FirstGroup Reports Strong FY 2025 Results with Profit and Revenue Growth
Why we think this is good
FirstGroup has delivered a robust financial performance in FY 2025, with notable improvements across key metrics. The company's adjusted operating profit increased to £222.8m from £204.3m in the previous year, while adjusted EPS grew to 19.4p from 16.7p. Revenue growth was evident in both the First Bus and First Rail divisions, with overall adjusted revenue rising to £1,370.0m. Particularly encouraging was the improvement in First Bus's adjusted operating margin to 8.9%. The company's outlook remains positive, with expectations to at least maintain adjusted earnings per share in FY 2026. However, the shift from a net cash position to a net debt of £86.9m and potential risks in the evolving rail industry landscape temper the overall sentiment. While the results are undoubtedly strong, the current share price being near the top of its 52-week range suggests that some of this positive performance may already be reflected in the valuation.
Key Points
- Adjusted operating profit up to £222.8m from £204.3m
- Adjusted EPS increased to 19.4p from 16.7p
- Adjusted revenue grew to £1,370.0m
- First Bus adjusted operating margin improved to 8.9%
- Passenger volumes in First Bus grew by c.2%
- Adjusted net debt of £86.9m, previously net cash of £64.1m
- Expects to at least maintain adjusted EPS in FY 2026
- Final dividend of 4.8p per share proposed
- Additional £50m buyback programme announced
Summary
FirstGroup has reported robust financial results for FY 2025, demonstrating growth across key metrics. Adjusted operating profit increased to £222.8m (FY 2024: £204.3m), while adjusted EPS grew to 19.4p (FY 2024: 16.7p). The company saw revenue growth in both its First Bus and First Rail divisions, with overall adjusted revenue rising to £1,370.0m. Notably, First Bus improved its adjusted operating margin to 8.9% and experienced passenger volume growth of c.2%. The company maintains a strong balance sheet with adjusted net debt of £86.9m. Looking ahead, FirstGroup expects to at least maintain adjusted earnings per share in FY 2026. However, investors should note the evolving landscape in the UK rail industry and potential risks associated with new open access rail operations.