The parent company of North Staffordshire’s main bus company has reported higher profits – following a recovery in ridership and cost cutting. The update on the finances of bus and train operator FirstGroup was presented to shareholders yesterday.
They were told that adjusted operating profit for the year to March 26 had risen to £226.8m compared with £220.2m a year earlier. It comes a week after the company rejected a £1.2 billion takeover proposal from American serial advertiser, Miami-based I Squared Capital Advisors.
FirstGroup – North Staffordshire’s longest-established bus company – says profit from continuing operations – which was responsible for the sale of its US Greyhound bus business – exceeded its expectations for the year. Meanwhile, total revenue fell to £5.58 billion for the year from £6.84 billion last year due to disposals.
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Income from ongoing operations has increased as the number of bus passengers has increased after the pandemic disruption, while rail traffic has also grown.
FirstGroup – which serves North Staffordshire from a depot in Adderley Green – said current trading was “in line with our expectations” and expects to make progress in the current year despite the uncertainty in the economic environment. It added that it will benefit from a further £5m in cost savings over the course of the year.
Executive Chairman David Martin said: “This year we have delivered on our commitments to realign the business, de-risk the balance sheet and unlock value for shareholders. As a cash-generating company with a strong balance sheet, FirstGroup is well-positioned to invest in the services our passengers want, to continue our journey towards a zero-emission bus fleet, and to actively consider additional value-add opportunities to leverage our market-leading public transportation expertise . The Management Board’s confidence in the Group’s prospects is reflected in the decision to start paying dividends.”
It comes five days after FirstGroup rejected a takeover proposal, saying the 118p-per-share upfront cash portion of I Squared Capital’s unsolicited takeover approach “materially undervalued FirstGroup’s continued operations and future prospects.” There is significant takeover interest across the industry, with rival Go-Ahead accepting a £650million takeover bid on Monday night.
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