ii view: results power FirstGroup shares near to 13-year high

Full-year results to 29 March

• Adjusted revenue up 7% £1.37 billion
• Adjusted earnings per share up 16% to 19.7p
• Final dividend of 4.8p per share
• Total dividend for the year up 18% to 6.5p per share
• New share buyback of £50 million
• Net debt down 15% to £975 million

Guidance:

• Expects to at least maintain adjusted earnings per share over the year (FY2026) ahead

 Chief executive Graham Sutherland said:

"I am pleased to report another positive set of results for our 2025 financial year. We have further strengthened our businesses and continued to deliver against our strategy, including growing and diversifying our earnings in both First Bus and First Rail. This leaves us well placed to at least maintain our adjusted earnings per share in FY 2026, from a stronger base, as we continue to successfully navigate a period of transition in bus and rail in the UK.

"Our focus remains on operational excellence and the disciplined deployment of capital to maintain our accelerated investment in decarbonisation and continuing to build a diverse, sustainable earnings base, while returning any excess capital to shareholders."

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

ii round-up:

FirstGroup (LSE:FGP) today detailed increased sales and earnings, with the operator of both bus and rail services expecting to at least maintain profits over the year ahead. 

Adjusted revenue for the year to late March rose 7% to £1.37 billion, driving adjusted earnings up 16% to 19.7p. Productivity improvements for bus operations over the year ahead are expected to counter the loss of profits from its South West Railways business which is now moving to public ownership. 

Shares in the FTSE 250 company rose 4% in UK trading having come into these latest results up by around a fifth so far in 2025. That’s comfortably ahead of a 3% gain for the FTSE 250 index in that time. National Express coach operator Mobico Group (LSE:MCG) has more than halved year-to-date. 

FirstGroup transports almost 2 million passengers per day via rail services including Great Western Railways (GWR) and a fleet of around 5,800 regional and London buses. 

A 2% increase in underlying passenger volumes for First Bus along with cost savings and improved driver availability, helped drive the division’s adjusted annual operating profit up to £96 million from the prior year’s £84 million.

Profits on the same basis for First Rail climbed 5.5% year over year to £149 million, aided by an increase in non-contracted open assess services of 2.9 million passengers journeys versus 2.7 million the year before. 

Group net debt fell 15% to £975 million. A final dividend of 4.8p per share, and payable to eligible shareholders on 8 August, takes the total full year payment up 18% to 6.5p per share. 

A new £50 share buyback programme follows on from the £92 million of buybacks made over the year to late March. 

First-half results are likely to be announced mid-November. 

ii view:

Headquartered in Aberdeen, FirstGroup employs around 30,000 people. West Coast services via Avanti provide its other contracted service alongside GWR, with open access services including Hull Trains and Lumo. First Bus serves more than a fifth of the UK population, with the business recently re-entering the London bus market via an acquisition which gives the company a 12% share of the capital’s marketplace.  

For investors, the model to operate rail services is moving from franchised contracts to open access services offering a period of future transition. Business model changes for bus services are seeing regions outside of London planning to adopt a franchising model, with changes offering similar uncertainties and opportunities. Industrial staff relations for the industry have historically proved difficult, while net debt of £975 million and including lease liabilities compare to a stock market value of around £1.2 billion. 

• 10 hottest ISA shares, funds and trusts: week ended 6 June 2025
• The 20 most-popular dividend shares among UK fund managers
• Why Wizz Air shares plunged over 25%

More favourably, opportunities to add open access rail services and win bus franchises are being targeted. Acquisitions such as that for London bus services continue to provide growth. Cost savings via more efficient operations continue to be chased, while the group’s environmental focus includes investment of around £88 million this latest financial year in electric buses and depots. 

In all, and despite ongoing risks, public transport and its green credentials combined with a forecast dividend yield of around 3.2% are likely to keep investors interested in this highly experienced UK transport operator. 

Positives: 

• Environmental credentials given a need to reduce fossil fuel emissions
• New £50 million share buyback programme

Negatives:

• Subject to political change and risks
• Many factors such as the weather outside of management control

The average rating of stock market analysts:

Buy