AGM Statement and Q1 Interim Management Statement

Wednesday 17 July 2013 FIRSTGROUP PLC AGM STATEMENT AND INTERIM MANAGEMENT STATEMENT FirstGroup ("the Group") will provide the following update on trading duringthe first quarter period ("the period") from 1 April to 30 June 2013 at theGroup's Annual General Meeting in Aberdeen today. Summary * Overall trading in line with management's expectations * Completion of £615m rights issue, providing a strong base to continue our transformation plans and invest to create sustainable long term value * Recovery programmes in First Student and UK Bus on track * Solid performance in First Transit * Recent trends in core Greyhound continue with effects of a weak US economy being mitigated through ongoing cost management. Further profitable expansion of Greyhound Express * Continued solid revenue growth in UK Rail and shortlisted for Caledonian Sleeper and Luas competitions * Completed sale of London bus operations First Student Our recovery plan is on track and as we implement a more efficient operatingmodel and uniform practices across the division we expect margins for the firsthalf of the year to be ahead of the equivalent period last year. We are ontrack to achieve a retention rate of approximately 90%, with a focus on winningor retaining only those contracts that meet our returns criteria. We areincreasingly well positioned to leverage our scale as the market leader anddeliver sustainable returns and good cash flows. First Transit First Transit delivered a solid performance in the period. We are achievinggood growth, using our knowledge, wide-ranging expertise and scale to pursueopportunities in our core markets. During the period we added to our marketleading shuttle bus portfolio with further contract wins for universitycampuses at Chapman, Auburn and the University of Alabama at Birmingham. FirstTransit has won new business throughout the last year totalling more than $130mworth of revenue, including ten conversion contracts. Greyhound Our core Greyhound operations continue to be impacted by softness in the USeconomy however, as a result of the continuation of cost actions we have takento mitigate these effects, we anticipate full year profitability to remain inline with our business plan. During the period like-for-like revenue reduced by 6.1% compared to the sameperiod last year. However, Greyhound Express achieved good like-for-like revenuegrowth of 7.9%, and continues to deliver a strong performance particularly whereservices become established following the initial start-up phase. We are harnessingthe experience from Greyhound Express and BoltBus to support our plans to moderniseand improve the yield management capability of the core business. UK Bus During the period, like-for-like passenger revenue increased by 1.4%. We areseeing positive results from our transformation programme, particularly fromthose operations that are furthest along the process. As we continue to workthrough detailed local plans, we are pleased to see strong volume growth as aresult of fares and network changes we initiated in areas such as Sheffield,Rotherham, Doncaster and Manchester. For the depots which have completed thefirst stage of the process, lost mileage and vehicle breakdowns have reduced byaround a third. On 23 June we completed the previously announced sale of eightof our London bus depots for a combined consideration of approximately £80m. UK Rail Our UK Rail division delivered further solid performance during the period withlike-for-like passenger revenue increased by 5.5%. We were pleased to beshortlisted for the Scottish Government's Caledonian Sleeper services and theRailway Procurement Agency's Luas light rail network in Dublin. We remain indiscussion with the Department for Transport in respect of the proposedextensions to our First Great Western and First Capital Connect franchises. Capital structure During the period we completed the previously announced £615m rights issue toremove the constraints of our balance sheet and provide a strong base tocontinue our transformation plans and invest to create sustainable, long termvalue. We have a detailed programme to invest approximately £1.6bn across ourfive divisions over the next four years, to support growth and a return totarget ROCE levels. As previously indicated, as a consequence of this period ofincreased investment, we expect that our cash flows will be broadly flat in thecurrent year. Our expectation is that, through the actions we are taking, thebusiness will be equipped to deliver improved growth and return to a profile ofconsistent returns and cash generation in the medium term. Outlook Commenting, Tim O'Toole, Chief Executive said: "Trading during the period was in line with our expectations. While we continueto see challenging conditions in some of our markets, there is considerablelong term opportunity across the Group and particularly from our recoveryprogrammes in First Student and UK Bus. While there remains significant work todo, our confidence increases as we see the results of our actions taken todate. "The task of returning the Group to the position of strength that ourcustomers, employees, and shareholders expect will require hard work andpersistent delivery for some time to come, and we are pleased by the support ofour shareholders in the recent rights issue. This not only strengthens theGroup with an appropriate capital structure, but also provides a strong basefor the continued investment in our transformation programmes to createsustainable long term value. " Contacts FirstGroup:Chris Surch, Group Finance DirectorRachael Borthwick, Group Corporate Communications Director, Tel: +44 7771 945432/ +44 20 7291 0512Stuart Butchers, Group Corporate Communications Manager, Tel: +44 7713 317979 Brunswick PR:Michael Harrison/Andrew Porter Tel: +44 20 7396 7406