Saturday, 10 June 2023

First Group Results - Strong Financial Performance

SHARES in FirstGroup increased nearly 14 per cent after the Aberdeen-based transport giant beat profit expectations and cheered investors with an additional share buyback worth £115 million.

Commenting on the results for 52 weeks to 25th March, Chief Executive Officer Graham Sutherland said: “We have delivered a strong financial performance in 2022 - 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.
 “Our leading positions in bus and rail, together with the strength of our balance sheet, will allow FirstGroup to create long-term shareholder value while delivering the vital services and innovation that are key to achieving society’s sustainability and economic goals.

Key developments  

First Bus: 
• 1.1m passenger journeys a day (FY 2022: 0.9m); 168m service miles operated in FY 2023 (FY 2022: 185m) 
• Passenger volumes increased 20% vs. FY 2022 levels, with commercial and concessionary volumes up 21% and 19% 
• Total passenger revenue increased to £660.0m (FY 2022: £570.0m), more than offsetting the reduction in government funding, which decreased by £42.8m to £86.5m 
• Improvement in operating margin in H2 2023 to 7.9% despite ongoing inflationary pressures due to: - increased passenger demand - improved driver availability and operational improvements FirstGroup plc | 52 weeks to 25 March 2023 2 - network and fare realignments to better match services to demand - regional management restructure completed to drive further operational efficiencies 
• Acquisition of Ensignbus in Essex, Airporter in Northern Ireland and the Metrobus service in Bristol 
• Disposal of First Scotland East and closure of Southampton-based operations • Accelerated investment in electrification of fleet and infrastructure: - gross investment of c.£43m on electric buses and depot infrastructure before funding - 83 electric buses delivered in FY 2023 and 58 ultra-fast chargers installed - installation of solar panels at 20 depots completed in FY 2023 - net investment of c.£105m committed in FY 2024 on First Bus decarbonisation, including the installation of 143 ultra-fast chargers, 

First Rail: 

• 263m passenger journeys in FY 2023 (FY 2022: 201m); TOCs: 261m and open access 2.2m 
• Open access operations performance ahead of expectations, underpinned by strong leisure volumes 
• Management-fee based contracts aggregate financial performance broadly in line with expectations; focus remains on operational delivery for passengers across all our services 

• Great Western Railway awarded National Rail Contract to June 2025 with an option for the DfT to extend it to June 2028 
• South Western Railway contract extended to May 2025 
• West Coast Partnership (incorporating Avanti West Coast) contract extended to October 2023; discussions with the Department for Transport (‘DfT’) on a National Rail Contract for WCP are ongoing 
• TPE contract not extended by DfT; operations were handed to the Operator of Last Resort on 28 May 2023