FirstGroup has reported "resilient financial performance", despite the challenging political, economic and industrial relations environment.
Adjusted operating profit increased to £66.1m from £51.8m at the same stage last year, principally reflecting increased open access earnings, with aggregate rail management fee-based income broadly in line, lower First Bus adjusted operating profit, and lower central costs.
The half-year report also showed statutory operating profit of £62.1m, up from £52.2m, which includes net adjusting item charges of £4m.
Adjusted net cash of £7.3m included adjusted net debt of £3.9m, with £557.7m of undrawn committed liquidity.
The board declared an interim dividend of 0.9p, in line with previously-announced policy.
Within First Bus, commercial volumes increased by 32%, although concession volumes recoveredmore slowly.
To better align with demand, the group sold off its First Scotland East business to McGill's during the period, with its regional management structure reorganised accordingly.
"The recent extension of recovery funding arrangements in England, ongoing driver shortages and the cost inflationary backdrop limit the pace of near-term progress," the report noted.
At First Rail the focus has been on operational delivery across all services in a "challenging industrial relations environment".
The West Coast Partnership contract was recently extended, enabling Avanti West Coast to begin restore services "to the levels that passengers rightly expect".
Elsewhere in the group, the sale of almost all remaining legacy Greyhound properties for £122m to Twenty Lake Holdings is expected to complete in December. As a result, the exit from residual Greyhound assets will be substantially completed, at an aggregate net value in excess of $160m since start of the financial year.
FirstGroup estimates First Transit earnout consideration of around £74m at hedged rates to be received during 2024, following recently-announced sale of the Transit business by EQT Infrastructure
The 2023 outlook explained that the group is on track to realise a further £5m in annual central cost savings than previously guided.
Adjusted net cash position expected to be in the range of £100 to £110m at the end of next year, after receipt of Greyhound property proceeds and before any deployment of this capital.
Chief executive Graham Sutherland said: "We have delivered a resilient financial performance in the period despite significant headwinds – demonstrating our strengths in the UK bus and rail markets and the increasing capability and potential we are building into our businesses as public transport continues to navigate the aftershocks of pandemic travel restrictions.
"With a strong balance sheet and an important role supporting the sustainability and economic growth agendas in our core UK public transport markets, we see clear opportunities to create further value and deliver progressive returns to shareholders in the coming years."
Also during the year, FirstGroup received a series of unsolicited, conditional proposals from I Squared Capital Advisors in relation to a possible offer to acquire the entire issued share capital.
A final proposal on 15 August of 135 pence per share, together with further contingent value from the First Transit earnout, was rejected by the board, which concluded that the cash component significantly undervalued FirstGroup's continuing operations and future prospects, and the contingent value did not provide shareholders with sufficient certainty.
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