FirstGroup revenues jump 25% as Scottish transport giant gives Lumo update

Scottish transport giant FirstGroup has seen annual revenues rev up by a quarter as its diversification strategy pays off.

Results for the 52 weeks to March 28 revealed revenues of just over £1.71 billion, up 25 per cent on the year before. The Aberdeen-headquartered group pointed to strong underlying performance in both its bus and rail divisions.

Despite the surge in sales, group adjusted operating profit was marginally lower at £219.4 million. There was continued profit growth at First Bus - one of the largest operators in the UK with a fleet of around 6,000 buses and coaches, but First Rail, which encompasses open access operator Lumo, saw profits ease due to a range of factors.

First Bus is one of the largest operators in the UK with a fleet of around 6,000 buses and coaches. Picture: John Devlin

A final dividend of 5p per share has been proposed giving a full-year total pay-out of 7.2p, up from 6.5p.

The group said it was on course to more than double open access rail capacity over the next two to three years and confirmed that Lumo’s new Stirling to London service would be fully operational from July after teething difficulties.

Chief executive Graham Sutherland said: “Our strong performance in [the full year] against significant headwinds has reinforced our track record for delivery and shareholder returns.

“Looking ahead, our focus on operational excellence and our diverse portfolio, robust asset base and cash generative businesses will enable continued growth and scope for further, material returns.

“As the UK bus and rail industries evolve over the coming years, we will continue to position the group as a leading UK transport company with the commitment, expertise, scale and financial strength to build active, long-term partnerships to create better transport services.”

Adam Vettese, market analyst at eToro, noted: “The group delivered a resilient performance, with adjusted revenue rising 25 per cent and adjusted EPS [earnings per share] increasing 4.6 per cent, in line with guidance for modest growth.

“Overall, these results reinforce FirstGroup’s successful shift towards a more diversified and higher-quality UK transport business. With strong cash generation expected over the next three years and attractive shareholder returns, the shares look well supported at current levels.”

New Lumo train service between Stirling and London suspended one week after launch