FirstGroup stays on track despite strikes and losing TransPennine franchise
The bus and rail group said it expects ‘broadly consistent’ earnings from its trains business in the year to next March.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Transport giant FirstGroup has said it expects to keep results on track over the year ahead despite ongoing rail strike action and being stripped of its TransPennine Express franchise by the Government last month.
The bus and rail firm said it expects “broadly consistent” earnings from its trains business in the year to next March and for its group results to be in line with expectations, although it has cautioned that the “economic and industrial relations backdrop remains challenging”.
FirstGroup saw its TransPennine Express franchise taken over by the Government at the end of May – a decision the firm said was a “huge disappointment”.
The franchise contributed £8.5 million in the last financial year to the group’s rail division income.
It said the past few years have been “among the most challenging in the history of the UK’s rail industry” as it has grappled with the pandemic and changing passenger habits, as well as industrial action.
FirstGroup’s full-year results showed statutory pre-tax profits falling sharply to £128.7 million from £654.1 million in the year to March 25 due to the sale of its First Student, First Transit and Greyhound businesses.
It said with this impact stripped out, underlying earnings more than doubled to £82.1 million from £36.2 million the previous year, which it said was ahead of expectations.
The Aberdeen-headquartered group launched a plan to buy back £115 million of shares after offloading businesses in North America, helping the stock leap more than 13% higher in morning trading on Thursday.
The past three years have been among the most challenging in the history of the UK’s rail industry
Its results for the past year were boosted by rising demand, with a Government scheme to cap bus fares at £2 helping boost passenger numbers following pandemic disruption.
The Government last month announced it would extend the £2 fare cap until October, with plans for it to rise to £2.50 in November and remain at that level for a year.
FirstGroup said its bus business saw revenues surge to £902.5 million from £789.9 million the year before as total passenger numbers jumped by a fifth thanks to recovering demand for public transport.
Underlying earnings in the bus arm rose to £58.4 million from £45.2 million the previous year.
Its First Rail division – which runs around a quarter of the UK rail market – saw underlying earnings leap to £124.8 million from £87.8 million as passengers also returned to railways.
Chief executive Graham Sutherland said: “The past three years have been among the most challenging in the history of the UK’s rail industry, with it adapting to post-pandemic travel patterns and continued industrial action which has caused significant disruption for rail passengers and businesses across the country.
“We welcomed the recent position articulated by the Secretary of State highlighting that going forward, there will be an enhanced role for the private sector, to reinvigorate the rail industry, drive innovation and attract more customers to the railway.”
On the decision to nationalise the TransPennine Express franchise, he said: “The loss of the contract was a huge disappointment for our team which has worked extremely hard to improve services and to successfully recruit and train more drivers than ever before.”
“The decision has not altered our belief in the important role of private rail operators in the delivery of vital, environmentally friendly transport for customers and communities across the UK,” he added.