Pension Indexation Changed

28 March 2018

THE GO-AHEAD GROUP PLC

("GO-AHEAD" OR "THE GROUP")

Pension Indexation Changed from RPI to CPI Inflation

The Go-Ahead Group plc announces that the Group and the Trustee of The Go-Ahead Group Pension Plan ("the Plan") have agreed to change the reference inflation index for the purpose of annual increases to the majority of pensions payable by the Plan. From 1 April 2018 onwards, the Consumer Prices Index ("CPI") will be used to increase pensions in payment rather than the Retail Prices Index ("RPI").

The change reduces the financial risks of the Plan and enhances the long-term sustainability of the scheme, providing an improvement in the security of Plan members' benefits.

This decision follows a detailed review by the Group and the Plan Trustee and a 60 day consultation process with relevant employees that closed on 7 March 2018.

As a result of this change, the IFRS1 balance sheet valuation of the Group's pension liabilities reduces by around £40 million and the Group will recognise a pre-tax, non-cash exceptional credit of this value in the financial results for the year to 30 June 2018, with a corresponding increase to shareholders' funds. There will also be a reduction of c£1m in the Group's non-cash interest charge in future financial years.

While the change will reduce the Plan's liabilities as assessed by its Trustee at the 31 March 2018 triennial actuarial valuation, cash contributions to the Plan will not reduce as a result of the change.

Notes:

1 International Financial Reporting Standards, which apply to Go-Ahead's financial reporting

ENDS

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