FirstGroup shares are accelerating after a £50m buyback and a looming rail boost
- FirstGroup announced that adjusted turnover rose to £649.6 million in the first half of the year
- The company attributed its growth in part to the £2 fare cap on bus travel in England
FirstGroup shares rose sharply on Thursday as the FTSE 250 travel group unveiled a £50 million share buyback after the first half of the year.
The Aberdeen-based transporter announced that its adjusted turnover rose by £14.8 million to £649.6 million in the six months ended September 28.
Growth was boosted by the bus division taking advantage of the £2 fare cap in England and free travel for under-22s in Scotland.
Growth: Aberdeen-based transporter FirstGroup announced that its adjusted turnover rose by £14.8 million to £649.6 million in the six months ended September 28
Although total passenger numbers in the segment fell by 3 percent to 204 million, partly because the comparable period last year included an additional trading week, revenues still rose by £8.8 million to £513.7 million.
By comparison, FirstGroup’s rail business only saw adjusted revenue grow by £1.3m to £136m, although customer volume grew by almost 9m to 132.4m.
However, FirstGroup said the rail division’s performance in the second half of the financial year will marginally exceed previous forecasts, partly due to growing demand for its open access services.
During the same period, the company expects the bus business to “make further progress” and achieve an adjusted operating margin of 10 percent.
Graham Sutherland, CEO of FirstGroup, said: ‘We have reported a robust set of results for the first half of our 2025 financial year and are on track to make further progress in the second half.’
FirstGroup’s trading update comes as the new Labor government brings forward new legislation to nationalize England’s passenger rail franchises when rail operators’ contracts expire.
The FTSE 250 company operates three major train operators: Avanti West Coast, Great Western Railway and South Western Railway, as well as open-access operators Lumo and Hull Trains.
Open access operators operate trains on main lines but receive no taxpayer money and have no concessions with the UK government.
“Looking further ahead, First Bus and our First Rail open access business are expected to continue to grow from their existing strong base,” FirstGroup said.
Just last month the company acquired Shropshire-based Lakeside Group and Anderson Travel, a bus operator based near London’s Tower Bridge, for undisclosed sums.
These two companies have approximately 185 buses and coaches between them, and both offer school and private rental services.
FirstGroup shares were 5.5 per cent higher at 144.3p just before midday on Thursday, making them one of the FTSE 250 Index’s top gainers, although their value is still down around 17 per cent this year.
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