FirstGroup (LSE:FGP) delivered higher annual revenue and strong cash generation as growth in its bus operations helped offset challenges in its rail division, while the company continued to invest heavily in fleet electrification and shareholder returns.
For the year ended 28 March 2026, adjusted revenue rose 25% to £1.72 billion. Adjusted operating profit remained broadly stable at £219.4 million as stronger performance from First Bus balanced lower earnings from rail operations and the impact of contract transitions.
The transport operator also announced a new £100 million share buyback programme and reiterated expectations for approximately £400 million of free cash generation over the next three years.
Strong Shareholder Returns Backed by Cash Generation
FirstGroup continued to generate robust cash flows during the year, maintaining what management described as a strong balance sheet position.
The company returned £89 million to shareholders through a combination of dividends and share repurchases and said the newly announced buyback reflects confidence in its financial position and future prospects.
Management believes its disciplined capital allocation strategy provides flexibility to invest in growth opportunities while continuing to reward shareholders.
Bus Division Delivers Growth
First Bus was the group’s standout performer during the year, reporting a 33% increase in revenue alongside higher operating profit.
The improvement came despite lower government fare support and softer passenger volumes in some markets.
Growth was driven by expansion within London bus franchises, increasing contributions from business and coach operations, and continued investment in zero-emission transport infrastructure.
The company has accelerated the rollout of electric buses and charging facilities, reinforcing its commitment to decarbonisation and the transition to cleaner public transport networks.
Rail Business Navigates Market Challenges
Within First Rail, revenue from open access services increased modestly, although profitability was affected by mobilisation costs, competitive pressures and weaker demand in certain areas.
Despite these challenges, the division secured the London Overground contract during the year and continues to pursue expansion opportunities within the UK’s rail market.
Management said plans are in place to more than double open access rail capacity, which is expected to support future growth and strengthen the group’s rail portfolio.
Focused on Long-Term UK Transport Growth
FirstGroup continues to position itself as a leading UK transport operator, with growth strategies centred on bus franchising opportunities, rail expansion and decarbonisation initiatives.
The company believes ongoing investment in electric vehicles, infrastructure and operational improvements will support long-term growth while helping meet evolving environmental and regulatory requirements.
With a strong balance sheet, growing bus operations and an expanding pipeline of rail opportunities, management remains focused on delivering sustainable value creation across its transport network.
More about FirstGroup
FirstGroup is a UK transport operator providing bus and rail services through its First Bus and First Rail divisions. The company operates regional bus networks, London bus franchises, open access rail services and rail contracts on behalf of the Department for Transport. FirstGroup is focused on electrification, decarbonisation and UK transport growth, while continuing to expand its presence in coach services, rail consultancy and passenger transport infrastructure.
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