FirstGroup plc

Group adjusted revenue increased 30% to GBP 834 million. Group adjusted operating profit was GBP 103.6 million, up 2.8%, and adjusted earnings were GBP 55.5 million, up 7.1%. Adjusted EPS rose 16.5% to 9.9p, and the interim dividend was lifted 29.4% to 2.2p per share. Adjusted net debt was GBP 207.6 million, with debt cover at 0.95x. For full-year 2026, management expects modest growth in adjusted EPS, bus annual revenue above GBP 1.4 billion, IFRS 16 positive impact to EBIT of circa GBP 36 million, central costs circa GBP 8 million lower, interest of GBP 60 million, net CapEx in First Bus of circa GBP 180 million, and ending adjusted net debt of circa GBP 125 million to GBP 135 million. For full-year 2027, management expects to at least maintain adjusted EPS at the higher level as remaining DfT TOCs transition to public ownership.

Graham Sutherland struck a confident but measured tone, saying FirstGroup had delivered another strong half despite economic and policy headwinds. He emphasized execution across bus and rail, the benefits of recent restructuring, and the group’s push into electrification, franchising, and open access rail growth. He also highlighted that the business is positioned to keep improving earnings quality as the rail portfolio shifts and the bus business diversifies.

Ryan Mangold focused on earnings quality, capital allocation, and cash. He cited adjusted operating profit of GBP 103.6 million, adjusted earnings of GBP 55.5 million, adjusted EPS of 9.9p, and adjusted net debt of GBP 207.6 million, explaining that buybacks, acquisitions, and accelerated bus electrification spending were key cash uses. He said the business generated GBP 223.7 million of capital from operations over 12 months, spent GBP 126.5 million on CapEx net of grant funding and battery sales, and returned GBP 99.1 million through buybacks and GBP 37.1 million in dividends over 12 months. He also said the group is not extending the buyback program yet and expects leverage to remain below 1x on an underlying basis for the time being.

Analysts pressed on bus franchising, asking how much revenue is at risk in regions like West and South Yorkshire and whether asset ownership could release capital; management said it is too early to quantify, but believes the group’s well-capitalized fleet and depot base leave it well positioned, and that some capital could be released where authorities prefer ownership models. Questions also focused on why CapEx is rising faster than net debt guidance; management pointed to the new London EV trial, GBP 20 million of escrow cash returning to the business, and stronger rail cash generation offsetting the spend. On rail services and the remaining DfT contracts, management said the endgame is still uncertain, but believes private-sector expertise remains valuable and said cash guidance was upgraded because of better operating performance and longer contract durations.