FirstGroup PLC (LSE:FGP) saw its shares plunge on Tuesday after the transport operator revealed a drop in bus passenger volumes, overshadowing what was otherwise a solid earnings performance for the first half of fiscal 2026.
The company reported that adjusted earnings per share rose 16% to 9.9p, but the stock still sank 14.2% as markets reacted to softer demand and a notable free cash outflow.
Adjusted revenue climbed 30% to £833.6 million, largely reflecting the contribution from First Bus London, which was acquired in February 2025. Adjusted operating profit inched up to £103.6 million.
Passenger trends, however, disappointed investors. Commercial bus ridership slid 7%, partially offset by a 4% rise in concessionary travel. FirstGroup attributed the weakness to “the transition to the £3 fare cap, lower consumer confidence and some modal shift to other transport modes.”
Chief Executive Graham Sutherland maintained a positive tone, saying, “We have delivered a robust performance in H1 2026, made further progress in growing and diversifying the business and maintained our positive earnings trajectory.” He added that “In the second half, we will benefit from the actions we have taken to restructure the business.”
The group posted a free cash outflow of £35.6 million prior to acquisitions and shareholder returns, largely tied to accelerated spending on its bus electrification programme. FirstGroup now operates around 1,280 zero-emission buses—roughly 23% of its total fleet.
The company raised its interim dividend to 2.2p per share, up from 1.7p a year earlier, and completed a £50 million share buyback in October 2025. For the full year, FirstGroup continues to expect a modest increase in adjusted EPS and forecasts adjusted net debt to end the year between £125 million and £135 million.
Leave a Reply