REG-FirstGroup PLC: Extension of GWR Emergency Measures Agreement

FirstgroupAnnouncement

01/09/2020 07:05

FirstGroup plc (‘the Group’)
Statement re extension of Great Western Railway Emergency Measures Agreement

We are pleased to announce that the Department for Transport (‘DfT’) has
today exercised its option to extend the Emergency Measures Agreement
(‘EMA’) for Great Western Railway (‘GWR’) until at least 26 June 2021.

On 30 March 2020 we announced that we had signed an agreement with the DfT to
continue operating GWR until March 2023, with a possible one-year extension.

At that time, we also announced that the franchise would run under EMA terms
for at least the first six months in response to the coronavirus outbreak.
That time period is now expiring and therefore the DfT has exercised its
option for the EMA to continue under the same terms and conditions as
previously. Under the EMA, the DfT waive our revenue, cost and contingent
capital risk and GWR are paid a fixed management fee with the potential for a
small performance-based fee.

Before the end of the EMA period in June 2021, the DfT has an option to
further extend the EMA. GWR also has the right to revert to operating with
revenue risk but with protection provided though the Forecast Revenue
Mechanism until at least 2023. The franchise agreement also makes provision to
agree a revenue rebasing which would apply at the end of the EMA term.

The parent company support and performance bond commitments associated with
GWR are each £10m, and cash ring-fenced within the train operating company
was £266m as at 31 March 2020, out of a First Rail total of £612m.

GWR’s existing EMA was signed on the same day as the new franchise agreement
in March, and the DfT’s option to review the EMA formed part of that
contract. This process and timing is different from our other three rail
franchises which were already on established franchise agreements before
adopting EMAs in response to the pandemic. Discussions are underway with the
DfT about these franchises which are under EMAs until 20 September 2020.
Further updates will be provided to the market as appropriate.

Commenting, Matthew Gregory, Chief Executive said:

“We welcome the news of the extension of the EMA for GWR. This demonstrates
the essential nature of GWR’s services to the communities it serves, and
provides important clarity and continuity for our customers, employees and
wider stakeholders. Across the network we are increasing service levels to
provide more capacity as schools recommence and work and leisure facilities
reopen, and we are taking all necessary steps to ensure our passengers
continue to travel safely. This includes running services with more carriages
to allow for distancing, enhanced cleaning and sanitisation of our trains and
ensuring more customer-facing employees are readily available. We look forward
to delivering further plans that will bring improvements for passengers over
the next few months and into the future.”

Group Liquidity

As at the end of August 2020 FirstGroup had c.£850m in free cash (before rail
ring-fenced cash) and committed undrawn revolving banking facilities, stable
with the liquidity level at the end of June. We intend to update the market on
trading conditions in advance of our Annual General Meeting on 15 September.

Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR
6 Annex 1R: 3.1.

About GWR

Great Western Railway provides high speed, commuter, regional and branch line
train services and help more than 100 million passengers reach their
destinations every year - across South Wales, the West Country, the Cotswolds,
and large parts of Southern England. The network is currently seeing the
biggest investment since Brunel so we can offer more trains, more seats, and
shorter, more frequent journeys and continue the network’s heritage of
helping connect more businesses to new markets. Through a series of
initiatives, we aim to be a good neighbour to the communities we serve and are
committed to making a positive social impact in those regions.

Since 2015, GWR has delivered new fleets of modern intercity and local trains
and successfully introduced the largest timetable change in decades in
December 2019. Building on these improvements, GWR recently took delivery of
the UK’s first tri-mode train able to run on overhead and third-rail
electric lines, as well as under its own diesel power, which will enter
service next year. The franchise is also due to introduce new more flexible
tickets for customers who do not commute every day, such as discounted
part-time season tickets and the extension of paperless pay-as-you-go schemes.

About FirstGroup

FirstGroup plc (LSE: FGP.L) is a leading provider of transport services in the
UK and North America. With £7.8 billion in revenue in 2020 and around 100,000
employees, we transported 2.1 billion passengers. Whether for business,
education, health, social or recreation – we get our customers where they
want to be, when they want to be there. We create solutions that reduce
complexity, making travel smoother and life easier.

We provide easy and convenient mobility, improving quality of life by
connecting people and communities.

Each of our five divisions is a leader in its field: In North America, First
Student is the largest provider of home-to-school student transportation with
a fleet of 43,000 yellow school buses, First Transit is one of the largest
providers of outsourced transit management and contracting services, while
Greyhound is the only nationwide operator of scheduled intercity coaches. In
the UK, First Bus is one of Britain's largest bus companies with 1.4 million
passengers a day in 2020, and First Rail is one of the country's most
experienced rail operators, carrying 340 million passengers in the year. Visit
our website at www.firstgroupplc.com and follow us @firstgroupplc on Twitter.

Contacts at FirstGroup:
Faisal Tabbah, Head of Investor Relations
Stuart Butchers, Group Head of Communications
Tel: +44 (0) 20 7725 3354

Contacts at Brunswick PR:
Andrew Porter / Simone Selzer, Tel: +44 (0) 20 7404 5959



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