FIRSTGROUP registered a decrease in profits as the new Covid-19 restrictions put into question the group's recovery pace. In the six months ended 30 September, Firstgroup's profits from continuing operations went down four per cent, from £55.7m to £51.8m.

The group's shares also suffered a blow, falling 5.7 per cent to 95.9p by the close yesterday.

Following the new restrictions introduced by the UK Government to stop the spread of the Omicron variant, the transport giant said doubts still remain about the speed of its recovery.

While passenger volumes increased to 71 per cent of 2019 levels, Firstgroup - which now operates only in the UK following the April sale of its North American operations - has registered a slowdown in the pace of recovery.

The company is also experiencing a shortage of staff drivers.

Despite the four per cent slump, Firstgroup's total adjusted profit was higher than last year, with revenues increasing slightly to £3.109bn. The operator said it would start paying back dividends next year.

"With a well-capitalised balance sheet and an operating model that supports our intention to begin regular dividends to shareholders within the next 12 months, Firstgroup is now a more resilient and flexible business," said Firstgroup's executive chairman David Martin.

"I am confident that we are wellplaced to create long-term, sustainable value from the opportunities ahead, underpinned by the UK policy backdrop which places public transport at the centre of the economic recovery, decarbonisation and levelling up agendas." In July, the group tried to win back investors by handing back £500m from the £3.3bn sale of its North American operations.

The deal proved controversial as two of the company's biggest shareholders were profoundly opposed, on grounds that it was "too cheap", City A.M. reported. Activist investor and Firstgroup's main shareholder Coast Capital said: "In spite of numerous representations in which concerns were raised about the rushed, opaque, poorly timed, and uncompetitive sales process, the low valuation of the deal, the lack of fairness opinion, the company continued to press ahead with this value-destroying transaction."

(c) 2021 City A.M., source Newspaper