Trading Statement

FIRSTGROUP PLC - Trading Statement

PR Newswire

London, April 9

FirstGroup plc ("the Group") reports the following update on trading for itsfinancial year ended 31 March 2013 ("the year" or "the period"), ahead of itspreliminary results due to be announced on 22 May 2013.

Summary

Overview

Overall trading for the Group during the period is in line with management'sexpectations. Despite the challenging economic conditions that prevail, wecontinue to strengthen the business for the future. As previously stated theBoard held the interim dividend at last year's level, following the uncertaintycaused by the DfT's decision to delay rail re-franchising, and will considerthe full year dividend in May 2013.

First Student

Trading, excluding the previously reported one-off effect of Hurricane Sandy inOctober 2012, has developed in line with our expectations although we sawfurther periods of severe weather disruption in early 2013. US Dollar revenuesare expected to be reduced by 2.9% on a like-for-like basis, with ourexpectations for underlying margin performance for the year broadly unchanged.This year's bidding season is on plan with a number of new contract wins. As wework through our plans to reform the operating model we continue to implement aseries of actions, such as the recent roll out of a comprehensive operatingguide which is achieving consistency and greater efficiency across our 600locations.

First Transit

We continue to see good operating results in our First Transit division,particularly from our core operations. US Dollar revenues for the division areexpected to grow by 7.1% on a like-for-like basis for the ongoing business andwe anticipate that full-year margins will remain in line with our expectations.First Transit has established a market leading position with unrivalledexpertise across many areas. It is this reputation and credibility that is keyto retaining and winning contracts of significant scale including a US$48mFixed Route contract in Phoenix, Arizona; a US$22m Paratransit contract inWashington DC and a US$22m Paratransit contract in Maryland, all of which wewere awarded during the period. On 8 March we completed the sale of FirstSupport Services, our military base facility management business, to ParsonsGovernment Services for a gross consideration of US$10.2m. As previouslyindicated, we are proactively working through historic legal cases and have nowsettled meal and break claims, dating back to 2003, for approximately £8m.

Greyhound

Greyhound is seeing some effects from continuing softness in the US economy.Like-for-like revenue during the period is expected to increase by 1.1%. As aresult of actions we have taken to create a more flexible and agile operatingmodel, we have been able to reduce the impact of a weak economic backdrop andlower consumer confidence, with anticipated operating margin performance inline with our expectations. During the period we expanded our popular GreyhoundExpress product to new markets in British Columbia, Florida, Illinois, Kentuckyand Tennessee. The Express service complements our national network, the onlyone of its kind, which is uniquely placed to support the launch of new routesby providing sustainable passenger flows.

UK Bus

We are working through our comprehensive plan to recover performance and equipour UK Bus business to achieve sustainable revenue and patronage growth, andare seeing early positive signs in some of our markets. During the period weachieved steady growth with like-for-like passenger revenue expected toincrease by 2.4%. As previously stated, we expect the full year operatingmargin to be approximately 8%.

In line with our strategy to pursue selected business and asset disposals,today we are pleased to announce the sale of five of our London depots toMetroline, an existing London bus operator, and three of our London depots toTransit Systems Group, an Australian transport company, for a combinedconsideration of approximately £80m. Both disposals are subject to thenecessary regulatory approvals including contractual obligations with Transportfor London.

UK RailDuring the period we continued to benefit from strong passenger volume growthacross all of our franchises with like-for-like revenue expected to increase by7.4%. On 31 January the Department for Transport (DfT) announced its intentionto exercise the 28-week extension clauses in the existing contracts of ourFirst Capital Connect and First Great Western franchises. Further extensions ofsix months for First Capital Connect and 33 months for First Great Western, aswell as ten months for First TransPennine Express, were announced on 26 March.We are currently in negotiation with the DfT in respect of the terms for theseextensions. As the UK's largest and most experienced rail operator we remaincommitted to maintaining a leading position in the market. We look forward toreviewing the details of the new franchise competitions, and submitting furtherhigh quality bids.

Outlook

Commenting, Tim O'Toole, Chief Executive said:

"Trading during the period is in line with our expectations. Although thereremains significant work still to be done, we are satisfied with the progressmade so far. While remaining cautious in respect of continued challengingeconomic conditions, we are confident the actions we are taking will positionthe business to generate sustainable growth and improved returns.

"Public transport is a key enabler of economic growth and the private sector isbest placed to deliver high quality and attractive services that representvalue for passengers and taxpayers and provide an economic return forshareholders. With leading positions across all of our markets, we are wellplaced to leverage our scale whilst developing our global expertise andresource and bringing them to bear at the local level for the benefit of ourcustomers and our stakeholders."

A conference call for analysts and investors will be held at 9:00am today.

Please call +44 20 7291 0507 in advance of the call to register and to receive

Contacts at FirstGroup:

Chris Surch, Group Finance Director

Rachael Borthwick, Group Corporate Communications Director Tel: + 44 20 72910512 / +44 7771 945 432

Stuart Butchers, Group Corporate Communications Manager Tel: + 44 20 7291 0507/ +44 7713 317 979

Brunswick PR: Michael Harrison/Andrew Porter Tel: +44 207 404 5959

FirstGroup plc is the leading transport operator in the UK and North America.With approximately 124,000 employees we carry 2.5 billion passengers every yearacross our bus and rail networks in the UK and our school bus, transit andintercity coach operations in the US and Canada. Our vision is to providesolutions for an increasingly congested world...keeping people moving andcommunities prospering.