FirstGroup unveils £50m buyback as full-year profits rise
Train and bus operator has announced a new £50m buyback and said the outlook for the current year remains in line with expectations, though rail results will be lower due to South Western Railway (SWR) transferring into public ownership.
While further adjusted operating profit progress is expected in the First Bus division over the 12 months to 29 March, helped by productivity, overhead and yield improvements, along with recent acquisitions, First Rail adjusted revenue and profit will be "marginally lower".
Lower fees are expected from SWR transferring into public ownership - was made official last month - while results will also be helped by normalising levels of variable fees from the Department for Transport.
The outlook came as FirstGroup delivered a small increase in annual adjusted revenues to £1.37bn from £1.28bn the year before, helped by a strong underlying First Bus performance, higher variable fees from the DfT and further growth in open access rail.
Adjusted pre-tax profit increased to £164.3m from £136.8m, with profit growth across both divisions.
The board proposed a final dividend of 4.8p per share, up from 4.0p last year and in line with its payout ratio, taking the full-year dividend to 6.5p from 6.0p.
The company also unveiled plans to return £50m to shareholders via a share repurchase programme, following £92m in buybacks in FY2025.
"Our positive cash generation and strong balance sheet allow us to capitalise on opportunities to grow our business as our industries transition, to maintain our progressive dividend policy and for further potential returns to shareholders," FirstGroup said.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.