By Nithyashree R B and Yadarisa Shabong (Reuters) -British public transport operator FirstGroup reported full-year profit ahead of market expectations on Tuesday, helped by strong performance of its
FirstGroup Shares Surge Following Strong Profit Report and Growth Plans
By Nithyashree R B and Yadarisa Shabong
(Reuters) -British public transport operator FirstGroup reported full-year profit ahead of market expectations on Tuesday, helped by strong performance of its bus division and recent acquisitions.
Shares in the London-listed company, which carries more than a million passengers daily on its buses and trains, rose more than 6% after it also announced an additional share buyback of 50 million pounds and raised dividend by 18% to 6.5 pence a share.
Britain, as part of a new spending review, pledged 15.6 billion pounds ($21.04 billion) for transport projects targeting cities outside London, which have long been underfunded.
"We intend to build up a good, strong bid team and we intend to participate in the opportunities as and when they come to market," CEO Graham Sutherland told Reuters, adding that he expects further details on the government's spending plans on Wednesday.
FirstGroup has been expanding its bus network across Britain, including by entering the London market earlier this year with its acquisition of RATP London.
Its First Bus service, which caters to about a fifth of the UK population, reported revenue of 1.08 billion pounds for the year ended March 29, ahead of expectations of 1.05 billion pounds, according to a company-compiled consensus.
The company also acquired track access for two open access services between London Euston and Stirling and between London Paddington and South Wales, last year.
FirstGroup was looking at further acquisitions this year, Sutherland said.
Sutherland expects growth in buses and its open access rail companies such as Hull trains and Lumo. This is likely to counter the hit from nationalization of some of its railway projects.
Nationalisation of its South Western Railway unit, which happened in May, will hit the company's fiscal 2026 revenue, Sutherland said. The unit contributed about 1.18 billion pounds in revenue in fiscal 2025.
The Aberdeen-based company posted adjusted earnings per share of 19.3 pence for the year, ahead of company-compiled consensus of 18.9 pence.
($1 = 0.7414 pounds)
(Reporting by Nithyashree R B and Yadarisa Shabong in Bengaluru; Editing by Sumana Nandy and Leroy Leo)
