FirstGroup PLC on Thursday announced a lower annual profit but a dividend hike amid current restructuring.
The Aberdeen, Scotland-based transport company said in the year ended March 25, pretax profit fell to £128.7 million from £654.1 million a year ago. Revenue fell 15% to £4.76 billion from £5.59 billion.
FirstGroup declared a final dividend of 2.9 pence per share, up from 1.1p per share a year ago. This brings the total dividend to 3.8p for financial 2023, more than tripled from 1.1p a year prior.
The firm said net debt increased to £1.27 billion from £619.0 million. It explained it faced ongoing inflationary pressure, partially due to regional management restructure which it completed ‘to driver further operational efficiencies’ and higher passenger demand.
The company said that revenue from discontinued operations was £4.0 million, sharply down from £996.9 million a year ago. These are First Student, First Transit and Greyhound.
In July 2021, it sold First Student and First Transit to Stockholm-based EQT Infrastructure, an asset of investment firm EQT Group, for net disposal proceeds of $3.12 billion. Gain on sale of the division before tax was £501.1 million. In October 2021, it sold Greyhound Lines for $172 million to a subsidiary of Munich-based FlixMobility GmbH.
Looking ahead, the company said current trading and outlook for financial 2024 is in line with its own expectations.
Chief Executive Graham Sutherland said: ‘In First Bus, we are seeing the benefits of actions we have taken to transform the business, and we are establishing ourselves as leaders in decarbonisation as we accelerate the electrification of our bus fleet to deliver value not just for FirstGroup but for all our stakeholders.’
FirstGroup shares rose 16% to 138.00 pence each in London on Thursday morning.
Last month, UK Transport Secretary Mark Harper announced that FirstGroup’s TransPennine Express will be nationalised, following months of delays and cancellations. Back then the Department for Transport said the services will be brought under its operator of last resort, a business in the UK that operatores a railway franchise on behalf of the government, by the end of May.
About one in six TransPennine Express trains were cancelled in most of March.
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