Bus and rail outfit FirstGroup shrugged off the loss of the TransPennine Express franchise and the continuing impact of industrial action as it benefited from strong travel demand.
Regulation does not always have a negative impact and the company has benefited from a government scheme to cap bus fares – which has helped boost passenger levels.
AJ Bell’s Russ Mould said:
“Alongside the better-than-expected annual profit, perhaps even more significantly given the recent loss of the TransPennine franchise, the company said current trading and the outlook for 2024 were in line with expectations.
“The company’s strong balance sheet is testament to careful husbandry of its finances through the pandemic and gives the company scope to reward shareholders with buybacks and to look at acquisitions, perhaps even a bid for rival UK bus operator Arriva.
“The company still needs to focus on improving performance and reliability if it isn’t to face further government sanction and also see passenger numbers drop off as people are turned off by delays and cancellations.”