FirstGroup warns of uncertain recovery amid fresh Covid restrictions

Posting first-half numbers, the transport group - the UK’s second-largest regional bus operator - said passenger volumes at its First Bus division were now at 71% of 2019 levels, which represented a slowdown in the rate of improvement.

It left its expectations for adjusted full-year operating profits unchanged, reflecting the "current pandemic-related restrictions and government-funding schemes in place, some further passenger volume improvement, and with our pricing strategy expected to broadly offset the effects of industry-wide driver shortages".

But it also conceded: "Some uncertainly remains around the pace of recovery in light of the evolving circumstances of the pandemic."

As at 0920 GMT, shares in FirstGroup were down 4% at 97.75p.

The spread of the omicron variant and rising cases saw the government announce so-called Plan B measures on Wednesday, including a call to work from home where possible.

FirstGroup, which also operates the Avanti, GWR, SWR and PTE rail services, reported total revenues of £3.1bn for the 26 weeks to 25 September, largely unchanged on last year’s figure. Adjusted operating profits from continuing operations were £51.8m, against £55.7m a year previously.

Group pre-tax profits, which were boosted by a number of one-off items, were £516.5m compared to a £100.1m interim pre-tax loss in 2020.

FirstGroup is undergoing a major overhaul, including exiting North America and cutting debt. The three North American divisions have been sold for a combined enterprise value of around $4.6bn, while about £2.2bn of debt has been repaid. Net debt stood at £234.2m at the end of September, against £2.95bn a year previously.

David Martin, executive chairman, said: "By divesting our North American operations, we have strengthened our financial position, refocused on our market-leading public transport operations in the UK, and returned £500m in value to shareholders.

"With a well-capitalised balance sheet and an operating model that supports our intention to begin regular dividends to shareholders within the next 12 months, FirstGroup is now a more resilient and flexible business.

"I am confident we are well-placed to create long-term, sustainable value from the opportunities ahead."