3 UK Transport Stocks Linked To The £2 Bus Fare Cap

The government’s decision to reinstate the £2 bus fare cap in England from January 2027, backed by over £500m of subsidies, puts public transport firmly back on the investing radar. Cheaper fares could support passenger volumes, while stable funding underpins operators and parts of the wider supply chain. For investors, that opens up a focused corner of the market where policy rather than fashion drives demand. This article looks at 3 stocks exposed to the renewed fare cap and broader public transport spending, helping you decide whether they deserve a closer look in your portfolio research.

Mobico Group (LSE:MCG)

Overview: Mobico Group is a Birmingham based transport operator running buses, coaches, rail and shuttle services across the UK, Europe and North America for cities, businesses, healthcare and education customers as well as individual passengers. Its fleet of around 27,300 vehicles, including buses, long haul coaches and alternative fuel options like electric and hydrogen, gives it broad exposure to everyday travel demand.

Operations: Mobico generates revenue mainly from ALSA at £1.5b, followed by the UK at £586.9m, WeDriveU at £432.2m and German Rail at £252.4m.

Market Cap: £147.0m

Mobico Group is closely aligned with the £2 fare cap, with UK urban buses and ALSA contract operations geared to policy backed passenger volumes and subsidy frameworks, while its WeDriveU shuttles tap into corporate and campus transport needs without owning heavy infrastructure. At the same time, investors need to weigh real issues, including negative shareholders’ equity, debt funded liabilities and ongoing work to reshape German rail contracts and exit lower quality activities. With analysts expecting a turn toward profitability over the next few years and recent German contract changes reducing revenue risk, Mobico presents a combination of potential upside along with balance sheet and execution risk that warrants detailed consideration before forming a firm view.

Mobico’s potential turn toward profitability, alongside those complex contracts and balance sheet questions, is only half the picture. Walk through the 3 key rewards and 2 important warning signs (1 is major!) and see what might be quietly reshaping the story.

Trifast (LSE:TRI)

Overview: Trifast is a Walsall based manufacturer and distributor of engineered fasteners and related components that hold together everything from vehicles and medical equipment to smart infrastructure such as data centres and energy systems. Alongside supplying screws, bolts and specialist hardware, Trifast provides sourcing, logistics and technical support so OEMs can secure critical components on time and to specification.

Operations: Trifast generates around £208.4m of revenue from industrial fasteners and category C components, with sales spread across Asia (£46.3m), Europe (£75.8m), the UK & Ireland (£64.3m) and North America (£33.6m), partly offset by £11.5m of inter segment revenue.

Market Cap: £110.7m

Trifast gives you exposure to the nuts and bolts behind spend on buses, smart infrastructure and data centres, with engineered fasteners that sit in vehicles, power systems and high spec equipment that benefit when operators order more fleet and hardware. The company is currently loss making and reported a net loss of £1.0m on £208.4m of sales. It is restructuring its footprint, including closing its Malaysian plant, which adds operational and execution risk. Management is targeting a higher EBIT margin of about 7.8%. For investors who want to understand whether forecast earnings improvement, self help savings above £5m a year and fastener demand tied to public transport and energy investment can outweigh those risks, Trifast may warrant closer consideration.

Trifast’s reset story hinges on whether self help savings and higher margins can turn today’s loss into tomorrow’s opportunity, and the 3 key rewards and 1 important warning sign could reveal the twist investors are missing.

FirstGroup (LSE:FGP)

Overview: FirstGroup is a United Kingdom based transport company that runs around 6,000 local buses and coaches and operates roughly 320 trains, moving passengers across key towns, cities and intercity routes. It gives you exposure to everyday commuting and regional travel that is closely linked to government transport policy and funding decisions.

Operations: FirstGroup generates about £1.4b of revenue from First Bus and £3.3b from First Rail, with group items of £19.3m, almost all earned in the United Kingdom and Republic of Ireland at £4.8b.

Market Cap: £971.3m

FirstGroup sits at the centre of the renewed £2 bus fare cap story, with a large English bus footprint that could benefit if cheaper fares keep volumes firm while subsidies support revenue, all on top of a rail business that already contributes the bulk of group sales. Earnings are modest but positive, net margins are thin, and analysts still expect revenue to decline over coming years, so this is not a simple growth story. Yet a P/E below the wider UK market, a sizeable buyback of up to £100m and a proposed 5.0p dividend suggest the market may be pricing those policy and funding risks quite cautiously, leaving investors to decide what they might be missing.

FirstGroup’s mix of thin margins, a P/E below the wider UK market and sizeable buyback plans suggests investors may be missing something in the story. The 3 key rewards and 1 important major warning sign could be where the real twist starts.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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