TRANSPORT giant Firstgroup has hiked its dividend as profit surged year-on-year due to the strong demand for rail and bus travel.

The FTSE 250 firm reported an adjusted operating profit of £204.3m, up from £161m, despite revenue dipping marginally to £4.7bn.

Off the back of this profit jump, Firstgroup hiked its full-year dividend by 45 per cent to 5.5p. This is in addition to the £118m already returned to investors via share buybacks.

On a statutory basis, the group reported a loss of £24.4m, but this was predominantly due to non-cash charges of £146.9m related to its exit from two local government pension schemes.

Chief executive Graham Sutherland said: "We have made considerable progress in our financial and operational performance in FY 2024 as we continue to transform and grow our leading First Bus and First Rail businesses.

"This is testament to the resilience and capability of our people across the group and leaves us well positioned to grow and create further value for all our stakeholders."

Looking ahead, Firstgroup said it expected to continue to trade in line with current expecations. Its adjusted net cash position is forecast to be in the range of between £40-50m at the end of full-year 2025. It is also working towards a 10 per cent adjusted operating profit margin.

Adam Vettese, analyst at

Etoro, said: "Firstgroup has pulled up with a set of results that make for good reading, with a jump in year-onyear operating profit and margins. "This is somewhat of a surprise given that the past year has been dominated by strikes and unreliable service, notably on Firstgroup's own Avanti West Coast service. The disruption to travellers doesn't seem to bother the balance sheet however with the firm ending 2024 with a strong cash position also."

(c) 2024 City A.M., source Newspaper