended to come in ahead of previous guidance, driven by better-than-expected trading in its rail division and stable performance from its bus operations.
The FTSE 250 passenger transport operator said that for the 12 months ended 29 March, its rail business outperformed forecasts due to stronger variable fees from Department for Transport-contracted train operating companies.
It also highlighted continued growth in its open access rail services, supported by robust demand and effective yield management.
The company said it had secured track access rights for two new services and signed a £500m deal to lease 14 new UK-built trains to support this expansion.
First Bus meanwhile delivered revenue growth in the second half of the year, as yield improvements and contributions from recent acquisitions offset lower government funding.
The introduction of a new distance-based fare structure in England, following the increase in the fare cap from £2 to £3 in January, led to higher yields despite a slight decline in passenger volumes.
Full-year passenger growth is expected at around 2% on a like-for-like basis, excluding the extra trading week in the previous year.
The acquisition of RATP's London bus operations completed at the end of February and contributed around £23m in revenue during the final month of the financial year.
FirstGroup said it expected the rebranded First Bus London to generate annual revenue of £300m to £350m over time, with operating margins of % to 67%.
The company said its balance sheet remained strong and that it now expects to close the year with adjusted net debt of £85m to £90m, lower than previous estimates.
It said the revised figure reflected the timing of electric vehicle deliveries and came despite the early completion of a £50m share buyback.
Looking ahead, FirstGroup said it anticipated maintaining its adjusted earnings per share in the 2026 financial year.
"We have continued our strong financial and operational delivery in the second half of our financial year and have committed significant capital to further grow and diversify our portfolio," said chief executive officer Graham Sutherland.
"In First Bus, we have entered the London market at scale and continued to extend our reach across the UK.
"In First Rail, we have agreements in place to double the size of our open access operations with potential to go much further."
At 0840 BST, shares in FirstGroup were up 1.76% at 162.1p.
Reporting by Josh White for Sharecast.com.
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