FIRSTGROUP PROFITS UP AS PASSENGERS GET BACK ON BOARD

It comes after rejecting takeover bid

THE parent company of North Staffordshire’s main bus operator has reported an increase in profits after a recovery in passenger numbers and cost reductions.

The update on the finances of bus and train operator Firstgroup was outlined to shareholders yesterday.

They were told that adjusted operating profits rose to £226.8 million for the year to March 26, compared with £220.2 million in the previous year.

It came a week after the company rejected a £1.2 billion takeover proposal from an American serial suitor, Miamibased I Squared Capital Advisors.

Firstgroup – which is the longest established bus operator in North Staffordshire – said profit from continuing operations – which accounted for the sale of its U.S. Greyhound coach business – surpassed its expectations for the year.

Meanwhile, total revenues declined to £5.58 billion for the year, from £6.84 billion a year earlier, due to disposals.

It said revenues on continuing operations grew as it saw an increase in bus passenger numbers following pandemic disruption, while it also witnessed growth in rail.

Firstgroup – which serves North Staffordshire from a depot in Adderley Green – said current trading is ‘in line with our expectations’ and that it expects to make progress over the current year despite uncertainty in the economic backdrop.

It added that it will benefit from a further £5 million in cost savings over the year.

Executive chairman David Martin said: “We have delivered on our commitments this year to refocus the business, de-risk the balance sheet and unlock value for shareholders.

“As a cash generative business with a strong balance sheet, Firstgroup is well placed to invest in the services our passengers want, to sustain our path to a zero-emission bus fleet, and to actively consider additional value creation opportunities to leverage our market leading public transport expertise.

“The board’s confidence in the prospects for the group is reflected in the decision to commence dividend payments.”

It comes five days after Firstgroup turned down a takeover proposal, saying the 118p-a-share upfront cash part of the unsolicited takeover approach from I Squared Capital ‘significantly undervalued Firstgroup’s continuing operations and its future prospects’.