FirstGroup plc: history, ownership, mission, how it works & makes money

A Brief History of FirstGroup plc

FirstGroup plc, established in 1995, is a prominent transportation company based in the United Kingdom. Originally formed through the merger of two regional bus operators, First Glasgow and First Bedfordshire, the company has significantly expanded its operations over the years.

In its early years, FirstGroup focused on acquiring various transport businesses, helping it to grow its fleet and service coverage. By 1999, the company became listed on the London Stock Exchange under the ticker symbol "FGP," and it quickly gained a reputation for being one of the largest bus operators in the UK.

FirstGroup made a strategic acquisition in 2001 when it purchased the TransPennine Express franchise, further establishing its footprint in rail transportation. By 2007, FirstGroup expanded its operations into North America, acquiring the US-based school bus operator, Laidlaw International, for approximately £1.6 billion ($3.2 billion). This acquisition made FirstGroup one of the largest school transportation providers in North America.

In the following years, FirstGroup continued to enhance its service offerings and operational efficiency. The company reported revenue of £2.53 billion for the fiscal year ending March 31, 2010, with a profit before tax of £85 million. By 2019, FirstGroup had managed to capture a significant share of the UK bus and rail markets, reporting revenues of £6.83 billion.

One of the notable changes came in 2020 when FirstGroup undertook a restructuring strategy to streamline its operations and refocus on its core competencies. The company divested several non-core assets, including the sale of the Greyhound bus service in the United States, which was completed for a consideration of approximately $46 million.

As of March 2023, FirstGroup plc reported a revenue of £6.3 billion for the financial year ending March 31, 2022, with a net profit of approximately £100 million. The company continues to operate numerous bus and rail franchises across the UK and North America, demonstrating resilience amid industry challenges.

Recent strategic initiatives include investing in environmentally friendly transport solutions, aligning with broader sustainability goals. FirstGroup aims to have a fleet of more than 50% ultra-low emission buses by 2025, contributing to its commitment to reducing carbon emissions.

Overall, FirstGroup plc has maintained a solid position in the transportation sector through strategic acquisitions, operational restructuring, and a focus on sustainability. The company's historical growth trajectory highlights its adaptability and ongoing relevance in a competitive market.

A Who Owns FirstGroup plc

FirstGroup plc, a leading transport operator in the UK, has a diverse ownership structure that includes institutional investors, private shareholders, and hedge funds. As of the latest update, the largest shareholders are as follows:

As of the end of Q2 2023, FirstGroup plc reported a market capitalization of approximately £1.1 billion. This valuation reflects the company's operational performance and market conditions.

FirstGroup's share price has shown considerable volatility over the past year, with a 52-week range of £0.80 to £1.60. The stock has been influenced by various factors, including regulatory changes, fuel prices, and competition in the public transport sector.

The recent restructuring efforts and strategic focus on core operations have also impacted investor sentiment. In the first half of FY 2023, FirstGroup reported a revenue increase of 12% compared to the previous year, culminating in approximately £1.3 billion in total revenue.

Additionally, FirstGroup plc is focused on enhancing shareholder value through its dividend policy. The company announced a semi-annual dividend of £0.05 per share, reflecting a 3.2% yield based on the latest share price. This commitment highlights FirstGroup's dedication to returning value to its shareholders amidst ongoing operational challenges.

Overall, the ownership structure of FirstGroup plc exemplifies a balanced mix of institutional and retail investors, with a notable concentration among top institutional shareholders. This diverse ownership base can influence the company's strategic decisions and overall market performance.

FirstGroup plc Mission Statement

FirstGroup plc is a leading transport operator in the UK and North America, providing essential services that connect communities and promote sustainable travel. The company’s mission is to deliver safe, reliable, and efficient public transport services that improve the quality of life for passengers. This commitment is reflected in their operational strategies and service delivery.

As of the latest financial report for the year ended March 2023, FirstGroup reported revenues of £5.03 billion, showcasing their significant role in the transport sector. The company operates under two main divisions: First Bus in the UK and First Rail, which includes a portfolio of UK rail franchises. The revenue breakdown highlights the company's diversified operations:

FirstGroup's sustainability initiatives are also a core part of their mission. The company aims to reduce carbon emissions across its operations. For the fiscal year 2022/2023, FirstGroup achieved a carbon reduction of 7% against their 2019 baseline. This commitment to sustainability is aligned with the broader industry goal of achieving net-zero carbon emissions by 2050.

Moreover, FirstGroup places high importance on customer satisfaction, with a target to achieve a customer satisfaction score above 80%. As part of their mission-driven focus, they continually invest in service enhancements, technology upgrades, and employee training to ensure the highest standards of safety and reliability.

In terms of financial health, FirstGroup reported an operating profit of £378 million in their latest fiscal year, reflecting a year-on-year growth of 15%. This profitability allows the company to reinvest in their infrastructure and services, ensuring they can fulfill their mission effectively.

FirstGroup’s approach to corporate responsibility is encapsulated in its mission to prioritize safety, sustainability, and reliability. Their strategic objectives include:

• Improve operational efficiency and reduce costs by 10% over the next three years.
• Expand their electric bus fleet to cover 25% of their operations by 2025.
• Enhance community engagement through partnerships with local organizations.

The commitment to their mission and the execution of their strategies put FirstGroup in a strong position to drive future growth while enhancing the quality of service provided to their customers. The alignment of their financial performance with their mission-driven objectives showcases their determination to be a leader in the transport sector.

How FirstGroup plc Works

FirstGroup plc operates in the public transport sector in the UK and North America, providing bus and rail transportation services. FirstGroup is divided into two main segments: First Bus and First Rail.

First Bus Segment

First Bus operates urban and rural bus services, serving over 1,000 routes and transporting approximately 1.5 billion passengers annually. As of 2022, the company had a fleet of around 5,000 vehicles.

• Revenue (2022): £1.3 billion
• Operating profit (2022): £100 million
• Market share of UK bus market: 17%

First Rail Segment

First Rail operates several franchises, including Avanti West Coast, Great Western Railway, and South Western Railway. These franchises cover vital transport routes connecting major cities. In FY 2022, First Rail carried around 115 million passengers.

• Revenue (2022): £2.3 billion
• Operating profit (2022): £150 million
• Market share of UK rail services: 12%

Financial Overview

According to the latest financial reports from 2022, FirstGroup plc reported a total revenue of £3.6 billion, with a net profit of £250 million after tax. The company has shown resilience in recovering post-pandemic, with a year-on-year revenue growth of 10%.

Market Position

FirstGroup holds a significant position in the UK transport market. As of 2023, the company controls around 5% of the overall UK public transport market, with notable presence in urban areas.

• Competitors: National Express, Stagecoach Group
• Franchise performance: Avanti West Coast reported an increase in train service utilization by 15% in 2022.

Sustainability Initiatives

FirstGroup has committed to reducing carbon emissions by 30% by 2030. Investments in electric buses total £40 million, aiming to electrify major routes in the UK.

Recent Developments

FirstGroup plc has announced plans to divest its First Student and First Transit businesses, which provide school and transit services in North America, for $4 billion. This move aims to refocus its operations on core UK services.

Furthermore, the company has signed a partnership with a technology firm to integrate smart ticketing solutions by 2024, enhancing the passenger experience and operational efficiency.

How FirstGroup plc Makes Money

FirstGroup plc, a leading transport operator in the UK and North America, generates revenue through several key segments, primarily focusing on public transport services. The company operates in two main divisions: First Bus and First Rail. In the fiscal year 2023, FirstGroup reported a revenue of £2.1 billion.

Revenue Streams

• First Bus: This division provides bus services across the UK. In 2023, First Bus contributed approximately £1.1 billion to total revenues, predominantly from fare collections and contracts with local authorities.
• First Rail: This segment includes the operation of train services, which accounted for around £980 million in revenue for the same year. The revenue comes from ticket sales, franchise agreements, and government subsidies.

Financial Performance

In the financial year ending March 2023, FirstGroup recorded an operating profit of £210 million, up from £150 million in the previous year. This increase can be attributed to a rebound in passenger numbers following the easing of COVID-19 restrictions.

The company's net profit for FY 2023 stood at £85 million, showing significant growth compared to £50 million in FY 2022. The earnings before interest and taxes (EBIT) reached £180 million, reflecting a solid improvement in operational efficiency.

Cost Management

FirstGroup has been focused on managing operational costs, which were approximately £1.9 billion in FY 2023. Key cost-saving initiatives included streamlining operations and optimizing staff levels.

Passenger Numbers

As of March 2023, FirstBus reported an average of 1.5 million passengers per day, while First Rail’s services saw about 700,000 daily passengers, indicating a strong recovery trend.

Franchise Agreements

FirstGroup operates under multiple franchise agreements, which play a significant role in its revenue structure. In 2023, the company's franchise revenue amounted to approximately £400 million, benefiting from fixed payments and performance-based incentives.

Government Support

In response to the pandemic, FirstGroup received approximately £200 million in government support, which helped stabilize its finances during periods of reduced ridership.

Future Outlook

Looking ahead, FirstGroup aims to expand its operations and improve service efficiency. The company plans to invest around £300 million over the next three years in fleet modernization and digital infrastructure enhancements.

In summary, FirstGroup plc's revenue model is driven by its diverse portfolio of transport services, cost management strategies, and strategic partnerships with government entities and local authorities. The recovery from the pandemic has positioned the company for growth in the coming years.