Key Highlights

  • FirstGroup (LSE:FGP) is in focus on the FTSE 250 as it prepares to publish half-year results for FY2027 in November 2026.
  • In FY2026, group adjusted operating profit was £219.4 million, with adjusted Revenue up 25% to £1,716 million.
  • First Bus revenue grew to around £1.44 billion, with adjusted operating profit up to £102.8 million, helped by the first full year of First Bus London.
  • First Rail adjusted operating profit fell to £129.9 million as UK rail contracts move into public ownership and costs rose in open access.
  • Open access brands Lumo and Hull Trains are becoming increasingly important to the rail strategy, alongside Rail Services businesses.

Why FirstGroup (LSE:FGP) Is in Focus Today

FirstGroup (LSE:FGP), one of the UK's largest public transport operators, is in focus on 3 November 2026 as investors position for its half-year results, scheduled for November. The FTSE 250 company is in the middle of a major transition, as UK government-contracted train operating companies move into public ownership under the government's rail reforms, while its bus Business and private open access rail services grow rapidly.

The upcoming results will be the first detailed update since FY2026 results in June, and they are expected to show how well FirstGroup is replacing declining rail management fee income with profit growth from buses and open access rail. The company's transformation, including a big push into electric buses, has been a regular topic of discussion among UK investors.

FY2026 Results Recap

For the 52 weeks to 28 March 2026, FirstGroup reported group adjusted revenue up 25% to £1,716 million, reflecting acquisitions in bus. Group adjusted operating profit was £219.4 million, marginally lower than the prior year, as continued growth in First Bus was offset by a decline in First Rail. Statutory revenue was around £4.75 billion.

First Bus revenue rose to around £1.44 billion from £1.08 billion, and adjusted operating profit increased to £102.8 million from £96.0 million. The adjusted operating Margin was 7.1%, lower than the previous year due to the mix effect of the London acquisition, but management has set a medium-term target margin of 8% to 9%. First Bus EBITDA rose to £164.7 million.

First Rail adjusted operating profit fell to £129.9 million from £148.8 million, reflecting additional costs in open access, the transfer of South Western Railway to public ownership in May 2025 and a lower IFRS 16 adjustment.

First Bus: The Growth Engine

First Bus has grown rapidly through acquisitions, including bus operations in London, which performed ahead of expectations in their first full year. Revenue has grown from around £800 million in FY2022 to £1.4 billion in FY2026. FirstGroup is investing heavily in fleet electrification, with accelerated net Capital Expenditure focused on decarbonisation, supported by government co-funding. Electric buses lower operating costs over time and support contract wins with local authorities pursuing net zero targets.

First Rail: Open Access and Rail Services

FirstGroup (LSE:FGP) operates open access rail routes that are not part of government franchises, including Hull Trains and two routes under the Lumo brand. Open access operators take full revenue risk and can earn higher margins than management-fee contracts. FirstGroup is seeking to expand its open access network, which could become a major source of growth as the government-contracted business shrinks.

The group's Department for Transport contracts, including Avanti West Coast and Great Western Railway, are expected to transfer to public ownership over time under the government's plans for Great British Railways. FirstGroup also operates Rail Services businesses such as First Customer Contact, Mistral Data and First Rail Consultancy, which provide services to the rail industry.

Capital Allocation

FirstGroup has a track record of returning capital through dividends and share Buybacks while investing in fleet decarbonisation and acquisitions. Cash returned from pension Escrow arrangements has also supported its balance sheet. Investors will be watching how the group balances investment, Debt and Shareholder returns as rail management fees decline.

Key Risks

Risks include the loss of management fee income as rail contracts transfer to public ownership, regulatory approval for new open access routes, cost inflation, wage negotiations, driver availability, changes to bus funding from government, and execution risk on electrification. Passenger Demand and fuel or energy costs also affect profitability.

What Investors Are Watching Next

The half-year results in November 2026 are the key near-term catalyst. Investors will focus on First Bus revenue and margin progress towards 8% to 9%, the performance of Lumo and Hull Trains, any new open access approvals, the timetable for DfT contract transfers, cash generation, net debt and capital returns. Updated guidance for adjusted Earnings Per Share in FY2027 will be critical to sentiment.