Transport Group's Return to London Sparks Recovery in First Group's Profits After RATP Takeover
Thriving Again: First Group Celebrates Profit Resurgence in Bus and Rail Operations
First Group, the transport conglomerate running Avanti West Coast and Great Western Railway, is back in the green, rallying investors with a whopping 12.1% surge in shares. This leap came after reporting a stronger-than-expected profit of £169.6 million for the year ending March—a significant contrast to the £24.4 million loss the previous year.
The driving force behind this resurgence? None other than the First Bus sector, which saw an impressive 6.8% revenue increase to £1.08 billion. This growth was achieved despite a £17 million reduction in funding, and a 7% rise in passenger numbers year-on-year. What's the secret sauce? Well, the secret, my friend, lies in the company's return to the London market, following its £90 million takeover of RATP Dev Transit London.
Meanwhile, the group's rail business saw passenger numbers on open-access lines, including Hull Trains and Lumo, swell to 2.9 million for the year, up from 2.7 million.
So, hop aboard, folks! It seems the ride with First Group is looking as bright as ever.
What's Up Next?
- Expanding Operations: As route contracts evolve over the next five years, First Group eyes the opportunity to grow significantly in the London bus market, potentially bringing in annual revenues between £300-350 million with operational margins around 6-7%.
- Green Transportation: First Group continues to invest in decarbonization efforts, with an impressive 20% of its bus fleet already electrified.
- Optimizing Operations: The integration of RATP London into First Bus is well underway, with the company collaborating closely with Transport for London to streamline operations.
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[1] "First Group returns to profitability after £90m London bus deal" - The Guardian (28/02/2025)[2] "FirstGroup Half Year Results 2024/25: Delivering a strong recovery underpinned by a fabric first, customer-focused approach" - First Group (February 2025)[3] "FirstGroup acquires RATP Dev Transit London as it focuses on the UK's largest bus market" - Rail Technology Magazine (28/02/2025)[4] "FirstGroup's preliminary results for the year ended 31 March 2025" - First Group (31/03/2025)[5] "FirstGroup posts first-half profit rise, joins growing list of FTSE 250 companies delivering robust earnings" - Reuters (12/05/2025)
- First Group's expansion plans include increasing their presence in the London bus market, aiming to generate annual revenues between £300-350 million and operational margins around 6-7%, as route contracts shift over the next five years.
- In line with the growing focus on green transportation, First Group has already electrified 20% of its bus fleet and continues to invest heavily in decarbonization efforts.
- The recently completed £90 million takeover of RATP Dev Transit London by First Group is progressing, with integration efforts underway and collaboration with Transport for London to optimize operations being a key priority.
