FirstGroup expects lower adjusted earnings as sells Mistral to Tracsis

FirstGroup PLC on Wednesday announced the sale of subsidiary Mistral Data Ltd to transport technology provider Tracsis PLC.

FirstGroup, an Aberdeen, Scotland-based bus and rail transport provider, said it is selling Mistral for an enterprise value of £48 million. The consideration will be paid in cash upon completion.

UK-based Mistral provides software solutions for the rail industry. FirstGroup noted that it generated operating profit of around £4 million and revenue of around £13 million for financial 2026, up from £7 million four years prior.

FirstGroup said it expects a roughly £4 million decrease in operating profit for financial 2027, and a roughly 0.6 pence decrease in adjusted earnings per share from 20.3p the year before, as a result of the disposal.

It also said it now expects free cash generation of approximately £435 million over the next three years. It had included about £6 million in anticipated total cashflows from Mistral in its guidance of £90 million in "cash inflow from DfT TOCs and related Rail Services".

"The sale of Mistral Data, which we have successfully grown into an attractive, high-quality asset, is another example of our ability to create and realise value as the UK transport sector evolves," commented FirstGroup Chief Executive Officer Graham Sutherland. "The sale proceeds will further strengthen our balance sheet, supporting continued growth in attractive UK bus and rail markets and meaningful returns to our shareholders."

Leeds, England-based Tracsis said acquiring Mistral accelerates its strategy to build a scalable, higher-margin transport software business.

Tracsis intends to fund the acquisition from its existing cash resources and debt facilities.

It expects to complete the deal by no later than October 31.

Tracsis CEO David Frost called the deal "a highly strategic moment," continuing: "Mistral Data is a high-quality business in the market we know best, with products that complement rather than compete with our own. Its products are built on a modern, cloud-native platform that delivers strong recurring revenues and high margins.

"Together, these attributes accelerate our transition to a scalable software product business."

Frost added: "[The acquisition] comes at a time of structural change across the UK rail industry...operators need smarter, more integrated tools to support safer operations, improve punctuality, protect revenue, keep fleets running and enhance the passenger experience - with less reliance on fragmented legacy in-house systems.

"We believe the combined group will be well placed to meet this demand, bringing together complementary capabilities across planning, operations, passenger experience and data, to create a broader and more relevant proposition for UK rail customers."

FirstGroup shares were down 0.3% at 180.00p on Wednesday afternoon in London.

Tracsis shares, however, were 6.2% higher at 353.00p each.

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