REG-FirstGroup PLC: Trading Statement <Origin Href="QuoteRef">FGP.L</Origin>

FirstgroupAnnouncement

07/02/2017 07:01

FIRSTGROUP PLC

THIRD QUARTER 2016/17 TRADING UPDATE

FirstGroup plc (the 'Group'), a leading transport operator in the UK and North
America, today reports the following update on trading for the period to the
end of December 2016.

Summary:
*
Trend of overall trading and expectations for the full year unchanged
*
Reported Group revenue increased by 12.8% in the third quarter, benefiting
from favourable currency translation. Group revenue in constant currency was
flat, with growth in North America offset by previously announced rail
franchise changes and First Bus trading

 Increase/(decrease) vs comparable period, in constant currency        Q3       YTD  
                                                                   2016/17   2016/17 
 First Student revenue                                               +1.0%     +0.5% 
 First Transit revenue                                               +5.5%     +4.0% 
 Greyhound like-for-like revenue                                     +1.2%    (2.5)% 
 First Bus like-for-like passenger revenue                          (0.6)%    (1.1)% 
 First Rail like-for-like passenger revenue                          +1.1%     +0.8% 

Commenting on today's announcement, FirstGroup Chief Executive Tim O'Toole
said:

"Our overall trading performance continues to support our expectation of good
progress for the current year. Our substantial North American operations are
delivering encouraging performances and are benefiting from currency
tailwinds, but we continue to experience tough trading conditions for our
First Bus and First Rail operations in what remains an uncertain UK
macroeconomic environment. We remain focused on disciplined execution to
deliver significantly increased cash generation for the full year."

Divisional update on the third quarter:

In First Student we continue to benefit from our ongoing pricing strategy,
aiming to generate appropriate returns from a more focused book of contracts.
Although the strong US employment market continued to cause driver shortages
in some areas, we have responded with improved recruitment processes and
marketing. With solid execution since the successful school start-up, we are
well positioned to achieve our targeted margin progression for the year.

First Transit’s revenue performance in the third quarter benefited from
organic growth and the commencement of new business, including the successful
mobilisation of our first US commuter rail contract in Denton, Texas. In the
period First Transit continued actions to recover the cost increases incurred
in certain contracts in the first half.

Improving Greyhound volumes resulted in like-for-like revenue growth of 1.2%
in the third quarter, benefiting from higher fuel prices than the comparable
period last year and the continued development of our algorithmic pricing and
yield management systems.

Industry-wide market conditions continue to be challenging for First Bus, with
mixed Christmas trading for the UK high street and ongoing congestion issues
in several local markets. Like-for-like passenger revenues decreased by 0.6%
in the third quarter, a modest improvement on the first half. We continue to
focus on cost efficiencies including ongoing depot consolidation to improve
margins, while investing in our customer offering through smarter ticketing
and real-time passenger information.

In First Rail third quarter like-for-like passenger revenue growth of 1.1%
continued to reflect the moderating growth rates seen across the industry. The
impact of the slowdown for GWR has been exacerbated by the volume of
infrastructure upgrade work taking place on the network; TPE revenue
performance continues to be above the industry average year to date. We
continue to work closely with Transport for London and others to assist those
affected by the tragic Tramlink incident which occurred in November 2016, and
to support the ongoing investigations.

We were delighted that Hull Trains was named Rail Operator of the Year at the
recent National Transport Awards. We recently announced the formation of two
joint ventures with Trenitalia UK to participate in the East Midlands and West
Coast Partnership rail franchise competitions.

In the third quarter the Group repaid $50m of private placement notes from
cash balances.

Investor information
A conference call for investors and analysts will be held at 8:30am today.
Please call +44 (0) 20 7725 3354 in advance of the call to register and
receive joining details. A playback facility will be available together with a
pdf copy of this announcement at www.firstgroupplc.com/investors.

The Group is scheduled to announce results for the year to 31 March 2017 on
Thursday 1 June 2017.

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

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

Notes
Unless otherwise stated, all financial figures for the 'third quarter' include
the results of the rail business for the twelve weeks to 7 January 2017 and
the results of all the other businesses for the three months to 24 December
2016, with growth compared to the comparable period in the prior year.
References to ‘like-for-like’ revenue adjust for changes in the
composition of the divisional portfolio, holiday timing, severe weather,
business acquisitions or disposals, industrial action, other significant
one-off events and other factors that distort the period-on-period trends in
our passenger revenue businesses. No account is taken of foreign exchange
translation effects in the descriptions of divisional performances and
outlook.

Figures presented in this announcement are not audited. Certain statements
included or incorporated by reference within this announcement may constitute
‘forward-looking statements’ with respect to the business, strategy and
plans of the Group and our current goals, assumptions and expectations
relating to our future financial condition, performance and results. By their
nature, forward-looking statements involve known and unknown risks,
assumptions, uncertainties and other factors which may cause actual results,
performance or achievements of the Group to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Shareholders are cautioned not to place undue
reliance on the forward-looking statements. Except as required by the UK
Listing Rules and applicable law, the Group does not undertake any obligation
to update or change any forward-looking statements to reflect events occurring
after the date of this announcement.

FirstGroup plc (LSE: FGP.L) is a leading transport operator in the UK and
North America. With £5.2 billion in revenues and 110,000 employees, we
transported around 2.2 billion passengers last year. Each of our five
divisions is a leader in its field: In North America, First Student is the
largest provider of student transportation with a fleet of around 47,000
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 coach services. In the UK,
FirstGroup is one of Britain's largest bus operators running a fleet of some
6,200 buses, and we are one of the country's most experienced passenger rail
operators, carrying around 140 million passengers last year.

Our vision is to provide solutions for an increasingly congested world...
keeping people moving and communities prospering.

Visit our website at www.firstgroupplc.com and follow us @firstgroupplc on
Twitter.



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