Shares in FirstGroup rose on a reassuringly upbeat pre-close trading update for the first half. The most eye-catching feature was a commitment to dividend growth of “at least” 7 per cent a year. That’s bullish for a UK public transport company - generally considered dull but predictable - just before the UK government announces cuts to the transport budget.
It’s not necessarily reckless, though, as FirstGroup’s operations are broadly spread between the US and UK and, locally, between rail and more vulnerable bus services. The geographical balance was highlighted last month when the long-time chief executive Sir Moir Lockhead announced his retirement in March 2011. He will be replaced by his transatlantic deputy, Tim O’Toole, an American who used to run London Underground.
