This article first appeared on GuruFocus .
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Adjusted Revenue:Increased by 30% to 834 million, driven by growth in First Bus due to the acquisition of First Bus London.
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Adjusted Earnings Per Share (EPS):Increased by 16% to 9.9p, supported by the repurchase of approximately 22 million shares.
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Interim Dividend:Proposed at 2.2p per share, up 29% from the prior year.
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Adjusted Operating Profit:103.6 million, up 2.8%.
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Adjusted Net Debt:207.6 million, with strong free cash generation offset by accelerated CapEx and acquisitions.
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Free Cash Flow Generation:Impacted by investment in bus electrification, resulting in above-normal spend.
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Bus Operating Profit Margin:6.1%, after absorbing a 1.4% impact from higher national insurance contributions.
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Open Access Rail Operating Profit:16.3 million, lower due to industrial action and mobilization costs.
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Electrification Progress:23% of the fleet is zero emission, with 3 fully and 17 partially electrified depots.
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Capital Expenditure (CapEx):126.5 million net of grant funding, with significant investment in bus electrification.
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Return on Capital Employed (ROCE):9.4% in the bus business, impacted by the acquisition of the London business.
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Seat Miles Capacity Utilization:67% in open access rail, above industry average.
Release Date: November 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Group adjusted revenue increased by 30% to 834 million, driven by growth in First Bus due to the acquisition of First Bus London.
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Adjusted earnings per share for the half year increased by 16% to 9.9%, supported by the repurchase of approximately 22 million shares.
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The board proposed an interim dividend of 2.2p per share, up 29% from the previous year.
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Operational efficiencies in First Bus led to a 24% reduction in loss mileage to 1.3%, and the net promoter score increased to +15.
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FirstGroup PLC is at the forefront of bus fleet and infrastructure electrification, with 23% of its fleet now zero emission.
Negative Points
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Economic and policy headwinds, such as lower bus funding in England and above-inflation wage pressures, impacted the business.
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Regional bus volumes were down by 4%, with a 7% decline in commercial volumes due to lower consumer confidence.
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Inflationary pressures remain, with cost increases due to inflation of approximately 3%, mainly in wages.
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Industrial action at Hull Trains and mobilization costs for the new Sterling to London Euston service impacted open access rail profits.
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The transition to a 3 fare cap in England resulted in lower funding levels, down 17 million from the previous year.
Q & A Highlights
Q: Can you quantify the revenue opportunity and risks associated with bus franchising in regions like West Yorkshire? A: Graham Sutherland, CEO: West and South Yorkshire present risks, but we've capitalized our assets well, positioning us strongly in discussions with local authorities. We expect to release some capital and leverage our experience from the London business to be competitive in bidding processes. Results from the first phase of Liverpool are expected by the end of the calendar year, providing insight into our standing.
Q: There's been a significant increase in CapEx guidance but not in adjusted net debt guidance. Can you explain the reconciling items? A: Ryan Mangold, CFO: The CapEx increase is mainly due to a 30 million trial of electric vehicles in London. The net debt guidance benefits from 20 million of escrow cash inflow and stronger cash generation from the rail business, offsetting the CapEx increase.
Q: What are the challenges of owning electric buses in London compared to diesel buses? A: Ryan Mangold, CFO: The transition risk for electric buses has decreased due to improved warranties from OEMs. TFL's commitment to electrification ensures continued use for these buses. We are trialing ownership on a specific route to assess financial benefits, aiming for higher margins.
Q: If commercial bus volumes remain subdued, what levers do you have to manage this? A: Graham Sutherland, CEO: We are prepared to manage softer volumes with initiatives to stimulate demand, such as increasing frequency in urban areas. We expect some improvement from current levels due to population growth and macro tailwinds.
Q: What is the strategy for M&A, and is there a pipeline of opportunities in the UK? A: Graham Sutherland, CEO: We are focused on UK opportunities, having completed several acquisitions recently. We have a strong pipeline aligned with our strategy for growth in bus and open access rail, and we are not currently looking outside the UK.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
