REG-FirstGroup PLC: Trading Update

FirstgroupAnnouncement

10/03/2023 07:15

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FIRSTGROUP PLC

Trading update

FirstGroup plc ('FirstGroup' or ‘the Group') today reports an update on
trading since the half-year results for the 26 weeks to 24 September 2022,
published in November 2022.
* First Bus improved performance driven by higher passenger volumes in H2 2023
and driver resource pressures easing in certain locations
* First Rail open access operations benefiting from stronger than anticipated
passenger demand over the winter months
* Acquisition of Ensign Bus Company Limited (‘Ensignbus’) completed
* Sale of First Transit by EQT Infrastructure completed with final earnout
consideration anticipated later in 2023
First Bus
Recent First Bus passenger volumes have increased to 83% of 2020 equivalent
levels, with commercial and concessionary volumes at 87% and 75% respectively.
The increase in demand has partially resulted from the £2 bus fare cap scheme
introduced in England in January 2023, recently extended to the end of June
2023, and the Scottish Government’s funding for free bus travel for all
under-22s that has been in place since January 2022.

First Bus has also benefited from improved driver resources in certain
locations, with increased recruitment largely due to a number of initiatives
introduced across the business, with more drivers completing their training
and lower rates of attrition.

In addition, we welcomed the Government’s extension of the Bus Recovery
Grant in February 2023, which will help protect vital services for passengers
for a further three months. We continue to work with our government and
industry partners on long-term funding arrangements for the sector.

First Rail
Our open access operations Lumo and Hull Trains, which are the only segment of
the First Rail division where the Group takes full passenger revenue risk,
have experienced stronger than anticipated passenger demand throughout H2
2023. The First Rail division has also benefited from the settlement of
one-off claims relating to prior reporting periods.  

FY 2023 Guidance
As a result of the factors detailed above, the Group anticipates that the FY
2023 Group adjusted operating profit and Group adjusted attributable profit
will be ahead of the Group’s previous expectations. The Group’s
expectations for FY 2024 remain unchanged.

The Group expects to report its results for the year ended 25 March 2023 on 8
June 2023.

Completion of acquisition of Ensignbus
Following the conclusion of a customary regulatory review, the Group completed
the acquisition of Ensignbus on 9 March 2023. The Ensignbus business includes
commercial bus operations in Essex, a vehicle refurbishment and re-sale
operation, and a high value depot. The acquisition of this long-established,
high-performing business will not only provide a number of synergies and value
accretive growth opportunities in the B2B and bus vehicle dealership markets,
but it will also enhance the Group’s local commercial bus operations in
Essex.

Update on First Transit Earnout
Further to the Group’s announcement on 26 October 2022, the Group notes that
EQT Infrastructure’s sale of First Transit to Transdev North America, Inc.
has now completed.

FirstGroup is entitled to an earnout consideration which is calculated as a
percentage of the realised equity value on the disposal and contemplating the
cash flows generated by First Transit since March 2021 to completion. As
previously announced, the Group currently estimates the earnout consideration
to be approximately £74m. The Group anticipates confirmation of the earnout
consideration and subsequent receipt of proceeds later in 2023.  

Graham Sutherland, FirstGroup Chief Executive Officer, said:
“I am pleased by the Group’s progress in the second half of our 2023
financial year, which has been driven by increased passenger volumes and
improved operational performance in bus and stronger than anticipated demand
for our open access operations in rail. We remain committed to working closely
with our partners to deliver successful bus and rail networks that serve the
needs of our customers and communities and to playing a central role in
achieving many of society’s economic, social and environmental aims.”

 Contacts at FirstGroup: Marianna Bowes, Head of Investor Relations Stuart Butchers, Head of Corporate Communications corporate.comms@firstgroup.co.uk Tel: +44 (0) 20 7725 3354  Contacts at Brunswick PR: Andrew Porter / Simone Selzer Tel: +44 (0) 20 7404 5959                    
 Contacts at Liberum Capital Limited: Nicholas How / John Fishley / William Hall Tel: +44 (0) 20 3100 2000                                                                        Contacts at RBC Europe Limited:  James Agnew / Jonathan Hardy / Jack Wood Tel: +44 (0) 20 7653 4000  

FirstGroup plc compiled analyst consensus estimates for FY 2023
The Group’s compiled consensus estimates for FY 2023 Group adjusted
operating profit and Group adjusted attributable profit are currently £137.4m
and £58.6m respectively. These estimates are an aggregation of five sell side
analysts’ forecasts, based on publically available information, published
following the announcement of the Group’s half-yearly results for the 26
weeks to 24 September 2022 on 9 November 2022.

FirstGroup plc does not endorse or approve the analysts’ consensus estimates
or any underlying estimates that may have formed part of the analysts’
consensus estimates. FirstGroup plc provides no assurance with regards to the
accuracy or correctness of the analysts’ consensus estimates. 

Forward-looking statements
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 that 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. No statement in this announcement should be
construed as a profit forecast for any period. 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.

Notes                                               
                                                   
                                                   
  
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR
6 Annex 1R: 2.2 and 3.1

This announcement contains inside information. The person responsible for
making this announcement is David Blizzard, Company Secretary.

FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With £4.6 billion in revenue and more than 30,000
employees, our UK divisions transported nearly 1.5m passengers a day in the
last financial year. First Bus is the second largest regional bus operator in
the UK, serving two-thirds of the UK’s 15 largest conurbations with a fleet
of c.4,900 buses. First Rail is the UK’s largest rail operator, with many
years of experience running long-distance, commuter, regional and sleeper rail
services. We operate a fleet of c.3,800 rail vehicles through four management
fee-based train operating companies (Avanti West Coast, GWR, SWR, TPE) and two
open access routes (Hull Trains and Lumo). We create solutions that reduce
complexity, making travel smoother and life easier. Our businesses are at the
heart of our communities and the essential services we provide are critical to
delivering wider economic, social and environmental goals. We no longer
purchase new diesel buses and are formally committed to operating a
zero-emission First Bus fleet by 2035; and First Rail will help support the UK
Government’s goal to remove all diesel-only trains from service by 2040. In
February 2023 FirstGroup was named as one of the world's cleanest 200 public
companies for the fourth consecutive year by sustainable business media group
Corporate Knights in partnership with US not-for-profit organisation, As You
Sow. Visit our website at www.firstgroupplc.com and follow us @firstgroupplc
on Twitter.



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