FirstGroup beats profit forecasts on the back of strong demand
FirstGroup saw group adjusted profit more than double this morning to £82.1m in its full year results, ahead of expectations, as increased passenger demand helped the train operator resist the impacts of industrial action.
FirstGroup, who ran Transpennine Express, said its adjusted operating profit for the year ending in March came in at £161m, up nearly £50m on the previous year.
Passenger journeys were also up to 1.1m a day year-on-year, with volumes increasing 20 per cent on 2022 levels. Passenger revenues hit £660m, up from £570m.
Chief Executive Officer, 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 and we urge the Government to engage with the industry on the steps that can be taken, without primary legislation, in order to achieve this.”
The results come despite significant challenges for the operator this year, including ongoing rail disputes, which have seen the RMT and ASLEF unions walk out repeatedly since May last year.
FirstGroup-operated Transpennine Express was also brought into government control last month, following a string of poor performance ratings.
The Aberdeen-based firm has performed strongly despite the turbulence, raising its profit guidance in March as passenger volumes hit 83 per cent of pre-pandemic levels.
It said today that the £2 fare cap scheme in England, introduced in January and recently extended to November 2024 had also boosted its results.
Sutherland added: “We have delivered a strong financial performance in FY 2023. In First Rail, our teams have worked extremely hard on our service objectives, and the notable success of our open access operations is further recognition of the considerable expertise and ambition of our team.”
“In First Bus, we are seeing the benefits of actions we have taken to transform the business, and we are establishing ourselves as leaders in decarbonisation as we accelerate the electrification of our bus fleet to deliver value not just for FirstGroup but for all our stakeholders.”
Its shares were up 0.63 per cent in early trading.