FirstGroup H1 2026: Earnings and Revenue Rise, Shares Tumble

FirstGroup PLC (LON: FGP) shares fell on Tuesday despite reporting a robust first half for fiscal year 2026, marked by revenue and earnings growth.

The transport operator is on track to deliver modest adjusted EPS growth for the full year, with H2 2026 expected to benefit from completed business restructuring.

Adjusted revenue surged 30% to £833.6 million (H1 2025: £639.6 million), propelled by growth in bus revenues, the inclusion of First Bus London, and advancements in First Rail open access and Rail services. Group adjusted operating profit rose to £103.6 million (H1 2025: £100.8 million), driven by recent acquisitions and cost efficiencies, which were partially offset by increased employer National Insurance contributions and the conclusion of the SWR NRC.

Adjusted EPS increased by 16% to 9.9p (H1 2025: 8.5p), bolstered by the repurchase of 22 million shares during H1 2026. The company returned approximately £76 million to shareholders, including £49 million through the £50 million buyback program completed in October 2025 and the FY 2025 final dividend paid during the period.

An interim dividend of 2.2p per share (H1 2025: 1.7p per share) aligns with the company's progressive dividend policy.

FirstGroup's commitment to shareholder value is evident through its buyback program and increased dividend payout.

The company's strategic allocation of capital, including growth investments and shareholder returns, reflects confidence in its future performance. While the free cash outflow of £(35.6) million before acquisitions and returns is notable, it is attributed to accelerated First Bus investment, primarily in electrification.

Driver Breakdown:

Strategic Acquisitions: The acquisition of First Bus London significantly boosted overall revenue.
Operational Efficiencies: Cost-saving measures and network improvements contributed to increased profitability.
Electrification Investments: Substantial investment in zero-emission buses and infrastructure positions FirstGroup for long-term sustainability and revenue opportunities.

CEO Graham Sutherland commented, “We have delivered a robust performance in H1 2026, made further progress in growing and diversifying the business and maintained our positive earnings trajectory. In the second half, we will benefit from the actions we have taken to restructure the business as well as the contribution of our recent acquisitions and expect modest growth in our adjusted earnings per share for the full year.”

FirstGroup anticipates modest growth in adjusted EPS in FY 2026 and aims to at least maintain it in FY 2027, continuing its investment in portfolio diversification.

Adjusted net debt is projected to be £125m-£135m by the end of FY 2026, reflecting strong cash generation and accelerated net cash capex of approximately £180m in First Bus, inclusive of new zero-emission buses in London.

The Group is actively evaluating strategic growth opportunities in both bus and rail, aligning with its UK-focused growth strategy.