Underlying profits at FirstGroup PLC (LSE:FGP) were full steam ahead in the first half of the year thanks to better-than-expected growth at both its rail and bus businesses despite rail strikes causing significant disruption for passengers.
However, on a statutory basis, the operator of Glasgow, Bristol and Leeds buses and Avanti West Coast, GWR and SWR rail franchises swung to a £68.5 million loss in the half-year to 30 September 2023, from a profit of £37 million a year ago.
This reflected a £142 million pension settlement charge and related costs at First Bus after consultation with two local government pension funds saw the FTSE 250-listed company terminate its participation in these funds on 31 October 2023. An accounting gain of £160.4 million was recognised elsewhere in the results.
If excluding this, the group's adjusted operating profit increased more than 50% to £100.6 million.
A dividend of 1.5p per share was declared and management said the current trading and the group's outlook the full year remain in line with previous expectations, “despite the ongoing challenging economic and industrial relations environment”.
The latest on rail strikes is that the RMT union decided to agree a “way forward” and put the offer from rail operators to its members.
FirstGroup said it is continuing to evaluate a "pipeline of value-accretive inorganic growth opportunities".