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(Alliance News) - FirstGroup PLC on Tuesday reported a swing towards a pretax profit for the financial year and announced the departure of Chief Executive Matthew Gregory.
The Aberdeen, Scotland-based transport group's pretax profit for year ended March 27 was GBP115.8 million, swinging from a pretax loss of GBP299.6 million a year ago. Adjusted pretax profit was GBP39.4 million, narrowed from GBP109.9 million.
FirstGroup posted revenue of GBP6.84 billion, a fall of 12% from GBP7.75 billion.
"Public transport services are also critical long-term green infrastructure, as demonstrated during the coronavirus pandemic, and are fundamental to achieving the goals of the communities they serve, the economy and wider society. The connections offered by the ongoing group's services are a critical enabler of vibrant local economies and can play an important role in the UK’s regional 'levelling up' agenda," the firm said.
The financial performance was significantly ahead of initial expectations, generating cash despite lower volumes due to travel restrictions.
Going forward First Bus' contribution to adjusted operating profit in financial year 2022 will be dependant on the pace at which passenger volumes build back.
Central costs are expected to be GBP5 million lower in 2022, reflecting half a year of progress towards the GBP10 million per annum reduction target following completion of the First Student and First Transit sale.
FirstGroup shareholders narrowly voted in favour of allowing the firm to sell its US school bus and transit divisions for GBP3.3 billion in May.
Further ahead, the group has committed to commencing paying a regular dividend during financial year 2023, supported by its expectations for a 10% margin in First Bus on increasing revenues, as passenger volumes return to between 80-90% of pre-pandemic levels over the first year after restrictions on public transport are lifted.
Also on Tuesday, FirstGroup said that Matthew Gregory intends to step down as chief executive officer with effect at the annual general meeting on September 13, following investor pressure.
Chair David Martin will become interim Executive Chair until a permanent chief executive is appointed. A comprehensive search is underway to select a new chief executive for the group.
Matthew will work closely with David to ensure a smooth handover process.
On Monday, FirstGroup's largest shareholder and US hedge fund Coast Capital called for Gregory's resignation alongside two others following the sale of the group's US assets to Scandinavian private equity firm EQT AB for GBP3.3 billion.
The shareholder had said that Gregory should "resign and be replaced by a CEO of industry competency, as soon as possible".
Shares in First Group were up 3.5% to 87.35 pence each in London on Tuesday.
By Amrit Sahota; newsroom@alliancenews.com
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