FIRSTGROUP PLC
HALF-YEARLY REPORT FOR THE 26 WEEKS TO 28 SEPTEMBER 2024
A robust operational and financial performance in H1 2025 leaves the Group
slightly ahead of full year expectations, with the Board announcing an
additional buyback programme.
Highlights
· Adjusted revenue growth to £649.6m (H1 2024 £634.8m) reflecting strong
underlying performance in First Bus and good demand in First Rail open
access
· Group adjusted operating profit £100.8m; H1 2024 was positively affected by
an extra week of trading and a c.£13m uplift from higher than accrued final
FY 2023 variable fee awards in the First Rail DfT Train Operating Companies
(`DfT TOCs')
· Adjusted EPS of 8.5p for continuing operations (H1 2024: 8.1p)
· Interim dividend of 1.7p per share declared (H1 2024: 1.5p per share)
· Additional on market share buyback programme of £50m announced
· Strong balance sheet maintained; adjusted net debt at period end of £0.2m
· Recent strategic acquisitions in both divisions that will grow First Bus
Adjacent Services and increase First Rail's open access capacity
H1 2025 H1 2024
(£m) (£m)
Cont. Disc. Total Cont. Disc. Total
Adjusted revenue1 649.6 - 649.6 634.8 - 634.8
Adjusted operating 100.8 - 100.8 100.6 (2.2) 98.4
profit/(loss)2
Adjusted operating 15.5% 15.5% 15.8% 15.5%
profit margin
Adjusted 70.8 (0.1) 70.7 73.5 (2.2) 71.3
profit/(loss) before
tax2
Adjusted EPS3,4 8.5p - 8.5p 8.1p (0.3)p 7.8p
Dividend per share 1.7p 1.5p
Adjusted net 0.2 (77.1)
debt/(cash)5
H1 2025 H1 2024
(£m) (£m)
Statutory Cont. Disc. Total Cont. Disc. Total
Revenue 2,344.1 - 2,344.1 2,207.0 - 2,207.0
Operating 100.3 5.9 106.2 (41.4) 0.1 (41.3)
profit/(loss)
Profit/(loss) before 70.3 5.8 76.1 (68.5) 0.1 (68.4)
tax6
EPS4 9.2p (7.9)p
Net debt 977.1 1,144.6
- Bonds, bank and (274.7) (384.4)
other debt net of
(cash)
- IFRS 16 lease 1,251.8 1,529.0
liabilities
'Cont.' refers to the Continuing operations comprising First Bus, First Rail,
and Group items. 'Disc.' refers to discontinued operations, being First Student,
First Transit and Greyhound US.
Key developments
First Bus:
· Underlying7
passenger
volumes
increased 4%
vs. H1 2024,
with
operational
improvements
driving growth
in both volumes
and
profitability
· Total of 83m
service miles
operated in H1
2025 (H1 2024:
80m on an
underlying
basis)
· Total revenue
increased to
£513.7m (H1
2024: £504.9m)
despite a
c.£12.4m
reduction in
government
funding;
underlying
passenger
revenue growth
of 10%
· Adjacent
Services
revenue
increased to
£125.7m from
£116.2m in H1
2024 due to
contract wins
and extensions
and
contribution of
Ensignbus and
York Pullman
· Adjusted
operating
margin
increased to
8.0% (H1 2024:
7.1%); on track
for 10% in H2
2025
· Further
progress in
electrification
of fleet and
infrastructure:
- c.15% of the fleet is now zero emission, with three
depots in England now fully electrified and a further
five across the UK substantially electrified
- First Bus placed the UK's largest single repower order
with Wrightbus for 32 diesel to electric bus
conversions, scheduled for delivery in FY 2025
· Post period end
acquisitions of
Anderson Travel
and Lakeside
Group in
England and new
contract with
Flixbus
representing
additional
combined annual
revenues of
c.£25m
First Rail:
· 132.3m passenger journeys in H1 2025 (H1 2024: 123.4m); DfT TOCs: 130.9m
and open access 1.4m
· DfT TOCs financial performance in line with expectations; H1 2024 was
positively affected by higher than accrued final variable fee payments for
FY 2023. Focus remains on operational delivery for passengers across all
our services
· Open access operations revenue growth of £5.6m (12%) in line with
expectations
· First London Cableway successfully took over the operation of the London
Cable Car on behalf of TfL in June (c.£60m revenue anticipated over the
eight-year contract)
· Acquisition of track access rights for new rail open access service between
London and Stirling
· Applications for the extension of Hull Trains to Sheffield and Lumo to
Glasgow have been submitted, as well as for a new service to run between
Rochdale and London ; consultations are progressing, supported by detailed
performance and business case analysis
Corporate:
· Appointment of Lena Wilson as Board Chair effective from 1 February 2025
· FirstGroup upgraded to MSCI's highest possible ESG ranking of AAA in July
2024
· Remainder of the Group's September 2024 6.875% bonds repurchased
· Legacy US Greyhound pension obligations now fully discharged; one-off net
settlement gain of £5.5m after related costs recognised in H1 2025
Outlook
· Current
trading and
the Group's
outlook for
FY 2025 is
slightly
ahead of our
expectations
as set out
at the full
year results
in June:
- First Bus: we
expect to make
further
progress in H2
2025, reaching
a 10% adjusted
operating
margin for the
half, driven
by operational
improvements,
efficiency
initiatives
and the newer
fleet
- First Rail:
the division's
financial
performance in
H2 2025 is
anticipated to
be slightly
ahead of our
prior
expectations,
reflecting
growth in open
access and a
normal level
of variable
fee awards in
the DfT TOCs
(approximately
two thirds of
the maximum
available)
- Marginal
adjusted net
debt position
expected at
the end of FY
2025, assuming
net cash capex
of £125m in
First Bus and
after the
deployment of
announced
growth capital
and
progression of
the £50m
buyback
programme
· The
Group
expects
to
maintain
its
adjusted
EPS in
FY 2026
as we
grow
earnings
in First
Bus and
open
access
rail
Commenting, Chief Executive Officer Graham Sutherland said:
"We have reported a robust set of results for the first half of our 2025
financial year and are on course to make further progress in the second half,
reinforcing our strong track record for delivery. As a major bus and rail
operator in the UK we have a critical role to play in supporting the country's
wider economic, social and environmental goals. We will continue to take a
proactive approach, demonstrating our strengths as an experienced, trusted
partner in public transport."
Results presentation and webcast
A presentation and webcast for investors and analysts will be held at 09:00
(GMT) today in London . To register to join in person or to request the webcast
details, please email corporate.comms@firstgroup.co.uk. To access the
presentation to be discussed on the webcast, together with a pdf copy of this
announcement, go to www.firstgroupplc.com/investors. A playback facility will
also be available there in due course.
Contacts at FirstGroup: Contacts at Brunswick Group:
Marianna Bowes, Head of Investor Andrew Porter / Simone Selzer
Relations
Tel: +44 (0) 20 7404 5959
Stuart Butchers, Head of
Corporate Communications
corporate.comms@firstgroup.co.uk
Tel: +44 (0) 20 7725 3354
Contacts at Panmure Liberum: Contacts at RBC Capital Markets:
Nicholas How / John Fishley James Agnew / Jack Wood
Tel: +44 (0) 20 3100 2000 Tel: +44 (0) 20 7653 4000
Notes
1 `Adjusted revenue' is defined as revenue excluding that element of DfT TOC
revenue, and related intercompany eliminations, where the Group takes
substantially no revenue risk. The Adjusted revenue measure includes management
and performance fee income earned by the Group from its DfT TOC contracts.
2 `Adjusted operating profit/(loss)' and `Adjusted profit/(loss) before tax' are
before adjusting items as set out in note 3 to the financial statements
3 `Adjusted earnings' are shown before net adjusting items and excludes IFRS 16
impacts in First Rail management fee operations. For definitions of alternative
performance measures and other key terms, see the definitions section on pages
20-21.
4 `Adjusted EPS' and EPS based on weighted average number of shares in the
period of 608.5m (H1 2024: 697.7m) reflecting the current year and prior year
share buybacks.
5 `Adjusted net debt/(cash)' is bonds, bank and other debt net of free cash
(i.e. excludes IFRS 16 lease liabilities and ring-fenced cash).
6 `H1 2024 statutory operating loss of £(41.4)m included predominantly non-cash
charges of £142.3m relating to the Group's termination of its participation in
two Local Government Pension Schemes during the year with an offsetting £160.4m
gain in the Condensed Consolidated Statement of Comprehensive Income.
7 `Underlying' adjusts for certain items which distort period-on-period trends
in our commercial bus business, described on page 21
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 6
Annex 1R: 1.1.
About FirstGroup
FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With £4.7 billion in revenue and around 30,000 employees, we
transported almost 2m passengers a day in FY 2024. 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 regional bus
operators in the UK , serving more than 20% of the population in the UK with a
fleet of around c.4,800 buses, and carrying more than a million passengers a
day. First Rail is one of the UK's largest rail operators, with many years of
experience running long-distance, commuter, regional and sleeper rail services.
We operate a fleet of c.3,700 locomotives and rail carriages through three DfT
contracted train operating companies: WCP (incorporating Avanti West Coast and
West Coast Partnership Development), GWR and SWR) and two open access routes
(Hull Trains and Lumo). We 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. During FY 2024
FirstGroup was named as one of the world's cleanest 200 public companies for the
fifth consecutive year and achieved Industry Top-Rated status for the first time
with Sustainalytics. 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 @firstgroupplc on X.
CEO review
Introduction
I am pleased to report a robust performance during the first half of our 2025
financial year. We are reporting Group Adjusted operating profit of £100.8m
compared to £100.6m in H1 2024 which was positively affected by an extra week of
trading and higher than accrued final variable fee payments for FY 2023 in our
DfT TOCs (a c.£13m uplift). Our Adjusted Earnings per share has increased to
8.5p from 8.1p in the prior year, reflecting the benefit of the buyback
programme that was completed in August.
Focus on operational delivery and modal shift
Operational excellence and driving modal shift from car and air travel to bus
and train are key to our strategy. We strive to make use of our leading
positions and expertise to ensure the best possible customer experience, to
deliver reliable, cost efficient services, drive demand, add capacity, win key
contracts and grow our businesses.
In First Bus, we are benefiting from improved operational performance,
efficiency initiatives and our newer electric fleet which have resulted in
volume growth and lower costs. The division has again grown its revenues and
profit, leaving it on track to achieve a 10% adjusted operating margin in the
second half. Passenger volumes have seen some further recovery despite the
seasonally quiet summer period. On an underlying basis7, mileage increased by 4%
compared to H1 2024, with revenue per mile improving by 5%, to £6.19 in H1 2025.
First Bus's Adjacent Services revenues further increased due to contract wins
and extensions and the contribution of Ensignbus and York Pullman. After the
period end, we completed the acquisition of Anderson Travel and Lakeside Group,
further growing our Adjacent Services portfolio and allowing us to enter new B2B
and B2C coach services markets. We have also recently entered into a new five
-year contract with Flix Bus to operate eight new or expanded coach routes. The
acquisitions we have made in First Bus in the last few years are anticipated to
contribute combined annual revenues of c.£100m and EBIT of c.£13m on a current
run rate basis.
In First Rail we reported a 7% increase in passenger journeys during the period,
with a total of just over 132m journeys (H1 2024: 123m), 131m in the DfT TOCs
and 1.4m in Hull Trains and Lumo, our successful open access operations.
Financial performance has been in line with our expectations and our focus
remains firmly on operational delivery for our customers and partners.
We successfully took over the operation of the London Cable Car contract at the
end of June following several months of mobilisation activity during which we
have built a positive working relationship with TfL. We look forward to working
with TfL to enhance the customer proposition and place the service at the heart
of its local community.
Leading in environmental and social sustainability
We were very pleased to announce in July that FirstGroup has achieved the
highest possible ESG rating by MSCI, AAA, a further endorsement of our
sustainability credentials.
During H1 2025, we have continued to make good progress in our First Bus
decarbonisation programme. Following successful applications with our local
authority partners to secure £16m through the UK Government's ZEBRA 2 co-funding
scheme earlier this year, we have been working hard to prepare our depots and
infrastructure for the delivery of electric buses in the coming months. We now
have eight fully or substantially electric depots across the UK and c.15% of our
bus fleet is zero emission.
We are also preparing to publish our first climate transition plan, in alignment
with the Transition Plan Taskforce (TPT) Disclosure Framework, to further
enhance transparency and accountability in our climate reporting practices. The
plan, which will be published in early 2025, will outline our comprehensive
strategy and pathway to achieve our climate transition goals, detailing our
approach to reducing greenhouse gas emissions, managing climate-related risks
and contributing to an economy-wide transition.
A period of change in UK bus and rail
As a major public transport operator in the UK we have a critical role to play
in the delivery of the country's wider economic, social and environmental goals.
Following the UK general election in July our teams have been engaging with the
new government. We will continue to take a proactive approach, demonstrating our
strengths as an experienced, trusted partner for the delivery of public
transport services.
The rail and bus industries in the UK are set to see considerable change over
the next few years, with the National Rail Contracts set to move to public
ownership and a number of regions outside London planning to adopt the
franchising model in bus.
In rail, we have been one of the largest operators for more than 25 years,
during which we have worked successfully with a wide range of partners under
various contract types and delivered a number of significant rail infrastructure
and fleet upgrade projects. Companies such as ours bring innovation, enhanced
service delivery, private investment and focus on cost control to an industry
that needs it - our DfT TOCs have saved more than £300m for the DfT in their
annual business plans over the last three years.
Open access has been a hugely successful aspect of rail policy, providing
services to under-served communities, supporting local communities and
suppliers, creating jobs and additional capacity on core routes which help drive
modal shift away from more carbon-intensive modes of transport. It has great
potential for helping to drive future social mobility and economic growth; any
future rail policy must fully embrace open access. We know that growth and
innovation are key for the future of the railway and are committed to working
with our partners to provide competitive, sustainable and improved services for
all passengers and communities. Furthermore, if the applications we have
submitted to grow our open access portfolio are successful, the new services
will not only benefit under-served communities and create operational jobs, they
will also support the wider value chain through train manufacturing and
associated jobs in the UK .
Likewise, as one of the largest regional bus companies in the UK , First Bus is
the leading operator in the majority of its local areas, carrying more than a
million passengers a day. First Bus is playing a leading role in the
transformation of the bus sector, leveraging its proven capability and expertise
to work in close partnership with national, regional and local governments, in
every regulatory environment, to ensure the best outcomes for customers. We
believe this can be achieved with a focus on bus priority and congestion
tackling measures, `bus first' planning decisions, targeted fare initiatives,
improved reliability, enhanced facilities and accessibility for customers,
attracting workers to the bus sector and making bus a leading visible indicator
in our green transition.
Significant scope to grow and diversify our portfolio
With our cash generative businesses and considerable balance sheet capacity we
are able to take advantage of value accretive opportunities to grow and
diversify our portfolio and ensure we increase our profitability and remain a
profitable, resilient business. When assessing any opportunity for the Group, we
have a disciplined capital allocation policy and a strict set of criteria. We
will always seek to ensure that the opportunities we explore are complementary
to our existing portfolio and the Group's strategy, thoroughly assessed for
risks and opportunities and operated within a well-understood contractual,
political and regulatory environment with an appropriate balance of risk and
reward.
In First Rail, we are focused on growing in open access, identifying where we
can scale our Additional Services businesses, bidding for new contracts and
identifying new open access opportunities in the UK , as well as monitoring open
access opportunities in Europe as the market continues to liberalise.
In August we acquired Grand Union Trains WCML Holdings Limited, which owns the
track access rights granted by the Office of Rail and Road (`ORR') to run a new
open access rail service on the West Coast Mainline from London Euston to
Stirling . The current track access agreement runs from May 2025 for a period of
five years and includes four return services a day between London Euston and
Stirling , and a fifth return service between Euston and Preston. The new service
will call at a number of intermediate stations in England and Scotland ,
including Whifflet, Greenfaulds and Larbert which will have their first direct
services to London . We look forward to providing further detail including on
rolling stock and an operational start date in due course.
Earlier this year we submitted applications to the Office of Rail and Road
(`ORR') for a new Hull Trains London-Worksop-Sheffield service and a new Lumo
Rochdale -London service, as well as for the extension of a number of Lumo's
daily services to and from Glasgow and for additional paths on both Lumo and
Hull Trains. Positive discussions on these applications continue with the ORR
and Network Rail, supported by detailed business case and performance modelling
conducted by our internal teams and third-party experts. We expect to start
being notified of updates and decisions in the first half of next year.
In addition to growing in open access we are bidding for new contracts,
including TfL's upcoming Elizabeth Line contract, for which we submitted a joint
bid in July 2024, ahead of the anticipated mobilisation start date in May 2025.
The First Rail Consultancy team have also participated in a high-quality
consortium bid for the consultancy services relating to the design, build and
operation of a new high frequency electrified intercity rail service, a major
infrastructure rail project between Quebec City and Toronto .
In H1 2025 our First Rail Additional Services businesses, First Customer
Contact, Mistral Data and First Rail Consultancy generated revenues of £20.0m
(H1 2024: £18.2m). We are looking at ways to scale these businesses as we
believe that private sector ancillary services suppliers will continue to be
vital to the success of the rail industry, bringing experience, expertise and
benefits to the sector.
In First Bus, we have identified a clear plan to navigate the market transition,
to grow and diversify our portfolio and steadily grow our earnings. To do this,
we intend to win our fair share of the franchise market across the UK , develop
our existing commercial bus business, grow our Adjacent Services earnings and
market share, and we will continue to actively evaluate a pipeline of inorganic
growth opportunities in existing and new areas across the UK . Coupled with this,
we will make use of our property portfolio and decarbonisation credentials to
drive innovation, leverage electrification efficiencies and generate new revenue
streams in the energy sector.
With regards to franchising, a number of Mayoral authorities have indicated that
franchising is their preferred future option, representing an opportunity to
gain market share by bidding for contracts in areas where we currently operate
and entering new regions. Our mission is for more people to use the bus and we
will participate in future franchise bids and partnership opportunities,
positioning First Bus as the partner of choice, capable of consistent and
competitive service delivery.
In Adjacent Services, we have built an experienced business development team and
are leveraging our operational strengths and decarbonisation capabilities to
extend and win new contracts. We are also benefiting from the contribution of
Ensignbus and York Pullman and continuing to grow our market share and
geographical footprint, including through the recent acquisitions and contract
wins mentioned above. We already have a strong regional footprint and a credible
market position, but there is considerable scope for us to grow in this market,
specifically in airport services, workplace shuttles and B2B and B2C coach
services, which offer stable earnings with attractive margins.
Board changes
At our AGM in July, David Martin announced his intention to retire from the
Board. I thank David for his contribution to the Group and the strategic
progress that he has overseen.
We were pleased to announce in September that Lena Wilson CBE will be joining
the Board as Chair on 1 February 2025. Lena is a highly experienced director and
Chair, currently a Non-Executive Director at NatWest Group plc, and has held
senior and Board roles at a number of listed and private companies including
Scottish Power Renewables Limited, Intertek Group plc, AGS Airports Limited.
Lena was also Chief Executive of Scottish Enterprise from 2009 to 2017 and prior
to that, a Senior Investment Advisor to The World Bank in Washington DC . We are
delighted that Lena will be joining us to chair our Board, bringing substantial
experience from both the public and private sectors combined with a strong track
-record as a Non-Executive Director.
Corporate activity and capital allocation
Key corporate activity during the period has included the repurchasing the
remainder of the Group's 2024 bonds and we have now fully discharged the Group's
legacy Greyhound pension obligations which has resulted in a one-off gain of
£5.5m in the profit and loss statement in H1 2025.
We have maintained our strong balance sheet, reporting adjusted net debt of
£0.2m at period end, having invested in the electrification of our bus fleet and
infrastructure and returned c.£41m to shareholders via our buyback programme. In
line with our disciplined capital policy and the Group's continued strong
financial performance, the Board has announced an additional £50m on market
share buyback programme and declared an interim dividend of 1.7p per share (H1
2024: 1.5p per share). This will result in a dividend payment of c.£10m to be
paid on 31 December 2024 to shareholders on the register at 29 November 2024.
Outlook
Current trading and the Group's outlook for FY 2025 is slightly ahead of the
outlook set out in the full year results in June 2024. We expect to make further
progress in First Bus, reaching a 10% adjusted operating margin in the second
half. Financial performance in First Rail is anticipated to be slightly ahead of
our prior expectations, reflecting growth achieved in open access and a normal
level of variable fee awards in the DfT TOCs (approximately two thirds of the
maximum available). Positive free cash generation, after c.£125m of net cash
capital expenditure in First Bus, the deployment of our announced growth capital
and progression of the £50m buyback programme, is expected to result in a
marginal net debt position at the end of FY 2025.
We anticipate that we will maintain our adjusted EPS in FY 2026 as we grow
earnings from First Bus and open access rail. Furthermore, the Group has a
strong pipeline of organic and inorganic growth opportunities, and the Board
remains committed to returning surplus cash to shareholders.
In First Bus we are well positioned to manage through the measures announced in
the recent budget that will affect the bus sector. Our team has the experience
to manage both the transition from the £2 fare cap to the new £3 cap in January
2025 and the impact of the increases in employers' national insurance, through
the implementation of a combination of yield and operational efficiencies. We
welcome the announcement of continued government support for the bus sector,
with an extension to the Bus Service Improvement Plan (`BSIP') and Bus Service
Operators Grant (`BSOG') funding packages, and the £200m increase in City Region
Sustainable Transport Settlements (`CRSTS') funding, as well as support for
local transport beyond the city regions.
In First Rail, the Government's announced policy is to bring the National Rail
Contracts into public ownership at the earliest possible opportunity. As the
contracts transition, we anticipate a cash inflow of c.£80m from the DfT TOCs,
including any reorganisation costs the Group may incur, over a three-year period
from April 2025 with cash received from the management fees a year in arrears.
This cash receipt includes the earnings from the division's Additional Services
businesses that are expected to continue supporting the DfT TOCs after their
contracts end, as required under the National Rail Contracts.
Looking further ahead, First Bus and our First Rail open access businesses are
expected to continue to grow from their existing strong bases. They are also
expected to remain cash generative following a period of significant investment
in the First Bus fleet and open access rail is capital light, with rolling stock
funded through operating leases in line withtrackaccess agreements.
Conclusion
H1 2025 has been another strong period of delivery for the Group. We still have
more to do, and as we enter a period of transition, we will continue to work
with government and all our partners to make use of our extensive experience and
expertise to deliver the best possible services and encourage more people to use
bus and rail.
There is no doubt that our businesses will change over the next few years, but
our core strategy around operational excellence, encouraging modal shift and
leading in environmental and social sustainability will underpin everything that
we do. Furthermore, we have considerable growth opportunities which puts
FirstGroup in a strong position. We will continue to invest, with strict
discipline, to grow and diversify our portfolio and maintain our earnings
trajectory as well as remaining focused on delivering potential further capital
returns to shareholders.
Graham Sutherland
Chief Executive Officer
14 November 2024
Business Review
First Bus
£m £m
H1 2025 H1 2024 Change
Revenue 513.7 504.9 8.8
Adjusted operating profit 41.1 36.0 5.1
Adjusted operating margin 8.0% 7.1% 90bps
Adjusted EBITDA 72.7 68.8 3.9
Adjacent Services revenue 125.7 116.2 9.5
Passenger volumes (m) 204 210 (3)%
Operational mileage (m) 83 84 (1)%
Revenue per mile (£) 6.19 6.01 0.18
Net operating assets 658.3 512.4 145.9
Net capital expenditure 52.4 88.7 (36.3)
Return on Capital Employed1 11.4% 11.3% 10bps
1 Return on capital employed is a measure of capital efficiency and is
calculated by dividing adjusted operating profit after tax on a trailing 12
-months basis using a normalised tax rate basis of 25% by average period-end
assets and liabilities excluding debt items.
First Bus generated revenue of £513.7m in H1 2025 compared to £504.9m in H1
2024, which had an extra week of trading and included the operation of the
Oldham depot in Manchester , offsetting a £12.4m reduction in government funding.
Total passenger revenue increased to £385.8m (H1 2024: £377.1m), with revenue
per mile increasing from £6.01 in the prior period, to £6.19. Excluding the
extra week in H1 2024 and the transfer of First Bus operations in Oldham to
TfGM, underlying passenger volumes increased 4% compared with the prior period,
with total mileage also up 4%.
Passenger volumes have continued to be underpinned by our data-led service
improvements, the free travel for under-22s scheme in Scotland , and the £2 fare
cap in England that has grown patronage, mostly in markets with longer journey
fares that were typically much more expensive previously.
Under the Scottish Government's under-22s scheme, operators are reimbursed a
proportion of the cost of a full adult fare. Under the £2 fare cap scheme in
England , operators agree a reimbursement schedule in advance with the DfT based
on the projected cost to the operator for charging a flat £2 fare for journeys
that would otherwise have cost more.
The £2 fare cap in England is due to be replaced by a £3 fare cap from 1 January
to 31 December 2025. Whilst the terms and conditions have not yet been
confirmed, we believe that the £3 cap will still protect the majority of our
customers from the largest increases back to uncapped fares, and in turn,
protect the passenger volume uplifts we have seen on these routes. We are
currently reviewing our pricing strategy ahead of the introduction of the £3
cap.
The extra week of trading in H1 2024 added c.£1.4m of adjusted operating profit.
In H1 2025 adjusted operating profit increased to £41.1m (H1 2024: £36.0m), an
adjusted operating profit margin of 8.0% (H1 2024: 7.1%), leaving the division
on track to achieve a 10% margin in H2 2025.
The return on capital employed increased to 11.4% during the period (H1 2024:
11.3%). This reflects the growth in the division's adjusted operating profit,
substantially offset by the accelerated investment in the electrification of our
fleet and infrastructure that is anticipated to increase future profitability
due to lower operating costs and the benefits of adjacent revenue streams.
Improved operational delivery
As a result of the actions we have taken, including the use of our industry
-leading data tools, we are delivering better quality mileage, aligning services
to demand, implementing smarter fares and driving operational and cost
efficiencies throughout the division. During H1 2025 we made use of our granular
data to implement a number of fare increases.
We have also continued to invest in our workforce to provide enhanced benefits
and learning opportunities and attract more people to work at First Bus. In H1
2025 this included a ground-breaking new learning agreement with our trade union
partner, Unite the Union. Six new learning centre hubs will be created, offering
all frontline colleagues a dedicated facility that puts continual learning
opportunities outside of their day-to-day skillset at the forefront, equipping
them with new skills to drive forward their careers and better support First Bus
customers. Both vocational and non-vocational modules will be available to
colleagues, alongside support from a trained and full-time Trade Union Learning
Representative. We are very proud of this important initiative which builds on
the strong foundations of an ongoing education partnership with Unite the Union
that has spanned over two decades.
Thanks to our enhanced driver recruitment and training programmes, we now have
more drivers (a net increase of 75 drivers in the period vs. the prior year)
which contributed to us running 98.4% of our scheduled mileage (H1 2024: 98.0%).
We are also benefiting from our newer electric fleet, with an average fleet age
in H1 2025 of 9.0 years, down from 10.1 years in FY 2022.
Inflationary pressures continued during the period. Costs increased due to
inflation by c.3%, principally in wages where there was a 5% average increase in
driver pay awards, much of which is carried over from agreements in the previous
financial year; we have now settled over 80% of our pay awards for FY 2025.
Pricing changes of c.£21m offset cost inflation during H1 2025. We have fuel and
electricity hedging programmes in place to mitigate in-year cost inflation and
overall volatility of fuel and energy costs and these programmes continue to
evolve as we transition the First Bus fleet to zero emission.
Growing our share of the Adjacent Services market
We have built an experienced business development team and are successfully
leveraging our operational strengths, infrastructure and decarbonisation
credentials to extend existing and win new contracts. This allows us to maximise
commercial return through longer-term, higher value contracts and grow both our
market share and geographical footprint.
Revenue from Adjacent Services increased to £125.7m in H1 2025 (H1 2024:
£116.2m). As well as benefiting from the contribution of Ensignbus and York
Pullman, we have continued to win new contracts and successfully negotiate
extensions to existing contracts. These have included contracts within our
workplace shuttle services for a number of high-profile brands and Park & Ride
contracts in Taunton , Portsmouth and Norwich .
Earlier this month we were also pleased to announce a new five-year contract
with FlixBus to operate eight coach routes across the UK spanning from Penzance
to Newcastle . As part of the Group's investment in the partnership First Bus is
purchasing 21 express coaches, with plans to recruit 65 new drivers across seven
First Bus depots in three regions. The services are due to be launched from
April to July 2025, with First Bus providing staff, all vehicle-related
requirements and service delivery and FlixBus providing the platform for
passengers. The coaches will be branded in the full FlixBus livery, including
uniform for the drivers.
We are also growing our business through strategic bolt-on acquisitions which in
recent weeks has included Anderson Travel and Lakeside Group. These are all well
established, profitable businesses that will grow our share of the B2B and B2C
coach market and allow us to enter new markets. The acquisitions we have made in
First Bus in the last few years will contribute combined annual revenues of
c.£100m and EBIT of c.£13m.
We have a strong regional footprint and a credible market position in adjacent
services, but there is considerable scope for us to grow in this market,
specifically in airport services, workplace shuttles and B2B and B2C coach
services, which offer stable earnings with attractive margins.
Franchising and partnerships
A number of Mayoral authorities outside London have indicated that franchising
is their preferred future option, including in some areas where they currently
operate, and some where we do not. We continue to build relationships and have a
strong commercial team ready to take advantage of franchising opportunities as
they develop, bidding for contracts in areas where we currently operate, and to
enter new regions.
We have experience of both the partnership and franchise models, as the key
operator in the successful Enhanced Partnership Scheme in Leicester and through
our Rochdale franchise contracts in Manchester . Our mission is for more people
to use the bus, and we will participate in future franchise bids and partnership
opportunities, positioning First Bus as the partner of choice, capable of
consistent and competitive service delivery. We will continue to adapt our
business to deliver great value, to shape networks to suit where and when people
want to travel, to serve communities and grow local economies in a sustainable
way. Regardless of the model, close partnerships with local government
stakeholders are essential for the thriving local bus networks we all want to
see, and we are committed to working with our partners locally and nationally to
achieve this.
Decarbonisation
Earlier this year we announced that we had worked successfully with our local
authority partners to secure £16m through the UK Government's ZEBRA 2 co-funding
scheme to support bus and fleet decarbonisation across four of our regions.
We have made good progress in preparing our depots for the delivery of electric
buses. In August 2024 we were pleased to announce that three of our depots, in
Leicester , York and Norwich , had been officially verified as net zero emission
depots, some of the first in the country to achieve this milestone. The depots
have built on the progress of their fully electric commercial bus fleets by
investing in the necessary additional carbon reduction requirements to claim net
zero status.We have five further depots across the UK substantially electrified,
and we have continued to grow our fleet of electric buses to over 650, c.15% of
our fleet.
We have more than 650 charging outlets and continue with our successful third
-party charging arrangements, including with DPD, Openreach and various public
services providers across multiple depots in England and Scotland . We also have
a purpose-built hub at our Summercourt depot in Cornwall , providing direct
access for the public to eight rapid charging outlets. In addition, we have
recently announced a new agreement with Centrica for their drivers to use the
chargers at our Leicester depot and have signed our first agreement with a
customer operating an eHGV fleet and anticipate this being an area of focus
going forwards.
Another significant milestone for First Bus has been our entry into the
`repowers' market. A repowered bus is a mid-life diesel or hybrid bus that has
been converted to run entirely on electricity. Along with all the regular
benefits of electric buses such as reduced emissions and lower operating costs,
repowered vehicles are cheaper, can extend the lifespan of buses and avoid the
emissions of manufacturing new vehicles. In 2022 we partnered with Equipmake to
upgrade twelve electric buses in York and more recently, we placed the UK's
largest single repower order with Wrightbus for 32 electric conversions,
scheduled for delivery in H2 2025. These orders are an important, incremental
component of our decarbonisation strategy and if successful, we will consider
opportunities to place further orders in the future.
In addition to our recent orders for repowers, in H1 2025 we invested £1m into
KleanDrive, a leader in the electric conversion of heavy vehicles, such as
buses, coaches and trucks. KleanDrive's modular electric drivetrains combines
next-generation technology from top tier suppliers with deep engineering
expertise to provide a flexible, bespoke solution to quickly repower heavy duty
vehicles to reduce emissions, extend vehicle life and materially lower costs.
This is our first venture investment and is consistent with our focus on
accessing new and innovative solutions in decarbonisation through targeted
investments.
We continue to play a leading role in bus and infrastructure electrification
both through our programme and through sharing our learnings with other
operators and local authorities, and we are now able to leverage our
decarbonisation credentials when we bid for new contracts. Furthermore, thanks
to the progress we have made to date, we can now see the benefits of operating
fully electric bus depots and firmly believe that the electrification of our
fleet and infrastructure will further transform our business and provide a
number of value accretive adjacent revenue streams. It will allow us to
standardise and reduce the size of our fleet to drive efficiency and lower
engineering costs whilst delivering the same mileage, and by making use of smart
charging software we will be able to optimise our energy use, increase battery
efficiency and potentially extend battery life.
Looking ahead
We expect to make further progress in H2 2025, reaching a 10% adjusted operating
margin, driven by operational improvements, efficiency initiatives and the
division's newer fleet.
In First Bus we are well positioned to manage through the measures announced in
the recent budget that will affect the bus sector. Our team has the experience
to manage both the transition from the £2 fare cap to the new £3 cap in January
2025 and the impact of the increases in employers' national insurance, through
the implementation of a combination of yield and operational efficiencies. We
welcome the announcement of continued government support for the bus sector,
with an extension to the Bus Service Improvement Plan (`BSIP') and Bus Service
Operators Grant (`BSOG') funding packages, and the £200m increase in City Region
Sustainable Transport Settlements (`CRSTS') funding, as well as support for
local transport beyond the city regions.
In FY 2026 we anticipate growth in adjusted operating profit. We expect capital
expenditure in the division will be lower than in FY 2025, reflecting depot
build and continued electrification infrastructure investment, offset by a lower
level of fleet capital expenditure following a period of higher capex which has
resulted in the division lowering its average fleet age to c.9 years (from 10.1
years in FY 2022).
Looking further ahead, we will navigate the market transition as the Government
introduces new policies, grow and diversify our portfolio and steadily grow our
earnings. To do this, we intend to win our fair share of the franchise market
across the UK , develop our existing commercial bus business, grow our Adjacent
Services earnings and market share, and we will continue to actively evaluate a
pipeline of inorganic growth opportunities in existing and new areas across the
UK . We will also make use of our property portfolio and decarbonisation
credentials to drive innovation, leverage electrification efficiencies and
generate energy-related revenue streams. Underpinning this, we firmly believe
that government policy, favourable demographics and environmental and societal
trends will support sustainable growth in the UK bus sector going forward.
First Rail
£m £m
H1 2025 H1 2024 Change
Adjusted revenue from DfT TOCs 1 23.7 34.7 (11.0)
Revenue from open access and 112.3 100.0 +12.3
additional services2
First Rail Adjusted Revenue 136.0 134.7 +1.3
Adjusted operating profit from 44.1 54.9 (10.8)
DfT TOCs
Adjusted operating profit from 23.8 22.1 +1.7
open access and additional
services
First Rail adjusted operating 67.9 77.0 (9.1)
profit
Passenger journeys (m) - DfT 130.9 122.1 +8.8
TOCs3
Passenger journeys (m) - open 1.4 1.3 +0.1
access operations
Passenger journeys (m) - Total 132.3 123.4 +8.9
1 `Adjusted revenue' is revenue excluding that element of DfT TOC
revenue, and related intercompany eliminations, where the Group takes
substantially no revenue risk. The Adjusted revenue measure includes management
and performance fee income earned by the Group from its DfT TOC contracts
2 Includes intra divisional eliminations
3 Totals exclude TPE: H1 2024: 3.3m passenger journeys
The First Rail division reported total adjusted revenue of £136.0m in H1 2024
(H1 2024: £134.7m). The division's open access operations contributed £51.9m in
revenue for the period, up from £46.3m in the prior year. The division's
Additional Services businesses delivered revenue of £60.4m (H1 2024: £54.0) and
adjusted operating profit of £5.7m (H1 2024: £6.4m).
The DfT TOCs reported adjusted operating profit for the period of £44.1m (H1
2024: £54.9m). As previously reported, during H1 2024 the final variable fee
payments due for the DfT TOCs for the FY 2023 fiscal year were agreed with the
DfT at a rate ahead of the amounts accrued in the Group's FY 2023 financial
statements, resulting in a c.£13m uplift in the division's adjusted operating
profit in H1 2024.
Rail attributable net income from the DfT TOCs - being the Group's share of the
management fee income available for distribution from the GWR, SWR and WCP DfT
contracts - was £14.0m (H1 2024: £23.2m which included the final variable fee
payments for FY 2023 mentioned above, as well as the contribution of
TransPennine Express which was operated by the Group until 28 May 2023).
The division's two open access operations Lumo and Hull Trains delivered further
growth in adjusted operating profit in H1 2025, to £18.1m (H1 2024: £15.7m).
This was due to robust passenger volumes and effective yield management,
including some inflationary increases in fares, which helped offset higher
costs.
To address energy cost inflation, our DfT TOCs and open access operations are
members of industry buying groups in order to mitigate the long-term impact of
electricity costs. For our open access operations, total electricity costs
represent a material proportion of their total costs; these costs decreased by
c.25% in H1 2025 against H1 2024.
Focused on operational delivery in our DfT TOCs
Our three DfT TOCs operate under National Rail Contacts (NRCs), under which the
DfT retains substantially all revenue and cost risk (including for fuel, energy
and wage increases). There is a fixed management fee and the opportunity to earn
an additional variable fee. The punctuality and other operational targets
required to achieve the maximum level of variable fee under the contracts are
designed to incentivise service delivery for customers. During FY 2024 the DfT
introduced some revenue upside potential for operators within the quantitative
variable fee metrics, with a Revenue Outturn Mechanism (ROM), due to run until
31 March 2025. The ROM represents an incremental fee opportunity for the Group
for FY 2025 if we are able to grow the revenues of the NRC contracts within
certain thresholds.
We are an experienced UK rail operator and we are focused on working
collaboratively with the DfT and our industry partners and stakeholders to add
value, innovate and enhance our service offering, alongside the execution of a
number of major investment programmes.
During H1 2025 Avanti West Coast started the roll out of its new £350m fleet of
ten seven-car electric and 13 five-car bi-mode Hitachi trains across the
network. The fleet upgrade will not only improve the customer experience, but it
will also lower emissions compared to the trains that will be replaced. In
addition, the £117m investment programme to refurbish Avanti's electric
Pendolino fleet was completed and the final refurbished train went into service
in June.
Avanti West Coast also extended its Superfare ticket to more routes to mark the
popular low-cost fare's first anniversary. In a survey of Superfare customers,
the majority said they would have not travelled or would have done so by a
different mode, demonstrating how the Superfare ticket is successfully
attracting people to use our services.
At SWR, the team started the phased introduction of its new fleet of Alstom
Class 701 trains and aim to complete the full rollout of the fleet during the
next financial year. In addition, a number of newly refurbished Class 458/4
trains entered service between London Waterloo, Hounslow, Weybridge and
Twickenham , to improve the customer offering.
GWR worked successfully with its partners to open Ashley Down station in Bristol
at the end of September, connecting the local community to the wider rail
network for the first time in sixty years. The project was part of a £300m
investment by the West of England Mayoral Combined Authority, in partnership
with GWR, Network Rail, and Bristol City Council, to bring rail travel within
easy reach of more people than ever before.
GWR's industry-first fast-charge battery-only train trial has now been running
for more than six months, gathering insights to be shared with the DfT and wider
industry to help shape the industry's future decarbonisation plans. More than
300 return trips have been completed between West Ealing and Greenford, testing
the technology's capability in all elements, from extreme heat to heavy rain.
The work the team has done has successfully raised the profile of fast charge as
part of the potential solution for the decarbonisation of lines that are
difficult or expensive to reach through traditional electrification.
Leveraging our expertise and capabilities in Additional Services
Our First Rail Additional Services businesses - First Customer Contact (`FCC'),
Mistral Data and First Rail Consultancy, generated revenues of £20.0m in H1
2025, up from £18.2m in H1 2024, leveraging our extensive experience and
expertise. We are looking at ways to scale these businesses as we believe that
private sector ancillary services suppliers will continue to be vital to the
success of the rail industry, bringing experience, expertise and benefits to the
sector.
FCC provides customer relations, delay repay services and fraud prevention and
management services to a number of train operating companies including TPE. In
H1 2025, working with technology partners, FCC implemented a number of
artificial intelligence tools to further improve the customer handling
experience.
During H1 2025, the team at Mistral Data have continued to develop new modules
and services and to market their range of products to UK and international
industry participants. Products include cloud-based tools focused on transport
operations, staff messaging, customer engagement, revenue management, business
intelligence and remote asset management. New modules and services are being
developed that will be available and marketed to both existing and potential new
customers.
First Rail Consultancy provides expertise in all the major facets of railway
operations to a range of operating companies, addressing both current services
and the cost-effective delivery of major infrastructure projects, rolling stock
procurement and upgrades. During H1 2025, the team qualified to work under a
number of industry-wide framework agreements and continued to support a wide
range of clients in the UK , as well as working on an international consultancy
project.
Continued delivery in open access
First Rail's two open access businesses, Lumo and Hull Trains, where we bear all
revenue and cost risk and opportunity, have continued to perform well in H1
2025. Demand has remained strong, and they also remain two of the most reliable
operators in the UK .
Hull Trains has continued to run a ten-car service at peak demand times
(typically a five-car service) to match demand; seat capacity has grown by 13%,
with the seat utilisation remaining stable at 68%. Hull Trains reported a 15%
increase in revenue, to £23.3m (H1 2024: £20.2m).
At Lumo, profit is driven predominantly by improving demand and effective yield
management, whilst still offering competitive prices. Revenue increased by 10%
to £28.6m in H1 2025 (H1 2024: £26.1m), with further improvement in yields
offsetting slightly higher costs. Seat capacity utilisation also rose, to 80%
from 78% in the prior year.
Growing our successful open access business
Growing our successful open access rail portfolio is a key priority for the
Group and delivers against our strategic aims of driving modal shift, leading in
social and environmental sustainability and growing and diversifying our
businesses. We are growing through efficiency improvements, acquiring and
applying for routes where we can connect under-served communities and add value
for our stakeholders.
In August we acquired Grand Union Trains WCML Holdings Limited, which owns the
track access rights granted by the Office of Rail and Road (`ORR') to run a new
open access rail service on the West Coast Mainline from London Euston to
Stirling . The current track access agreement runs from May 2025 for a period of
five years and includes four return services a day between London Euston and
Stirling , and a fifth return service between Euston and Preston. The new service
will call at a number of intermediate stations in England and Scotland ,
including Whifflet, Greenfaulds and Larbert which will have their first direct
services to London . The new service will provide more choice for passengers with
significantly increased direct connections to and from London and central and
southern Scotland , making use of available capacity on the network. We will
provide further detail, including on rolling stock and an operational start date
in due course.
In January 2024, we announced that we had submitted an application for a new
open access service to provide a fast link between London and Sheffield ,
comprising two return journeys a day from London King's Cross, calling at
Retford, Worksop, Woodhouse and Sheffield . It would be the first regular service
from London King's Cross to Sheffield since 1968 and Worksop in Nottinghamshire
would have its first regular direct London train service in decades. The
application is currently being reviewed as part of East Coast Mainline (`ECML')
December 2025 timetable review process with an update anticipated in the first
half of 2025.
We also submitted an application to the ORR for a new open access service
between Rochdale and London with a December 2027 start date. The application
includes six return journeys a day, providing a direct Rochdale to London link
via Manchester Victoria which last ran in 2000. The service would be operated
under the successful Lumo brand, which has transformed long-distance
connectivity between London and Edinburgh and helped support a growth in
passenger numbers for all operators on the East Coast Mainline. It is
anticipated that the trains on this new route will be new, UK manufactured,
electric and battery powered trains.
Following discussions with Network Rail Scotland and Transport Scotland, we also
submitted an application for an extension of some of Lumo's services to Glasgow ,
the expansion of some of Lumo's services to ten car operations, as well as for a
sixth return Lumo service between London and Newcastle and for Hull Trains, an
eighth return service between London and Hull . These operations could commence
in line with ECML timetable change.
Positive discussions on these applications continue with the ORR and Network
Rail, supported by detailed business case and performance modelling conducted by
our internal teams and third-party experts.
Transport for London contracts
Having operated London Trams on behalf of Transport for London (`TfL') for a
number of years, in March 2024, we were delighted to announce that we had been
awarded the contract to operate the London Cable Car on behalf of TfL from the
end of June 2024, with estimated revenues of c.£60m over the eight-year contract
period. We successfully took over the operation at the end of June following
several months of mobilisation activity. We look forward to working with TfL to
enhance the customer proposition and place the service at the heart of its local
community.
As previously announced, in July 2024 we submitted a bid for the Elizabeth Line
contract in partnership with Keolis SA.
A period of transition in UK rail
The UK rail industry is set to see considerable change over the next few years.
We have been one of the largest operators for more than 25 years, during which
we have worked successfully with a wide range of partners under various forms of
contract types and delivered a number of significant rail infrastructure and
fleet upgrade projects. Companies such as ours bring innovation, enhanced
service delivery, private investment and focus on cost control to an industry
that needs it - our businesses have saved more than £300m for the DfT in the
last three years.
Furthermore, as we look to grow our open access portfolio, we recognise what
successful open access services can achieve. They can provide new connections
for under-served communities, add capacity on core routes to help drive modal
shift away from more carbon-intensive modes of transport, support local
businesses and suppliers, create jobs and help to drive social mobility and
future economic growth.
We know that growth and innovation are key for the future of the railway and are
committed to working with our government partners to provide competitive,
sustainable and improved services for all passengers and communities.
Furthermore, if the applications we have submitted to grow our open access
portfolio are successful, they will not only create operational jobs, but it
could also support the wider value chain through train manufacturing and
associated jobs in the UK .
Looking ahead
Financial performance in H2 2025 is expected to be slightly ahead of our prior
expectations, reflecting growth achieved in open access and a normal level of
variable fee awards in the DfT TOCs (approximately two thirds of the maximum
available).
It is the Government's announced policy to bring the National Rail Contracts
into public ownership at the earliest possible opportunity. As the contracts
transition, we anticipate a cash inflow of c.£80m from the DfT TOCs, including
any reorganisation costs the Group may incur, over a three-year period from
April 2025 with cash received from the management fees a year in arrears. This
cash receipt includes the earnings from the division's Additional Services
businesses that are expected to continue supporting the DfT TOCs after their
contracts end, as required under the National Rail Contracts.
Our open access businesses are expected to continue to grow from their existing
strong base and will remain capital light, with rolling stock funded through
operating leases in line withtrackaccess agreements. The addition of the London
to Stirling service will add capacity, albeit with a lower operating profit
margin than our existing services due to comparatively higher fleet costs.
As the UK rail industry goes through this period of transition, we are focused
on growing in open access, identifying where we can scale our Additional
Services businesses, bidding for new contracts including upcoming TfL tenders,
and identifying new open access opportunities in the UK , as well as monitoring
open access opportunities in Europe as the market continues to liberalise.
Financial review
Adjusted revenue from continuing operations increased to £649.6m (H1 2024:
£634.8m). First Bus revenue increased by 2% to £513.7m, principally reflecting
underlying passenger revenue growth of 10% offset by reduced government funding
and the additional week in H1 2024 that added £19m. First Rail saw increased
revenue across its open access and additional services businesses, offset by
lower management fees in the DfT TOCs as H1 2024 included an uplift for higher
than accrued FY 2023 fees.
Operating performance
Adjusted operating performance by division is as follows:
26 weeks 27 weeks
53 weeks
to 28 to 30
to 30
September September
March
2024 2023
2024
Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted
Adjusted Adjusted Adjusted
Revenue1 operating operating operating operating
Revenue operating operating
£m profit2 margin2 Revenue profit2 margin2
£m profit2 margin2
£m % £m £m %
£m %
First Bus 513.7 41.1 8.0 504.9 36.0 7.1
1,012.2 83.6 8.3
First Rail 136.0 67.9 49.9 134.7 77.0 57.2
285.0 143.3 50.3
Group items/ (0.1) (8.2) n/a (4.8) (12.4) n/a
(5.4) (22.6) n/a
eliminations3
Continuing 649.6 100.8 15.5 634.8 100.6 15.8
1,291.8 204.3 15.8
operations
Discontinued - - n/a - (2.2) n/a -
(1.9) n/a
operations4
Total 649.6 100.8 15.5 634.8 98.4 15.5
1,291.8 202.4 15.7
Statutory operating performance by division is as follows:
26 weeks 27 weeks 53
to 28 to 30 weeks
September September to 30
2024 2023 March
2024
Revenue Operating Operating Revenue Operating Operating
Revenue Operating Operating
£m profit margin £m profit margin% £m
profit margin
£m % £m
£m %
First Bus 513.7 41.1 8.0 504.9 (106.3) (21.1)
1,012.2 (63.3) (6.3)
First Rail 1,843.0 67.9 3.7 1,721.9 77.0 4.5
3,738.4 143.3 3.8
Group items3 (12.6) (8.7) n/a (19.8) (12.1) n/a
(35.5) (33.5) n/a
Continuing 2,344.1 100.3 4.3 2,207.0 (41.4) (1.9)
4,715.1 46.5 1.0
operations
Discontinued - 5.9 n/a - 0.1 n/a -
(5.3) n/a
operations4
Total 2,344.1 106.2 4.5 2,207.0 (41.3) (1.9)
4,715.1 41.2 0.9
1` Adjusted revenue' is revenue excluding DfT TOC revenue, and related
intercompany eliminations, where the Group takes substantially no revenue risk
2`Adjusted operating profit' and "Adjusted operating margin" are before
adjusting and certain other items as set out in note 3 to the interim financial
statements.
3Includes elimination of intra-group trading between Bus and Rail divisions, and
charges relating to central management and other items.
4Discontinued operations relates to the Group's residual Greyhound US
activities.
Adjusted operating profit from continuing operations was £100.8m (H1 2024:
£100.6m), reflecting growth in First Bus and lower central costs offset by First
Rail. First Bus benefited from underlying passenger revenue growth of 10% and
new acquisitions offset by reduced government funding, inflation and the impact
of the extra week in H1 2024 (£1.4m). First Rail adjusted operating profit
decreased by £9.1m reflecting the impact of higher than accrued final FY 2023
variable fees in the prior year of c.£13m and business development costs, offset
by open access where strong demand and inflationary fare increases improved
profitability. Central costs were £8.2m with the decrease due to continued
efficiencies and a higher proportion of central costs allocated to the
divisions.
The Group's EBITDA adjusted for First Rail management fees performance measure
were lower year-on-year driven mostly by the FY23 management fee recognised in
First Rail in the prior year.
26 weeks to 28 27 weeks to 30 53 weeks to
September 2024 September 2023 30 March
£m £m 2024
£m
First Bus EBITDA1 63.9 61.4 132.5
Attributable net 14.0 23.2 39.5
income from First
Rail DfT
contracted TOCs2
First Rail - open 22.6 22.2 37.6
access and
Additional
Services EBITDA1
Group central (8.0) (12.0) (21.8)
costs (EBITDA
basis1)
Group EBITDA 92.5 94.8 187.8
adjusted for First
Rail
DfT contracted
TOCs' management
fees
1Pre-IFRS 16 basis.
2A reconciliation to the segmental disclosures is set out in note 3.
Adjusted earnings were £51.8m (H1 2024: £56.5m), driven by strong adjusted
operating profit performance across the business, offset by the lower net
attributable management fees at the DfT TOCs.
26 weeks to 28 27 weeks to 30 53 weeks to
September 2024 September 2023 30 March
£m £m 2024
£m
First Bus adjusted 41.1 36.0 83.6
operating profit
First Rail adjusted 67.9 77.0 143.3
operating profit
Group central costs (8.2) (12.4) (22.6)
(operating profit
basis)
Group adjusted 100.8 100.6 204.3
operating profit
Interest (30.0) (27.1) (65.3)
Profit before tax 70.8 73.5 139.0
IFRS 16 DfT contracted 1.3 5.3 10.2
TOCs adjustment
Taxation (17.8) (18.4) (32.0)
Non-controlling (2.5) (3.9) (6.5)
interest
Group adjusted 51.8 56.5 110.7
earnings
Reconciliation to non-GAAP measures and performance
Note 3 to the financial statements sets out the reconciliations of operating
profit and profit before tax to their adjusted equivalents.
The principal adjusting items in H1 2025 are as follows:
Greyhound Canada
A net £0.5m charge was incurred in the period relating to the continued winding
down of Greyhound Canada operations.
The principal adjusting items in relation to the operating profit adjustments -
discontinued operations were as follows:
CARES receipt
A credit of £0.4m was recognised in the period on receipt of CARES funding in
relation to the discontinued North American operations.
Legacy US pensions scheme buy out
On 16 July 2024, the Group agreed terms with an insurance company to buy out the
remaining liabilities of the legacy Greyhound US pension plan, with the plan
being terminated thereafter. Following a Group contribution of $6m , gross
liabilities valued at $155m (£123m) at the FY 2024 year-end were removed from
the Group's balance sheet and the Group recognised a net settlement gain after
related costs of £5.5m in the income statement as an adjusting item.
The principal adjusting items in H1 2024 were as follows:
First Bus pension settlement charge and related items
In September 2023, First Bus concluded a period of consultation with regards to
its two Local Government Pension Funds and subsequently terminated its
participation in these funds on 31 October 2023, with affected employees
enrolled into the First Bus Retirement Savings Plan. Adjusting charges of
£142.3m were recognised in the prior period for the settlement charge and
related termination costs. A gain of £160.4m was recognised in Other
comprehensive income in relation to the restricted accounting surplus.
Adjusting items - discontinued operations
An initial payment of the First Transit earnout consideration of $62.8m (£48.9m)
was received during the first half of the prior year. At that time, an adjusting
credit of £2.3m arose as a result of the hedging of the cash receipt and the
retranslation of the US dollar asset into pounds sterling.
Group statutory operating profit
Statutory operating profit (continuing basis) was £100.3m (H1 2024: loss of
£(41.4)m reflecting the First Bus pension settlement charge and related costs).
Finance costs and investment income
Net finance costs were £30.0m (H1 2024: £27.1m) with the increase principally
due to additional PCV finance leases, lower interest receivable on deposits and
lower IFRS 16 interest charge in the DfT TOCs.
Profit before tax
Statutory profit before tax (continuing basis) was £70.3m (H1 2024: loss of
£(68.5)m). Adjusted profit before tax (continuing basis) as set out in note 3 to
the financial statements was £70.8m (H1 2024: £73.5m). Adjusting items
(continuing basis) were a charge of £0.5m, relating to the continued winding
down of Greyhound Canada operations. (H1 2024: charge of £142.0m, primarily
reflecting the First Bus pension settlement charge and related costs).
Tax
The tax charge on adjusted profit before tax on continuing operations was £17.8m
(H1 2024: £18.4m), representing an effective tax rate of 25.1% (H1 2024: 25.0%).
The effective rate remains broadly in line with the UK rate. There was no tax
relating to adjusting items (H1 2024: credit of £35.6m). The total tax charge,
including tax on discontinued operations, was £17.8m (H1 2024: credit of
£(17.2)m). The actual tax paid during the period was £0.8m (H1 2024: £1.5m).
The ongoing Group's effective tax rate is expected to be broadly in line with UK
corporation tax levels (currently 25%).
EPS
Adjusted continuing EPS was 8.5p (H1 2024: 8.1p). Basic continuing EPS was 8.2p
(H1 2024: (7.9)p).
Shares in issue
As at 28 September 2024 there were 598.6m shares in issue (H1 2024: 662.5m),
excluding treasury shares and own shares held in trust for employees of 152.1m
(H1 2024: 88.2m). The Company's £115m share buyback programme completed on 5
August 2024 having repurchased 71,200,278 shares. The weighted average number of
shares in issue for the purpose of basic EPS calculations (excluding treasury
shares and own shares held in trust for employees) in the period was 608.5m (H1
2024: 697.7m).
Capital allocation framework
The Group's capital allocation framework can be summarised as follows:
Investment · First Bus: £125m net cash capex for FY 2025, mostly on
electrification
· First Rail: continues to be cash capital-light, with any
capital expenditure required by the management fee-based
operations fully funded under the new contracts and open access
rolling stock operating leases in line with the track access
agreements
Growth · Actively reviewing adjacent organic and inorganic
opportunities where this creates value for shareholders and
exceeds the Group's pre-tax WACC (c.10%)
Returns for · Progressive dividend policy currently around 3x cover of
shareholders Group adjusted earnings; paid c.1/3 interim and 2/3 final
dividend
· Interim dividend of 1.7p per share declared
· Additional £50m buyback announced
· The Board remains committed to returning surplus cash to
shareholders
Balance · Less than 2.0x Adjusted Net Debt: rail management fee
sheet -adjusted EBITDA target in the medium term
Dividend
The Board has declared an interim dividend of 1.7p per share (c.£10m in
aggregate), to be paid on 31 December 2024 to shareholders on the register at 29
November 2024.
Adjusted cash flow
The Group's adjusted cash outflow of £(7.8)m (H1 2024: outflow of £(108.0)m) in
the period reflects strong underlying cash generated by operations offset by
capital outflows relating to investment in First Bus, the impact of the share
buyback programmes, lease payments and movement in First Rail ring-fenced cash
(£25.3m outflow since FY 2024). The adjusted cash flow is set out below:
26 weeks to 28 27 weeks to 30 53 weeks to
September 2024 September 2023 30 March
£m £m 2024
£m
Adjusted EBITDA 362.0 342.3 748.6
Other non-cash income statement 6.4 (134.3) 13.7
charges
Working capital 19.1 (74.9) (117.0)
Movement in other provisions (31.3) (18.8) (30.2)
Movement in financial (1.0) 26.0 23.7
assets/contingent consideration
receivable
Settlement of foreign exchange - (1.1) (1.1)
hedge
Pension payments lower than (4.7) 113.1 (9.3)
income statement charge
Cash generated by operations 350.5 252.3 626.6
Capital expenditure and (74.0) (115.6) (236.0)
acquisitions
Proceeds from disposal of 10.1 17.2 42.8
property, plant and equipment
Proceeds from capital grant 23.8 55.3 94.8
funding
Proceeds from contingent - 48.9 65.3
consideration
Interest and tax (31.6) (31.4) (67.6)
Shares purchased for Employee (9.3) (6.1) (16.5)
Benefit Trust
Share repurchases from buyback (41.4) (66.6) (117.6)
programmes, including costs
External dividends paid (24.0) (19.7) (29.5)
Dividends paid to non - - (6.5)
-controlling interests
Settlement of foreign exchange - 4.2 4.1
hedge
Lease payments now in debt (211.9) (246.5) (526.2)
Fees for finance facilities - - (1.4)
Adjusted cash flow (7.8) (108.0) (167.7)
Foreign exchange movements 1.5 0.8 3.4
Net inception of leases (37.9) (14.8) (237.5)
Lease payments in debt 211.9 246.5 526.2
Other non-cash movements - - (0.1)
Movement in net debt in the 167.7 124.5 124.3
period
Capital expenditure
Non-First Rail cash capital expenditure was £60.1m, which related to First Bus
and Group items (H1 2024: £95.2m). First Rail cash capital expenditure was
£12.4m (H1 2024: £20.4m) and is typically matched by receipts from the DfT under
current contractual arrangements or other funding.
During the period leases in the non-First Rail divisions were entered into with
capital values in First Bus of £9.2m and Group items of £0.7m (H1 2024: Bus
£5.5m and Group items £1.3m). First Rail entered into leases with a capital
value of £21.8m (H1 2024: £9.0m). During the period asset backed financial
liabilities were entered into in First Bus of £35.1m (H1 2024: £nil).
Non-First Rail gross capital investment (fixed asset and software additions,
plus the capital value of new leases) was £53.1m and comprised First Bus £52.4m
and Group items £0.7m (H1 2024: £88.8m, comprising First Bus £88.7m, Group items
£0.1m). First Rail gross capital investment was £35.8m (H1 2024: £35.2m). The
balance between cash capital expenditure and gross capital investment represents
new leases, creditor movements and the recognition of additional right of use
assets in the period.
Funding
As at the period end, the Group had £532.7m of undrawn committed headroom and
free cash (FY 2024: £705.2m), being £300.0m (FY 2024: £300.0m) of committed
undrawn headroom on the RCF, £97.7m (FY 2024: £129.8m) committed undrawn
headroom on the Green Hire Purchase facility, £42.2m (FY 2024: £54.9m) committed
undrawn headroom on the NextGen battery finance facility and £92.8m (FY 2024:
£220.5m) of net free cash after offsetting overdraft positions.
Net debt/(cash)
As at 28 September 2024 the Group's adjusted net debt, which excludes IFRS 16
lease liabilities and ring-fenced cash, was £0.2m (FY 2024: adjusted net cash of
£(64.1)m). Reported net debt was £977.1m (FY 2024: £1,144.8m) after IFRS 16 and
including ring-fenced cash of £(274.9)m (FY 2024: £(249.6)m), as follows:
Analysis of net debt 28 30 September 30 March 2024
September 2023 £m
2024 £m
£m
Sterling bond (2024) - 172.0 96.2
Bank loans and overdrafts 70.6 96.4 27.8
Lease liabilities 1,251.8 1,529.0 1,458.5
Asset backed financial liabilities 72.1 32.1 45.6
NextGen (Hitachi JV) facility 19.4 - 13.2
Loan notes - 0.6 -
Gross debt excluding accrued 1,413.9 1,830.1 1,641.3
interest
Cash (161.9) (378.2) (246.9)
First Rail ring-fenced cash and (271.2) (303.2) (245.6)
deposits
Other ring-fenced cash and (3.7) (4.1) (4.0)
deposits
Net debt excluding accrued 977.1 1,144.6 1,144.8
interest
IFRS 16 lease liabilities - rail 1,198.7 1,492.2 1,408.9
IFRS 16 lease liabilities - non 53.1 36.8 49.6
-rail
IFRS 16 lease liabilities - total 1,251.8 1,529.0 1,458.5
Net cash excluding accrued (274.7) (384.4) (313.7)
interest (pre-IFRS 16)
Adjusted net debt/(cash) (pre-IFRS 0.2 (77.1) (64.1)
16 and excluding ring-fenced cash)
Under the terms of the First Rail contractual agreements with the DfT, cash can
only be distributed by the TOCs either up to the lower amount of their retained
profits or the amount determined by prescribed liquidity ratios. The ring-fenced
cash represents that which is not available for distribution or the amount
required to satisfy the liquidity ratios at the balance sheet date.
Interest rate risk
Exposure to floating interest rates is managed to ensure that at least 50% (but
at no time more than 100%) of the Group's pre-IFRS 16 gross debt is fixed rate
for the medium term.
Fuel and electricity price risk
We use a progressive forward hedging programme to manage commodity risk. As at
November 2024, 86% of our `at risk' UK crude requirements for H2 2025 (38.4m
litres, which is all in First Bus) was hedged at an average rate of 48.7p per
litre, 62% of our requirements for the year to the end of March 2026 at 49.3p
per litre, and 25% of our requirements for the year to the end of March 2027 at
45.7p per litre. We also have an electricity hedge programme in place, with 78%
of our consumption (based on current consumption forecasts) hedged for H2 2025
at £137/MWh, 68% for FY 2026 at £73/MWh and 33% for FY 2027 at £70/MWh.
Foreign currency risk
`Certain' and `highly probable' foreign currency transaction exposures
(including fuel purchases for the UK divisions) may be hedged at the time the
exposure arises for up to two years at specified levels, or longer if there is a
very high degree of certainty. The Group does not hedge the translation of
earnings into the Group reporting currency but accepts that reported Group
earnings will fluctuate as exchange rates against pounds Sterling fluctuate for
the currencies in which the Group does business, although this exposure is
materially reduced following the sales of the North American divisions. During
the year, the net cash generated in each currency may be converted by Group
Treasury into pounds Sterling by way of spot transactions in order to keep the
currency composition of net debt broadly constant.
Foreign exchange
The most significant exchange rates to pounds Sterling for the Group are as
follows:
28 30 30
September September March
2024 2023 2024
Closing Effective Closing Effective Closing Effective rate
rate rate rate rate rate
US 1.34 1.32 1.22 1.26 1.26 1.26
Dollar
Canadian 1.81 1.80 1.66 1.70 1.71 1.77
Dollar
Pensions
We have updated our pension assumptions for the defined benefit schemes in the
UK and North America . The net pension deficit of £25.3m at the beginning of the
reporting period moved to a net surplus of £32.9m as at 28 September 2024, with
the movement principally due to increased discount rate and lower inflation rate
assumptions reducing scheme liabilities, as well as lower scheme commutation
factors. The main factors that influence the balance sheet position for pensions
and the principal sensitivities to their movement at 28 September 2024 are set
out below:
Movement Impact
Discount rate -0.1% Decrease surplus by £14m
Inflation +0.1% Decrease surplus by £10m
Life expectancy +1 year Decrease surplus by £48m
Legacy Greyhound pension obligations in the USA have been fully discharged. An
adjusting item gain of £5.5m has been recognised in the income statement.
Following the transfer of the majority of assets and liabilities from The First
UK Bus Pension Scheme to the FirstGroup Pension Scheme in May 2024, the former
Bus Scheme is being wound up. Payment of winding-up lump sums to eligible
members is well under way and winding up is expected to be completed during
2025.
The FirstGroup Pension Scheme Trustee and the Company are focused on completing
the Scheme's funding valuation by the statutory deadline of 5 July 2025, which
will determine how the £79m from the Limited Partnership held in escrow is to be
distributed between the Scheme and the Company. It is unlikely that the outcome
will be known until shortly before the funds are to be distributed in July 2025.
Balance sheet
Net assets have increased by £59.6m since 30 March 2024.
Balance sheets - net As at As at As at
assets/(liabilities) 28 September 2024 30 September 2023 30 March 2024
£m £m £m
First Bus 658.3 512.4 580.2
First Rail 968.3 1,240.0 1,169.2
Greyhound (retained) (11.4) (24.8) (24.7)
Divisional net 1,615.2 1,727.6 1,724.7
assets
Group items 101.6 57.3 60.7
Borrowings and cash (977.1) (1,145.0) (1,148.3)
Taxation (38.5) (6.9) 4.0
Held for sale assets 0.1 0.7 0.6
Total 701.3 633.7 641.7
Post-balance sheet events
On 21 October, the Group announced its acquisition of Anderson Travel, a coach
operator providing contracted school, private hire, mini coach and tour services
in and around London . The acquisition will extend First Bus' operational
footprint and forms part of the Group's strategy of targeted acquisitions to
grow its share of the UK adjacent services market.
On 25 October, the Group announced its acquisition of Lakeside Group, a
Shropshire and Cheshire -based company that provides school, B2B and B2C private
hire services, with a fleet of around 145 buses and coaches. The acquisition
will grow the Group's coaching business and offers the potential to increase our
presence in the West Midlands .
Going concern
The Board carried out a review of the Group's financial projections for the 18
months to 31 March 2026 and having regard to the risks and uncertainties to
which the Group is exposed, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the condensed consolidated financial statements
in the half-yearly report have been prepared on the going concern basis.
Definitions
Unless otherwise stated, all financial figures for the 26 weeks to 28 September
2024 (the 'first half', the 'period' or 'H1 2025') include the results and
financial position of the First Rail business for the period ended 14 September
2024 and the results of all other businesses for the 26 weeks ended 28 September
2024. The figures for the 27 weeks to 30 September 2023 (the 'prior period' or
'H1 2024') include the results and financial position of the First Rail business
for the period ended 16 September 2023 and the results of all other businesses
for the 27 weeks ended 30 September 2023. Figures for the 53 weeks to 30 March
2024 ('FY 2024') include the results and financial position of the First Rail
business for the year ended 31 March 2024 and the results of all other
businesses for the 53 weeks ended 30 March 2024.
'Cont.' or the 'Continuing operations' refer to First Bus, First Rail, Group
items and Greyhound Canada.
'Disc.' or the 'Discontinued operations' refer to First Student, First Transit
and Greyhound US.
References to 'adjusted operating profit', 'adjusted profit before tax',
`adjusted earnings' and 'adjusted EPS' throughout this document are before the
adjusting items as set out in note 3 to the financial statements, and in the
case of `adjusted earnings' and `adjusted EPS', excluding the impact of IFRS 16
for the Group's management fee-based Rail operations.
`Adjusted revenue' is revenue excluding that element of DfT TOC revenue, and
related intercompany eliminations, where the Group takes substantially no
revenue risk. The Adjusted revenue measure includes management and performance
fee income earned by the Group from its DfT TOC contracts.
'EBITDA' is adjusted operating profit less capital grant amortisation plus
depreciation.
The Group's 'EBITDA adjusted for First Rail management fees' is First Bus and
First Rail EBITDA from open access and Additional Services on a pre-IFRS 16
basis, plus First Rail attributable net income from management fee-based
operations, minus central costs.
`Adjusted earnings' is the Group's statutory profit for the period attributable
to equity holders of the parent, excluding adjusting items as detailed in note
3, and also excluding the impact of IFRS 16 for the Group's management fee-based
Rail operations.
'Net debt/(cash)' is the value of Group external borrowings, excluding accrued
interest, less cash balances.
'Adjusted net debt/(cash)' excludes ring-fenced cash and IFRS 16 lease
liabilities from net debt/(cash).
References to `underlying' adjust for the impact of the additional week in H1
2024 and the transfer of First Bus operations in Oldham to TfGM franchising.
Forward-looking statements
Certain statements included or incorporated by reference within this document
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 document 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 document.
Principal risks and uncertainties
The Board has conducted a thorough assessment of the principal risks and
uncertainties facing the Group for the remainder of the financial year,
including those that would threaten the successful and timely delivery of its
strategic priorities, future performance solvency and liquidity.
There are a number of risks and uncertainties facing the Group in the remaining
six months of the financial year in addition to those mentioned in the Business
and Financial Reviews. The underlying principal risks and uncertainties in our
operating businesses remain broadly consistent with those set out in detail on
pages 86 to 95 of the Annual Report and Accounts 2024, with "Human Resources" re
-termed "People" and "Contracted Business" and "Growth within the Sector"
changed to "Growth and Diversification", aligning strategic principal risks with
the Group's four strategic pillars.
Several of the principal risks remain more elevated currently given the wider
geopolitical and related economic backdrop. The Principal Risks are:
· Economic conditions
· Geopolitical
· Climate change
· Growth and Diversification
· Financial resources
· Safety
· Pension scheme funding
· Regulatory compliance
· Information Security, including Cyber-security
· People
Risks that are of particular focus to monitor in the second half of the year and
going forwards include the anticipated changes in the UK bus and rail sectors as
a result of the Government's announced transport policies, and developments in
the wider geopolitical backdrop which may affect the UK economy.
For a full summary of the Principal Risks and Uncertainties facing the Group,
please refer to the Annual Report and Accounts 2024 at Annual Report 2024 -
FirstGroup plc (https://www.firstgroupplc.com/investors/annual-report-2024.aspx)
annual-report-2024.pdf
(firstgroupplc.com) (https://www.firstgroupplc.com/~/media/Files/F/Firstgroup
-Plc/reports-and-presentations/reports/annual-report-2024.pdf)
Graham Sutherland Ryan Mangold
Chief Executive Officer Chief Financial Officer
14 November 2024 14 November 2024
Condensed consolidated income statement
Notes Unaudited Unaudited
26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Revenue 2, 4 2,344.1 2,207.0
Operating costs before LGPS (2,243.8) (2,106.1)
pension settlement and related
charges
LGPS pension settlement and - (142.3)
related charges
Total operating costs (2,243.8) (2,248.4)
Operating profit/(loss) 100.3 (41.4)
Investment income 5 4.7 11.0
Finance costs 5 (34.7) (38.1)
Profit/(loss) before tax 70.3 (68.5)
Tax 6 (17.8) 17.2
Profit/(loss) from continuing 52.5 (51.3)
operations
Profit from discontinued 4 5.8 0.1
operations
Profit/(loss) for the period 58.3 (51.2)
Attributable to:
Equity holders of the parent 55.8 (55.1)
Non-controlling interests 2.5 3.9
58.3 (51.2)
Earnings per share
Earnings per share for
profit/(loss) from continuing
operations attributable to the
ordinary equity holders of the
company
Basic 8.2p (7.9)p
Diluted 7.8p (7.9)p
Earnings per share for
profit/(loss) attributable to
the ordinary equity holders of
the company
Basic 7 9.2p (7.9)p
Diluted 7 8.8p (7.9)p
Adjusted results (from
continuing operations)1
Adjusted operating profit 3 100.8 100.6
Adjusted profit before tax 70.8 73.5
Adjusted EPS 7 8.5p 8.1p
Adjusted diluted EPS 8.1p 7.5p
1Adjusted for certain items as set out in note 3 and note 7.
The accompanying notes form an integral part of this consolidated income
statement.
Condensed consolidated statement of comprehensive income
Unaudited Unaudited
26 weeks to 27 weeks to
28 September
2024 30 September
£m
2023
£m
Profit/(loss) for the period 58.3 (51.2)
Items that will not be reclassified subsequently
to profit or loss
Actuarial gains/(losses) on defined benefit 43.0 (70.7)
pension schemes
Gain on termination of LGPS participation from - 160.4
restricted accounting surplus
Deferred tax on actuarial losses on defined (10.2) (22.3)
benefit pension schemes
32.8 67.4
Items that may be reclassified subsequently to
profit or loss
Hedging instrument movements (7.2) 11.2
Deferred tax on hedging instrument movements 1.8 (2.2)
Cumulative profit on hedging instruments - (2.9)
reclassified to the income statement
Exchange differences on translation of foreign (1.8) (0.6)
operations - continuing operations
Exchange differences on translation of foreign 2.2 (1.9)
operations - discontinued operations
(5.0) 3.6
Other comprehensive income for the period 27.8 71.0
Total comprehensive income for the period 86.1 19.8
Attributable to:
Equity holders of the parent 83.6 15.9
Non-controlling interests 2.5 3.9
86.1 19.8
Total comprehensive income/(loss) for the period
attributable to owners of FirstGroup plc arises
from:
Continuing operations 77.5 24.5
Discontinued operations 8.6 (4.7)
86.1 19.8
The accompanying notes form an integral part of this consolidated statement of
comprehensive income.
Condensed consolidated balance sheet
Note Unaudited Audited
28 September 2024
£m 30 March 2024
£m
Non-current assets
Goodwill 8 112.5 111.0
Other intangible assets 8.8 10.4
Property, plant and 9 1,956.5 2,155.4
equipment
Deferred tax assets 13.4 39.6
Retirement benefit assets 18 35.7 6.4
Derivative financial 13 - 0.4
instruments
Financial asset 13 101.9 99.6
Investments 2.9 2.6
2,231.7 2,425.4
Current assets
Inventories 29.0 25.9
Trade and other 10 837.9 852.6
receivables
Current tax assets 4.1 4.4
Cash and cash equivalents 17 436.8 496.5
Derivative financial 13 - 2.0
instruments
1,307.8 1,381.4
Assets held for sale 0.1 0.6
Total assets 3,539.6 3,807.4
Current liabilities
Trade and other payables 1,198.7 1,258.6
Tax liabilities- Current 0.1 0.4
tax liabilities
- Other tax and social 55.9 39.6
security
Borrowings 11 548.2 626.5
Derivative financial 13 6.1 3.4
instruments
Provisions 14 64.9 74.6
Current liabilities 1,873.9 2,003.1
Net current liabilities (566.1) (621.7)
Non-current liabilities
Borrowings 11 865.7 1,018.3
Retirement benefit 18 2.8 31.7
liabilities
Derivative financial 13 2.4 1.3
instruments
Provisions 14 93.5 111.3
964.4 1,162.6
Total liabilities 2,838.3 3,165.7
Net assets 701.3 641.7
Equity
Share capital 15 37.5 37.5
Share premium 693.3 693.3
Hedging reserve (6.0) (1.8)
Other reserves 22.4 22.4
Own shares (26.4) (20.4)
Translation reserve (22.5) (22.9)
Retained earnings (7.9) (74.8)
Equity attributable to 690.4 633.3
equity holders of the
parent
Non-controlling interests 10.9 8.4
Total equity 701.3 641.7
The accompanying notes form an integral part of this consolidated balance sheet.
COndensed consolidated statement of changes in equity
Share Share Hedging Other Own Translation
Retained Total Non Total
capital premium reserve reserves shares reserve
earnings £m -controlling equity
£m £m £m £m £m £m £m
£m
interests
£m
Balance at 30 37.5 693.3 (1.8) 22.4 (20.4) (22.9) (74.8)
633.3 8.4 641.7
March
2024
Profit for - - - - - - 55.8
55.8 2.5 58.3
the
period
Other - - (5.4) - - 0.4 32.8
27.8 - 27.8
comprehensive
income/(loss)
for
the period
Total - - (5.4) - - 0.4 88.6
83.6 2.5 86.1
comprehensive
income/(loss)
for
the period
Derivative - - 1.2 - - - -
1.2 - 1.2
hedging
instrument
movements
transferred
to
balance sheet
(net
of
tax)
Transactions
with
owners in
their
capacity as
owners
Movement in - - - - (6.0) - (3.2)
(9.2) - (9.2)
EBT and
treasury
shares
Share-based - - - - - - 6.0
6.0 - 6.0
payments
Deferred tax - - - - - - (0.5)
(0.5) - (0.5)
on
share-based
payments
Dividends - - - - - - (24.0)
(24.0) - (24.0)
paid
Balance at 28 37.5 693.3 (6.0) 22.4 (26.4) (22.5) (7.9)
690.4 10.9 701.3
September
2024
(unaudited)
Balance at 25 37.5 693.2 (0.7) 22.4 (15.4) (16.3) 19.5
740.2 10.6 750.8
March
2023
(Loss)/profit - - - - - - (55.1)
(55.1) 3.9 (51.2)
for
the period
Other - - 6.1 - - (2.5) 67.4
71.0 - 71.0
comprehensive
income/(loss)
for
the period
Total - - 6.1 - - (2.5) 12.3
15.9 3.9 19.8
comprehensive
income/(loss)
for
the period
Hedging - - (1.5) - - - -
(1.5) - (1.5)
instrument
movements
transferred
to balance
sheet
(net of tax)
Transactions
with
owners in
their
capacity as
owners
Shares issued - 0.1 - - - - -
0.1 - 0.1
Movement in - - - - 4.0 - (10.0)
(6.0) - (6.0)
EBT and
treasury
shares
Share-based - - - - - - 6.6
6.6 - 6.6
payments
Deferred tax - - - - - - (0.6)
(0.6) - (0.6)
on
share-based
payments
Shares bought - - - - - - (22.7)
(22.7) - (22.7)
back
but not yet
cancelled
Liability for - - - - - - (93.1)
(93.1) - (93.1)
shares
not yet
bought back
Dividends - - - - - - (19.7)
(19.7) - (19.7)
paid
Balance at 30 37.5 693.3 3.9 22.4 (11.4) (18.8) (107.7)
619.2 14.5 633.7
September
2023
(unaudited)
The accompanying notes form an integral part of this consolidated statement of
changes in equity.
Condensed consolidated cash flow statement
Note Unaudited Unaudited
26 weeks to 28 27 weeks to 30
September 2024 September 2023
£m
£m
Cash generated by operations 350.5 252.3
Tax paid (0.8) (1.5)
Interest paid (35.6) (39.4)
Net cash from operating activities 16 314.1 211.4
Investing activities
Interest received 4.8 9.5
Proceeds from disposal of property, 10.1 17.2
plant and equipment
Purchases of property, plant and (71.7) (113.9)
equipment
Purchases of software (0.8) (1.7)
Proceeds from capital grant funding 23.8 55.3
Proceeds from contingent consideration - 48.9
Acquisitions of businesses (1.5) -
Settlement of foreign exchange hedge - 4.2
Net cash from investing activities (35.3) 19.5
Financing activities (9.3) (6.1)
Shares purchased by Employee Benefit
Trust
Treasury shares purchased via share (41.4) (66.6)
buyback schemes and directly associated
costs
External dividends paid (24.0) (19.7)
Repayment of bond issues (96.2) (12.2)
Repayment of asset backed financial (5.3) (12.1)
liabilities
Proceeds from asset backed financial 31.6 -
liabilities
Repayment of NextGen facility (3.0) -
Proceeds from NextGen facility 8.1 -
Repayment of lease liabilities (243.3) (234.4)
Net cash flow used in financing (382.8) (351.1)
activities
Net decrease in cash and cash (104.0) (120.2)
equivalents before foreign exchange
movements
Cash and cash equivalents at beginning 468.7 708.5
of period
Foreign exchange movements 1.5 0.8
Cash and cash equivalents at the end of 366.2 589.1
the period
Cash flow from discontinued operations
Net cash outflow from operating activities (1.2) (3.7)
Net cash inflow from investing activities - 53.1
Net cashflow from financing activities - -
Net cash flow from discontinued operations (1.2) 49.4
Cash and cash equivalents are included within current assets on the consolidated
balance sheet. Cash and cash equivalents includes ring-fenced cash of £274.9m in
H1 2025 (full year 2024: £249.6m). The most significant ring-fenced cash
balances are held by the Group's First Rail subsidiaries. All non-distributable
cash in franchised Rail subsidiaries is considered ring-fenced under the terms
of the National Rail Contracts.
Reconciliation to cash flow statement Note Unaudited Audited
28 September 2024
£m 30 March
2024
£m
Cash and cash equivalents - balance sheet 17 436.8 496.5
Bank overdraft 17 (70.6) (27.8)
Balances per consolidated cash flow statement 366.2 468.7
Note to the condensed consolidated cash flow statement - reconciliation of net
cash flow to movement in net debt
Note Unaudited Unaudited
26 weeks to 28 27 weeks to 30
September 2024 September 2023
£m
£m
Net decrease in cash and cash (104.0) (120.2)
equivalents in period
Decrease in debt excluding leases 90.0 12.2
Adjusted cash flow (14.0) (108.0)
Repayment of lease liabilities and 248.6 246.5
asset backed financial liabilities
Inception of leases and asset (68.4) (14.8)
backed financial liabilities
Foreign exchange movements 1.5 0.8
Other non-cash movements - -
Movement in net debt in period 167.7 124.5
Net debt at beginning of period (1,144.8) (1,269.1)
Net debt at end of period 17 (977.1) (1,144.6)
Management considers that adjusted cash flow is an appropriate measure for
assessing the Group cash flow as it is the measure that is used to assess both
Group and divisional cash performance against budgets and forecasts. Adjusted
cash flow is stated prior to cash flows in relation to debt excluding leases.
The accompanying notes form an integral part of this consolidated cash flow
statement.
Notes to the CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1Basis of preparation
The half yearly results for the 26 weeks to 28 September 2024 include the
results and financial position of the First Rail division for the period ended
14 September 2024 and the results and financial position for the other divisions
for the 26 weeks ended 28 September 2024. The comparative figures for the 27
weeks to 30 September 2023 include the results of the First Rail division for
the period ended 16 September 2023 and the results of the other divisions for
the 27 weeks ended 30 September 2023. The comparative figures for the 53 weeks
ended 30 March 2024 include the financial position of the First Rail division at
31 March 2024 and the financial position of the other divisions at 30 March
2024.
These half yearly results do not comprise statutory accounts within the meaning
of section 434 of the Companies Act 2006. Statutory accounts for the year ended
30 March 2024 were approved by the board of directors on 11 June 2024 and
delivered to the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under section 498 of the Companies Act 2006.
These condensed consolidated interim financial statements for the half year
reporting period for the 26 weeks to 28 September 2024 have been prepared in
accordance with the UK -adopted International Accounting Standard 34 Interim
Financial Reporting and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
The interim condensed consolidated interim financial statements do not include
all of the notes of the type normally included in an annual financial report.
Accordingly, this report is to be read in conjunction with the annual report for
the year ended 30 March 2024, and any public announcements made by FirstGroup
plc during the interim reporting period.
The accounting policies applied are consistent with those described in the
Group's latest annual audited financial statements, except for income tax which
at the interim is based on applying expected full year effective tax rates to
the interim results. There has been no material change as a result of applying
these amendments. We have also included certain non-GAAP measures in order to
reflect management's reported view of financial performance excluding certain
other items.
These results are unaudited but have been reviewed by the auditor. The
comparative figures for the 27 weeks to 30 September 2023 are unaudited and are
derived from the condensed consolidated interim financial statements for that
period, which was also reviewed by the auditor.
Going concern - basis of preparation
The Directors have carried out a review of the Group's financial projections for
the 18 months to 31 March 2026, with due regard for the risks and uncertainties
to which the Group is exposed, the uncertain economic climate and the impact
that this could have on trading performance. The review also considered the
Group's net current liabilities position at 28 September 2024. Based on this
review, the Directors believe that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the half yearly results have been prepared on the going concern
basis in preparing this report.
Evaluation of going concern
The Board evaluated whether it was appropriate to prepare the half yearly
results in this report on a going concern basis and in doing so considered
whether any material uncertainties exist that cast doubt on the Group's and the
Company's ability to continue as a going concern over the going concern period.
Consistent with prior years, the Board's going concern assessment is based on a
review of future trading projections, including whether banking covenants are
likely to be met and whether there is sufficient committed facility headroom to
accommodate future cash flows for the going concern period.
Divisional management teams prepared detailed, bottom-up projections for their
businesses reflecting the impact of the macroeconomic considerations on the
operating environment, assumptions on passenger volumes and government support,
and the potential impact of the policy changes which may arise with the new UK
government. Projections also considered the impact of actions required to
address the Group's climate-related targets and ambitions, and also took into
account the risks and uncertainties to which the Group is exposed.
Base case scenario
These projections were the subject of a series of executive management reviews
and were used to update the base case scenario that was used for the purposes of
the going concern assessment at the 2024 year end. The base case assumes a
continuing recovery in passenger volumes and yields in FY 2025, with some offset
from a reduction in direct government funding. The base case assumes the three
TOC rail contracts run to their earliest expiry date (South Western Railway in
May 2025, Great Western Railway in June 2025, West Coast Partnership in October
2026). The macro projections in the updated base case assume that the UK
operates in a low-growth, cautiously recovering economy. The projections also
capture the expected financial impact of the actions required to support the
Group's climate-related targets and ambitions, and the cash flow impact of other
capital allocation decisions which the Group may consider.
1Basis of preparation (continued)
Severe, plausible downside scenario
In addition, a severe but plausible downside case was also modelled which
assumes a more adverse macroeconomic recovery profile. In First Bus the severe
but plausible downside case assumes a reduction in passenger volumes driving a
25% reduction in Bus profitability, as well as the impact of other unexpected
cost inflation. In First Rail, the downside case assumes reduced TOC performance
fee awards and lower revenues in Hull Trains and Lumo open access. The downside
case also considered potential downsides of a significant climate-related event
or unbudgeted decarbonisation costs, as well as the risk of one-off safety,
regulatory non-compliance or technology events.
Mitigating actions
If the future operating environment of the Group were to be more challenging
than assumed in the base case or downside case scenarios, the Group would reduce
and defer planned growth capital expenditure and further reduce costs in line
with a lower-volume operating environment, to the extent that the essential
services we operate in First Bus are not required to be run for the governments
and communities we support.
Going concern statement
Based on the scenario modelling undertaken, and the potential mitigating actions
referred to above, the Board is satisfied that the Group's liquidity and
covenant headroom over the going concern period is sufficient for the business
needs.
Operating and financial review
The operating and financial review considers the impact of seasonality on the
Group and also the principal risks and uncertainties facing it in the remaining
six months of the financial year.
Summary of significant events in the Group
Significant events in relation to the change in the financial position and
performance of the Group:
Following the UK general election in July, the rail and bus industries in the UK
are set to see considerable change over the next few years, with the National
Rail Contracts set to move to public ownership, and a number of regions outside
London planning to adopt the franchising model in Bus.
In First Rail, adjusted operating profit was lower than the prior year, with H1
2024 benefiting from a £13m uplift as a result of FY 2023 variable fees for DfT
TOCs having been agreed.
First Rail's open access operations Lumo and Hull Trains delivered further
growth in adjusted operating profit due to robust passenger volumes and
effective yield management, which helped offset slightly higher costs.
In the First Bus division, first half performance benefited from higher
passenger volumes and revenue per mile, which offset a reduction in government
funding. The prior year included a week of extra trading as well as the
operation of the Oldham depot in Manchester .
On 28 June 2024, the Group successfully took over the operation of the IFS Cloud
London Cable Car on behalf of Transport for London (`TfL'). The contract has an
initial core five-year term with the option to extend for a further three years,
with anticipated revenues of c.£60m over the eight-year period.
In August, the Group acquired Grand Union Trains Wcml Holdings Limited, which
owns the track access rights granted by the ORR to run a new open access rail
service on the West Coast Mainline from London Euston to Stirling .
In September, the Group's 6.875% bond matured and was repaid from the Group's
existing financial resources. The Group continues to make use of its Green Hire
Purchase Facility and NextGen Battery Facility to support Bus electrification.
The Group has a £300m sustainability-linked Revolving Credit Facility (`RCF')
with a group of its relationship banks. This committed RCF remains undrawn and
matures in August 2026.
The Company's £115m share buyback programme completed on 5 August 2024 having
repurchased 71,200,278 shares.
On 16 July 2024, the Group agreed terms with an insurance company to buy out the
remaining liabilities of the legacy Greyhound US pension plan, with the plan
being terminated thereafter. Following a Group contribution of $6m , gross
liabilities valued at $155m (£123m) at the FY 2024 year-end were removed from
the Group's balance sheet and the Group recognised a net settlement gain after
related costs of £5.5m in the income statement as an adjusting item.
Key sources of estimation uncertainty and significant accounting judgements
The preparation of these half yearly results requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense.
Although these estimates are based on management's best knowledge, actual
results may ultimately differ from those estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis.
In preparing these half yearly results, the significant judgements made by
management in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated
financial statements for the year ended 30 March 2024.
This half yearly report has been prepared in respect of the Group as a whole and
accordingly matters identified as being significant or material are so
identified in the context of FirstGroup plc and its subsidiary undertakings
taken as a whole.
These condensed consolidated interim financial statements were approved by the
Board on 14 November 2024.
2Revenue
Passenger revenue in First Bus was £385.8m (H1 2024: £377.1m) with the increase
mainly due to higher passenger volumes and increased revenue per mile. First
Rail passenger revenue was £1,512.8m (H1 2024: £1,405.6m).
The principal direct fiscal support recognised during the period comprised
£13.9m (H1 2024: £24.5m) of funding and concessions in First Bus. These are
recognisedwithin revenue in accordance with IFRS 15 (as per our policy on
revenue recognition in the 2024 Annual Accounts), when control of the good or
service is transferred to the customer and the Group is entitledto the
consideration.
The main direct fiscal support recognised in revenue over time for each division
has been as follows:
First Bus: The English, Scottish and Welsh Governments have each supported bus
operators, through a variety of funding schemes since March 2020. In England the
BSOG+ scheme provides funding through enhanced BSOG rates per litre and an
additional payment per km operated for eligible miles. In addition to this the
DfT implemented a £2 cap on all single fares across the country in January 2023
and is currently reimbursing operators for any revenue foregone as a result of
the reduced ticket prices. The scheme will run to December 2024, whereupon the
fare cap will increase to £3. In Scotland , funding is provided by the NSG scheme
which replaced their BSOG scheme. In Wales funding is provided through BSSG and
the tendering of routes which are no longer commercially viable.
First Rail: The Emergency Measures Agreements (EMAs), the Emergency Recovery
Measures Agreement (ERMAs) and the National Rail Contracts (NRCs) transferred
substantially all revenue and cost risk to the government and for the current
year and prior year periods, our First Rail franchises were operated under the
terms of these arrangements.
- GWR operated under an NRC, with a core period to June 2025 and an
option for the DfT to extend by a further three years to June 2028
- WCP/Avanti were awarded a nine-year NRC in September 2023, with a
minimum core three-year term to October 2026
- SWR operated under an NRC throughout both periods, with an expiry
date of May 2025
- On 11 May 2023 the DfT confirmed that it would not exercise its
option to extend FirstGroup's TPE NRC, and the contract expired on 28 May 2023.
On that date the DfT appointed its Operator of Last Resort to take over delivery
of passenger services on the TPE network
Under the arrangements, our franchised TOCs are paid a fixed management fee to
continue to operate the rail network at a service level agreed with the
government. Performance based fees are earned through a combination of
scorecards and quantified target methodologies benchmarked off this agreed
service level. Net DfT funding including the management and performance fee is
recognised as revenue in Rail franchise subsidy receipts, in line with the
revenue recognition policy for franchise subsidy receipts from the DfT.
Disaggregated revenue by operating segment is set out in note 4.
3Reconciliation to non-GAAP measures and performance
In measuring the Group and divisional adjusted operating performance, additional
financial measures derived from the reported results have been used by
management in order to eliminate factors which distort year-on-year comparisons,
and to enable the like-for-like monitoring of the Group's recurring operations
over time. The Group's adjusted performance is used to explain year-on-year
changes when the effect of certain items is significant, including strategic
items (including material M&A and group restructuring projects), costs of
acquisitions including aborted acquisitions, and impairment of assets. Other
items below £5.0m would not normally be considered as adjusting items unless
part of a larger strategic project, but items which distort year-on-year
comparisons that exceed this amount could potentially be classified as an
adjusting item and are assessed on a case-by-case basis. Such potential
adjusting other items include: restructuring and reorganisation costs; property
gains or losses; aged legal and self-insurance claims; movements on insurance
discount rates; onerous contract provisions; pension settlement gains or losses;
and other items which management has determined as not being relevant to an
understanding of the Group's underlying business performance. Subsequent
remeasurements of adjusting items are also recognised as an adjusting item in
the future period in which the remeasurement occurs.
In light of the recently-announced government policy to take National Rail
Contracts back into public ownership and the potential future impact on the
Group's statutory revenue, the Group has identified Adjusted revenue as a new
performance measure, to provide an indication of the Group's revenue excluding
that from NRCs. Adjusted revenue is defined as revenue excluding that element of
DfT TOC revenue, and related intercompany eliminations, where the Group takes
substantially no revenue risk. The Adjusted revenue measure includes management
and performance fee income earned by the Group from its DfT TOC contracts.
3Reconciliation to non-GAAP measures and performance (continued)
Reconciliation of operating profit/(loss) to 26 weeks 27 weeks to
adjusted operating profit on a continuing to 30 September 2023
basis 28 £m
September
2024
£m
Operating profit/(loss) on a continuing basis 100.3 (41.4)
Adjustments for:
LGPS pension settlement and related charges - 142.3
Greyhound Canada 0.5 (0.3)
Total adjusting operating profit items on a 0.5 142.0
continuing basis
Adjusted operating profit on a continuing 100.8 100.6
basis
Reconciliation of operating profit to 26 weeks 27 weeks to
adjusted operating loss on a discontinued to 30 September 2023
basis 28 £m
September
2024
£m
Operating profit from discontinued 5.9 0.1
operations
Adjustments for:
CARES receipt (0.4) -
Legacy US pensions scheme buy out (5.5) -
Transit earnout credit - (2.3)
Total adjusting operating profit items (5.9) (2.3)
from discontinued operations
Adjusted operating loss from discontinued - (2.2)
operations
Reconciliation of profit/(loss) 26 weeks to 27 weeks to
before tax to adjusted earnings 28 September 2024 30 September 2023
£m £m
Profit/(loss) before tax 76.1 (68.4)
(including discontinued
operations)1
Adjusting operating profit 0.5 142.0
items - continuing operations
Adjusting operating profit (5.9) (2.3)
items - discontinued operations
Adjusting operating profit (5.4) 139.7
items - total operations
Adjusted profit before tax 70.7 71.3
including discontinued
operations
Rail management fee-based 1.3 5.3
operations - IFRS 16 adjustment
Adjusted tax charge (17.8) (18.4)
Non-controlling interests2 (2.5) (3.9)
Adjusted earnings including 51.7 54.3
discontinued operations
1 See note 4.
2 Statutory non-controlling interests principally reflects Avanti West
Coast and South Western Railway.
Adjusting items
The principal adjusting items in relation to the operating profit adjustments -
continuing operations were as follows:
Greyhound Canada
A net £0.5m charge was incurred in the period relating to the continued winding
down of Greyhound Canada operations.
The principal adjusting items in relation to the operating profit adjustments -
discontinued operations were as follows:
CARES receipt
A credit of £0.4m was recognised in the period on receipt of CARES funding in
relation to the discontinued North American operations.
Legacy US pensions scheme buy out
On 16 July 2024, the Group agreed terms with an insurance company to buy out the
remaining liabilities of the legacy Greyhound US pension plan, with the plan
being terminated thereafter. Following a Group contribution of $6m , gross
liabilities valued at $155m (£123m) at the FY 2024 year-end were removed from
the Group's balance sheet and the Group recognised a net settlement gain after
related costs of £5.5m in the income statement as an adjusting item.
3Reconciliation to non-GAAP measures and performance (continued)
First Bus EBITDA comprises: 26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Pre-IFRS 16 EBITDA 63.9 61.4
IFRS 16 adjustments1 8.8 7.4
First Bus adjusted EBITDA 72.7 68.8
per segmental results (note
4)
First Rail EBITDA comprises:
Non-management fees based TOCs 22.6 22.2
Group's share of management fee income available for dividends 14.0 23.2
Non-controlling interest 3.0 3.9
Tax at 25% (H1 2024: 25%) 5.7 8.7
IFRS 16 adjustments1 251.0 228.8
First Rail adjusted EBITDA per segmental results table (note 4) 296.3 286.8
Group items EBITDA comprises:
Pre-IFRS 16 EBITDA (8.0) (12.0)
IFRS 16 adjustments1 1.0 0.9
Group items adjusted EBITDA per (7.0) (11.1)
segmental results table (note 4)
First Rail adjusted operating profit comprises:
Non-management fees based TOCs 22.3 21.6
Group's share of management fee income available for dividends 14.0 23.2
(net of tax and non-controlling interest)
Non-controlling interest 3.0 3.9
Tax at 25% (H1 2024: 25%) 5.7 8.7
IFRS 16 adjustments1 22.9 19.6
First Rail adjusted operating profit per segmental results table 67.9 77.0
(note 4)
Reconciliation of pre-IFRS 16 adjusted operating profit to post-IFRS 16 adjusted
operating profit:
Pre-IFRS 16 adjusted EBIT 76.7 80.2
IFRS 16 adjustments1 24.1 20.4
Post-IFRS 16 adjusted EBIT 100.8 100.6
Reconciliation of statutory revenue to adjusted revenue2:
Revenue - statutory basis 2,344.1 2,207.0
Deduct: DfT TOC revenue (1,774.5) (1,662.1)
Add back: DfT TOC management and performance fees 23.7 34.7
Intercompany eliminations related to DfT TOCs 56.3 55.2
Adjusted revenue 649.6 634.8
Reconciliation of reported net 28 September 2024 30 March 2024
debt to adjusted net £m £m
debt/(cash):
Reported net debt 977.1 1,144.8
IFRS 16 lease liabilities (1,251.8) (1,458.5)
Ring-fenced cash 274.9 249.6
Adjusted net debt/(cash) 0.2 (64.1)
1 IFRS 16 adjustments to EBITDA principally reflect the add back of
operating lease rental costs charged to the income statement before the adoption
of IFRS 16. IFRS 16 adjustments to operating profit reflect operating lease
rental costs less depreciation charges on right of use assets.
2 Adjusted revenue is revenue excluding DfT TOC revenue, and related
intercompany eliminations, where the Group takes substantially no revenue risk.
The Adjusted revenue measure includes management and performance fee income
earned by the Group from its DfT TOC contracts.
4Business segments information
For management purposes, the Group is organised into three operating divisions -
First Bus, First Rail and Greyhound. Greyhound Canada is categorised as a
Continuing Operation, although trading operations have ceased. The divisions are
managed separately in line with the differing services that they provide and the
geographical markets which they operate in. There is a clear distinction between
each division and no judgement is required to identify each reportable segment.
The segment results for the 26 weeks to 28 September 2024 are as follows:
Continuing Discontinued
Operations Operations
First First Greyhound Group Total Greyhound
Total
Bus Rail £m Items1 £m £m
£m
£m £m £m
Passenger 385.8 1,512.8 - - 1,898.6 -
1,898.6
revenue
Contract 104.5 - - (12.6) 91.9 -
91.9
revenue
Rail franchise - 211.6 - - 211.6 -
211.6
subsidy
receipts
Other 23.4 118.6 - - 142.0 -
142.0
Revenue 513.7 1,843.0 - (12.6) 2,344.1 -
2,344.1
Rail TOC - (1,707.0) - 12.5 (1,694.5) -
(1,694.5)
revenue
adjustments
Adjusted 513.7 136.0 - (0.1) 649.6 -
649.6
revenue2
Adjusted 72.7 296.3 - (7.0) 362.0 -
362.0
EBITDA3
Depreciation (37.0) (248.6) - (1.0) (286.6) -
(286.6)
Software (0.4) (0.4) - (0.2) (1.0) -
(1.0)
amortisation
Capital grant 5.8 20.6 - - 26.4 -
26.4
amortisation
Segment results 41.1 67.9 - (8.2) 100.8 -
100.8
Other - - (0.5) - (0.5) 5.9
5.4
adjustments
(note 3)
Operating 41.1 67.9 (0.5) (8.2) 100.3 5.9
106.2
profit/(loss)
Investment - 0.1 - 4.6 4.7 0.1
4.8
income
Finance costs (4.1) (25.1) - (5.5) (34.7) (0.2)
(34.9)
Profit/(loss) 37.0 42.9 (0.5) (9.1) 70.3 5.8
76.1
before tax
Tax
(17.8)
Profit after
58.3
tax
1Group items comprise the elimination of intra-group trading between Bus and
Rail divisions and charges relating to central management and other items.
2 Adjusted revenue is revenue excluding DfT TOC revenue, and related
intercompany eliminations, where the Group takes substantially no revenue risk.
3Adjusted EBITDA is adjusted operating profit less capital grant amortisation
plus depreciation plus software amortisation.
Balance sheet at Total assets Total liabilities Net assets/(liabilities)
28 September 2024 £m £m £m
Greyhound 36.0 (47.4) (11.4)
retained
First Bus 923.5 (265.2) 658.3
First Rail 1,982.5 (1,014.2) 968.3
2,942.0 (1,326.8) 1,615.2
Group items 143.2 (41.6) 101.6
Borrowings and 436.8 (1,413.9) (977.1)
cash
Taxation 17.5 (56.0) (38.5)
Total 3,539.5 (2,838.3) 701.2
Greyhound (held 0.1 - 0.1
for sale)
Grand total 3,539.6 (2,838.3) 701.3
4Business segments information (continued)
The segment results for the 27 weeks to 30 September 2023 were as follows:
Continuing Discontinued
Operations Operations
First First Greyhound Group Total Greyhound
Group Total
Bus Rail £m Items1 £m £m
Items1 £m
£m £m £m £m
Passenger 377.1 1,405.6 - - 1,782.7 - -
1,782.7
revenue
Contract 94.2 - - (19.8) 74.4 - -
74.4
revenue
Rail franchise - 204.9 - - 204.9 - -
204.9
subsidy
receipts
Other 33.6 111.4 - - 145.0 - -
145.0
Revenue 504.9 1,721.9 - (19.8) 2,207.0 - -
2,207.0
Rail TOC - (1,587.2) - 15.0 (1,572.2) - -
(1,572.2)
revenue
adjustments
Adjusted 504.9 134.7 - (4.8) 634.8 - -
634.8
revenue2
Adjusted 68.8 286.8 - (11.1) 344.5 (1.1)
(1.1) 342.3
EBITDA3
Depreciation (36.6) (229.2) - (1.0) (266.8) - -
(266.8)
Software (0.7) (1.1) - (0.3) (2.1) - -
(2.1)
amortisation
Capital grant 4.5 20.5 - - 25.0 - -
25.0
amortisation
Segment results 36.0 77.0 - (12.4) 100.6 (1.1)
(1.1) 98.4
Other (142.3) - 0.3 - (142.0) -
2.3 (139.7)
adjustments
(note 3)
Operating (106.3) 77.0 0.3 (12.4) (41.4) (1.1)
1.2 (41.3)
(loss)/profit
Investment 1.2 1.3 - 8.5 11.0 - -
11.0
income
Finance costs (1.3) (28.2) - (8.6) (38.1) - -
(38.1)
(Loss)/profit (106.4) 50.1 0.3 (12.5) (68.5) (1.1)
1.2 (68.4)
before tax
Tax
17.2
Loss after tax
(51.2)
1Group items comprise the elimination of intra-group trading between Bus and
Rail divisions and charges relating to central management and other items.
2 Adjusted revenue comment is revenue excluding DfT TOC revenue, and related
intercompany eliminations, where the Group takes substantially no revenue risk.
3Adjusted EBITDA is adjusted operating profit less capital grant amortisation
plus depreciation plus software amortisation.
Balance sheet Total assets Total liabilities Net assets/(liabilities)
at 30 March £m £m £m
2024
Greyhound 54.2 (78.9) (24.7)
retained
First Bus 895.5 (315.3) 580.2
First Rail 2,164.1 (994.9) 1,169.2
3,113.8 (1,389.1) 1,724.7
Group items 152.5 (91.8) 60.7
Borrowings and 496.5 (1,644.8) (1,148.3)
cash
Taxation 44.0 (40.0) 4.0
Total 3,806.8 (3,165.7) 641.1
Greyhound (held 0.6 - 0.6
for sale)
Grand total 3,807.4 (3,165.7) 641.7
Segment assets and liabilities are determined by identifying the assets and
liabilities that relate to the business of each segment but excluding
intercompany balances, borrowings and cash and taxation.
5Investment income and finance costs
26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Investment income
Bank interest receivable (4.7) (9.5)
Interest on pensions (0.1) (1.5)
Total investment income (including (4.8) (11.0)
discontinued operations)
Finance costs
Bonds 3.1 6.5
Bank interest and facility fees 5.0 3.2
Finance charges payable in respect 24.4 27.8
of lease liabilities
Finance charges payable in respect 1.6 0.6
of asset backed financial
liabilities
Interest on long-term provisions 0.4 -
Interest on pensions 0.4 -
Total finance costs (including 34.9 38.1
discontinued operations)
Total finance costs 34.9 38.1
Investment income (4.8) (11.0)
Net finance costs (including 30.1 27.1
discontinued operations)
Investment income relating to discontinued operations was £0.1m (H1 2024: £nil)
and finance costs relating to discontinued operations were £0.2m (H1 2024:
£nil).
6Tax on profit on ordinary activities
26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Current tax charge 0.9 0.7
Deferred tax charge/(credit) 16.9 (17.9)
Total tax charge/(credit) 17.8 (17.2)
(including discontinued
operations)
Tax (credit)/charge attributable to:
Profit/(loss) from continuing operations 17.8 (17.2)
Profit from discontinued operations - -
The tax effect of the adjustments disclosed in note 3 was £nil in H1 2024 (H1
2024: credit of £35.6m).
7Earnings per share (EPS)
Basic EPS is calculated by dividing the profit attributable to equity
shareholders of £55.8m in H1 2025 (H1 2024: £(55.1)m) by the weighted average
number of ordinary shares in issue of 608.5m (H1 2024: 697.7m). The number of
ordinary shares used for the basic and diluted calculations is shown in the
table below.
The difference in the number of shares between the basic calculation and the
diluted calculation represents the weighted average number of potentially
dilutive ordinary share options.
28 September 2024 30 September 2023
number number
m m
Weighted average number of 608.5 697.7
shares used in basic calculation
Executive share options 29.0 26.0
Weighted average number of 637.5 723.7
shares used in the diluted
calculation
7Earnings per share (EPS) (continued)
The adjusted EPS is intended to highlight the results of the Group before
certain other adjustments as set out in note 3, and before IFRS 16 charges
relating to the Group's management fee-based Rail operations. A reconciliation
is set out below:
26 weeks 27 weeks to
to
30 September 2023
28
September
2024
£m EPS £m EPS (p)
(p)
Basic profit/(loss) / EPS 55.8 9.2 (55.1) (7.9)
Management fee-based Rail operations - 1.3 0.2 5.3 0.8
IFRS 16 adjustments
Other adjustments (note 3) (5.4) (0.9) 139.7 20.0
Tax effect of other adjustments - - (35.6) (5.1)
Adjusted profit and EPS attributable to 51.7 8.5 54.3 7.8
the ordinary equity holders of the
company
Add back: Adjusted loss from discontinued (0.1) - (2.2) (0.3)
operations
Adjusted profit and EPS from continuing 51.8 8.5 56.5 8.1
operations
26 weeks to 27 weeks to
28 September 2024 30 September 2023
pence pence
Diluted EPS 8.8 (7.9)
Adjusted diluted EPS1 8.1 7.5
1Adjusted diluted EPS for the prior period reflects the amended definition of
adjusted earnings, where it excludes certain adjustments as set out in note 3,
and before IFRS 16 charges relating to the Group's management fee-based Rail
operations.
8Goodwill and impairment of assets
£m
Cost
At 31 March 2024 111.0
Additions1 1.5
At 28 September 2024 112.5
Accumulated impairment losses
At 31 March 2024 -
At 28 September 2024 -
Carrying amount
At 28 September 2024 112.5
At 30 March 2024 111.0
1Additions of £1.5m relates to goodwill on the acquisition of Grand Union Trains
WCML Holdings Ltd (subsequently renamed as First Rail Stirling Holdings Ltd) and
Grand Union Trains Ltd (subsequently renamed as First Rail Stirling Ltd).
Disclosures including goodwill by cash generating unit (CGU), details of
impairment testing and sensitivities thereon are set out on page 201 of the 2024
Annual Report.
At 28 September 2024, a review for indicators of impairment was undertaken for
each of the First Bus, Hull Trains and Lumo CGUs. For each of these, it was
concluded that there had been no indicators of impairment since March 2024,
therefore no impairment assessment was performed at 28 September 2024.
9Property, plant and equipment
Owned assets
Land and Passenger Other plant Total
buildings carrying vehicle and £m
£m fleet equipment
£m £m
Cost
At 31 March 2024 235.1 828.3 689.6 1,753.0
Additions 3.8 30.5 31.3 65.6
Transfers to right - - (8.2) (8.2)
of use assets
Disposals (1.4) (26.6) (1.4) (29.4)
Reclassifications1 16.3 - (13.9) 2.4
Foreign exchange - (0.3) - (0.3)
movements
At 28 September 253.8 831.9 697.4 1,783.1
2024
Accumulated
depreciation and
impairment
At 31 March 2024 62.9 426.8 515.2 1,004.9
Charge for period 5.7 26.1 19.2 51.0
Disposals (0.7) (25.5) (1.1) (27.3)
Reclassifications1 - - 1.6 1.6
Foreign exchange - (0.2) - (0.2)
movements
At 28 September 67.9 427.2 534.9 1,030.0
2024
Carrying amount
At 28 September 185.9 404.7 162.5 753.1
2024
At 30 March 2024 172.2 401.5 174.4 748.1
1As part of the Group's continuing efforts to streamline reporting processes, it
was identified that £16.3m of assets had been incorrectly classified between
Land and buildings and Other plant and equipment, and £2.4m had been incorrectly
classified between cost and accumulated depreciation.
Right of use assets
Rolling Land and Passenger Other plant Total
stock buildings carrying vehicle and £m
£m fleet equipment
£m £m £m
Cost
At 31 March 2024 3,743.4 65.1 60.4 25.6 3,894.5
Additions and 20.7 1.0 - 0.8 22.5
modifications
Transfers from - - - 9.2 9.2
owned assets
Disposals (0.2) - - - (0.2)
At 28 September 3,763.9 66.1 60.4 35.6 3,926.0
2024
Accumulated
depreciation and
impairment
At 31 March 2024 2,395.6 33.2 50.2 8.2 2,487.2
Charge for period 226.1 3.8 3.7 2.0 235.6
Disposals (0.2) - - - (0.2)
At 28 September 2,621.5 37.0 53.9 10.2 2,722.6
2024
Carrying amount
At 28 September 1,142.4 29.1 6.5 25.4 1,203.4
2024
At 30 March 2024 1,347.8 31.9 10.2 17.4 1,407.3
The discounted lease liability relating to the right of use assets included
above is shown in note 12.
As at 28 September 2024 the Group had entered into contractual capital
commitments amounting to £150.2m principally representing purchase of PCVs and
TOC commitments.
9Property, plant and equipment (continued)
Owned assets and Rolling Land and Passenger Other plant Total
right of use stock buildings carrying vehicle and £m
assets £m fleet equipment
£m £m £m
Carrying amount
At 28 September 1,142.4 215.0 411.2 187.9 1,956.5
2024
At 30 March 2024 1,347.8 204.1 411.7 191.8 2,155.4
The maturity analysis of lease liabilities is presented in note 12.
Amounts recognised in 26 weeks to 27 weeks to
income statement
28 September 2024 30 September 2023
£m £m
Depreciation expense on 235.6 216.8
right of use assets
Interest expense on 24.4 27.8
lease liabilities
Impairment charge - 1.6
Expense relating to - 0.8
short-term leases
Expense relating to - 0.1
leases of low value
assets
260.0 247.1
10Trade and other receivables
Amounts due within one year 28 September 2024 30 March 2024
(from continuing operations) £m £m
Trade receivables 328.6 400.1
Loss allowance (42.0) (41.7)
Trade receivables net 286.6 358.4
Other receivables 172.3 187.6
Amounts recoverable on 52.3 38.9
contracts
Prepayments 52.1 38.7
Accrued income 274.6 229.0
837.9 852.6
11Borrowings
28 September 2024 30 March 2024
£m
£m
On demand or within
one year
Leases (note 12)1 468.7 492.8
Asset backed financial 8.9 6.2
liabilities (note 12)2
Bank overdraft 70.6 27.8
Bond 6.875% (repayable - 99.7
2024)3
Total current 548.2 626.5
liabilities
Within one to two
years
Leases (note 12)1 309.2 385.0
Asset backed financial 9.4 7.9
liabilities (note 12)2
318.6 392.9
Within two to five
years
Leases (note 12)1 442.3 546.2
NextGen battery debt 11.5 3.0
Asset backed financial 21.4 13.6
liabilities (note 12)2
475.2 562.8
More than five years
Leases (note 12)1 31.6 34.5
NextGen battery debt 7.9 10.2
Asset backed financial 32.4 17.9
liabilities (note 12)2
71.9 62.6
Total non-current 865.7 1,018.3
liabilities
1The right of use assets relating to lease liabilities are shown in note 9. The
maturity analysis of lease liabilities is presented in note 12.
2The maturity analysis of asset backed financial liabilities is presented in
note 12.
3Includes £nil of accrued interest (FY 2024: £3.5m of accrued interest).
12Lease liabilities and asset backed financial liabilities
The Group had the following lease liabilities at the balance sheet dates:
Lease liabilities 28 September 2024 30 March 2024
£m £m
Due in less than one year 507.5 539.4
Due in more than one year 333.8 414.1
but not more than two years
Due in more than two years 462.4 574.6
but not more than five
years
Due in more than five years 41.7 44.9
1,345.4 1,573.0
Less future financing (93.6) (114.5)
charges
1,251.8 1,458.5
Comprising:
Lease liabilities - Rail 1,198.7 1,408.9
Lease liabilities - non 53.1 49.6
-Rail
The Group had the following asset backed financial liabilities at the balance
sheet dates:
Asset backed financial 28 September 2024 30 March 2024
liabilities £m £m
Due in less than one year 9.4 6.5
Due in more than one year 10.4 8.5
but not more than two years
Due in more than two years 26.0 16.2
but not more than five
years
Due in more than five years 44.2 23.7
90.0 54.9
Less future financing (17.9) (9.3)
charges
72.1 45.6
Comprising:
Asset backed financial 72.1 45.6
liabilities - non-Rail
Asset backed financial - -
liabilities - Rail
13Financial instruments
Non-derivative financial instruments
28 September 2024 30 March 2024
£m £m
Total non-derivatives
Total non-current assets 101.9 99.6
Total assets 101.9 99.6
Certain pension partnership structures were implemented during 2023. These
structures involved the creation of special purpose vehicles (SPVs) to hold cash
to fund the Bus and Group pension schemes, if required, based on a designated
funding mechanism. Management have concluded that these amounts represent
financial assets under IAS 32.
During H1 2024, FirstGroup Energy Ltd purchased a £1.0m fixed rate unsecured
convertible loan note in KleanDrive Ltd. Management have concluded that this
represents a financial asset under IAS 32.
13Financial instruments (continued)
Derivative financial instruments
28 September 2024 30 March 2024
£m £m
Derivatives designated and effective as
hedging instruments carried at fair
value
Non-current assets
Fuel derivatives (cash flow hedge) - 0.4
- 0.4
Current assets
Fuel derivatives (cash flow hedge) - 2.0
- 2.0
Current liabilities
Fuel derivatives (cash flow hedge) 4.1 2.7
Currency forwards (cash flow hedge) 2.0 0.7
6.1 3.4
Non-current liabilities
Currency forwards (cash flow hedge) 0.7 0.2
Interest rate swaps (NextGen) 0.6 0.5
Fuel derivatives (cash flow hedge) 1.1 0.6
2.4 1.3
Fair value of the Group's financial assets and financial liabilities (including
trade and other receivables and trade and other payables) on a continuing basis:
28 September 2024
Fair value Carrying value
Total
£m
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial assets
and derivatives
Trade and other - 655.5 - 655.5 655.5
receivables
Financial
liabilities and
derivatives
Borrowings1 70.6 1,352.1 - 1,422.7 1,414.0
Trade and other - 1,039.1 - 1,039.1 1,039.1
payables
Derivative - 8.5 - 8.5 8.5
financial
instruments
30 March 2024
Fair value Carrying value
Total
£m
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial assets
and derivatives
Trade and other - 668.0 - 668.0 668.0
receivables
Derivative - 2.4 - 2.4 2.4
financial
instruments
Financial
liabilities and
derivatives
Borrowings1 - 1,621.0 - 1,621.0 1,616.9
Trade and other - 1,096.4 - 1,096.4 1,096.4
payables
Derivative - 4.7 - 4.7 4.7
financial
instruments
1Includes lease liabilities as set out in note 12.
The estimated fair value of cash and cash equivalents, short term trade and
other receivables and short term trade and other payables is a reasonable
approximation to the carrying value of these items.
Level 1:Quoted prices in active markets for identical assets and liabilities.
Level 2:Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly or indirectly.
Level 3:Inputs for the asset or liability that are not based on observable
market data.
There were no transfers between Level 1 and Level 2 during the current or prior
year.
14Provisions
Insurance claims Dilapidations Legal and other Total
£m £m £m
£m
At 31 March 100.2 47.1 38.6 185.9
2024
Charged to the 7.7 (0.4) (4.9) 2.4
income
statement
Utilised in the (23.9) (1.6) (1.0) (26.5)
period
Notional 0.4 - - 0.4
interest
Foreign (3.1) (0.1) (0.6) (3.8)
exchange
movements
At 28 September 81.3 45.0 32.1 158.4
2024
Current 25.2 20.8 18.9 64.9
liabilities
Non-current 56.1 24.2 13.2 93.5
liabilities
At 28 September 81.3 45.0 32.1 158.4
2024
Current 35.7 12.6 26.3 74.6
liabilities
Non-current 64.5 34.5 12.3 111.3
liabilities
At 30 March 100.2 47.1 38.6 185.9
2024
The insurance claims provision arises from estimated exposures for incidents
occurring prior to the balance sheet date. It is anticipated that the majority
of such claims will be settled within the next four years although certain
liabilities in respect of lifetime obligations of £1.0m (full year 2024: £1.1m)
can extend for more than 25 years. The utilisation of £23.9m in H1 2025 (full
year 2024: £37.0m) represents payments made against the current liability of the
preceding year as well as the settlement of claims resulting from incidents
occurring in the current year.
The insurance claims provisions, of which, £36.6m (full year 2024: £55.7m)
relates to legacy Greyhound claims, includes £31.8m (full year 2024: £50.8m)
which is recoverable from insurance companies and a receivable is included
within other receivables in note 10.
Dilapidations are provisions in respect of costs anticipated on the exit of
surplus properties which are expected to be settled over the remaining terms of
the respective leases and dilapidation, other provisions in respect of
contractual obligations under rail franchises and restructuring costs. The
dilapidation provisions are expected to be settled at the end of the respective
franchise.
Legal and other provisions relate to estimated exposures for cases filed or
thought highly likely to be filed for incidents that occurred prior to the
balance sheet date. It is anticipated that most of these items will be settled
within ten years.
15Called up share capital
28 September 2024 30 March 2024
£m £m
Allotted, called up and
fully paid
750.7m ordinary shares of 5p 37.5 37.5
each (30 March 2024: 750.7m)
The Company has one class of ordinary shares which carries no right to fixed
income.
On 8 June 2023, the Company announced a share buyback programme to purchase up
to £115m of ordinary shares. This buyback programme completed on 5 August 2024
having repurchased 71,200,278 shares.
The directors have declared an interim dividend of 1.7p per ordinary share in
respect of the period ended 28 September 2024, totalling approximately c.£10m.
16Net cash from operating activities
26 weeks 27 weeks to
to
30 September 2023
28
September £m
2024
£m
Operating profit/(loss) from:
Continuing Operations 100.3 (41.4)
Discontinued Operations 5.9 0.1
Total Operations 106.2 (41.3)
Adjustments for:
Depreciation charges 286.6 266.8
Capital grant amortisation (26.4) (25.1)
Software amortisation charges 1.0 2.1
Impairment charges - 2.1
Share-based payments 6.0 6.6
Loss/(profit) on disposal of property, 0.4 (0.9)
plant and equipment
Operating cash flows before working 373.8 210.3
capital and pensions
(Increase)/decrease in inventories (3.1) 0.6
Decrease/(increase) in receivables 11.6 (131.7)
Increase in payables due within one year 15.5 56.2
(Increase)/decrease in financial assets (1.0) 23.7
Decrease in provisions due within one (11.0) (9.3)
year
Decrease in provisions due over one year (20.3) (9.5)
Settlement of foreign exchange hedge - (1.1)
Defined benefit pension payments (greater (15.0) 113.1
than)/lower than income statement charge
Cash generated by operations 350.5 252.3
Tax paid (0.8) (1.5)
Interest paid1 (35.6) (39.4)
Net cash from operating activities 314.1 211.4
1 Interest paid includes £24.4m relating to lease liabilities (H1 2024:
£27.8m).
17Analysis of changes in net debt - adjusted cash flow
At Cash Foreign Other At 28
flow Exchange £m September
31 March £m £m 2024
£m
2024
£m
Bonds1 (96.2) 102.8 - (6.6) -
Lease (1,458.5) 267.7 - (61.0) (1,251.8)
liabilities1
Asset backed (45.6) (25.3) - (1.2) (72.1)
financial
liabilities1
Share of NextGen (13.2) (4.6) - (1.6) (19.4)
battery debt1
Total movements (1,613.5) 340.6 - (70.4) (1,343.3)
on debt items
Cash 246.9 (86.8) 1.5 0.3 161.9
Bank overdrafts (27.8) (42.5) - (0.3) (70.6)
Ring-fenced cash 249.6 25.3 - - 274.9
Cash and cash 468.7 (104.0) 1.5 - 366.2
equivalents
Net debt (1,144.8) 236.6 1.5 (70.4) (977.1)
1 The `Other' column for Bonds, Lease liabilities, Asset backed financial
liabilities and Share of NextGen battery debt consists of the net inception of
new leases, as well as interest charges. The `Cash flow' column consists of
repayments of principal and interest (financing activities and operating
activities respectively in the Condensed consolidated cash flow statement).
18Retirement benefit schemes
The Group supports defined contribution (DC) and defined benefit (DB) schemes
for the benefit of employees across the following business areas:
- UK Bus and Group - DB schemes: The First UK Bus Pension Scheme and
The FirstGroup Pension Scheme. DC schemes: The First Bus Retirement Savings Plan
and the Enhanced Lifetime Savings Plan. In the prior year, the Group terminated
its participation in two Local Government Pension Schemes with affected
employees enrolled into The First Bus Retirement Savings Plan
- North America - legacy schemes from operations which have now been
sold
- Rail - sponsoring four sections of the Railways Pension Scheme (RPS)
relating to the Group's obligations for its TOCs, with an additional section for
its open access Hull Trains business. Since the obligations to the TOC
arrangements are considered to be limited to contributions during the period of
the contract, these are fundamentally different to the obligations to the other
pension arrangements.
Each of these groups of arrangements have therefore been shown separately. The
scheme details are described on pages 236 to 247 of the Annual Report and
Accounts for the 53 weeks ended 30 March 2024.
(a) UK Bus and Group (including Hull Trains)
The table below is set out to show amounts charged/(credited) to the condensed
consolidated income statement along with the amounts included in the condensed
consolidated balance sheet arising from the fair value of schemes' assets
(Assets) and the present value of defined benefit obligations (DBO)
(Liabilities) for the UK Bus, Group and Hull Trains DB schemes:
Income statement 26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Operating
- Current service and 4.4 2.2
administration cost
- Past settlement gains (3.2) (5.1)
including service gains and
curtailments
- Settlement charge in relation - 141.4
to LGPS participation
termination
Total operating 1.2 138.5
Interest charge/(income) 0.1 (1.4)
Total income statement 1.3 137.1
Balance sheet 28 September 2024 30 March 2024
£m £m
Fair value of scheme assets 1,094.0 1,147.8
Present value of defined benefit (1,062.1) (1,161.8)
obligations
Surplus/(deficit) in schemes 31.9 (14.0)
The amount is presented in the
condensed consolidated balance sheet as
follows:
Non-current assets 34.4 6.0
Non-current liabilities (2.5) (20.0)
31.9 (14.0)
(b) North America
Greyhound pension arrangements
The Group has retained certain responsibilities for the provision of retirement
benefits for some legacy schemes.
The Group operates a legacy DB arrangement in the US, while in Canada , there is
a legacy plan with a DB and DC section and a small unfunded supplementary
executive retirement plan (SERP).
On 16 July 2024, the Group agreed terms with an insurance company to buy out the
remaining liabilities of the legacy Greyhound US pension plan, with the plan
being terminated thereafter. Following a Group contribution of $6m , gross
liabilities valued at $155m (£123m) at the FY 2024 year-end were removed from
the Group's balance sheet and the Group recognised a net settlement gain after
related costs of £5.5m in the Group's income statement as an adjusting item.
The table below is set out to show amounts charged/(credited) to the condensed
consolidated income statement along with the amounts included in the condensed
consolidated balance sheet arising from the fair value of schemes' assets
(Assets) and the present value of DBO (Liabilities) for the North American DB
schemes:
18Retirement benefit schemes (continued)
Income statement 26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Operating
- Current service and administration 1.1 1.3
cost
- Past service (gain)/charge including (6.2) 0.4
curtailments and settlements
Total operating (5.1) 1.7
Interest charge/(income) 0.2 (0.1)
Total income statement (4.9) 1.6
Balance sheet 28 September 2024 30 March 2024
£m £m
Fair value of schemes' assets 150.9 264.8
Present value of defined benefit (149.9) (276.1)
obligations
Surplus/(deficit) before adjustment 1.0 (11.3)
Opening irrecoverable surplus - (6.8)
Change in irrecoverable surplus - 6.8
Surplus/(deficit) in schemes 1.0 (11.3)
The amount is presented in the
condensed consolidated balance sheet as
follows:
Non-current assets 1.3 -
Non-current liabilities (0.3) (11.3)
1.0 (11.3)
(c) Rail contracts
The Railways Pension Scheme (RPS)
The Group is responsible for collecting and paying contributions for a number of
sections of the Railways Pension Scheme (RPS) as part of its obligations under
the contracts which it holds for its TOCs. These responsibilities continue for
the periods of the TOCs and are passed to future contract holders when those
TOCs terminate.Management of the RPS is not the responsibility of the Group, nor
is it liable to benefit from any future surplus or fund any deficit of those
funds.
The Group currently sponsors four sections of the RPS, relating to its
contracting obligations for its TOCs. The RPS is managed by the Railways Pension
Trustee Company Limited, and is subject to regulation from the Pensions
Regulator and relevant UK legislation. The RPS is a shared cost arrangement. All
costs, and any deficit or surplus, are shared 60% by the employer and 40% by the
members. For the TOC sections, under the contractual arrangements with the DfT,
the employer's responsibility is to pay the contributions following
triennialfunding valuations while it operates the contracted services. These
contributions are subject to change on consideration of future statutory
valuations, though the Group is fully protected from any such changes through
its contracts with the DfT. At the end of the contract, any deficit or surplus
in the scheme section passes to the subsequent train operating company with
nocompensating payments from or to the outgoing TOC.
The statutory funding valuations of the various Rail Pension Scheme sections in
which the Group is involved (last finalised with an effective date of 31
December 2022) and the IAS 19 actuarial valuations are carried out for different
purposes and may result in materially different results. The IAS 19 valuation is
set out in the disclosures below. The accounting treatment for the time-based
risk-sharing feature of the Group's participation in the RPS is not explicitly
considered by IAS 19 Employee Benefits (Revised). The contributions currently
committed to being paid to each TOC section are lower than the share of the
service cost (for current and future service) that would normally be calculated
under IAS 19 (Revised) and the Group does not account for uncommitted
contributions towards the sections' current or expected future deficits.
Therefore, the Group does not need to reflect any deficit on its balance sheet.
A TOC adjustment (asset) exists that exactly offsets any section deficit that
would otherwise remain after reflecting the cost sharing with the members. This
reflects the legal position that some of the existing deficit and some of the
service costs in the current year will be funded in future years beyond the term
of the current contract and committed contributions. The TOC adjustment on the
balance sheet date reflects the extent to which the Group is not currently
committed to fund the deficit.
The table below is set out to show amounts charged/(credited) to the condensed
consolidated income statement along with the amounts included in the condensed
consolidated balance sheet arising from the fair value of schemes' assets
(Assets) and the present value of defined benefit obligations (DBO)
(Liabilities) for the TOC defined benefit schemes:
18Retirement benefit schemes (continued)
Income statement 26 weeks to 27 weeks to
28 September 2024 30 September 2023
£m £m
Operating
- Current service cost 36.1 39.3
- Administrative cost 1.0 1.7
- Impact of franchise (12.4) (13.8)
adjustment on operating
cost
Total operating 24.7 27.2
Interest cost 2.5 0.6
Impact of franchise (2.5) (0.6)
adjustment on net interest
income
Total income statement 24.7 27.2
Balance sheet 28 September 2024 30 March 2024
£m £m
Fair value of schemes' 3,759.1 3,722.4
assets
Present value of defined (3,551.5) (3,588.7)
benefit obligations
Surplus/(deficit) before 207.6 (133.7)
adjustment
Franchise adjustment (60%) (124.6) (80.3)
Adjustment for employee (83.0) (53.4)
share of RPS deficits
(40%)
Surplus in schemes - -
(d) Valuation assumptions
The valuation assumption used for accounting purposes have been made uniform to
Group standards, as appropriate, when each scheme is actuarially valued.
The key assumptions were as follows:
28 30
September March
2024 2024
First Bus First North First First North
Rail Bus Rail
America America
% % % % % %
Key assumptions
used:
Discount rate 5.08 - 4.89 4.53 4.86 4.89 4.85 - 5.16
5.11 - 4.88
Expected rate of n/a 3.46 n/a n/a 3.70 n/a
salary increases
Inflation - CPI 2.54 - 2.46 2.00 2.61 2.60 2.00
2.56 - 2.62
Future pension 2.522 2.46 n/a 2.582 2.60 n/a
increases
Post retirement
mortality
(life expectancy
in years)1
Current pensioners 19.3 20.1 19.8 - 19.3 20.1 19.8 - 21.6
at 65: 21.6
Future pensioners 19.7 21.5 21.4 - 19.7 21.5 21.4 - 22.6
at 65 aged 45 now: 22.6
1 Life expectancies reflect the largest underlying plans in each region.
2 Weighted average for principal scheme.
Virgin Media case
In June 2023, the High Court made a significant ruling in Virgin Media Ltd vs
NTL Pension Trustees regarding the validity of amendments to benefits in Defined
Benefit pension schemes that were contracted-out between 1997 and 2016 based on
meeting the reference scheme test. In July 2024, the Court of Appeal upheld the
High Court's decision. The potential impact of this, if any, has not yet been
confirmed and, in light of the recent ruling, the Company will continue to
assess this in the second half of the year.
19 Contingent liabilities
To support subsidiary undertakings in their normal course of business,
FirstGroup plc and certain subsidiaries have indemnified certain banks and
insurance companies who have issued performance bonds for £50.1m (30 March 2024:
£59.8m) and letters of credit for £134.0m (30 March 2024: £164.3m). The
performance bonds primarily relate to First Rail franchise operations of £47.2m
and residual North American obligations of £2.9m. The letters of credit relate
substantially to insurance arrangements in the UK and North America . The parent
company has committed further support facilities of up to £100.9m to First Rail
Train Operating Companies of which £76.0m remains undrawn. Letters of credit
remain in place to provide collateral for legacy Greyhound insurance and pension
obligations.
The Group is party to certain unsecured guarantees granted to banks for
overdraft and cash management facilities provided to itself and subsidiary
undertakings. The Company has given certain unsecured guarantees for the
liabilities of its subsidiary undertakings arising under certain HP contracts,
finance leases, operating leases and certain pension scheme arrangements. It
also provides unsecured cross guarantees to certain subsidiary undertakings as
required by VAT legislation. First Bus subsidiaries have provided unsecured
guarantees on a jointand several basis to the FirstGroup Pension Scheme Trustee.
One of the Company's North American subsidiaries participated in multi-employer
pension plans in which their contributions were pooled with the contributions of
other contributing employers. The funding of those plans is reliant on the
ongoing involvement of third parties.
In its normal course of business the Group has ongoing contractual negotiations
with Government and other organisations. The Group is party to legal proceedings
and claims which arise in the normal course of business, including but not
limited to employment and safety claims. The Group takes legal advice as to the
likelihood of success of claims and counterclaims. No provision is made where
due to inherent uncertainties, no accurate quantification of any cost, or timing
of such cost, which may arise from any of the legal proceedings can be
determined.
The Group's operations are required to comply with a wide range of regulations,
including environmental and emissions regulations. Failure to comply with a
particular regulation could result in a fine or penalty being imposed on that
business, as well as potential ancillary claims rooted in noncompliance.
First MTR South Western Trains Limited (FSWT), a subsidiary of the Company and
the operator of the South Western railway contract, is a defendant to collective
proceedings before the UK Competition Appeal Tribunal (the CAT) in respect of
alleged breaches of UK competition law. Stagecoach South Western Trains Limited
(the former operator of the South Western network) was also a defendant to these
proceedings, but agreed a settlement of the claim against it with the class
representative (CR) which was approved by the CAT in May 2024 and, as a result,
the claim that was originally brought against it is not proceeding. Separate
sets of proceedings have been issued against London & South Eastern Railway
Limited and related entities (LSER) and against Govia Thameslink Railway Limited
and related entities (GTR) in respect of the operation of other rail services.
The three sets of proceedings are being heard together. The CR alleges that
FSWT, LSER and GTR breached their obligations under UK competition law by not
making boundary fares sufficiently available for sale, and/or by failing to
ensure that customers were aware of the existence of boundary fares and/or
bought an appropriate fare in order to avoid being charged twice for part of a
journey. A collective proceedings order (CPO) has been made by the CAT in
respect of the proceedings. The proceedings have been split into three trials,
the first of which took place in June/July 2024. As at 13 November 2024, the CAT
had not issued its judgment in relation to the first trial. The proceedings are
currently stayed pending the decision in the first trial, meaning that no dates
are yet set for the second and third trials. In March2022, FSWT, the Company and
the CR executed an undertaking under which the Company has agreed to pay to the
CR any sum of damages and/or costs which FSWT fails to pay, and which FSWT is
legally liable to pay to the CR in respect of the claims (pursuant to any
judgment, order or award of a court or tribunal), including any sum in relation
to any settlement of the claims.
20 Related party transactions
There are no related party transactions or changes since the Group's 2024 Annual
Report which could have a material effect on the Group's financial position or
performance of the Group in the 26 weeks to 28 September 2024.
21Events after the reporting period
On 21 October, the Group announced its acquisition of Anderson Travel, a coach
operator providing contracted school, private hire, mini coach and tour services
in and around London . The acquisition will extend First Bus' operational
footprint and forms part of the Group's strategy of targeted acquisitions to
grow its share of the UK adjacent services market.
On 25 October, the Group announced its acquisition of Lakeside Group, a
Shropshire and Cheshire -based company that provides school, B2B and B2C private
hire services, with a fleet of around 145 buses and coaches. The acquisition
will grow the Group's coaching business and offers the potential to increase our
presence in the West Midlands .
Responsibility statement
The directors confirm that these condensed consolidated interim financial
statements have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and that the interim management report includes a fair review
of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:
· an indication of important events that have occurred during the first 26
weeks and their impact on the half yearly results, and a description of the
principal risks and uncertainties for the remaining 26 weeks of the financial
year; and
· material related-party transactions in the first 26 weeks and any material
changes in the related-party transactions described in the last annual report.
The Directors of FirstGroup plc are listed on the Group's website at
www.firstgroupplc.com.
Graham SutherlandRyan Mangold
Chief Executive OfficerChief Financial Officer
14 November 202414 November 2024
Independent review report to FirstGroup plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed FirstGroup plc's condensed consolidated interim financial
statements (the "interim financial statements") in the Half-Yearly Report of
FirstGroup plc for the 26 week period ended 28 September 2024 (the "period").
Based on our review, nothing has come to our attention that causes us to believe
that the interim financial statements are not prepared, in all material
respects, in accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
· the Condensed Consolidated Balance Sheet as at 28 September 2024;
· the Condensed Consolidated Income Statement for the period then
ended;
· the Condensed Consolidated Statement of Comprehensive Income for the
period then ended;
· the Condensed Consolidated Cash Flow Statement for the period then
ended;
· the Condensed Consolidated Statement of Changes in Equity for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Half-Yearly Report of
FirstGroup plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK ) 2410, `Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial Reporting Council for
use in the United Kingdom ("ISRE (UK ) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK ) and, consequently, does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the Half-Yearly Report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in
an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern that
are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK ) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Half-Yearly Report, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Half-Yearly Report in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the Half-Yearly Report, including the
interim financial statements, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Half-Yearly Report based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion, has
been prepared for and only for the company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Watford
13 November 2024
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FirstGroup Plc
FirstGroup Plc - Half-year Report
14th November 2024, 07:00
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