FirstGroup: Share price up for rail and bus operator after profit outlook lifted
Rail and bus operator FirstGroup’s share price soared this morning, after it raised its profit outlook thanks to better-than-expected demand.
The FTSE 250 company was the biggest riser on the index after the open, with its share price rising 4.92 per cent to 153.7p per share.
This comes after the company said demand for its rail services had been stronger than anticipated due to more leisure travel during the summer.
Its operating profit expected to be £12-£15m ahead of expectations for the year.
In its results issued this morning, it also said its First Bus division had traded ahead of expectations despite inflation, due to stronger passenger numbers. Many Brits have turned to buses because of the cost of living crisis, and also because of repeated rail and train strikes, that have crippled the country.
First Group added that last month it ended a period of consultation over its two local government pension funds, and it will be terminating its participation at the end of the month.
It said workers enrolled into it will now be put into a retirement savings plan, and terminating the deal will lead to a £2-3m cost savings for the division. The company said the
The firm said it now anticipates its adjusted operating profit and Group adjusted attributable profit to be at previous expectations by £14-£20m and £7-£10m respectively.
Graham Sutherland, FirstGroup chief executive, said: “Over the last few months, we have successfully built on the strong financial performance we reported at our full year results in June.”
Our updated outlook for FY 2024 reflects a strong performance in our First Rail division, which is testament to the hard work and capabilities of our teams. In First Bus, we are delivering sustainable revenue growth as passenger volumes increase and we continue to benefit from the actions we have taken to transform the business.”