FirstGroup, a leading UK transport operator, has released its FY 2026 results, showing a 25% increase in revenue to GBP 2.5 billion. The company's revenue growth was driven by a combination of higher ticket sales, increased demand for its rail services, and the expansion of its bus operations. However, despite the revenue growth, FirstGroup's profit margins have come under pressure. The company's operating profit fell by 10% to GBP 120 million, due to rising costs, including increased energy prices and higher staff costs.
The company's rail division, which operates the Great Western Railway and Great Western Railway franchise, saw a 15% increase in revenue, but its profit margins were squeezed by higher energy and maintenance costs. The bus division, which operates in several UK regions, saw a 20% increase in revenue, but its profit margins were also impacted by rising costs.
FirstGroup's CEO, Matthew Gregory, attributed the profit margin pressure to the ongoing challenges in the transport sector, including the impact of the COVID-19 pandemic and the ongoing fuel price crisis. He noted that the company is taking steps to mitigate the impact of rising costs, including reducing its energy consumption and exploring new revenue streams.
The FTSE 100-listed company's shares fell by 5% in early trading on the news, as investors reacted to the profit margin pressure. The company's shares are currently trading at around GBP 140, down from a high of GBP 170 in 2022.