FirstGroup returns to profit

Group operating profit surged by about two-thirds to £232m, but Mr O'Toole insisted more work had to be done before shareholder returns could resume. He cited poor performance from the US business, as severe weather in the final quarter blighted bus services FirstStudent and Greyhound. This is a controversial point, as FirstGroup is under pressure to offload its US assets from Sandell Asset Management, an activist hedge fund. But Mr O'Toole said a tight eye on costs and better contract terms could bring the businesses back to health.

Sandell's presence on the share register may also explain a boardroom reshuffle. Senior independent director John Sievwright, non-executive director David Begg and chairman of the safety committee Colin Hood will step aside, making way for easyJet's chief operations officer Warwick Brady, former Dairy Crest chief executive Drummond Hall and Imelda Walsh, non-executive director at William Hill and Mothercare.

Prior to these results, Investec expected pre-tax profits of £142m for the current financial year, giving EPS of 8.4p, but has placed its forecasts under review.