REG-FirstGroup Plc: FirstGroup named as preferred operator for London Overground rail contract

FirstgroupAnnouncement

Today 07:05

FIRSTGROUP named as preferred operator for LONDON OVERGRoUND rail contract

 

FirstGroup plc (‘FirstGroup’ or ‘the Group’) is pleased to announce
that it has been named as the preferred operator for the London Overground
suburban rail network contract by Transport for London (‘TfL’), acting
through its subsidiary, Rail for London Limited.

 

The Group’s subsidiary, First Rail London Limited (‘FRLL’) will become
the new operator from 3 May 2026, with an initial eight-year term contract and
an option to extend for up to two additional years at TfL’s discretion.

 

Under the terms of the contract TfL retains all revenue risk and will specify
the service levels, with FRLL, as the operator, responsible for the delivery
of train services and management of stations. The contract is estimated to
have a value of around £3bn, over eight years plus an optional extension
period of two years. FRLL will also be responsible for operational
performance, customer service and ticketless travel.

 

The Group will make use of its long-standing expertise and Rail Services
capabilities to work alongside TfL to deliver the next chapter of the London
Overground, with a number of key improvements set out in the contract. These
include:

 
*                        an increase in services on the Mildmay and Windrush
lines                     
*                        supporting TfL’s Vision Zero commitments to deliver
a safer transport network                     
*                        working with Network Rail, Alstom and other industry
partners to deliver continued high performance and passenger satisfaction     
               
*                        improving the customer experience through investing
in information systems, colleague training, enhanced security and better
customer information                     
*                        continuing to work in partnership with stakeholders
to improve accessibility on the network
 

Leading in sustainability is one of the Group’s four strategic pillars and
we strive to be the partner of choice for low- and zero-emission transport.
The London Overground has an electric train fleet, and as part of the contract
the Group will continue to develop and implement initiatives to reduce the
service’s impact on the environment, including improving air quality in line
with TfL’s commitment to a 90% reduction in Scope 1 and 2 emissions by 2030.
          

 

Graham Sutherland, FirstGroup Chief Executive Officer, said:

“The London Overground has greatly improved connectivity in London, with
around four million passengers now using the service every week. We are
delighted to have been named as the preferred operator for the service from
next May and look forward to welcoming employees who will be joining the Group
and to play our part in the success of this vital rail network.

 

We are an experienced and trusted partner in public transport and look forward
to building on our relationship with TfL, for whom we already operate buses,
trams and the London Cable Car. Our successful bid for this contract
represents another significant step in our strategy to diversify and grow our
portfolio, and we will continue to evaluate further growth opportunities like
this.”

 

David Thomas, Head of Concession for London Overground, said:

“London Overground is one of the most popular parts of our transport
network, and this new concession puts customers at its heart, helping make the
service even better. We’re delighted to welcome First Rail London Limited as
our preferred new partner and look forward to working together to deliver a
range of benefits for everyone who uses the network.”


Notes to Editors

Additional background on the London Overground and the financial terms of the
Concession Agreement

 
*                        The London Overground was launched in 2007 to provide
better connections between areas outside of central London. TfL took over a
series of under-used suburban rail lines and transformed them into a high
frequency metro-style service. The Overground network spans six routes and
covers 100 miles of railway, 113 stations and all 9 fare zones and around 4
million passengers use the service each week. (Source:                        
               London Overground - Transport for London                       
 
(https://tfl.gov.uk/corporate/about-tfl/culture-and-heritage/londons-transport-a-history/london-overground)
           )                     
*                        TfL retains all passenger revenue risk, and some cost
risk for electricity pricing, regulatory charges and inflation protection up
to an agreed amount.                     
*                        The contract includes a profit margin on concession
payments.                      
*                        The service quality regimes provide the opportunity
to earn additional fees if the train operator achieves greater levels of
performance. Service quality regimes cover operational performance, delivery
of customer service levels, customer satisfaction and ticketless travel.      
              
*                        The Group is obliged to retain a £30m Performance
Bond and a Parent company guarantee of £80m.                                
  
*                        First Rail London Limited will continue to be fully
consolidated in the Group’s financial statements.
 Contacts at FirstGroup:  Marianna Bowes, Head of Investor Relations  Stephen Bethel, Director of Brand & Communications  corporate.comms@firstgroup.co.uk  Tel: +44 (0) 20 7725 3354  Contacts at Brunswick Group:  Simone Selzer / Charlotte Millington  Tel: +44 (0) 20 7404 5959  

 

 Contacts at Panmure Liberum:  Nicholas How / Satbir Kler   Contacts at RBC Europe Limited:                           
  Tel: +44 (0) 20 3100 2000                                  James Agnew / Elliot Thomas  Tel: +44 (0) 20 7653 4000   

 

This announcement contains inside information and the person responsible for
publishing the announcement is David Blizzard, General Counsel and Company
Secretary.

 

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.

 

 

Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93.

 

About FirstGroup

FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With around 29,000 employees, we reported revenue of £5.1
billion and transported almost 2m passengers a day in FY 2025. 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. Each of our divisions is a leader in its field: First Bus is one of the
largest bus operators in the UK, serving more than 25% of the population in
the UK with a fleet of c.6,000 buses and coaches, and carrying more than a
million passengers a day. First Rail is one of the UK’s most experienced
rail operators, with many years of experience running long-distance, commuter,
regional and sleeper rail services. We operate a fleet of c.1,800 locomotives
and rail carriages through two DfT contracted train operating companies: WCP
(incorporating Avanti West Coast and West Coast Partnership Development) and
GWR, and two open access routes (Hull Trains and Lumo). We are formally
committed to operating a zero emission First Bus commercial fleet by 2035, and
First Rail will help support the UK Government’s goal to remove all
diesel-only trains from service by 2040. During FY 2025 FirstGroup received
MSCI’s highest possible ESG rating of AAA, was named one of the world’s
cleanest 200 public companies for the sixth consecutive year and holds an
Industry Top-Rated status with Sustainalytics and Sustainability Yearbook
membership with S&P Global. We provide easy and convenient mobility, improving
quality of life by connecting people and communities. Visit our website at
www.firstgroupplc.com and follow us on LinkedIn at
http://www.linkedin.com/company/first-group.



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