FirstGroup unveils £50m buyback as full-year profits rise

(Sharecast News) - Train and bus operator FirstGroup has announced a new £50m buyback and said the outlook for the current year remains in line with expectations, though rail results will be lower due to South Western Railway (SWR) transferring into public ownership. While further adjusted operating profit progress is expected in the First Bus division over the 12 months to 29 March, helped by productivity, overhead and yield improvements, along with recent acquisitions, First Rail adjusted revenue and profit will be "marginally lower".

Lower fees are expected from SWR transferring into public ownership - was made official last month - while results will also be helped by normalising levels of variable fees from the Department for Transport.

The outlook came as FirstGroup delivered a small increase in annual adjusted revenues to £1.37bn from £1.28bn the year before, helped by a strong underlying First Bus performance, higher variable fees from the DfT and further growth in open access rail.

Adjusted pre-tax profit increased to £164.3m from £136.8m, with profit growth across both divisions.

The board proposed a final dividend of 4.8p per share, up from 4.0p last year and in line with its payout ratio, taking the full-year dividend to 6.5p from 6.0p.

The company also unveiled plans to return £50m to shareholders via a share repurchase programme, following £92m in buybacks in FY2025.

"Our positive cash generation and strong balance sheet allow us to capitalise on opportunities to grow our business as our industries transition, to maintain our progressive dividend policy and for further potential returns to shareholders," FirstGroup said.