FirstGroup (FGP) H2 2024 earnings summary

Executive summary

• Achieved strong financial results for FY2024, with adjusted EPS up 44% to 16.7p, driven by robust performance in both bus and rail segments and supported by a strong balance sheet and disciplined capital allocation.

• Adjusted operating profit rose 27% to £204.3m, with material profit increases in both First Bus and First Rail.

• Strategy refreshed to focus on modal shift, sustainability, and diversification, with significant progress in bus electrification and open access rail expansion.

• Continued bolt-on acquisitions in bus, including York Pullman, and expansion in open access rail, aiming for long-term shareholder value.

• Significant cash generation and pension liability reduction, with c.£1bn of gross pension liabilities removed or insured.

Financial highlights

• FY2024 revenue £4,715.1m, down 1% year-over-year, but all commercial segment lines improved.

• Adjusted operating profit increased 27% to £204.3m, adjusted earnings up 29% to £110.7m, and adjusted EPS 16.7p (+44%).

• Final dividend proposed at 4p per share, total 5.5p for the year, up from 3.8p prior year.

• Adjusted net cash at year-end was £64.1m, down from £109.9m, reflecting strong cash generation offset by capital deployment and shareholder returns.

• £118m returned to shareholders via buybacks in the year.

Outlook and guidance

• FY2025 outlook in line with expectations, with continued improvement in earnings mix and First Bus expected to reach 10% margin in H2 2025.

• Anticipates £50-55m in interest costs, mainly from IFRS 16 charges.

• CapEx of ~£120m planned for bus electrification, with 18% of fleet to be electrified by year-end.

• Net cash expected to end FY2025 at £40-50m after dividends and buybacks.

• Final dividend of 4.0p per share proposed, maintaining progressive dividend policy.