FirstGroup Delivers Stronger Than Expected Performance
Why we think this is good
The trading update from FirstGroup plc indicates a stronger than expected financial performance in the second half of the financial year. The Group saw revenue growth in both its First Bus and First Rail divisions, with the First Bus London acquisition expected to contribute significantly to future revenues. The balance sheet remains strong, with lower than expected net debt levels. While there are some signs of slightly negative market sentiment around the fare cap introduction and guidance for maintaining EPS, the overall performance appears to be ahead of previous expectations.
Key Points
- First Bus division delivered further revenue growth in H2 2025
- First Rail division performed ahead of expectations with higher variable fees
- Group balance sheet remains strong with lower than expected net debt
- FY 2025 adjusted operating profit and EPS expected to be ahead of previous guidance
Summary
FirstGroup plc has provided a trading update for the financial year ended 29 March 2025, reporting stronger than expected financial performance. The First Bus division delivered further revenue growth in H2 2025, with yield management and recent acquisitions offsetting a reduction in funding. The First Rail division also performed ahead of expectations, with higher than previously forecast variable fees from the DfT-contracted Train Operating Companies.
The Group's balance sheet remains strong, and it now expects to end FY 2025 with an adjusted net debt position of c.£85-90m, lower than previous expectations. The Group anticipates that its FY 2025 adjusted operating profit and adjusted earnings per share will be ahead of previous expectations.