FirstGroup shares speed up on £50m buyback and looming rail enhance

FirstGroup share rose sharply on Thursday as the FTSE 250 travel group unveiled a £50million share buyback after a bumper first half. 

The Aberdeen-based transport operator revealed its adjusted turnover increased by £14.8million to £649.6million in the six months ending 28 September.

Growth was boosted by its bus division benefiting from the £2 fare cap in England and free travel for under-22s scheme in Scotland.

While the segment’s total passenger numbers slipped by 3 per cent to 204 million, partly because the equivalent period last year included an extra week of trading, its revenues still rose by £8.8million to £513.7million.

By comparison, FirstGroup’s rail business only saw adjusted sales grow by £1.3million to £136million even though its customer volumes expanded by almost 9 million to 132.4 million.

However, FirstGroup said the rail division’s performance over the second half of the financial year is set to marginally surpass previous forecasts, partly due to growing demand for its open-access services.

Over the same period, it expects the bus arm to ‘make further progress’ and achieve a 10 per cent adjusted operating margin.

Graham Sutherland, chief executive of FirstGroup, said: ‘We have reported a robust set of results for the first half of our 2025 financial year and are on course to make further progress in the second half.’

FirstGroup’s trading update comes as the new Labour Government brings forward new legislation to nationalise passenger railway franchises in England when rail operator contracts expire.

The FTSE 250 company runs three major train operators – Avanti West Coast, Great Western Railway and South Western Railway – as well as open-access operators Lumo and Hull Trains.

Open access operators manage trains on mainline routes but do not receive taxpayer cash or have franchises with the UK Government.

‘Looking further ahead, First Bus and our First Rail open access businesses are expected to continue to grow from their existing strong bases,’ FirstGroup said.

Just last month, the firm acquired Shropshire-based Lakeside Group and Anderson Travel, a coach provider based near London’s Tower Bridge, for undisclosed sums.

These two companies have around 185 buses and coaches between them, and both offer school and private hire services.

FirstGroup shares were 5.5 per cent up at 144.3p just before midday on Thursday, making them one of the FTSE 250 Index’s top risers, although their value has still slumped by around 17 per cent this year.