Bus and rail operator FirstGroup has crashed £18.8million into the red due to a combination of one-off pension expenses and higher finance costs.
Although FirstGroup’s revenues for the 53 weeks to March 30 were flat at £4.7billion, it fell into the red after its finance costs rose 18.7 percent to £82million due to higher interest rates and paying £146.9million to settle its part of the Local Government Pension Scheme.
As a result, FirstGroup fell into the red for 2023/24. The year before it made a pre-tax profit of £128.7million.
Despite this, it still hiked its dividend from 3.8p per share to 5.5p, a 45 percent increase.
Last October, the company’s First Bus division withdrew from the LGPS. First Bus had employees that were part of the LGPS as it acquired their employers in the 1980s and 1990s.
Graham Sutherland, FirstGroup chief executive, said that despite “continued economic and industrial relations challenges”, it had put in an “excellent” performance.
He added that its trading since the start of its current financial year has been within expectations, with First Bus hitting its 10 percent profit margin target in the second half thanks to productivity improvements, electrification benefits and new vehicles.
FirstGroup’s rail division includes West Coast, Great Western Railway, and South Western Railway.
