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Highlights
- FirstGroup’s announced to return £500 million cash to shareholders as a part of a tender offer post the sale of the company’s First Transit and First Student businesses.
- Go-Ahead Group recorded regional bus passenger volumes of around 65% to 70% of pre-COVID levels in June 2021.
The COVID-19 pandemic brought all public transportation operations in the UK to a standstill. Throughout the pandemic, people were advised to avoid public transport and these impacted revenues of public transport companies. However, recently, with rising vaccination rates, reopening of the economy, and easing of COVID-19 related restrictions, public transport operators and service providers are able to resume operations in full swing, almost similar to the pre-pandemic levels.
Further, public transport will play an important role in decarbonising the country’s transportation system, thus driving demand for public transportation services in the coming years. Rising fuel and automobile ownership costs are expected to push more car owners to use public transport.
Here we conduct a detailed review of two FTSE public transport stocks that have given solid returns in the last one year.
FirstGroup Plc (LON:FGP)
FirstGroup is a UK-based international transport company headquartered in Aberdeen, Scotland. The FTSE 250-listed company provides transport services in Ireland, the UK, the US, and Canada. The shares of the company traded at GBX 89.05, up by 2.95% at 12:40 PM on 13 September 2021, after the announcing to return £500 million cash to shareholders as a part of a tender offer post the sale of the company’s First Transit and First Student businesses.
First Group announced that its bus passenger volumes reached 65% of pre-pandemic levels on an average in the recent weeks, driven by the return of students to universities and schools.
On 31 August 2021, FirstGroup inked a £156 million multi-year sustainability-linked Revolving Credit Facility agreement with its relationship banks.
The shares of FirstGroup have returned 107.00% in the last one year to shareholders, and the market cap stood at £1,057.63 million.
Go-Ahead Group Plc (LON:GOG)
Go-Ahead Group is a provider of passenger transport services. The shares of the company traded at GBX 887.50, up by 0.51% at 12:51 PM on 13 September 2021.
For the half-year ended 2 January 2021, Go-Ahead Group recorded revenue of £2,070.2 million, representing an increase of 3.1% year on year compared to £2,007.3 million in H1 2020.
Go-Ahead Group recorded regional bus passenger volumes of around 65% to 70% of pre-COVID levels in June 2021. It expects to have more than £270 million cash and unutilised facilities for the year ended 3 July 2021.
The shares of Go-Ahead Group returned 29.82% in the last one year to shareholders, and the market cap stood at £381.26 million.
