FirstGroup: Firm reports less people using buses as rail renationalisation looms
Transport firm FirstGroup announced a drop in the number of people using its buses as the firm prepares to see a large portion of its rail business renationalised by the Government.
FirstGroup said underlying passenger volumes in its First Bus segment had fallen four per cent year-on-year, as the taxpayer-subsidised £2 fare cap brought in during the Covid pandemic came to an end.
The firm said the drop had also been caused by “lower consumer confidence” as well as a shift from consumers to other modes of transport including bicycles.
Despite the drop, First Bus posted adjusted operating profit up four per cent year-on-year to £42.7m for the 26 weeks to 27 September.
It came in what the firm said was a “challenging economic and policy environment”.
First Bus added, however, that its Business and Coach growth and the contribution of First Bus London had offset the impact of lower commercial volumes, cost inflation and higher National Insurance contributions.
Total revenue was up 37 per cent to £702.9m.
It comes as the company’s Great Western Railway and Avanti West Coast operations are set to come back into public ownership by 2027, as part of the Government’s wider move to renationalise train operators.
First said it was “focused on delivering on our National Rail Contracts ahead of their transfer to public ownership”.
FirstGroup chief executive officer, Graham Sutherland, said the firm’s restructure ahead of the Government’s rail nationalisation plan had put it in a good position for the second half.
He said: "We have delivered a robust performance in H1 2026, made further progress in growing and diversifying the business and maintained our positive earnings trajectory.
“In the second half, we will benefit from the actions we have taken to restructure the business as well as the contribution of our recent acquisitions and expect modest growth in our adjusted earnings per share for the full year.”
Recent months saw FirstGroup acquire Yorkshire-based Tetley Coaches, a move First said had “bolstered” its Business and Coach segment.
The Government’s plan to renationalise rail operators will not affect “open access” operators, including Hull Trains and Lumo, which are owned by FirstGroup.
First said both companies had “continued to perform well”, and were on track to deliver £1.4bn in economic benefits by the end of their current track access agreements.
The two delivered adjusted operating profit of £16.3m, down from £18.1m at the same time last year, as Hull trains took a small hit from employees undertaking strike action.
FirstGroup posted adjusted operating profit of £103.4m, up from £100.8m a year prior.