FirstGroup plc Stays Ahead Of EasyJet plc, Thomas Cook Group plc, Stagecoach Group plc And International Consolidated Airlns Grp SA After Update

FirstGroup plc (LON: FGP) is still ahead of EasyJet plc (LON: EZJ), Thomas Cook Group plc (LON: TCG), Stagecoach Group plc (LON: SGC) and International Consolidated Airlns Grp SA (LON: IAG)

FirstGroup plc
FirstGroup plc

Transport operator FirstGroup plc (LON: FGP) (LSE: FGP.L) has released a Q1 trading update today. Trading performance as outlined at its full-year results has continued in Q1, with group revenue in the quarter falling by 1.4%. Decreases in revenue for FirstGroup’s First Bus and Greyhound operating segments was offset partially by revenue increases in First Student, First Transit and First Rail.

For instance, First Student’s revenue increased by 1.1% and First Transit’s by 1%, while First Rail’s LFL sales rose by 2.3%. However, Greyhound and First Bus’s LFL numbers were down by 5% and 1.4% respectively.

In spite of this fall in sales, numbers for the full-year have not been changed by FirstGroup. Although the company’s international operations are now expected to benefit from a positive currency effect caused by a falling pound, FirstGroup believes that the more challenging outlook for the UK economy will offset this.

FirstGroup expects to make strong progress in the current year even though it faces a tough outlook. It will focus on disciplined contract bidding and a rigorous cost efficiency programme, as well as potentially benefitting from lower fuel costs and more First Student operating days compared to the prior year.

Although FirstGroup’s shares have fallen by 5% in 2016, they are still ahead of travel sector peers EasyJet plc (LON: EZJ), Thomas Cook Group plc (LON: TCG), International Consolidated Airlns Grp SA (LON: IAG) and Stagecoach Group plc (LON: SGC). In easyJet’s case, its shares are down by 47% in 2016, while Thomas Cook has fallen by 47%, IAG by 31% and Stagecoach by 31%.

FirstGroup has a P/E of 8.3 and in my view that is appealing. Although FirstGroup faces a difficult outlook in the UK, it is forecast to grow EPS in the next two fiscal years. Therefore, it could continue to outperform its travel sector peers in my opinion.

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The author does not own shares in FirstGroup, Thomas Cook, IAG, EasyJet or Stagecoach at the time of writing.

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