Britain’s biggest rail operator faces a £1bn hit to its profits under Labour’s plans to bring the network back into public ownership, City brokers have revealed.
Peel Hunt analysts have cut First Group’s 2026 rail revenue forecasts after recent opinion polls point to Labor winning the next general election.
FirstGroup owns South Western Railway, Avanti West Coast and Great Western Railway and operates around 4,500 buses in the UK.
Sir Keir Starmer’s shadow transport secretary has promised to bring forward “radical” plans for Britain’s railways under a Labor government.
This includes the possibility of reversing the privatization of the rail industry that took place in the mid-1990s, although companies are lobbying against the proposed changes.
Peel Hunt’s Alex Patterson said: “We are cautious about the railways because of Labour’s nationalization plans.”
As a result, he lowered First Group’s 2026 railway revenue forecast to £1.66 billion from the previous forecast of £2.79 billion. By contrast, Peel Hunt expects revenues from First Group’s rail division to be £3.7bn next year.
Mr Patterson said First Group’s 2026 profits would fall by 15% to £115m due to the expected weaker revenue, which would also include its bus business.