Great Western Coffee Shop

Firstgroup set for bumper results but Labour’s rail nationalisation policy a ‘threat’ to share price

Transport giant Firstgroup is expecting bumper profits in its half year results this Thursday amid strong passenger volumes on bus and rail.

Analysts have forecast a £13m rise in underlying profit to £95m and £4.7bn in sales for the full year to March 2024, while investors are currently looking forward to a 4.5p dividend – 18 per cent higher.

https://www.cityam.com/firstgroup-set-for-bumper-results-but-labours-rail-nationalisation-policy-a-threat-to-sentiment/

I wonder what improvements GWR customers can expect off the back of these "bumper profits"?

A “return on sales” of 2% is – assuming it’s been reported correctly– hardly ”bumper profits”.

Under the NRCs the DfT will retain all revenue risk and substantially all cost risk. For the Group’s 70% share of the First MTR joint venture for SWR the fixed management fee is £3.3m per annum and there is the opportunity to earn an additional fee of up to £9.9m which is the maximum attainable performance fee. The punctuality and other operational targets required to achieve the maximum level of performance fee are designed to incentivise the highest level of performance for customers.

The Performance Based Fee is scored against four categories (Operational Performance, Customer Satisfaction, Finance and Business Management). There is a mix of quantitative metrics and qualitative assessments with three levels (‘below acceptable’, ‘acceptable’, ‘good’) – ‘acceptable’ rating results in approximately two thirds of the performance-based fee element being payable