First Group Plc

FirstGroup plc

Annual Report and Accounts 2025

Further growth ahead

We are

FirstGroup

FirstGroup is a leading private sector provider

of public transport. 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.

Visit our website at www.firstgroupplc.com

and follow us @firstgroupplc on X.

Find out more about FirstGroup online

Introduction

Highlights of the year

At a glance

Strategic report

Chair’s statement

Our addressable markets

Our market drivers

Our business model

Chief Executive Officer’s review

Progress on our strategic pillars

Key performance indicators

Business review

Financial review

Responsible business

Climate-related financial disclosures

Our stakeholders

Section 172 statement

Risk management

Viability and going concern

Governance report

Corporate Governance report

Governance at a glance

Board

Nomination Committee report

Audit Committee report

Responsible Business Committee report

Remuneration Committee report

115

Directors’ report and additional disclosures

118

Statement of Directors’ responsibilities

Financial statements

120

Independent auditors’ report

129

Consolidated income statement

130

Consolidated statement of comprehensive income

131

Consolidated balance sheet

132

Consolidated statement of changes in equity

133

Consolidated cash flow statement

135

Notes to the consolidated financial statements

207

Group financial summary

209

Company balance sheet

210

Company statement of changes in equity

211

Notes to the Company financial statements

215

Shareholder information

217

Glossary

Read this report online

Strategic report

Governance report

Financial statements

Introduction

FirstGroup

Annual Report and Accounts 2025

Contents

Further progress across rail and bus divisions

positioning the Group well ahead of industry transition:

Significant investment in growth, diversification and decarbonisation:

£1,370.0m

(

7%)

FY 2025 Group adjusted revenue of

£1,370.0m (FY 2024: £1,279.6m) reflects

strong underlying First Bus performance,

higher variable fees in First Rail DfT-

contracted Train Operating Companies

(DfT TOCs) and further growth in open

access rail

£222.8m

(

9%)

Group adjusted operating profit increased

to £222.8m (FY 2024: £204.3m), driven

by First Bus rising £12.4m to £96.0m

and First Rail up £5.5m to £148.8m

19.4p

(

16%)

Adjusted EPS growth to 19.4p

(FY 2024: 16.7p) with earnings growth

further supported by repurchases of

54.8m shares during FY 2025

6.5p

(

18%)

Final dividend of 4.8p per share proposed

with FY total of 6.5p (FY 2024 total: 5.5p)

and additional £50m buyback programme

c.£92m

returned to shareholders via buyback

programmes in FY 2025

£86.9m

Strong cash conversion and balance sheet

strength maintained; adjusted year-end net

debt of £86.9m

£90m

acquisition of RATP London with a

c.12% share of London bus market

c.£31m

further c.£31m of bolt-on acquisitions

to grow First Bus’s Adjacent services

market share

£88m

investment in First Bus, mostly on

decarbonisation in FY 2025 net of £22m

of government co-funding

new open access

acquisition of track access rights for two

new open access rail services to double

existing capacity

c.£500m

c.£500m order for 14 new, UK-manufactured

Hitachi trains to facilitate First Rail open

access growth, with an option to invest an

additional c.£460m should our ongoing

applications be approved

Strategic report

Governance report

Financial statements

Introduction

FirstGroup

Annual Report and Accounts 2025

Highlights of the year

Performance summary

FY 2025 (£m)

FY 2024 (£m)

Cont.

Disc.

Total

Cont.

Disc.

Total

Adjusted Revenue

1,370.0

–

1,370.0

1,279.6

–

1,279.6

Adjusted operating profit/(loss)

222.8

(0.6)

222.2

204.3

(1.9)

202.4

Adjusted operating profit margin

16.3%

16.2%

16.0%

15.8%

Adjusted profit/(loss) before tax

165.1

(0.8)

164.3

139.0

(2.2)

136.8

Adjusted EPS

3,4

19.4p

(0.1)p

19.3p

16.7p

(0.3)p

16.4p

Dividend per share

6.5p

5.5p

Adjusted net debt/(cash)

86.9

(64.1)

FY 2025 (£m)

FY 2024 (£m)

Statutory

Cont.

Disc.

Total

Cont.

Disc.

Total

Revenue

5,066.3

–

5,066.3

4,715.1

–

4,715.1

Operating profit/(loss)

222.6

4.9

227.5

46.5

(5.3)

41.2

Profit/(loss) before tax

169.6

(24.4)

Total comprehensive income for

the year

161.7

49.0

EPS

21.3p

(2.4)p

Net debt

974.8

1,144.8

– Bonds, bank and other debt net

of (cash)

(228.8)

(313.7)

– IFRS 16 lease liabilities

1,203.6

1,458.5

‘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.

‘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.

‘Adjusted operating profit/(loss)’ and ‘Adjusted profit/(loss) before tax’ are before adjusting items as set out in note 3 to the

financial statements.

‘Adjusted earnings’ are shown before net adjusting items and excludes IFRS 16 impacts in First Rail management fee operations.

‘Adjusted EPS’ and EPS are based on the weighted average number of shares in the period of 597.7m (FY 2024: 662.9m) reflecting

the current year and prior year share buybacks.

‘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 ‘FY 2024 statutory operating loss of £(24.4)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.

I am pleased to report another

positive set of results for our

2025 financial year. We have

further strengthened our

businesses and continued

to deliver against our strategy,

including growing and

diversifying our earnings in

both First Bus and First Rail.

This leaves us well placed to

at least maintain our adjusted

earnings per share in FY 2026,

from a stronger base, as we

continue to successfully navigate

a period of transition in bus and

rail in the UK.

Our focus remains on

operational excellence and

the disciplined deployment

of capital to maintain our

accelerated investment

in decarbonisation and

continuing to build a diverse,

sustainable earnings base,

while returning any excess

capital to shareholders.”

Graham Sutherland

Chief Executive Officer

Operational highlights

15%

First Bus adjusted

operating profit grew 15% in FY 2025 due

to further data-led operational and yield

improvements, cost efficiencies, and

improved driver availability offsetting

inflationary pressures and lower funding.

23%

First Bus Adjacent

services revenue increased by 23%

in FY 2025 due to contract wins,

extensions and the contribution

of recently acquired businesses.

20%

At the end of March 2025

First Bus had c.1,115 electric buses in

operation (c.20% of the fleet), with

three fully electric depots and a further

ten depots substantially electrified

outside London.

2.9m

Hull Trains and Lumo

reported 2.9m passenger journeys in

FY 2025, up from 2.7m in FY 2024, with

very high levels of customer satisfaction;

the two operators received a joint NPS

score of 60 for the 2024 calendar year.

Adjusted operating profit was up 14%

reflecting strong demand and effective

yield management.

£110.7m

The DfT TOCs’

financial performance in FY 2025 was

ahead of expectations and First Rail’s

Additional services businesses grew

revenue by 13% to £110.7m.

Strategic report

Governance report

Financial statements

Introduction

FirstGroup

Annual Report and Accounts 2025

Highlights of the year

continued

London

York

Aberdeen

Edinburgh

Newcastle

Hull

York

Leeds

Shefﬁeld

Leicester

Ipswich

Slough

Basildon

Portsmouth

Glasgow

Cork

Galway

Belfast

Bristol

Manchester

Bradford

Stoke-on-Trent

Worcester

Penzance

Dublin

Weymouth

Plymouth

Crewe

Weston-super-Mare

Swansea

Cardiff

Truro

Bath

Norwich

Chelmsford

London

Birmingham

Southampton

Oxford

First Bus operations

First Bus

First Rail

Find out more about FirstGroup online

First Bus

FirstGroup

First Rail

Who we are

FirstGroup is one of the UK’s leading private sector

operators of public transport, with two divisions,

First Bus and First Rail, operating a diverse

portfolio of transport services. We have

c.30,000 employees and carry almost 2 million

passengers a day.

Our purpose

We provide efficient, reliable, safe and

increasingly sustainable transport links that

connect communities. Our businesses are at the

heart of our communities and the services we

provide are critical to ensuring local economies

are vibrant and robust.

Our strategy

Our four strategic pillars help us to drive value and

sustainable growth for all our stakeholders.

Read more about our strategy on page 13

Deliver day in,

day out

Drive modal

shift

Diversify our

portfolio

Lead in

environmental

and social

sustainability

First Bus is one of the largest bus companies

in the UK, with decades of experience working

closely with local authorities and partners

across the UK and Ireland. We carry more than

a million passengers a day and serve more

than 25% of the UK population with our

regional and London bus services.

Regional bus services

We provide tendered bus services for local

authorities and are a leading operator in the

majority of our local areas, including major

urban centres such as Glasgow, Bristol

and Leeds.

First Bus London

First Bus London was established in February

2025 following the acquisition of RATP London.

We operate c.90 Transport for London routes in

west and central London from ten depots,

serving 180 million passengers annually.

Adjacent services

Alongside the operation of our commercial

networks, our Adjacent services business

provides a range of bus and coach services

including for schools, private tour operators,

airports and airlines, distribution centres and

major construction sites.

First Rail has more than 25 years of experience

in the rail sector, including as one of the UK’s

leading operators for a number of years.

Open access

We have two open access rail operations,

Hull Trains and Lumo. We also operate the

Heathrow Express rail service on behalf of

Heathrow Airport.

Government-contracted operations

We have two DfT TOCs, Great Western Railway

(GWR) and West Coast Partnership (WCP),

which includes Avanti West Coast, and we

operated South Western Railway (SWR) from

May 2021 to 25 May 2025, when it transferred

to the DfT.

Transport for London contracts

We operate London Trams and the London

Cable Car on behalf of Transport for London.

Additional services

First Rail’s Additional services businesses,

First Customer Contact, Mistral Data and First

Rail Consultancy, offer a variety of solutions for

the rail industry, bringing experience, expertise

and benefits to the sector.

1.13m

passenger

journeys a day

c.5,800

buses and coaches

(includes 1,115 zero

emission buses)

c.14,500

employees

c.70

depots

800,000

passenger

journeys a day

c.3,819

locomotives and

carriages (includes

3,358 bi-mode or

electric trains)

c.16,000

employees

c.383

stations

Business split

Adjusted revenue share (as % of Group)

Adjusted EPS contribution (pence)

78%

22%

Avanti West Coast (Avanti)

Great Western Railway (GWR)

Hull Trains

Lumo

First Bus operations

Where we operate

First Bus

Open Access/Other rail

DfT TOCs

6.6p

5.2p

12.0p

Strategic report

Governance report

Financial statements

Introduction

FirstGroup

Annual Report and Accounts 2025

At a glance

I am very pleased to have joined the Board of

FirstGroup as Chair this year. I am excited about

the opportunities that exist to deliver great public

transport services for our customers and

employees in a sector that is vitally important to

the nation’s economy and to continue the good

progress the Group has made over recent years.

Since my appointment in February 2025, I have

visited many of our bus and rail operations across

the country and have spent time with the Board

and with senior management teams to discuss

their plans and priorities for our businesses.

Read more on page 79

I have also met our major shareholders to

understand their views of the Group and the

opportunities available to us, as well as a number

of political stakeholders from various parties to

hear their range of opinions and perspectives.

It is clear to me from these discussions that public

transport is a sector that has huge potential as a

key driver for the UK’s economy, contributing to the

Government’s growth agenda. Our strong societal

purpose was one of the key aspects of FirstGroup

that attracted me to the position of Chair. First Rail

and First Bus play a vital role in the lives of our

customers as we deliver for them, day in and day

out. We are able to show, on a daily basis, how we

connect communities and help local economies

thrive, as well as accelerating the transition to a

zero-carbon world.

Investment

FirstGroup has long been instrumental in benefiting

the communities where we operate, and we have

delivered unique and significant levels of private

sector investment into our businesses, aligned to

the Government’s aims for UK economic growth.

This includes more than £100m a year on electric

buses and infrastructure in First Bus, and you can

read elsewhere in this report how we have reached

a milestone of more than 1,000 zero emission

vehicles during the year. We now have zero

emission fleets based across the country, from

Hampshire to Aberdeen, Somerset to East Anglia,

demonstrating our national reach. We will continue

to capitalise on the benefits of our electrification

programme and leverage this expertise and

capability as we participate in bus franchising and

other partnership opportunities.

In First Rail, we placed a landmark £500m order

for new, UK-manufactured trains for our Hull Trains

and Lumo businesses, which are setting a new

benchmark for reliability and customer satisfaction

as well as delivering billions of pounds of economic

benefits along their routes, taking customers out of

cars and off planes onto rail. Approval by the Office

of Rail and Road for our other applications would

see a similar level of investment by the Group,

securing jobs in UK manufacturing and contributing

further to UK economic growth.

These examples demonstrate that private sector

investment can play a key role in public transport

and we are keen to make ongoing UK investments.

However, we will continue to monitor all

opportunities for investing into other markets.

A vital sector

with huge

potential

FirstGroup has long been

instrumental in benefiting

the communities where we

operate, and we have delivered

unique and significant levels

of private sector investment

into our businesses, aligned to

the Government’s aims for UK

economic growth.”

Lena Wilson CBE

Chair

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Chair’s statement

Diversification

The Group’s strategy, introduced in FY 2024, is

underpinned by four strategic pillars which will

drive the Group forward over the next period,

diversification of our portfolio being one. For some

time, the Group has been working on creating a

diverse, quality and sustainable earnings base that

is less affected by changes in government policy.

With this in mind, we have completed a number of

strategic acquisitions in the year, of which the

largest was our re-entry into the London bus

market with a strong position.

Our cash-generative businesses and strong

balance sheet allow us to invest in the transport

sector and continue to deliver returns for

shareholders. FirstGroup aims to keep growing

through both organic and inorganic activity.

We will continue to look for value-accretive

opportunities to grow and diversify our portfolio

that fits with our disciplined capital allocation

policy and strict set of investment and risk criteria.

I believe the management, supported by the Board,

is well placed to deliver this outcome.

Sustainability

Leading in environmental and social sustainability is

also a pillar of the Group’s strategy. I am delighted

that the Group published its first Climate Transition

Plan in March. As a leading public transport

operator, we have a critical role to play in the

climate transition, and setting out our structured

and ambitious approach to help achieve this is an

important step in our sustainability journey.

I was pleased that First Bus has become a Real

Living Wage employer, the largest bus operator in

the country to do so. The Group’s First Connections

programme for women and ethnically diverse

employees has gone from strength to strength, and

I was delighted to take part in an event marking

International Women’s Day in the first few weeks

of my tenure. The Group’s apprenticeship

programmes are also well established and are

delivering results. For example, 95% of Lumo’s

operational workforce began on apprenticeships.

Our people

I am deeply impressed by the unwavering

commitment and dedication of our more than

30,000 colleagues in delivering essential transport

services that millions of our customers depend on.

On a personal level, I’d like to thank everyone I have

met throughout the Group for making me feel

welcome, and on behalf of the Board, I extend my

heartfelt gratitude to all our employees for their

hard work throughout the year and for their

continued support of our customers and developing

effective local relationships in our communities.

The Board and corporate activity

You can read more about the Board evaluation

which took place in the year on page 81. We held

Board meetings in several locations this year,

including a visit to GWR’s battery train testing site

and First Bus’s Bramley depot, which you can read

more about on page 78.

I would also thank my predecessor as

Non-executive Chairman, David Martin, for his

service to the Group during his five-year term.

We have a disciplined capital allocation policy

which allows us to maintain our investment in

decarbonisation and continue to diversify our

earnings, while delivering returns to shareholders.

The £115m on-market share buyback programme

was completed during the year and our subsequent

£50m programme was completed in March 2025.

In light of the Group’s strong performance in

FY 2025, the Board has proposed a final dividend

of 4.8p per share, which is subject to shareholder

approval at the Group’s 2025 AGM. Our positive

cash generation and strong balance sheet allow us

to capitalise on opportunities to grow our business

as our industries transition, to continue to grow

our dividend, and to provide further potential

returns to shareholders.

Conclusion

With a large reach in the bus and rail sectors across

the country, a strong balance sheet and our vital

purpose, I am confident in the opportunities ahead

for FirstGroup. There is no doubt that public

transport is in a period of transition as a result of

the policies of the new Government and devolved

administrations, but the Group is in a good position

to respond to these changing dynamics through our

work to strengthen our businesses and invest, to

diversify and to grow.

I can already see huge potential after my first

four months – not least because we are fortunate

to have so many dedicated and experienced

colleagues who are working together to shape a

bright and sustainable future. The Group is in a

strong position and well placed to deliver against

our strategy in both First Bus and First Rail.

Lena Wilson CBE

Chair

10 June 2025

£230m

in acquisitions and

investment in bus

fleet and

infrastructure

c.1,115

zero emission buses

6.5p

Proposed total

dividend

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Chair’s statement

continued

The UK bus market

The UK rail market

Industry revenue in 2024

£7.0bn

2.2bn

passenger journeys made per annum

£10.3bn

1.6bn

passenger journeys made per annum

Bus Services Bill

The Government launched its Bus Services

Bill in late 2024. Designed to improve bus

services and provide enhanced connections,

the new legislation will give all local authorities

the opportunity to take back control of local

bus services, by supporting them to introduce

bus franchising. The Bill will also remove

the current ban on municipal ownership.

Enhanced partnerships remain an option for

local authorities to work with operators to

deliver similar improvements in bus services.

Rail Services Bill

The Government launched a consultation on its

draft Railways Bill in February 2025. If passed,

the legislation will include the establishment of a

new public body, Great British Railways (GBR).

The aim of GBR is to simplify and streamline the

UK’s rail system, improve customer experience

with modernised ticketing systems and fares,

lower costs and improve the overall efficiency of

the network. Headquartered in Derby, GBR will

oversee the operation of the Department for

Transport’s (DfT’s) passenger rail contracts,

which do not include open access operations

and c.20% of passenger rail services, mainly in

Scotland and Wales, and assume the ownership

and management of most railway infrastructure.

New government policy

Contracts overview

In London, bus operations are regulated by

Transport for London, with each individual route

forming a contract which is bid for by authorised

private sector operators. Transport for London (TfL)

decides the contract specifications for a given bus

route, controls ticket prices and collects passenger

revenue. Operators own the buses and depots, and

recruit and employ drivers to run routes.

Outside of London, for the majority of services

aside from franchising and enhanced partnerships,

operators set timetables and fares on a commercial

basis. A small proportion of services are operated

on behalf of local authorities on a contract basis,

where revenues are insufficient to support the

operators. In England, following the introduction

of franchising in Manchester, a number of mayoral

authorities have indicated that franchising is

their preferred future option taking control of

the bus routes, services, timetables and service

quality standards.

Adjacent services

The Adjacent services market in the UK bus sector

includes bus and coach services that complement

traditional bus operations. These include private

hire services for events, school transport and tours,

airport services, workplace shuttles, scheduled

express services and rail replacement services.

Contracts overview

Under the terms of the DfT concession-based

National Rail Contracts, operators bear no revenue

risk and very limited cost risk. Operators earn an

annual management fee for service delivery, with the

opportunity to earn additional performance-based

revenue. The Government passed legislation in

November 2024 allowing for the nationalisation of

passenger train operators; as a result, the DfT-

contracted train operating companies will be

transferred to Great British Railways over the next

few years.

Open access – there are currently five open access

train operating companies in the UK (three long-

distance operators, Heathrow Express and Eurostar).

Open access operators bear all commercial risk and

opportunity. They make all commercial decisions

including ticket pricing, and set working terms and

conditions. The track access charging regime for

open access operators takes into account the fact

that they do not receive government subsidies. Data

shows that, in 2025/26, Lumo will pay around 10%

more than LNER per train mile and around 35% more

than Avanti West Coast.

Open access Track Access Agreements are currently

awarded by the Office of Rail and Road (ORR),

typically for ten years, with scope for renewal. Routes

are awarded where there is a clear business case they

will promote competition for the benefit of passengers,

generate sufficient new revenue and provide wider

economic benefits for the communities they serve.

Open access rail operators are

connecting communities, stimulating

demand and delivering economic and

environmental benefits across the UK.

Open access has been a hugely successful

aspect of the rail industry over the last 25 years,

connecting previously under-served places and

providing additional capacity, which helps drive

more people towards rail and away from less

sustainable forms of transport. Services are

provided entirely at the operator’s own

commercial risk and bring private investment

into the sector. They create jobs and millions

of pounds in economic benefit to the UK,

while driving modal shift in public transport.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our addressable markets

Theme

Our actions

Decarbonisation

Public transport plays a critical role in supporting

decarbonisation and environmental objectives.

By investing in the decarbonisation of fleets and

infrastructure and actively incentivising and

accelerating modal shift from private cars

to buses and trains, especially zero and low

emission ones, we can reduce congestion,

improve air quality and create green jobs.

Modal shift

Modal shift is crucial for reducing congestion,

lowering emissions, and improving air quality.

By encouraging people to switch from private

cars and air travel to bus, coach and rail, we

can reduce congestion and significantly reduce

the carbon footprint of the transport sector.

Favourable demographics

As the UK population grows and cities

become more densely populated, the demand for

efficient and reliable public transport increases.

Car ownership is also declining in the youth

demographic and customers are increasingly

environmentally aware, preferring more

sustainable modes of transport.

New technologies

The innovative use of new technologies is

transforming public transport services.

Operators have increased visibility of large

numbers of customers and can stimulate

demand with real-time information, contactless

payments, smart ticketing and enhanced

customer service. Data analysis and tools are

also being used to improve service reliability and

efficiency and to support sustainability initiatives,

such as optimising the use of zero or low

emission buses and trains.

In First Bus, we continue to commit significant

investment and make use of innovative financing

and strategic partnerships to deliver our

decarbonisation programme. We have more than

1,000 zero emission buses, with three fully and

a further ten substantially electrified depots

outside London. In First Rail, we are leading

trials of battery train technologies, low-carbon

fuels, and collaborating with Network Rail to

improve energy efficiency and expand track

electrification. Our open access rail operations

are helping to drive modal shift from car and air

travel to rail, and thanks to Lumo’s fully electric

fleet and Hull Trains’ bi-mode fleet, our emissions

are lower than most other UK rail companies.

We are expanding our portfolio to extend our

reach and services, adding capacity to existing

operations and repositioning and improving our

customer proposition to encourage more people

to travel on our services. We are also working

closely with local authorities and communities to

develop tailored solutions that meet the specific

transport needs of different regions.

Read more on what we’re doing to

drive modal shift on page 14

A key area of focus for the Group is to enhance

our engagement with customers and to make our

services more attractive and accessible to all

age groups. We are also expanding our services

to meet and stimulate demand, delivering

infrastructure projects to enhance facilities

and working alongside our partners to create

integrated transport systems to make it easier

for customers to switch between different modes

of transport.

First Bus was the first regional bus operator in the

UK to roll out ‘Tap On, Tap Off’ (TOTO) payment

technology across our entire fleet. We are also

using our real-time granular data and software tools

to improve service delivery, continuously enhance

our networks and timetables, and introduce new

ticketing options that better match customer

demand and preferences. In First Rail, we are

making use of new digital tools in our customer

contact centre and our Mistral Data business is

providing industry-leading products and services

to a number of train operating companies,

including operational, staff messaging and

customer engagement systems.

Lowering emissions

The transport sector represents 26% of the

UK’s annual carbon emissions and is the single

largest contributor to it. Private car usage alone

accounts for 52% of these transport emissions.

In contrast, buses, coaches and trains

collectively contribute only 4%.

1 www.gov.uk/government/statistics/transport-

andenvironment-statistics-2023/transport-and-

environmentstatistics-2023

Data-led ticketing improvements

First Bus offers TOTO ticketing on its

services. This allows customers to use their

contactless bank card or phone to pay their

fares, which are calculated based on taps

made when boarding and alighting the bus.

Fares are capped at the price of a daily or

weekly ticket. This allows First Bus to

charge more granular fares, better reflecting

the journey distance, which avoids pricing

people out of shorter journeys.

Mistral Data at the

forefront of innovation

First Rail’s Mistral Data integrates customers’

datasets, providing a range of cloud-based,

real-time tools for transport operators,

infrastructure providers and manufacturers.

This leaves Mistral well positioned to support

the delivery of effective and cohesive data and

tools across the industry as it transitions,

and beyond.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our market drivers

Theme

Our actions

Funding

Sustained, long-term funding supports the

delivery of vital public transport services and

infrastructure, and brings certainty, which can

leverage significant investment and expertise from

the private sector, including in decarbonisation.

Looking ahead, transport authorities will need

capital funding to support bus priority and tackle

congestion, and authorities looking to pursue

franchising will need more generous and

sustainable capital allocations to deliver their

programmes, to purchase assets and deliver

on their decarbonisation ambitions.

Electrification

Alongside environmental benefits, the

electrification of fleets and infrastructure

can reduce operating costs, improve energy

efficiency, and enhance reliability and

performance. Electrification can also unlock

adjacent revenue streams including third party

charging, battery storage, and recycling

and consultancy opportunities.

Social and economic growth

Public transport networks are the lifeblood of

vibrant towns and cities, and can stimulate local

economies by improving access to markets,

leisure destinations, jobs and services. This

can lead to increased economic activity and the

creation of new business opportunities along

transport routes.

Government policy

There is significant government support and

recognition that bus and rail travel is a cost-

effective and quick mechanism to achieve modal

shift from private car use, to lower emissions,

improve congestion in our towns and cities and

to support governments’ levelling-up and

growth agendas.

Creating value

in the supply chain

By sourcing goods and services locally bus

and rail operators support and help to grow UK

suppliers and manufacturing. Public transport

networks also enhance the efficiency, reliability

and sustainability of supply chains, creating

significant value for businesses and

communities alike.

We have already invested over £300m in

the decarbonisation of our fleet and depot

infrastructure in First Bus, having secured

over £125m in government co-funding. In rail,

industry data for 2023/24 showed that

collectively private sector train companies

reduced their government subsidy by over

a quarter (c.£550m) against the prior year,

compared with public sector train companies

which increased their subsidy by 0.45%.

In First Bus, we are starting to see the benefits of

operating a fully electric bus depot. We were also

the UK’s first bus operator to offer access to our

electric vehicle charging infrastructure to other

organisations, including DPD, Openreach and

Centrica, as well as to eHGVs and smaller bus

operators. Through our joint venture with Hitachi

we are using smart software to optimise our

energy use and battery charging and we will

retain much of the residual value of the

batteries financed through the partnership

when they are taken off our buses with material

second-life value.

Our businesses are at the heart of our communities,

with the vast majority of our workforce recruited

from our local areas, including some with high

rates of unemployment. In April 2024, First Bus

became a Real Living Wage employer, the first

major bus operator to do so, and based on

independent research, our two open access rail

operations, Hull Trains and Lumo, are on track

to contribute a collective £1.4bn in economic

benefits by the end of their track access

agreements in 2032 and 2033.

FirstGroup generated £1.44bn of Gross Value

Added (GVA) contribution to the UK economy

in its 2022 financial year, spending £2.44bn

on goods and services provided by UK firms.

Looking ahead, in December 2024 we announced

that we had signed an agreement to lease 14 new

Hitachi electric, battery electric or bi-mode trains

at a cost of c.£500m to facilitate the growth of

our open access services. The trains will be

manufactured by Hitachi in County Durham,

securing the skills base and jobs in the local area.

A landmark £500m train order

to support UK manufacturing

Significant investment and expertise from the

private sector alongside long-term funding

supports the delivery of vital public transport

services and infrastructure, and brings

certainty to the sector. FirstGroup’s landmark

c.£500m train order will allow the Group to

expand its open access portfolio and,

importantly, will help to secure the factory’s

future and create certainty for the skills base

and jobs in the local area. The lease agreement

also provides the Group the option to invest

another c.£460m, on a further 13 trains, should

its ongoing applications for new open access

services be successful.

In First Bus we have taken part in the

government’s £2 and subsequent £3 fare

cap schemes in England and the free travel

scheme for under 22s in Scotland, and believe

that targeted funding for young people can

encourage life long bus use. In First Rail, we

have delivered a number of multi-million pound

fleet upgrades and infrastructure projects for

the DfT to enhance services and customer

experience, and to improve station and

integrated travel facilities.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our market drivers

continued

Strengths and resources

United by our Values

Our operations

Our diverse portfolio

Delivering for our stakeholders

Our people

Our c.30,000 employees are at the heart of our

business and have the skills, expertise and

knowledge to drive our future success.

Read more about open access on page 24

Find out more about FirstGroup online

Committed to

our customers

Supportive of

each other

Dedicated

to safety

Setting the

highest standards

Accountable for

performance

We are a leader in transport and a key partner to a wide range of stakeholders. Our business model leverages our

strengths and resources to create value for all of our stakeholders and to continue to grow and diversify our business.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our business model

Introduction

FY 2025 has been another year of strong

performance, further reinforcing our track record

for delivery. Our adjusted operating profit has

grown to £222.8m, from £204.3m in FY 2024,

and our adjusted earnings per share (‘EPS’) has

increased to 19.4p (FY 2024: 16.7p), with higher

earnings benefiting from the buyback programmes

we completed during the year. We have also

recently completed a corporate restructuring to

deliver significant cost savings and are well placed

to at least maintain our adjusted EPS in FY 2026,

off a stronger more diversified earnings base.

Continued growth in First Bus

We have improved our First Bus business over the

last few years, growing revenues from £790m in

FY 2022 to over £1bn in FY 2025 despite lower

government funding. This is a great achievement

and testament to the hard work and actions

the team has taken to strengthen and grow

the business.

In H2 2025 we delivered on our adjusted operating

margin target of 10.0% excluding the contribution

from London. For the full year First Bus has

reported revenue of £1,081.5m (FY 2024:

£1,012.2m) and adjusted operating profit of

£96.0m (FY 2024: £83.6m), despite a £17m

reduction in funding. This reflects further

operational improvements, network and cost

efficiencies, increased driver numbers, our newer

electric fleet and the contribution of the businesses

we acquired in FY 2025 and FY 2024.

Following the introduction of the £3 fare cap in

England in January 2025, replacing the £2 cap, we

introduced a clear and simple distance-based fare

structure and the resulting yield increases outpaced

a slight decline in passenger volumes in H2 2025.

For the full year, passenger volumes grew by c.2%

(excluding the extra week in FY 2024).

Entering the London bus market

at scale

At the end of February, we completed the £90m

acquisition of RATP London. This was a significant

acquisition for the Group as the market recovers

and has allowed us to enter London with a c.12%

market share. The business, now named First Bus

London contributed revenue of c.£23.2m and

adjusted operating profit of £0.6m in March 2025.

As the route contracts evolve over the next five

years, we anticipate annual revenues of £300-

£350m, with operating margins in line with historical

London levels of 6-7%. We are very pleased to

welcome RATP London’s employees to the

Group and the integration of the business is

progressing well.

Increased revenue contribution

from Adjacent services

As a result of further contract wins and extensions,

and the contribution of the businesses we have

acquired over the last two years, our Adjacent

services revenue has grown from £219.8m in FY

2024 to £270.8m in FY 2025. We have continued

to bolster our portfolio during the year, with the

acquisitions of Anderson Travel, Lakeside Coaches

and Matthews Coach Hire in Ireland, and a new

contract with Flixbus.

Leaders in electrification

We invested c.£88m in First Bus in FY 2025, mostly

in decarbonisation, net of c.£22m of government

co-funding. At the end of March 2025, c.20% of our

bus fleet was zero emission and we now have three

fully electric depots and a further ten substantially

electrified depots and electrification underway

at a further five depots outside of London. As well

as lowering emissions we are benefiting from

electrification operational and cost efficiencies and

making use of smart technologies to optimise our

battery charging and energy use.

Further

growth and

diversification

In FY 2025 we have

successfully executed our

strategy, further strengthened

our businesses and grown and

diversified our portfolio despite

high inflation and the impact of

public policy changes.”

Graham Sutherland

Chief Executive Officer

16%

growth in

Adjusted EPS

£90m

acquisition of

RATP London

new rail open access

routes acquired

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Chief Executive Officer’s review

We were the first operator to allow access to third

party organisations and businesses to the charging

facilities at our depots. During FY 2025 we have

announced further third party charging partnerships,

including with Centrica and a number of eHGV

operators. We also continue to share our expertise

with other operators and local authorities, including

hosting regular knowledge-sharing sessions.

Focus on operational delivery

in First Rail

In First Rail, we remain focused on delivering

for our customers and partners. The division’s

financial performance for FY 2025 was ahead

of expectations due to higher than previously

forecast variable fees from the DfT TOCs.

Adjusted operating profit increased to £148.8m

(FY 2024: £143.3m).

Our open access operations, Hull Trains and Lumo,

have continued to perform well thanks to strong

demand, effective yield management and continued

high levels of customer satisfaction. They have

delivered adjusted operating profit of £34.1m in

FY 2025, up from £30.0m in FY 2024.

Our Additional services businesses, FCC, Mistral

Data and First Rail Consultancy continue to perform

well. They contributed revenues of £110.7m in FY

2025, up from £98.2m in FY 2024.

In line with the Government’s announced policy,

the DfT took over the operation of South Western

Railway (‘SWR’) on 25 May 2025. Improving the

infrastructure, customer experience and rolling

stock across SWR’s services during our eight-year

stewardship has enabled us to deliver for our

passengers, who make more than 150 million

journeys each year. I would like to thank our

teams for their hard work and support to ensure

a successful transition.

Driving modal shift

Driving modal shift from car and air travel to bus

and train is a key strategic priority and commercial

driver for the Group, and crucial for reducing

congestion and improving air quality. To encourage

modal shift we strive to deliver the best possible

customer experience, with reliable, cost-efficient

services, and we are growing our businesses to

increase capacity.

Highlights during the year have included the launch

of the ‘Everyday Actions’ internal programme in

First Bus to drive service improvements. This was

complemented by a major brand refresh to deliver a

consistent look and feel for customers and re-focus

the business on its people and customers. A new

external campaign, ‘Moving the everyday’ was

launched alongside the brand refresh, to inspire

people to switch from cars to buses, highlighting

the role buses play in unlocking environmental,

social, economic and health benefits.

In First Rail, we are adding capacity and applying

for new routes in open access and participating in

other contract opportunities. We successfully took

over the operation of the London Cable Car at the

end of June 2024. Our team is now focused on

working with Transport for London to enhance the

customer proposition and place the service at the

heart of its local community.

Leading in sustainability

Leading in environmental and social sustainability

has long been a priority for the Group. We are

committed to the safety of our customers, our

employees and all third parties in contact with our

businesses. We are investing in decarbonisation,

enhancing our operations and driving modal shift

to reduce our environmental impact and support

growth and prosperity across the UK. During

FY 2025, we have again been recognised for

our achievements and progress to date, including

our inclusion in the most recent S&P Sustainability

Yearbook and Clean200 report as well as receiving

MSCI’s highest possible ESG rating of AAA. We

are also very pleased to have just been ranked

among Corporate Knights’ Europe 50 Most

Sustainable Corporations.

In March, we were pleased to publish our first

Climate Transition Plan, marking another important

step in our sustainability journey. It sets out our

comprehensive strategy to meaningfully reduce

emissions, manage climate-related risks, drive

modal shift and contribute to social and economic

growth in the communities we serve.

Building a diverse, quality and

sustainable earnings base

Our cash-generative businesses and balance

sheet capacity allow us to invest in value-accretive

opportunities to grow and diversify our portfolio,

creating a diverse, quality and sustainable

earnings base that is less affected by changes

in government policy.

In First Bus, we have bolstered our Adjacent

services business to grow our market share

and extend our geographical reach. We have

demonstrated that we have the capability to

successfully integrate new businesses and there

is still considerable scope for us to grow in this

market, specifically in airport services, workplace

shuttles and coach services, which offer stable

earnings with attractive margins. As I mentioned

above, the acquisition of RATP London was

significant for the Group, allowing us to enter

London in a strong position, with anticipated

material earnings contribution in the medium term.

In First Rail, we have made very good progress in

growing our UK open access capacity. We have

acquired track access rights for two new services,

between London and South Wales and between

London and Stirling which will double our current

seat capacity and treble Lumo’s services in two to

three years’ time, creating a national brand. We

have also submitted applications to the ORR for

extensions to our existing services and for new

routes where we have identified there is capacity

and demand. Should these applications be

successful, we will treble our existing capacity.

We have a disciplined capital allocation policy and

a strict set of criteria when assessing investment

opportunities. They must be 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.

A strong cash conversion and

balance sheet enables progressive

shareholder returns

We have reported a year-end adjusted net debt of

£86.9m, having invested c.£88m in decarbonisation

and c.£140m on acquisitions and returned

£126m to shareholders via dividends and our

buyback programmes.

We repurchased the remainder of our 2024 bonds,

extended our £300m Revolving Credit Facility for

five years and agreed a new £150m Term Loan

Facility to fund the continued electrification of our

bus fleet. We also fully discharged our remaining

legacy Greyhound pension obligations.

In light of the Group’s strong performance in FY

2025, the Board has proposed a final dividend of

4.8p per share (FY 2024: 4.0p per share) in line with

the current policy of around three times adjusted

EPS cover ratio. This will result in a dividend

payment of c.£27m, to be paid on 8 August 2025

to shareholders on the register at 4 July 2025. We

have also announced an additional £50m buyback

programme today.

Our positive cash generation and strong balance

sheet allow us to capitalise on opportunities to

grow our business as our industries transition, to

maintain our progressive dividend policy and for

further potential returns to shareholders.

A period of significant change

in UK bus and rail

The rail and bus industries in the UK will see

significant change over the next few years, with the

National Rail Contracts moving to public ownership,

and in the bus sector, a number of regions outside

London planning to adopt the franchising model.

First Rail has been one of the largest operators for

more than 25 years, working successfully with a

wide range of partners and stakeholders under

various contract types and delivering various

significant rail infrastructure projects and fleet

upgrades. Companies such as ours can bring

innovation, enhanced service delivery, private

investment and focus on cost control. Our DfT

TOCs have saved more than £360m for the DfT in

their annual business plans over the last four years.

Hull Trains and Lumo have delivered substantial

economic growth and created jobs in the

communities they serve, grown demand and

contributed to the funding of the rail network.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Chief Executive Officer’s review

continued

Enhancing rail connections is critical to boosting

economic growth in the UK and we believe that,

delivered effectively, rail reform will ensure the

industry can grow passenger numbers, generate

greater revenues and develop the value of rail

in a customer-focused, dynamic and efficient

environment. We believe that any future rail policy

must fully embrace open access. It has been a

hugely successful aspect of the rail industry over

the last 25 years, connecting previously under-

served places and providing additional capacity,

which helps drive more people towards rail and

away from less sustainable forms of transport at no

cost to the tax payer. Services are provided entirely

at the operator’s own commercial risk and bring

private investment into the sector. They create jobs

and over £1bn in economic benefit to the UK, while

driving modal shift to rail over more carbon intense

transport modes such as car or plane.

In bus, we are one of the largest operators in the

UK, carrying more than a million passengers a day.

We are well placed to support the transformation of

the bus sector, leveraging our 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

for young people to support life long bus usage,

improved reliability, enhanced facilities and

accessibility, attracting workers to the sector

and making bus a leading visible indicator in the

green transition.

Well positioned to navigate the

industry transition

Over the last few years we have worked to

transform, grow and diversify our businesses,

including a recently completed corporate

restructuring. Coupled with our strong balance

sheet and leading positions, this leaves us well

placed to navigate the industry transition ahead.

In First Bus we intend to win our fair share of the

regional franchise market, develop our existing

commercial bus business and grow our Adjacent

services 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

new revenue streams in the energy sector.

In First Rail, we are focused on growing our

successful open access business, 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.

Board changes

At our AGM in July 2024, David Martin announced

his intention to retire from the Board. I am grateful

to David for his contribution to the Group and the

strategic progress that he has overseen.

On 1 February 2025, Lena Wilson CBE joined

the Board as Chair. Lena is currently Senior

Independent Director at NatWest Group plc, and

has held senior and Board roles at a number of

listed and private companies. She was also Chief

Executive of Scottish Enterprise from 2009 to 2017

and prior to that a Senior Investment Adviser to The

World Bank in Washington DC. We are delighted

that Lena has joined the Group and there is no

doubt that we will benefit from her substantial

experience in both the public and private sectors.

Outlook

We have entered FY 2026 with a stronger and

more diversified earnings base and expect to at

least maintain our adjusted EPS, with a lower

contribution from the DfT TOCs offset by further

profit growth in First Bus and lower corporate

costs, aided by at least £15m of annualised

cost savings as a result of the restructuring of

our businesses.

In First Bus, we are restructuring the business to

ensure we remain a strong and agile business as

we respond to changes in the UK bus market.

We anticipate further progress during FY 2026,

with incremental yield, network and operational

efficiencies, the contribution of the businesses

acquired in the last two years and cost savings

resulting from the restructuring of the business

offsetting continued inflationary pressures and

the anticipated c.£15m impact of the increase in

employers’ National Insurance contributions. We

anticipate revenue of c.£1.4bn from First Bus in FY

2026, including c.£300m from First Bus London.

In First Rail, we anticipate lower adjusted revenue

and adjusted operating profit, reflecting the transfer

of SWR to public ownership, a normalised level of

DfT TOC variable fees and mobilisation costs in our

new open access operations, offset by continued

growth in our current open access operations.

The Government’s announced policy is to bring

the National Rail Contracts into public ownership

at the earliest possible opportunity, with SWR

transferring on 25 May 2025, c2c on 20 July

and Greater Anglia on 12 October 2025, with

subsequent contracts transferring at intervals of

approximately three months in the order that their

current core contractual terms expire.

As the contracts transition, we anticipate a cash

inflow of c.£120m from the DfT TOCs, after any

reorganisation cash costs the Group may incur,

over a three-year period from April 2025 with cash

received from the management fees a year in

arrears. The increase in the anticipated cash inflow

to the Group has primarily been driven by higher

variable fees in FY 2025 combined with GWR now

expected to transition in FY 2027. This cash receipt

includes the earnings from the division’s Additional

services businesses which are expected to

continue supporting the DfT TOCs for a year or

more after the National Rail Contracts end. First

Rail continues to support Trans Pennine Trains in a

number of areas two years after the transition of the

National Rail Contract.

In First Bus, positive free cash flow is anticipated

after net cash capital expenditure of c.£150m,

mainly on decarbonisation.

Looking further ahead, we anticipate that our First

Bus and our First Rail open access businesses will

continue to grow from their existing strong bases.

We also expect them to be more cash generative

following a period of significant investment in

the First Bus fleet and open access rail being

capital light, with rolling stock funded through

operating leases for the duration of the track

access agreements.

Conclusion

In FY 2025 we have successfully executed our

strategy, further strengthened our businesses and

grown and diversified our portfolio despite high

inflation and the impact of public policy changes.

Our strong performance is testament to the

expertise and efforts of our people and I am very

grateful to all our teams for their continued hard

work to ensure we provide the best possible

services for our customers and stakeholders.

Looking ahead, for some time now we have been

working to restructure our businesses and cost

base ahead of a period of major transition for the

Group. We are confident we will at least maintain

our adjusted EPS in FY 2026, from a stronger, more

diverse earnings base, with scope for material

earnings growth in the medium term as we grow

revenues in First Bus and open access rail.

As a leading, highly experienced and innovative

public transport operator we are well placed to

participate in future opportunities in UK bus and rail

and to continue our significant investment in growth

and decarbonisation. We recognise that we have a

critical role to play in the delivery of the country’s

wider economic, social and environmental goals,

and will continue to take a proactive approach,

demonstrating our strengths as a trusted,

experienced partner for the delivery of public

transport services.

Graham Sutherland

Chief Executive Officer

10 June 2025

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Chief Executive Officer’s review

continued

FY 2025 highlights

FY 2026 objectives

Case study

Deliver day in,

day out

Deliver a consistently safe and

reliable customer experience

Win/extend key contracts in

Bus and Rail

Pricing strategies to enhance

customer value, drive demand

and improve yield

Operational excellence to improve

customer experience, reliability

and cost efficiency

Delivering and innovating for

our customers and partners

We deliver vital services for our partners

and communities and our focus remains on

operational excellence across our businesses

to drive value, provide consistently safe and

reliable services and the best possible

customer experience.

In First Bus, we continue to drive operational,

cost and network efficiencies, evolve our pricing

strategy to enhance customer value, drive

demand and improve yield, and progress the

decarbonisation of our fleet and infrastructure.

In First Rail, we are building on the success

of our open access operations, to connect

under-served communities, support UK

manufacturing, local employment and economic

growth. We will also scale our Additional

services businesses, bringing experience,

expertise and benefits to the sector.



First Bus adjusted operating margin of 10%

in H2 2025 (excluding London)



First Rail DfT TOCs FY 2025 variable fees

ahead of forecast



Group adjusted EPS up 16% year-on-year



Cash generated from operations in FY 2025

increased by 44%, to £207.4m

First Bus brand

refresh – a major

milestone in our

transformation journey

In December 2024, First Bus launched a

refreshed brand alongside a new campaign,

‘Moving the everyday’, highlighting the integral

role buses play in connecting people to their

local communities. The launch was the

culmination of extensive planning and hard

work from teams across the business and

incorporates feedback from First Bus’s

customers and employees. It represents a key

milestone in the transformation of First Bus,

reinforcing its focus on its customers and

people with a clear, consistent brand that

is easier to recognise and engage with.



Further progress in First Bus driven by

incremental yield, network and operational

efficiencies and contribution of new businesses



Continued revenue and profit growth in

First Rail open access operations



To at least maintain Group adjusted EPS

in FY 2026, off a stronger, more diverse

earnings base



Deliver anticipated annualised cost savings

of c.£5m following corporate restructuring from

H2 2026

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Progress on our strategic pillars

FY 2025 highlights

FY 2026 objectives

Case study

Drive modal shift

Drive a step change from car

and air travel to bus and rail

Grow First Rail open access to

stimulate demand and provide

increased connectivity

Focus the First Bus customer

proposition to increase usage

Increase First Bus Adjacent

services where the car is becoming

less attractive

Growing demand for bus and rail

Driving modal shift from car and air travel to

bus and train is not only a key driver of our

commercial success, but also crucial for

reducing congestion, lowering emissions and

improving air quality. To encourage modal shift,

we are enhancing and expanding our portfolio,

evolving our bidding capability and working

closely with local authorities and communities

to develop tailored solutions that meet the

specific transport needs of different regions.

In First Bus, we have refocused our customer

proposition to stimulate demand and increase

usage and are growing our Adjacent

services business.

In First Rail, we are focused on increasing

capacity in our open access operations

and identifying new routes and markets

with capacity and demand.



First Bus underlying passenger revenue up 7%

and passenger volumes up 2% vs FY 2024



First Bus brand refresh focused on an

enhanced customer proposition



Hull Trains and Lumo revenue up 7%

vs FY 2024 with passenger volumes up 9%



Open access rail applications submitted to

ORR which, if successful, would significantly

increase our capacity

Driving modal shift

through our open

access rail offering

By making rail services accessible, reliable,

affordable and attractive to passengers, we

are at the forefront of driving modal shift.

The increased economic activity and the

creation of new business opportunities along

transport routes demonstrates the added

benefits that open access operations bring

to local communities. During FY 2025, we

have continued to build on the success of

our two open access operations, Hull Trains

and Lumo. As well as adding capacity and

growing demand in our existing operations,

we have acquired and applied for new and

complementary routes where there is proven

demand. This has included the acquisition of

track access rights for two new open access

rail services, from London to Stirling and from

London to South Wales, which will more than

double our existing capacity and establish

Lumo as a national brand.



Extend and win new contracts in First Bus

Adjacent services



Continue to enhance and grow capacity

in First Rail open access operations



Make use of our expertise and data tools to

deliver reliable and value-for-money services

to grow demand



Identify new contract opportunities

in bus and rail to grow our businesses

and passenger volumes

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Progress on our strategic pillars

continued

FY 2025 highlights

FY 2026 objectives

Case study

Lead in

environmental and

social sustainability

Deliver our decarbonisation

commitments

Continue the First Bus fleet and

infrastructure decarbonisation and

build out adjacent electrification

opportunities

Support prosperity, growth and

green jobs in the communities

we serve

Contribute to an economy-wide

climate transition through modal

shift to bus and rail travel

A leader in sustainability

Our ambition is to be the partner of choice for

innovative and sustainable transport and we

have a comprehensive strategy to meaningfully

reduce emissions, drive modal shift and

contribute to growth and prosperity in the

communities we serve.

In First Bus, we are a leader in decarbonisation

and are making good progress towards our

commitment of a zero emissions commercial

bus fleet by 2035. We are also sharing our

expertise and capabilities and were the first UK

bus operator to offer access to electric vehicle

charging infrastructure to external organisations

and operators.

In First Rail, our open access operations are

lowering emissions, stimulating demand and

supporting growth and job opportunities in

our communities and in UK manufacturing.



First Bus has over 1,000 electric buses,

c.20% of the fleet and three fully electrified

depots and a further ten substantially

electrified depots outside London



£500m order placed for new fleet of UK

manufactured Hitachi electric, battery electric

or bi-mode trains to facilitate growth in our

open access operations



We have onboarded over 1,000 suppliers to

our new supplier platform to monitor ESG risks



FirstGroup upgraded to MSCI’s highest

possible ESG ranking of AAA



The Group’s first Climate Transition Plan was

published in March 2025

Introducing

our Climate

Transition Plan

As a leading transport operator carrying

millions of passengers a day, we have a critical

role to play in the climate transition. Investing

in decarbonisation, enhancing our operations

and driving modal shift reduces our

environmental impact and supports growth

and prosperity in the communities we serve; it

is also a key driver of our commercial success.

The publication of our first Climate Transition

Plan was an important step in our sustainability

journey. It sets out our comprehensive strategy

to meaningfully reduce emissions, manage

climate-related risks, drive modal shift and

contribute to growth and prosperity in the

communities we serve.



Maintain our trajectory towards our 2035 zero

emission commercial bus fleet in First Bus



Leverage our leading sustainability credentials

and expertise when bidding for new contracts

in both divisions



Foster and maintain strong relationships with

our stakeholders, communities and charitable

partners, demonstrating the social, economic

and environmental benefits our services

can deliver



Continue to develop and progress new and

diverse talent through our apprenticeship,

recruitment and retention schemes

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Progress on our strategic pillars

continued

FY 2025 highlights

FY 2026 objectives

Case study

Diversify

our portfolio

Invest to grow and diversify our

portfolio and ensure our business

is resilient

Grow the First Rail open access

portfolio and scale the affiliate

businesses

Continue to grow our First Bus

Adjacent services portfolio and

geographical footprint

Actively pursue bus franchise

and partnership opportunities

Positioning the business for long-

term growth and value creation

We are investing to grow and diversify

our revenue streams to create material,

sustainable value.

In First Bus, we have entered the London bus

market at scale, with a strong medium-term

earnings growth profile. We are also actively

pursuing attractive opportunities in Adjacent

services, franchising and partnerships.

In First Rail, we are growing our open access

businesses by adding capacity, acquiring

access rights for new services and applying for

new routes where we can connect under-served

communities and add value for our stakeholders.

We are also looking to scale our Additional

services offerings, including marketing them

to other industry participants and evaluating

further rail contract opportunities.



Acquisition of RATP London to enter London

at scale as the market recovers



First Bus Adjacent services revenue grew

by 23% vs FY 2024



First Rail successfully took over the operation

of the London Cable Car in June 2024



Acquisition of track access rights for two new

open access rail services between London and

Stirling and London and South Wales to double

existing capacity and establish Lumo as a

national brand

Entering the

London bus

market at scale

In February 2025, we completed the acquisition

of RATP London, a well-established business

with a c.12% market share and a strong

operational footprint in West and Central

London. Now First Bus London, the business

has ten depots, c.1,000 buses, more than a

third of which are fully electric, and c.3,700

employees. This was a significant acquisition

for the Group that has seen us enter London

at scale as the market recovers. It will also

transform First Bus, allowing us to diversify

and materially grow our earnings in the

medium term and will bolster our credentials

as we participate in future franchising

opportunities across the UK.



Actively participate in regional bus franchising

and other rail contract opportunities to enter

new markets



Grow our share of the bus and coach Adjacent

services market



Commence the mobilisation of our new open

access services between London and Stirling

and London and South Wales



Continue to evaluate strong pipeline of

complementary, value-accretive growth

opportunities to further build and grow our

earnings base

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Progress on our strategic pillars

continued

Group adjusted revenue

(£m)

Continuing operations

£1,370.0m

2025

1,370.0

2024

2023

2022

2021

1,279.6

1,122.5

955.4

840.4

First Bus

OA/Other Rail

DfT TOCs

Description

Group adjusted revenue reflects

the overall size and health of the

business driven by passenger

volumes, contract income and DfT

TOC management and variable fees.

Performance

Adjusted revenue from continuing

operations increased to £1,370.0m

(FY 2023: £1,279.6m). Strong

performance in First Bus from

volume growth, increased yield

acquisitions. First Rail continued to

grow open access operations and

Other Rail Services revenue and

maintained a high level of TOC

performance fees. The prior year

included an extra week of trading

in FY 2024 at First Bus.

Group adjusted operating

profit (£m)

Continuing operations

REM

£222.8m

2025

222.8

2024

2023

2022

2021

204.3

161.0

106.7

112.2

Description

Group adjusted operating profit is

a measure of our ability to extract

value from our revenue and

manage costs.

Performance

Adjusted operating profit from

continuing operations was £222.8m

(FY 2024: £204.3m). First Bus

benefited from increased passenger

volumes, further data-led operational

and commercial improvements and

improved driver availability, which

more than offset ongoing inflationary

pressures and lower funding levels.

In First Rail, open access operations

performed strongly and the DfT

TOCs’ financial performance was

ahead of expectations owing to

higher than accrued final variable

fee awards.

Adjusted EPS (pence)

Continuing operations

REM

19.4p

2025

19.4

2024

2023

2022

2021

16.7

11.6

1.6

(2.8)

Description

Adjusted EPS summarises the

overall financial performance of

the Group and profit attributable

to shareholders.

Performance

Adjusted EPS for the continuing

business increased from 16.7p to

19.4p, due to strong growth in First

Bus and First Rail open access EBIT,

and the higher than anticipated

variable fee in the DfT TOCs.

Free cash flow (£m)

Continuing operations

REM

£113.5m

2025

113.5

2024

2023

2022

2021

53.9

80.5

17.8

52.3

Description

The level of free cash flow influences

our ability to invest and finance

the business.

Performance

The Group’s free cash flow for FY

2025 more than doubled to £113.5m

included growing pre-IFRS 16 EBITDA

in First Bus and First Rail open access,

and higher working capital cash

inflows offset by capital expenditure

invested in decarbonisation of the

First Bus fleet.

Financial KPIs

The Group and our divisions

focus on a range of financial

and non-financial KPIs linked

to our four strategic pillars

to measure progress and

evaluate performance

over time.

We have indicated below each KPI

which strategic pillar or pillars it is

linked to. In many cases, there is a

link to more than one of the strategic

pillars. KPIs used in the calculation

of variable remuneration in FY 2025

are marked

REM

Read more on page 91

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.

Adjusted operating profit is shown before

net adjusting items.

Adjusted EPS is shown before net adjusting

items, excludes IFRS 16 impacts in First Rail

management fee operations and uses the

weighted average number of shares in

the period.

Free cash flow is the movement in adjusted

net debt excluding proceeds from business

disposals and cash outflow from dividends,

share buybacks and business acquisitions.

Adjusted net debt excludes ring-fenced cash

and IFRS 16 lease liabilities.

Key to our strategic pillars

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social sustainability

Diversify

our portfolio

Link to strategic pillars

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Key performance indicators

Scope 1&2 emissions

(tCO

REM

704,655

tCO

2025

704,655

2024

2023

2022

2021

695,213

684,633

739,650

704,365

Description

Measures the success of our actions

to combat climate change and

improve local air quality by delivering

low and zero emission mobility

solutions and infrastructure for

our customers and communities.

Performance

During FY 2025, we have continued

to drive carbon efficiencies across

our operations, progressing towards

our science-based targets, to reduce

Scope 1 and 2 greenhouse gas

(GHG) emissions by 63% by FY

2035. Changes in carbon emissions

over the past year were partly due to

an increase in traction electricity

consumption.

Carbon intensity

(tCO

e/£m revenue)

REM

149

tCO

e/£m

2025

149

2024

2023

2022

2021

159

169

185

Description

Normalised measure of our Scope 1,

2, 3 (limited) and out-of-scope

emissions, calculated as tonnes of

carbon dioxide equivalent per £m of

revenue. Also linked to the Group’s

revolving credit facility.

Performance

Carbon intensity per £m revenue

has improved due to strong revenue

performance and ongoing

decarbonisation efforts across the

Group, indicating a de-coupling of

GHG emissions from business growth.

Responsible business KPIs

Link to strategic pillars

First Bus total operated

mileage (%)

98.2%

2025

98.2

2024

2023

2022

2021

98.6

96.3

96.7

99.2

50%

60%

70%

80%

90%

100%

Description

This measures bus miles operated

as a percentage of timetabled bus

miles. It is an important indicator

of service to customers and

contract fulfilment.

Performance

There has been an improvement in

performance in FY 2024 driven by

improved driver availability and the

successful implementation of

efficiency measures.

First Rail Public Performance

Measure (PPM) (%)

83.5

79.9

76.7

83.2

66.3

85.2

South Western Railway

Hull Trains

Lumo

Great Western Railway

Avanti West Coast

UK average

Description

This measures the percentage of

passenger trains punctual at final

destination

by financial period and

moving annual average (MAA).

Punctual is defined as arriving at the

final destination within five minutes

of the planned timetable for London

and South East, Regional and

Scottish operators, or within ten

minutes for long-distance operators.

1 Source: Network Rail.

Operational performance KPIs

Link to strategic pillars

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Key performance indicators

continued

Employee lost time injury

rate (per 1,000 employees)

9.60

2025

9.60

2024

2023

2022

2021

9.81

8.79

9.70

7.68

Description

Measures the number of lost

time injuries per 1,000 employees

per year.

Performance

There was a decrease in the lost time

injury rate (LTIR) compared to the

previous FY. The Group continues to

implement several initiatives to

improve this rate focused on raising

awareness, educating employees,

and utilising technology to ensure a

smooth journey.

Passenger injury rate

(per million journeys)

4.77

2025

4.77

2024

2023

2022

2021

4.64

4.62

4.88

4.99

Description

Measures the number of injuries

per million journeys per year.

Historical data is restated annually

to incorporate the most accurate

information for the last 36 months.

Performance

There was a slight increase in

passenger injuries in FY 2025.

The main cause for the increase

are the number of slips, trips, and

falls in both divisions. The Group’s

safety plans are concentrating on

these areas to reduce risks and

maintain a safe environment for

all passengers. Emphasising

customer-centricity remains a

priority for both divisions.

Responsible business KPIs

continued

Link to strategic pillars

Zero emission buses

(% of fleet)

REM

20.5%

of bus fleet

2025

20.5

2024

2023

2022

2021

13.0

6.0

3.3

1.1

Description

Indicates the speed of investment

in decarbonising our bus fleet.

Also linked to the Group’s revolving

credit facility.

Performance

The number of zero emission buses

in our fleet continues to increase in

line with our ambition to achieve a

100% zero emission bus fleet

by 2035.

Social value – community

investment (£m)

£1.3m

2025

1.3

2024

2023

2022

2021

1.4

0.62

1.58

1.32

Cash

Gift-in-kind

Time

Leverage

Description

Measures the Group’s contribution

to local communities using the

London Benchmarking Group (LBG)

model which tracks direct cash

contributions, employee volunteering

time, in-kind support, and leverage

including employee, customer and

supplier contributions.

Performance

This year we contributed over

£1.3 million to the communities we

serve. Our three divisional charity

partners, Railway Children, Macmillan

and Samaritans are supported

through gift-in-kind advertising

spaces and other donations, and

other community-based charities

are supported via employee

matchfunding, volunteering,

payroll giving and other donations.

Link to strategic pillars

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Key performance indicators

continued

Our focus remains on the

everyday basics, delivering

incremental performance

improvements to deliver the

best possible services for

our customers, drive growth

and ensure we are in a strong

position to participate in future

opportunities.”

Janette Bell

Managing Director, First Bus

First

Bus

First Bus revenue increased to £1,081.5m in

FY 2025 compared with £1,012.2m in FY 2024,

which had an extra week of trading and included

the operation of the Oldham depot in Manchester.

Total passenger revenue grew to £785.6m

(FY 2024: £769.1m), with regional revenue per

mile up by 4%.

Our adjusted operating profit increased to £96.0m

in FY 2025 compared with £83.6m in FY 2024

which included c.£1.4m from the extra week of

trading. In H2 2025 we delivered our targeted

adjusted operating margin of 10.0%, with a margin

of 8.9% for the full year, excluding First Bus London

(FY 2024: 8.3%). This reflects the delivery of further

operational improvements, network and cost

efficiencies, increased driver numbers, our newer

electric fleet and the contribution of recently

acquired businesses, which offset ongoing

inflationary pressures and a £17m reduction

in funding.

Revenue from Adjacent services has also grown, to

£270.8m from £219.8m in FY 2024 thanks to further

contract wins and extensions and the contribution

of the businesses we acquired in FY 2024 and

FY 2025.

We successfully managed the transition from the

£2 fare cap to £3 in England in January 2025,

introducing a new fare structure, making use of

our ‘Tap On, Tap Off’ technology that allows us

to introduce simple, distance-based fares. The

resulting yield increases outpaced a slight decline

in passenger volumes in H2 2025. For the full year,

excluding the extra week in FY 2024, passenger

volumes increased by c.2%, with concessionary

volumes up 4% and commercial volumes flat

versus the prior year.

The free travel for under-22s scheme in Scotland

and the £2, and subsequent £3 fare cap in England

continued to support demand during FY 2025.

Under the Scottish Government’s under-22s

scheme, operators are reimbursed a proportion

of the cost of a full adult fare. Under the £3 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 £3 fare for journeys that would

otherwise have cost more.

FY 2025

£m

FY 2024

£m

Change

Revenue

1,081.5

1,012.2

+69.3

Adjusted operating profit

96.0

83.6

+12.4

Adjusted operating margin

8.9%

8.3%

+60bps

EBITDA

160.1

148.1

+12.0

Adjacent services revenue

270.8

219.8

+51.0

Passenger volumes (m)

412.0

424.4

(12.4)

Regional revenue per mile (£)

5.58

5.38

+0.20

Net operating assets

813.3

580.2

+233.1

Net capital expenditure

88.2

129.4

(41.2)

Return on Capital Employed

11.1%

11.5%

(40)bps

Return on capital employed is a measure of capital efficiency and is calculated by dividing adjusted operating profit after tax by

average year-end assets and liabilities excluding debt items.

Key developments



10.0% adjusted operating profit margin

delivered in H2 2025 and 8.9% for the full

year, excluding London (FY 2024: 8.3%) due

to further data-led operational and yield

improvements, cost efficiencies, and improved

driver availability offsetting inflationary

pressures and lower funding



Underlying passenger volumes (excluding

extra week in FY 2024) increased c.2% vs.

FY 2024



1.13m passenger journeys a day (FY 2024: 1.14m)



Total revenue of £1,081.5m (FY

2024: £1,012.2m) despite a c.£17m reduction in

funding; underlying passenger revenue growth

of 7% vs. FY 2024



Adjacent services revenue increased to £270.8m

(FY 2024: £219.8m) resulting from contract

wins and extensions and the contribution of

businesses acquired in FY 2024 and FY 2025



Acquisition of RATP London completed in

February 2025 sees First Bus enter the London

bus market at scale with anticipated material

medium-term earnings growth; the business

now named First Bus London, contributed

£23.2m revenue and £0.6m adjusted operating

profit contribution in March 2025



Adjacent services portfolio bolstered by

acquisitions of Anderson Travel, Lakeside

Coaches and Matthews Coach Hire,

and Flixbus contract, with anticipated

combined annual revenues of c.£37.2m



Actively participating in upcoming regional

franchising opportunities in England



Continued progress in electrification:



Group net investment of £88m in FY 2025 in

First Bus, mostly on electrification, alongside

ZEBRA co-funding of £22m, and an

additional c.£20m of ZEBRA 2 funding

awarded in March 2025



c.1,115 electric buses (c.20% of our fleet)

in operation including in London at end of

March 2025; we now have three fully electric

depots and ten further depots substantially

electrified outside London



39 diesel to electric ‘repowers’ ordered

in FY 2025 following successful trials



third party charging underway at multiple

depots outside London with new contracts

signed, including with Centrica and a

number of eHGV operators



continued focus on energy cost efficiencies,

including vehicle smart charging and

investment in depot energy management

systems and controls

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Business review

In February 2025 the Welsh Government announced

plans for a year-long pilot scheme offering £1 single

bus fares and £3 day tickets to under-22s in Wales

from September and earlier this month we were very

pleased to welcome the Chancellor of the Exchequer

to our Huddersfield bus depot as she unveiled

details of £15.6bn in funding for local transport

projects across England’s city regions. We welcome

this investment by government and it is good to see

that buses are put at the forefront of these projects.

We very much welcome government funding in

critical areas and in key demographics, including in

air quality, modal shift and economic growth. We are

seeing some evidence in Scotland that young people

continue to use the bus when they turn 23,

reinforcing our support for young person funding

schemes to encourage life long bus use.

Our post-tax return on capital employed decreased

to 11.1% during the period (FY 2024: 11.5%). This

reflects the growth in adjusted operating profit

offset by growth investments, and the continued

accelerated investment in the electrification of our

fleet and infrastructure which, thanks to lower

operating costs and potential adjacent revenue

streams resulting from electrification, is anticipated

to increase future profitability

Focus on continued

operational improvement

Our focus remains on the everyday basics, delivering

incremental performance improvements to deliver

the best possible services for our customers, drive

further revenue growth and ensure we are in a strong

position to participate in future franchise and

commercial opportunities. We remain committed to

the safety of our customers, employees and all third

parties in contact with our business. In FY 2025, we

launched an internal programme, ‘Everyday Actions’

to drive these improvements. We also continue to

make use of our industry-leading data and software

tools to improve our service delivery, align services

to demand, implement smarter fares and drive

operational and cost efficiencies throughout

the business.

To manage the transition to the £3 fare cap and

the increased employer’s National Insurance

contributions from 1 April 2025, alongside the new

fare structure we introduced in H2 2025, we have

delivered further network efficiencies, working with

our local authority partners to ensure there is the

necessary coverage for local communities.

Thanks to our continued efforts and investment in

our recruitment and employee programmes, we have

recruited over 100 more drivers during FY 2025. We

are also benefiting from our newer electric fleet, with

an average fleet age in FY 2025 of 8.8 years, down

from 10.1 years in FY 2022 and 9.0 years in FY 2024.

A highlight of the year has been the launch of a

ground-breaking new learning agreement with our

trade union partner, Unite the Union. It includes six

new learning centre hubs, 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. Colleagues will have

access to both vocational and non-vocational

modules, alongside support from a trained and

full-time Trade Union Learning Representative. We

are 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.

Industry-wide inflationary pressures continued

during FY 2025. Costs increased due to inflation

by c.3.5%, mostly 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; this was offset by pricing

changes of c.£41m and network and operational

efficiencies of c.£10m. In line with our focus on

staggered, multi-year pay award settlements, c.16%

of our driver pay awards for FY 2026 were previously

agreed, at an average increase of c.3%, and we

have commenced negotiations for pay awards due in

FY 2026.

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.

A refreshed, unified brand marks

a major milestone in our

transformation journey

Over the last few years, we have transformed our

operational and financial performance and grown

our business both organically and inorganically. In

December 2024, following extensive planning and

incorporating feedback from our customers and

employees, we launched a refreshed First Bus

brand. This is yet another important milestone in our

transformation journey and reinforces our focus on

our customers, with a clear, consistent brand that is

easier to recognise and engage with. Alongside the

brand refresh we launched a campaign ‘Moving the

everyday’, to inspire people to switch from cars to

buses, highlighting the role buses play in unlocking

environmental, social, economic and health benefits.

In addition to the rebrand, we have launched a major

digital transformation programme to improve and

streamline a number of our processes and functions.

This includes the introduction of new systems in HR,

payroll and back office services, new ticket

machines and further improvements to our

customer app.

Entering the London bus market

at scale

At the end of February 2025, we completed the

£90m acquisition of RATP London and created First

Bus London. This was a significant acquisition for

First Bus and has allowed us to enter London with a

c.12% market share and strong operational footprint

as the market recovers, with anticipated material

earnings growth in the medium term. It will also

bolster our credentials when bidding in future

franchise opportunities.

With ten depots in West and Central London, c.3,700

employees and a fleet of around 1,000 buses, the

business, now named First Bus London, contributed

revenue of £23.2m and adjusted operating profit of

£0.6m in March 2025 and the integration of the

business has progressed well. As the route contracts

evolve over the next five years, we anticipate annual

revenues of £300-350m, with operating margins in

line with historical London levels of 6-7%.

A £38m onerous contract provision (‘OCP’) was

recognised on acquisition, covering c.50 contracts

of the total of c.90 TfL route contracts. The OCP is

expected to unwind over the coming five years as

these previously loss-making contracts are replaced

by new contracts that reflect the current higher costs

of contract delivery given the structural shift that

occurred in the cost base, mainly driver wages, as

London recovered from the impact of Covid-19. The

Group anticipates funding of c.£10m over the next

two years to cover the anticipated losses and capital

expenditure before the business is cash positive

from FY 2027 onwards. This does not include vehicle

capital expenditure, where we are evaluating the

optimal capital structure going forward.

We are very pleased to welcome RATP London’s

employees to First Bus to continue the delivery of

the proven turnaround plan.

Growing our Adjacent services

portfolio and operational footprint

In FY 2025 we have continued to grow our Adjacent

services business, through new contract wins

and extensions and the targeted acquisitions of

complementary, value-accretive businesses that

we have successfully integrated into the business.

Our Adjacent services revenues have increased by

23% during the year to £270.8m, thanks to new and

extended contracts in our workplace shuttle services

for a number of high-profile brands as well as a

number of Park & Ride contracts and the

contribution of the businesses we have acquired

in FY 2025 and FY 2024.

As well as growing our coach business and

extending our operational footprint in the UK, we

anticipate that the acquisitions we have made in

Adjacent services over last few years will contribute

combined annual revenues of c.£124m and adjusted

operating profit of c.£17m on a current run rate basis.

In FY 2025 we acquired Anderson Travel, Lakeside

Coaches and Matthews Coach Hire in Ireland, all

well-established, profitable businesses with

attractive margins and excellent growth profiles, for

a total acquisition cost of £31m. We also entered into

a new, five-year contract with FlixBus to operate

eight coach routes across the UK, from May 2025,

spanning from Penzance to Newcastle, out of our

depots in Bath, Bristol, Slough, Taunton, Truro and

Weston-super-Mare as well as in Yorkshire.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Business review

continued

We have built a strong regional footprint and a credible

market position in adjacent services but there is still

considerable scope for us to grow, specifically in

airport services, workplace shuttles and B2B and

B2C coach services. We have a highly experienced

business development team and will continue to

leverage our operational strengths, infrastructure and

decarbonisation credentials to grow our market share

and maximise commercial return through longer-term,

higher-value contracts.

A leader in bus fleet and

infrastructure decarbonisation

We continue to make good progress towards our

target of a zero emission commercial bus fleet by 2035

and remain at the forefront of bus decarbonisation in

the UK. The experience and expertise we have built

over the last few years places us in a strong position

when bidding for new contracts and we are also able

to share our learnings, including through our monthly

sessions for local authorities and other partners and

operators to learn about decarbonisation.

Our progress has been underpinned by our

accelerated investment in decarbonisation, alongside

available government co-funding. During the year, we

continued to secure advance power connections

to our sites, to install charging infrastructure and

purchase electric vehicles. We invested net capital

expenditure of c.£88m in First Bus in FY 2025, mostly

on electrification with £22m secured from the UK

Government’s ZEBRA co-funding scheme. In March

2025, we worked successfully with our local authority

partners to secure an additional £20m of ZEBRA 2

funding that had not yet been utilised. In addition to

adding more chargers and vehicles to existing

electrified depots, we introduced electric buses and

infrastructure in Taunton, Basildon, Weston-super-

Mare and Bristol. Later in 2025, our Bristol Hengrove

depot will be fully electric, a fantastic change for our

customers and colleagues in the city.

At the end of March 2025 we had c.1,115 zero emission

buses, c.20% of our fleet, including in London, and

outside London we now have three fully electrified and

ten substantially electrified depots and electrification

underway at a further five depots. We have more than

900 charging outlets at our depots outside London

and have secured further third-party charging

contracts during FY 2025, including with Centrica and

a number of eHGV operators. RATP London was an

early mover in electrification in the London market. At

the end of March 2025, c.35% of the First Bus London

fleet was electric, with charging infrastructure installed

at five of ten depots.

Following successful trials, in FY 2025 we placed an

order for 39 ‘repowers’ with NewPower, a new entity

launched by UK manufacturer Wrightbus. These are

mid-life diesel or hybrid buses that have been

converted to run entirely on electricity. Alongside the

benefits of electric buses such as reduced emissions

and lower operating costs, repowered vehicles are

cheaper than new electric buses, can extend the

lifespan of buses and avoid the emissions of

manufacturing new vehicles, representing an

important, incremental component of our

decarbonisation strategy.

Our strategic partner Hitachi Zero Carbon has made

further progress in FY 2025. This has included

agreements to pilot its ZeroCarbon Battery Manager

with Italian bus operator AMT Genoa to maximise fleet

energy and battery efficiency, and with Indian bus

manufacturer JBM Group to deploy the solution on

their electric buses to enhance performance, extend

battery life and maximise residual value.

The electrification of our fleet and infrastructure is a

key component in the transformation of our business.

It will allow us to standardise and reduce the size of

our commercial fleet to drive efficiency and lower

engineering costs whilst delivering the same mileage.

Furthermore, by making use of smart charging

software and, where possible, charging our vehicles

when electricity prices are lower, we can optimise our

energy use, increase battery efficiency and potentially

extend battery life. Looking further ahead, in addition

to the revenues generated from third party charging at

our depots, we are well positioned to benefit from

other potential value-accretive, adjacent electrification

revenue streams. This includes capacity market

trading, on-site battery storage, opportunities on

residual battery capacity and efficient battery

recycling post commercial use through our joint

venture with Hitachi Zero Carbon.

Well positioned to participate

in franchising and partnership

opportunities

The regional bus market will see considerable change

over the next few years, as a number of Mayoral

Authorities outside London choose franchising as their

preferred future option for bus delivery. This includes

some areas where we currently operate, and others

where we do not, representing an opportunity for us to

enter new markets.

As a leading, highly experienced operator with a large,

well-capitalised fleet and depot footprint we are well

positioned, and will actively take part in franchising

opportunities as they commence. These include in

Liverpool City Region, the West Midlands, West

Yorkshire, Cambridge and Peterborough and South

Yorkshire where locally Mayoral Authorities are

progressing with schemes planned to commence in

the next two to three years.

We also have good experience operating under the

enhanced partnership model and have seen the great

benefits these partnerships can deliver. In Leicester

and Portsmouth, for example, investments of c.£100m

and £76m respectively in their enhanced partnerships

between 2022 and 2025 have resulted in passenger

growth of 26% and 41% respectively since the start of

the period.

Our mission is to drive modal shift and encourage

more people to use the bus, and 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. 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.

Looking ahead

We are restructuring our business to ensure we remain

a strong and agile business as we respond to changes

in the UK bus market. We anticipate further progress

in First Bus during FY 2026, with further yield, network

and operational efficiencies, the contribution of our

recently acquired businesses and cost savings

resulting from the restructuring of the business

offsetting continued inflationary pressures and the

anticipated c.£15m impact of the increase in

employers’ National Insurance contributions. We

anticipate revenue of c.£1.4bn in FY 2026, including

c.£300m from First Bus London.

We expect net cash capital expenditure of c.£150m

in FY 2026, including £20m for accelerated investment

in electric buses supported by additional ZEBRA 2

funding, £40m for property and electrification

infrastructure projects and c.£10-12m to fund

London cash losses before the release of onerous

contract provisions.

Looking further ahead, we are well placed to navigate

the market transition and to grow and diversify our

portfolio and steadily grow our earnings, including

from the contribution of First Bus London as the

contract portfolio evolves. We intend to win our fair

share of the franchise market, develop our existing

commercial bus business, grow our Adjacent services

earnings and market share, and 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.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Business review

continued

As the UK rail industry

transitions 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.”

Steve Montgomery

Managing Director, First Rail

The First Rail division reported total adjusted

revenue of £288.8m for FY 2025 (FY 2024: £267.8m)

reflecting higher variable fees in the DfT TOCs and

further growth in open access and Additional

services, including the contribution of the London

Cable Car.

The division’s two open access operations, Hull

Trains and Lumo, delivered revenue of £106.4m in

FY 2025, up from £99.8m in FY 2024 and adjusted

operating profit of £34.1m (FY 2024: £30.0m).

This was driven by strong demand, effective yield

management, additional ten-car services on

Hull Trains and continued high levels of customer

satisfaction, partially offset by slightly higher costs.

Our DfT TOCs operate under National Rail

Contracts (‘NRCs’), where 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. The DfT TOCs reported adjusted

revenue of £71.7m in FY 2025 (FY 2024: £69.8m)

and adjusted operating profit of £107.3m (FY

2024: £105.6m). As previously reported, FY 2025

income includes non-recurring variable fee upside

for the year, higher than forecast, and FY 2024

included c.£13m higher final variable payments for

FY 2023.

Attributable net income from the DfT TOCs – the

Group’s share of the management fee income

available for distribution from the GWR, SWR and

WCP DfT contracts – was £39.0m compared with

£39.5m in FY 2024 which included the final variable

fee payments for FY 2023 mentioned above, as well

as the contribution of TransPennine Express which

the Group operated until 28 May 2023.

In line with the Government’s announced policy

to bring the NRCs into public ownership at the

earliest possible opportunity, the DfT took over

the operation of SWR on 25 May 2025. In FY 2025,

SWR contributed revenue of £1,178m and adjusted

operating profit of £25.2m. The IFRS 16 impact

comprises operating profit benefit of £7.6m and

interest cost of £4.5m. Net attributable fees earned

FY 2025

£m

FY 2024

£m

Change

Adjusted revenue from DfT TOCs

71.7

69.8

+1.9

Revenue from open access and Additional services

217.1

198.0

+19.1

First Rail Adjusted revenue

288.8

267.8

+21.0

Adjusted operating profit from DfT TOCs

107.3

105.6

+1.7

Adjusted operating profit from open access and Additional services

41.5

37.7

+3.8

First Rail adjusted operating profit

148.8

143.3

+5.5

Passenger journeys (m) – open access operations

2.9

2.7

+0.2

‘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; refer to note 5 for further detail.

Includes intra divisional eliminations related to affiliate trading with the open access operations.

Key developments



2.9m open access passenger journeys

in FY 2025 (FY 2024: 2.7m)



Open access revenue increased to £106.4m

(FY 2024: £99.8m) with adjusted operating

profit of £34.1m (FY 2024: £30.0m)



DfT TOCs financial performance ahead of

expectations due to higher than forecast final

variable fees



First Rail successfully took over the operation

of the London Cable Car in June 2024;

anticipated revenues of c.£60m over an

eight-year contract period



Acquisition of track access rights for two new

open access services between London Euston

and Stirling and between London Paddington

and South Wales to double existing seat

capacity in the next two to three years;

anticipated annual revenues of c.£100m with a

double digit operating margin, post mobilisation



Open access applications submitted to Office

of Rail and Road for additional paths on our

current operations, the extension of Hull Trains

to Sheffield and Lumo to Glasgow, a new

Lumo Rochdale-London service and for

additional services on the Carmarthen route,

between London, Paignton and Hereford



Additional services revenues of £110.7m (FY

2024: £98.2m), with operating profit growth in

Mistral Data, First Customer Contact (‘FCC’)

and First Rail Consulting partially offset by

higher business development costs



South Western Railway transitioned to DfT

control on 25 May 2025; First Rail’s Additional

services businesses continue to provide

services to SWR

First

Rail

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Business review

continued

by the Group were £9.2m after the non-controlling

interest of £4.0m. IFRS 16 leases recognised on the

balance sheet at the end of FY 2025 were £23.1m

(FY 2024: £160.5m), and SWR had £88.1m of

ring fenced cash (FY 2024: £30.0m) which is

anticipated to be returned following the handover

of the contract in May 2025.

The Additional services businesses contributed

revenue of £110.7m (FY 2024: £98.2m) and adjusted

operating profit of £7.4m (FY 2024: £7.7m) reflecting

business development costs of £5.7m (FY

2024: £1.7m).

Another strong year in open access

Our two highly successful open access operations,

Hull Trains and Lumo, where we bear all revenue

and cost risk and opportunity, continued to perform

well during FY 2025, with continued very high levels

of customer satisfaction.

Hull Trains has continued to run a ten-car service

at peak demand times (typically a five-car service)

to match demand, resulting in a 12% increase in

passenger revenue in FY 2025 to £48.1m. Seat

capacity utilisation remained at a similar level

to the prior year, at 67% (FY 2024: 69%).

Lumo’s profit is driven predominantly by demand

and effective yield management, whilst still offering

competitive prices. Passenger revenue increased

by 8% in FY 2025, to £54.2m, reflecting better seat

utilisation along all of the route coupled with further

improvement in yields offsetting slightly higher

costs. Seat capacity utilisation rose slightly,

from 75% in FY 2024 to 78% in FY 2025.

Growing our open access capacity

remains a key strategic priority

Growing our open access business is a key focus

for the Group and we are working hard to drive

efficiencies, add capacity and apply for new routes

where we can connect under-served communities,

and support economic growth and employment.

The progress we have made during FY 2025 will

see us at least doubling our existing seat capacity

in the next two to three years and trebling Lumo’s

services, creating a national brand.

We are also committing significant investment to

facilitate a material growth in our open access

capacity, including our recently announced

c.£500m ten-year lease and maintenance

agreements for 14 new five-car class 80X Hitachi

electric, battery or bi-mode trains. The trains will

be manufactured by Hitachi in County Durham,

securing the skills base and jobs in the local area.

The lease agreement also contains an option

for the Group to procure an additional 13 trains

for c.£460m if the applications outlined below

are successful.

At the end of 2024, we acquired track access

rights for two new open access services, between

London Paddington and Carmarthen and between

London Euston and Stirling which will double our

current capacity in two to three years’ time.

The current track access agreement for the Stirling

service runs from May 2025 for a period of five

years and includes four return services a day

between London Euston and Stirling (three on

Sundays), and a fifth return service between Euston

and Preston seven days a week. 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. It will create around

100 direct jobs and 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 have entered into

a rolling stock lease agreement for five Class 222

six-car diesel trains with Eversholt Rail, with a total

seat capacity of c.340 standard class seats per

service. Services are currently expected to

commence mid-2026 following the delivery of

the trains and staff training. Following a c.two-year

mobilisation period we expect an annual revenue

contribution of c.£50m, with a low double digit

adjusted operating margin, pre-IFRS 16.

The new South Wales service includes five

services a day between London Paddington and

Carmarthen, calling at intermediate stations in

England and Wales including Bristol Parkway,

Newport, Severn Tunnel Junction, Cardiff Central,

Gowerton and Llanelli. Passengers can look

forward to low fares with free Wi-Fi and on-board

catering, all offered in one comfortable class of

travel. The service will create around 100 direct

jobs and will create more customer choice and

much-needed additional capacity on the route as

well as providing the first direct service to London

from Severn Tunnel Junction and Gowerton, and a

vastly improved connection from Llanelli. The track

access commences in December 2027 and

following a two-year period of mobilisation the

Group expects the service to contribute annual

revenues of c.£50m, with a double digit operating

margin, pre-IFRS 16.

We have also submitted applications to the ORR

for extensions to our existing services and for new

routes where we have identified there is capacity

and demand. These include a new Lumo service

between London and Rochdale, the extension of

the Lumo service between Glasgow and Edinburgh,

an expansion of the new Lumo Carmarthen

services to Paignton and Hereford, and a new

Hull Trains service between London and Sheffield

via Retford and Worksop. Should these applications

be successful we will treble our existing capacity.

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.

Leveraging our expertise and

capabilities in Additional services

Our First Rail Additional services businesses – FCC,

Mistral Data and First Rail Consultancy, generated

revenues of £110.7m in FY 2025, up from £98.2m in

FY 2024. Adjusted operating profit was lower, at

£7.4m (FY 2024: £7.7m) due to higher business

development costs during the year, of £5.7m

(FY 2024: £1.1m), including the Elizabeth Line bid

and progressing the open access applications.

Our bespoke contact centre FCC provides

customer relations, delay repay services and

fraud prevention and management services to

train operating companies. During FY 2025 FCC

implemented a number of artificial intelligence tools

to further improve its customer handling experience

and continues to support a number of train

operating companies, including Transpennine

Express and SWR.

Our rail operations and commercial software as

a service business, Mistral Data provides a number

of cloud-based tools focused on rail transport

operations, staff messaging, customer

engagement, revenue management, business

intelligence and remote asset management. During

the year, the team has continued to develop new

tools and services, marketing them to UK and

international industry participants. New contracts

have been entered into with Network Rail Wessex,

for the provision of Berth Maps and Sirocco,

Mistral’s real-time train visualisation and decision

support solutions. Our services can enable data

sharing across functions and passengers, as

well as providing a single view of real-time

railway operations for both operators and

infrastructure providers.

This leaves us very well positioned to support the

delivery of effective and cohesive data and tools

across the industry as the operation of rail services

and the management of infrastructure and assets

transfers to Great British Railways.

First Rail Consultancy provides expertise in all

the major facets of transport 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 FY 2025, the team secured

a consultancy contract with its first non-rail client

in an adjacent transport market and continued

to support a wide range of UK rail industry clients,

including West Coast Partnership Development,

as they manage a range of deliverables in the

developing HS2 project.

We believe that as the UK rail industry evolves

the services our businesses provide are well placed

to bring experience, expertise and benefits to the

sector that will continue to be vital to the success

of the industry, and we are looking at ways to

scale them.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Business review

continued

Continued focus on operational

delivery in the DfT TOCs

Alongside our commitment to the safety of our

customers, employees and third parties in contact

with our business, we have continued to leverage

our deep sector experience and expertise to work

collaboratively with the DfT, our industry partners

and stakeholders to add value, innovate and

enhance our service offering.

Avanti West Coast successfully launched its new

Evero all electric class 807 and bi-mode class 805

fleet, offering more services on the London to

Liverpool route. The trains, rolled out as part of a

£350m investment programme, will provide more

seats and more services, and have received good

customer feedback. Earlier this year, Avanti

announced that a third of its new trainee driver

recruits are women, following a very successful,

targeted recruitment campaign. Since the launch

of the campaign in 2023, Avanti has increased the

number of female trainee drivers by nearly 60%.

At GWR, a three-year, £10m refurbishment of Great

Western Railway’s regional and suburban train fleet

was completed, providing an improved journey

experience for customers. GWR also opened the

new Reading West Station and re-opened Ashley

Down, which was part of a c.£300m investment by

the West of England Mayoral Combined Authority,

in partnership with GWR, Network Rail and Bristol

City Council.

GWR also continued its industry-first fast-charge

battery-only train trial during the year, gathering

insights to share with the DfT and wider industry.

The work the team has done to date 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.

At SWR, the team continued the roll out of the new,

£1bn fleet of 90 Arterio trains. At the end of May,

the new trains were serving some of SWR’s busiest

stations, including Earlsfield, Kingston, Richmond,

Twickenham and Wimbledon. Improving the

infrastructure, customer experience and rolling

stock across SWR’s services during our eight-year

stewardship enabled us to deliver for our

passengers, who make more than 150 million

journeys each year. Right up to the final weeks

of operation, we continued to innovate, with the

introduction of advanced 5G services on 70km

of line between Basingstoke and Earlsfield, with

best-in-class Wi-Fi experience for customers.

I would like to thank our SWR passengers for their

custom and our SWR colleagues for their hard work

and dedication to customers and the important role

they have played in the delivery of improvements

to the service.

Transport for London contracts

Having operated London Trams on behalf of TfL

for a number of years, we were very pleased to be

awarded the contract to operate the London Cable

Car on behalf of TfL, with estimated revenues of

c.£60m over the eight-year contract period. We

successfully took over the operation at the end of

June 2024, following several months of mobilisation

activity. Our team is now 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. We were disappointed

not to have been awarded the contract, having

submitted what we believed was a commercially

attractive bid. We will however apply our learnings

from the process to our future bid processes.

Entering a period of significant change

in UK rail

The UK rail industry will see considerable change

over the next few years, with the NRCs moving to

public ownership and the establishment of GBR.

First Rail has been one of the largest operators for

more than 25 years, working successfully with a

wide range of partners and stakeholders under

various contract types and delivering various

significant rail infrastructure projects and fleet

upgrades. Companies such as ours can bring

innovation, enhanced service delivery, private

investment and focus on cost control. Our DfT

TOCs have saved more than £360m for the DfT in

their annual business plans over the last four years

and recent data from the ORR has shown that West

Coast Partnership paid £67m to the Treasury in

2023/24 after years of being a subsidised operation.

Hull Trains and Lumo, our two very successful

open access operations, have delivered economic

growth and created jobs in the communities they

serve, grown rail passenger demand and

contributed to the funding of the rail network.

Lumo for example, is the first open access operator

to start paying the Infrastructure Capacity Charge

alongside the Variable Usage Charge and from the

fourth anniversary of launch in October 2025 will be

paying just over £5 per train mile. An independent

study earlier this year compared this with similar

long-distance operators and confirmed that Lumo

will pay more per mile in track access charges than

other major operators on the East Coast Mainline,

at the same time as growing passenger numbers

on the line for all operators. This is a material

benefit to taxpayers as the national infrastructure

is being more efficiently utilised.

We believe that any future rail policy must fully

embrace open access. It has been a hugely

successful aspect of the rail industry over the

last 25 years, connecting previously under-served

places and providing additional capacity which

helps drive more people towards rail and away from

less sustainable forms of transport. Services are

provided entirely at the operator’s own commercial

risk and bring private investment into the sector.

They create jobs and have added over £1bn in

economic benefit to the UK, while driving modal

shift to rail over more carbon intense transport

modes such as car or plane.

Enhancing rail connections is critical to boosting

economic growth in the UK and we believe that

delivered effectively, reform will ensure the industry

can grow passenger numbers, generate greater

revenues and develop the value of rail in a customer-

focused, dynamic and efficient environment.

Looking ahead

For FY 2026, we anticipate adjusted revenue

and adjusted operating profit in First Rail will be

marginally lower, reflecting the lower fees following

the transfer of SWR to public ownership, a lower

impact from IFRS 16 reflecting lease terms and

a normalised level of DfT TOC performance fees,

offset by continued growth in open access, partially

tempered by mobilisation costs for the new open

access operations.

The Government’s announced policy is to bring the

NRCs into public ownership at the earliest possible

opportunity, with SWR transferring on 25 May 2025,

c2c on 20 July 2025 and Greater Anglia on

12 October 2025, with subsequent contracts

transferring at intervals of approximately three

months in the order that their current core

contractual terms expire.

As the contracts transition, we anticipate a cash

inflow of c.£120m from the DfT TOCs, including

any reorganisation cash 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 for a year or more after the NRCs end. First

Rail continue to support Trans Pennine Trains in

a number of areas two years following the transition

of the NRC.

As outlined above, we expect our new London to

Stirling service to commence operations mid-2026,

and following a period of mobilisation, to deliver

annual revenues of c.£50m with a low double digit

adjusted operating profit margin, pre IFRS 16. Our

London to Carmarthen service is expected to begin

operations in December 2027 and following a

c.two-year mobilisation period, we anticipate

annual revenues of c.£50m, again with a low double

digit pre IFRS 16 adjusted operating profit margin.

As the UK rail industry transitions, 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.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Business review

continued

Our positive cash generation

and strong balance sheet

allow us to capitalise on

opportunities to grow our

business as our industries

transition, to maintain our

progressive dividend policy

and for further potential returns

to shareholders.”

Ryan Mangold

Chief Financial Officer

Adjusted operating performance by division is as follows:

52 weeks to 29 March 2025

53 weeks to 30 March 2024

Adjusted

revenue

£m

Adjusted

operating

profit

£m

Adjusted

operating

margin

Adjusted

revenue

£m

Adjusted

operating

profit

£m

Adjusted

operating

margin

First Bus

1,081.5

96.0

8.9

1,012.2

83.6

8.3

First Rail

288.8

148.8

51.5

267.8

143.3

53.5

Group items/

eliminations

(0.3)

(22.0)

(0.4)

(22.6)

Continuing

operations

1,370.0

222.8

16.3

1,279.6

204.3

16.0

Discontinued

operations

–

(0.6)

N/A

–

(1.9)

N/A

Total

1,370.0

222.2

16.2

1,279.6

202.4

15.8

Statutory operating performance by division is as follows:

52 weeks to 29 March 2025

53 weeks to 30 March 2024

Revenue

£m

Operating

profit

£m

Operating

margin

Revenue

£m

Operating

profit/(loss)

£m

Operating

margin

First Bus

1,081.5

96.0

8.9

1,012.2

(63.3)

(6.3)

First Rail

4,013.1

148.8

3.7

3,738.4

143.3

3.8

Group items/

eliminations

(28.3)

(22.2)

(35.5)

(33.5)

Continuing

operations

5,066.3

222.6

4.4

4,715.1

46.5

1.0

Discontinued

operations

–

4.9

N/A

–

(5.3)

N/A

Total

5,066.3

227.5

4.5

4,715.1

41.2

0.9

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany

eliminations, where the Group takes substantially no revenue risk.

‘Adjusted’ profit measures throughout this document are before adjusting items as set out in

note 4 to the financial statements. The statutory operating profit including discontinued

operations for the year was £227.5m (FY 2024: £41.2m) as set out in note 5.

Includes elimination of intra-group trading between Bus and Rail divisions, central management

and other items.

Discontinued operations relates to the Group’s residual Greyhound US activities.

Capital allocation framework

The Group has a disciplined capital allocation framework to drive further

growth and returns:

Maintain a strong balance sheet



Leverage policy: less than 2.0x adjusted net debt: Rail adjusted EBITDA



First Bus: a younger fleet and greater reliability and availability of electric

buses will drive cost efficiencies and mean fewer buses are required



First Bus London will be cash generative from FY 2027



First Rail: anticipated cash inflow of c.£120m over three years from

April 2025 as DfT TOCs transition; includes Additional services profit

Invest in future growth



Strong pipeline of value-accretive organic and inorganic growth

opportunities



Acquisitions must exceed the Group’s post-tax weighted average cost of

capital (‘WACC’) (8-9%)



Strong cash conversion in First Bus enables accelerated decarbonisation

investment supported by government co-funding. First Bus: c.£150m

net cash capital expenditure for FY 2026 including London, mostly

on electrification



First Rail: continues to be cash capital-light, with any capital expenditure

required by the DfT TOCs fully funded under the National Rail Contracts,

and open access rolling stock operating leases in line with the track

access agreements

Deliver progressive returns



Dividend policy: c.3x cover of Group adjusted earnings; paid around

one-third interim and two-thirds final dividend



Total dividends have increased from 3.8p in FY 2023 to 6.5p in FY 2025



FY 2025 final dividend of 4.8p proposed; dividends paid in FY 2025

total £34m

Return surplus cash to shareholders



£92m returned to shareholders via buyback programmes in FY 2025;

additional £50m buyback programme announced



c.£77m held in escrow for Bus section of the Group’s pension scheme;

July 2025 triennial valuation deadline



c.£23m held in escrow for Group section; 2030 valuation



The Board remains committed to returning surplus cash to shareholders

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Financial review

lower funding levels. In First Rail, open access

operations performed strongly underpinned by strong

demand and effective yield management more than

offsetting inflationary increases including access fees

now at the full level at Lumo. The DfT TOC business

was ahead of expectations owing to higher than

forecast variable fee awards despite the additional

variable fees recognised in FY 2024 relating to

FY 2023.

Central costs were £(22.0)m (FY 2024: £(22.6)m) with

the current year including higher costs relating to the

strategic growth including the acquisition costs for

RATP London. The net impact to operating profit of

IFRS 16 in the year was £49.4m (FY 2024: £47.7m), with

the increase driven by new rolling stock leases.

Revenue

Adjusted revenue increased to £1,370.0m (FY

2024: £1,279.6m), reflecting strong underlying First

Bus performance including from acquisition growth,

higher than accrued variable fees in First Rail DfT

TOCs, and further growth in open access rail. The

prior year benefited from an extra week of trading

at First Bus. Revenue from continuing operations

increased to £5,066.3m (FY 2024: £4,715.1m).

Adjusted operating performance

Adjusted operating profit from continuing operations

was £222.8m (FY 2024: £204.3m). First Bus benefited

from increased passenger volumes, further and

data-led operational and yield improvements, cost

efficiencies and improved driver availability which

more than offset ongoing inflationary pressures and

52 weeks to

29 March

2025

adjusted

earnings

£m

53 weeks to

30 March

2024

adjusted

earnings

£m

First Bus adjusted operating profit

96.0

83.6

First Rail adjusted operating profit

148.8

143.3

Group central costs (operating profit basis)

(22.0)

(22.6)

Group adjusted operating profit

222.8

204.3

Interest

(57.7)

(65.3)

Profit before tax

165.1

139.0

IFRS 16 DfT contracted TOCs adjustment

(1.1)

10.2

Taxation

(41.1)

(32.0)

Non-controlling interest

(7.1)

(6.5)

Group adjusted earnings

115.8

110.7

The Group’s definition of adjusted earnings excludes the impact of IFRS 16 depreciation and interest charges in relation to its First

Rail – DfT contracted TOCs operations, given the Group takes no cost risk on these rolling stock leases.

The Group’s adjusted EBITDA, that recognises only the net fees for First Rail DfT TOCs, increased year-on-

year and is calculated as follows:

52 weeks to

29 March

2025

£m

53 weeks to

30 March

2024

£m

First Bus EBITDA

144.0

132.5

Attributable net income from First Rail DfT contracted TOCs

39.0

39.5

First Rail – open access and Additional services EBITDA

40.8

37.6

Group central costs (EBITDA basis

)

(21.4)

(21.8)

Group EBITDA adjusted for First Rail DfT contracted TOCs’ management fees

202.4

187.8

1 Pre-IFRS 16 basis.

A reconciliation to the segmental disclosures is set out in note 4.

Adjusted earnings from continuing operations were

£115.8m (FY 2024: £110.7m), primarily driven by the

stronger adjusted operating profit performance across

the business, partially offset by higher net interest

charges (excluding DfT TOC IFRS 16 interest).

Reconciliation to non-GAAP measures

and performance

Note 4 to the financial statements sets out the

reconciliations of operating profit/(loss) and profit/

(loss) before tax to their adjusted equivalents. The

principal adjusting items in FY 2025 are as follows:

Greyhound Canada

A net £(0.2)m charge was incurred in the year

relating to the continued winding down of Greyhound

Canada operations.

The principal adjusting items in relation to the

operating profit adjustments – discontinued operations

are as follows:

CARES receipt

A credit of £0.4m was recognised in the year

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 £5.1m in the

income statement as an adjusting item.

The principal adjusting items in FY 2024 were

as follows:

First Bus pension settlement charge and

related items

First Bus terminated its participation in two Local

Government Pension Schemes on 31 October 2023,

with affected employees enrolled into the First Bus

Retirement Savings Plan. Adjusting charges of

£146.9m were recognised in the prior year for the

settlement charge and related termination costs.

A gain of £161.0m was recognised in FY 2024 in Other

comprehensive income in relation to the restricted

accounting surplus.

Legal claims in North America and the UK

The Group recognised legal provisions in the prior year

relating to claims in North America and the UK.

Adjusting items – discontinued operations in

FY 2024 were:

First Transit earnout

The final valuation of the First Transit earnout

contingent consideration receivable was agreed and

settled during the prior year, with the Group receiving

cash of $83.8m (£65.3m). The Group incurred an

adjusting charge of £2.3m, reflecting the hedging of

the cash receipt, translation of the US dollar asset into

pounds sterling before settlement, partially offsetting

the write-off of the residual asset on settlement.

Group statutory operating profit

Statutory operating profit from continuing operations

was £222.6m (FY 2024: £46.5m) as a result of the

positive underlying business performance. The prior

year included the £146.9m charge recognised as a

result of the termination of participation of the Local

Government Pension Schemes at First Bus.

Finance costs and investment income

Net finance costs from continuing operations were

£57.7m (FY 2024: £65.3m) with the decrease principally

due to lower bond interest as the 6.875% bond was

repaid on maturity in September 2024, and lower

interest received on lower cash balances following the

share buyback programme.

Profit before tax

Statutory profit before tax was £164.9m (FY 2024: loss

before tax of £(18.8)m). The prior year included the

Local Government Pension Scheme (LGPS) pension

settlement and related charges. Adjusted profit before

tax as set out in note 4 to the financial statements

was £164.3m (FY 2024: £136.8m) including

discontinued operations.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Financial review

continued

Tax

The tax charge, on adjusted profit before tax on

continuing operations for the year was £41.1m

(FY 2024: £32.0m), representing an effective tax rate of

24.9% (FY 2024: 23.0%) which is in line with the UK

corporation tax rate. There was a non-recurring

historical tax refund of £3.0m and a deferred credit

on recognising deferred tax on losses of £6.8m. The

total tax charge, including tax on discontinued

operations, was £31.3m (FY 2024: credit of £15.0m).

The actual tax paid during the year was £6.0m

(FY 2024: £2.2m).

The Group’s ongoing effective tax rate is expected to

be broadly in line with UK corporation tax levels being

25%, with the cash taxes anticipated to be lower due

to the utilisation of the brought forward losses and

continued full expensing for capital expenditure.

Cash flow

The Group’s adjusted cash flow of £(18.8)m (FY

2024: £(167.7)m) in the year reflects positive cash flow

from operations of £828.2m (FY 2024: £626.6m)

including working capital inflow of £75.7m. This is

offset by net capital invested in the business, mainly

in decarbonisation in First Bus and the £86.5m

(FY 2024: £16.7m) acquisitions completed during the

year, as well as the repayment of lease liabilities,

dividends paid and purchases of shares under the

share buyback programme. The movement in net debt

is set out on the right.

EPS

Total adjusted EPS from continuing operations was

19.4p (FY 2024: 16.7p) with higher adjusted earnings

further benefiting from lower shares in issue following

the share buyback programme completed in the year.

Basic EPS was 21.3p (FY 2024: (2.4)p).

Shares in issue

As at 29 March 2025, there were 565.6m shares in

issue (FY 2024: 625.4m), excluding treasury shares

and own shares held in trust for employees of 185.1m

(FY 2024: 125.3m). 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 year was

597.7m (FY 2024: 662.9m).

Dividend

The Board is proposing that a final dividend of 4.8p

per share, resulting in a total dividend payment

of c.£27m, be paid on 8 August 2025 to shareholders

on the register at 4 July 2025, subject to approval of

shareholders at the 2025 AGM.

Capital expenditure

Non-First Rail gross capital expenditure

before government grant funding was £239.4m

(FY 2024: £201.1m), comprising First Bus £239.4m and

Group items £nil (FY 2024: First Bus £200.8m and

Group items £0.3m). In the year, the First Bus average

fleet age was 8.8 years (FY 2024: 9.0 years) reflecting

continued investment in the fleet, mainly on electric

vehicles and related infrastructure. First Rail capital

expenditure was £46.9m (FY 2024: £45.5m) and is

typically matched by receipts from the DfT under

current contractual arrangements or other funding.

During the year asset backed financial liabilities were

entered into in First Bus of £36.8m (FY 2024: £22.1m),

with a further £43.3m as a result of the First Bus

London acquisition. Through the investment in the

strategic joint venture with Hitachi Zero Carbon, £9.8m

of battery leases have been recognised through the

sale and leaseback arrangements for 173 batteries

(FY 2024: £13.2m for 257 batteries).

In addition, during the year the Group entered into

leases with a right of use value of £50.8m comprising

First Rail £27.8m, First Bus £22.0m and Group items

£1.0m (FY 2024: £222.5m, comprising First Rail

£192.6m, First Bus £27.2m and Group items £2.7m).

A further £72.8m of leases were entered into as a

result of the First London Bus acquisition (£69.9m) and

other First Bus acquisitions (£2.9m).

Gross capital investment (fixed asset and software

additions plus rights of use asset additions) was

£380.9m (FY 2024: £443.5m) and comprised First

Bus £323.4m, First Rail £56.5m and Group items

£1.0m (FY 2024: First Bus £208.2m, First Rail £232.6m

and Group items £2.7m). 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 year.

52 weeks to

29 March

2025

£m

53 weeks to

30 March

2024

£m

Adjusted EBITDA

779.8

746.8

Other non cash income statement charges

10.3

13.7

Working capital

75.7

(106.1)

Movement in other provisions

(27.9)

(Increase)/decrease in financial assets

(1.0)

23.7

Settlement of foreign exchange hedge

–

(1.1)

Defined benefit pension payments (greater than)/lower than income

statement charge

(8.7)

(22.5)

Cash generated by operations

828.2

626.6

Capital expenditure

(156.4)

(219.3)

Acquisitions

(86.5)

(16.7)

Proceeds from disposal of property, plant and equipment

17.9

42.8

Proceeds from capital grant funding

66.4

94.8

Proceeds from contingent consideration

–

65.3

Interest and tax

(66.3)

(67.6)

Shares purchased for Employee Benefit Trust

(16.1)

(16.5)

Share repurchases from buyback programme including costs

(91.8)

(117.6)

External dividends paid

(34.2)

(29.5)

Dividends paid to non controlling shareholders

(3.4)

(6.5)

Settlement of foreign exchange hedge

–

4.1

Fees for finance facilities

–

(1.4)

Lease payments now in debt

(476.6)

(526.2)

Adjusted cash flow

(18.8)

(167.7)

Foreign exchange movements

0.2

3.4

Net (inception) and termination/reassessment of leases

(288.0)

(237.5)

Lease payments now in debt

476.6

526.2

Other non cash movements

–

(0.1)

Movement in net debt in the period

170.0

124.3

Reconciliation to movement in adjusted net debt

Ring-fenced cash

(66.1)

120.0

IFRS 16 lease liabilities

(254.9)

(290.1)

Movement in adjusted net debt

(151.0)

(45.8)

Reconciliation to free cash flow

Add back: Acquisitions and strategic growth

138.5

17.9

Add back: Transit earnout

–

(65.3)

Add back: Dividends

34.2

29.5

Add back: Share buyback

91.8

117.6

Free cash flow

113.5

53.9

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Financial review

continued

Net debt/(cash)

The Group’s adjusted net debt as at 29 March 2025, which excludes IFRS 16 lease liabilities and ring-

fenced cash was £(86.9)m (FY 2024: adjusted net cash of £64.1m). Reported net debt was £(974.8)m

(FY 2024: reported net debt of £(1,144.8)m) after IFRS 16 and including ring-fenced cash of £315.7m

(FY 2024: £249.6m), as set out below.

29 March

2025

30 March

2024

Analysis of net (cash)/debt

Total Group

£m

Total Group

£m

Sterling bond (2024)

–

96.2

Bank loans and overdrafts

56.4

27.8

Lease liabilities

1,203.6

1,458.5

Asset backed financial liabilities

115.3

45.6

Bank loans

66.7

–

NextGen (Hitachi JV) facility

19.9

13.2

Gross debt excluding accrued interest

1,461.9

1,641.3

Cash

(171.4)

(246.9)

First Rail ring-fenced cash and deposits

(308.8)

(245.6)

Other ring-fenced cash and deposits

(6.9)

(4.0)

Net debt excluding accrued interest

974.8

1,144.8

IFRS 16 lease liabilities – rail

1,074.4

1,408.9

IFRS 16 lease liabilities – non-rail

129.2

49.6

IFRS 16 lease liabilities – total

1,203.6

1,458.5

Net cash excluding accrued interest (pre-IFRS 16)

(228.8)

(313.7)

Adjusted net debt/(cash) (pre-IFRS 16 and excluding ring-fenced cash)

86.9

(64.1)

First Bus London

On 28 February 2025, the Group completed its

acquisition of London bus operator RATP Dev

Transit London Limited and its subsidiaries (‘First

Bus London’) for cash consideration of £47.3m. The

Group is currently undertaking the purchase price

allocation exercise for First Bus London, and this

has identified a number of adjustments to reflect

the fair value of the assets and liabilities acquired.

IFRS 3 Business Combinations allows the Group

12 months from the date of acquisition to finalise

this exercise, and the standard acknowledges that

it will be necessary to estimate certain acquisition

adjustments and fair values. Owing to the proximity

of the acquisition to the reporting date, the

acquisition adjustments and closing fair values

are therefore disclosed in the financial statements

as provisional. These will be finalised within the

timeframe permitted by IFRS 3. Note 29 to the

financial statements provides more information on

these provisional adjustments and fair values, and

reflects an initial recognition of £38.0m relating to

the onerous contract provision covering c.50

contracts of c.90 TfL route contracts that were

entered into before 2024 and which are expected

to be replaced over the coming five years.

Free cash flow for the 52 weeks ended 29 March 2025 was as follows:

Open access

& other rail

£m

DfT

TOCs

£m

First

Bus

£m

Group

items

£m

Total

Group

£m

EBITDA

40.8

–

144.0

(21.4)

163.4

DfT TOC management fees

–

37.9

–

37.9

Working capital

19.1

–

(7.4)

(5.6)

6.1

Cash flow from operations

59.9

37.9

136.6

(27.0)

207.4

Capital expenditure

(3.9)

–

(88.2)

(0.5)

(92.6)

Disposal proceeds

0.7

–

16.2

0.2

17.1

Defined benefit pension payments higher than

Income Statement

(3.0)

–

(2.0)

(3.7)

(8.7)

Interest and tax

–

(9.5)

Other movements

–

(0.2)

Free cash flow

53.7

37.9

62.6

(40.7)

113.5

Free cash flow for the 53 weeks ended 30 March 2024 was as follows:

Open access

& other rail

£m

DfT

TOCs

£m

First

Bus

£m

Group

items

£m

Total

Group

£m

EBITDA

37.6

–

132.5

(21.8)

148.3

DfT TOC management fees

–

38.2

–

38.2

Working capital

(8.8)

–

(28.5)

(5.5)

(42.8)

Cash flow from operations

28.8

38.2

104.0

(27.3)

143.7

Capital expenditure

–

(134.7)

–

(134.7)

Disposal proceeds

–

35.8

–

35.8

Defined benefit pension payment lower than

Income Statement

–

17.2

–

17.2

Interest and tax

–

(5.3)

Other movements

–

(2.8)

Free cash flow

28.8

38.2

22.3

(35.4)

53.9

Funding

As at the year end, the Group had £295.0m

(FY 2024: £300.0m) of undrawn committed

borrowing available under its Revolving Credit

Facility (‘RCF’). In addition, there was £92.4m

(FY 2024: £129.8m) of committed headroom

available under the Husk Financer Facility, £40.9m

(FY 2024: £54.9m) available under the NextGen

Battery facility and £85.0m (FY 2024: £nil) under

the term loan facility. Total undrawn bank

borrowing facilities at year end stood at

£523.3m (FY 2024: £501.0m) of which £513.3m

(FY 2024: £484.7m) was committed and £10.0m

(FY 2024: £16.3m) was uncommitted. The average

debt maturity is 4.1 years (FY 2024: 2.4 years).

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. £37.9m

(FY 2024: £38.2m) has been paid in dividends from

the TOCs after finalisation of their FY 2024 statutory

accounts to the Group during the year. The

ring-fenced cash represents that which is not

available for distribution, or the amount required to

satisfy the liquidity ratio 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. Based on the

current adjusted net debt profile, the variable rate

RCF is largely undrawn with only finance leases

and the term loan outstanding.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Financial review

continued

Fuel and electricity price risk

We use a progressive forward hedging programme

to manage commodity risk. As at June 2025, 90%

of our ‘at risk’ UK crude requirement for FY 2026

(84m litres, which is all in First Bus) was hedged

at an average rate of 47p per litre, and 61% of our

requirements for the year to the end of March 2027

at 44p per litre. We also have an electricity hedge

programme in place, with 70% of our consumption

(based on current consumption forecasts) hedged

for FY 2026 at £89/MWh and 56% for FY 2027

at £70/MWh.

Foreign currency risk

‘Certain’ and ‘highly probable’ foreign currency

transaction exposures (including fuel purchases

Foreign exchange

The most significant exchange rates to pounds Sterling for the Group are as follows:

29 March 2025

30 March 2024

Closing

rate

Effective

rate

Closing

rate

Effective

rate

US Dollar

1.29

1.25

1.22

1.11

Canadian Dollar

1.85

1.93

1.68

1.76

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

(pounds Sterling) 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.

Pensions

We have updated our pension assumptions as at

29 March 2025 for the defined benefit schemes in

the UK and North America. The net pension deficit

of £25.3m at the beginning of the year moved to

a net surplus of £22.7m at the end of the year.

The main factors that influence the balance sheet

liabilities for pensions and the principal sensitivities

to their movement (excluding rail contracts and

insurance liabilities) at 29 March 2025 are set

out below:

Movement

Impact

Discount rate

+1.0%

Decrease liabilities

by £11m

Inflation

+1.0%

Increase liabilities

by £9m

Life expectancy

+1 year

Increase liabilities

by £29m

During FY 2025, 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 of

$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 £5.1m in the Group’s income

statement as an adjusting item. Also during FY

2025, the merger of the First Bus and FirstGroup

pension schemes was completed to drive further

efficiencies. The Group Scheme triennial funding

valuation as at 5 April 2024 (now comprising legacy

Group and Bus pension obligations) will be finalised

in FY 2026. The valuation outcome will determine

how the £77m currently held in the Bus Scheme

Limited Partnership will be distributed, with the

balance of £23m relating to the Group scheme to

be determined based on the 2030 triennial valuation.

During FY 2024, following a consultation with

affected employees, the Group terminated the

participation of the relevant First Bus subsidiaries

in the two Local Government Pension Schemes

in which they were admitted bodies.

An expense of £146.9m was recognised in the

prior year as an adjusting income statement item

for the settlement charges and other related costs,

with gains of £5.0m recognised in income for

curtailment gains and £161.0m recognised in Other

comprehensive income in relation to the restricted

accounting surplus. Also during FY 2024, the

Limited Partnership created following the sale

of the North American divisions returned £23.7m

to the Bus Pension Scheme, and at legacy

Greyhound, the Group bought out and settled

c.$75m (c.£62m) of Greyhound US pension

liabilities, and in addition £153m of pension

liabilities in Canada were secured with an

annuity buy-in.

Balance sheet

Net assets have increased by £70.8m since

30 March 2024. The principal reasons is the impact

of the profit for the year offset by the share buyback

programme and dividends paid.

Balance sheets – Net assets/

(liabilities)

As at

29 March

2025

£m

As at

30 March

2024

£m

First Bus

813.3

580.2

First Rail

798.4

1,169.2

Greyhound

(10.5)

(24.7)

Divisional net assets

1,601.2

1,724.7

Group items

91.1

60.7

Net debt

(974.8)

(1,148.3)

Taxation

(5.0)

4.0

Greyhound – Held for sale

–

0.6

Total

712.5

641.7

Post-balance sheet events

The Group’s South Western Railway NRC expired

on 25 May 2025 and operations transferred to

public control under the DfT Operator, in line with

the Government’s policy and as announced in

December 2024.

Going concern

The Board carried out a review of the Group’s

financial projections for the 18 months to

30 September 2026 and evaluated whether it

was appropriate to prepare the full year results

on a going concern basis. In doing so the Board

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,

including assumptions on passenger volumes

and government support arrangements, and having

regard to the risks and uncertainties to which the

Group is exposed.

Following these reviews the Directors have

a reasonable expectation that the Group has

adequate resources to continue in operational

existence for at least the 12-month period from

the date on which the financial statements were

approved. Accordingly, they continue to adopt

a going concern basis of accounting in preparing

the consolidated financial statements in this full

year report.

Ryan Mangold

Chief Financial Officer

10 June 2025

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Financial review

continued

Our reporting system

Scan the code for our download centre

Our Strategic framework

Our Sustainability framework

Leading in environmental and social

sustainability is one of our four business

strategic pillars, ensuring that sustainability

is embedded throughout the Group.

‘Mobility Beyond Today’ is our Group-wide

strategic framework for sustainability. This

framework prioritises our most material

ESG topics. This section of the report

outlines our progress against our ‘Mobility

Beyond Today’ priorities, including

decarbonisation, supporting our people,

community investment, safety and

business ethics.

Alongside the Annual Report, our

Environmental Performance Report and

Climate Transition Plan provide a more detailed

breakdown of how our business is performing

across key environmental metrics including

climate change, carbon, energy, water and

waste. It also includes examples of biodiversity

initiatives taking place across FirstGroup.

Deliver day in, day out

Deliver a consistently safe and

reliable customer experience

Drive modal shift

Drive a step change from car

and air travel to bus and rail

Lead in environmental

and social sustainability

Deliver our decarbonisation

commitments and support

prosperity, growth and green

jobs in the communities we serve

Diversify our portfolio

Invest to grow and diversify

our portfolio and ensure our

business is resilient

Our approach

Our ambition is to be the partner of choice for innovative and sustainable transport, accelerating the transition to a zero-carbon world.

Environmental

Performance Report

Climate Transition

Plan 2025

FirstGroup plc

2024

UK Gender and

Ethnicity Pay

Gap Report

Gender and Ethnicity

Pay Gap Report 2025

Non-financial and sustainability

reporting regulations

In accordance with Sections 414CA and 414CB

of the Companies Act 2006, our non-financial

information and sustainability can be found on

the following pages of this Annual Report:

relating to environment matters, from page 34;

climate-related financial disclosures, from page

45; employees, pages 39 to 40; community,

page 41; human rights, pages 43 to 44; and

anti-corruption and anti-bribery, pages 43 to 44.

Third party recognition

Included in the

Clean200, the top

publicly listed

companies by

clean revenue

Included in the 2025

ESG Top-Rated

Companies List for

Sustainalytics with a

‘Low Risk’ rating

‘AAA’ ranking on

MSCI ESG index

Proud member of

UN Global Compact

Network UK

‘Prime’ status on the

ISS ESG Index and

ranked in the top

decile in our sector

Included in the 2024

S&P Sustainability

Yearbook once again

with a score of 59

Re-awarded the

Green Economy

Mark on the London

Stock Exchange

CDP Supporter and

maintained our rating

of B

Ranked as the top

performing bus

and rail operator

in our sector in the

FTSE4Good Index

Mobility

Beyond

Today

Mobility

Beyond

Today

Innovating for our

customers and society

Low and zero

emissions

transport

Supporting

our people

Communities

Value chain

Environmental

management*

Health and

safety

Ethics

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

Low and zero emission transport

Communities

Environment management

Value chain

Ethics

Safety

Innovating for our

customers and society

Supporting

our people

Zero carbon

Page 34

Climate resilience

Page 45

Carbon and energy

EPR page 5

Low and zero emission transport

EPR page 8

Air quality

EPR page 9

Noise

EPR page 9

Driving modal shift

Page 37

Affordability

Page 37

Improving accessibility

Page 37

Data privacy

Page 38

Cybersecurity

Page 38

Diversity and inclusion

Page 39

Skills for the future

Page 40

Wellbeing

Page 40

Social value

Page 41

Charitable giving

Page 41

Community investment

Page 41

Our policy framework

Page 43

Anti-bribery, fraud and corruption

Page 43

Human rights

Page 43

Whistleblowing

Page 44

Governance

Page 44

Safety management

Page 42

First Bus update

Page 42

First Rail update

Page 42

Environmental

management systems

EPR page 11

Energy management

EPR page 12

Waste management

EPR page 12

Water management

EPR page 13

Culture and engagement

EPR page 13

Sustainable supply chain

Page 44

EPR page 15

Economy-wide transition

EPR page 14

Biodiversity

EPR page 15

Our three priority areas

Foundations of a responsible business

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Why is sustainability one of the

pillars of FirstGroup’s strategy?

GS:

Transport is key to decarbonisation and

social mobility. By investing in sustainable

transport, we support economic growth while

reducing emissions and delivering social value.

Our commitment to responsible business

ensures we deliver cleaner, safer and more

efficient journeys for our customers.

What is the Climate Transition

Plan, and why is it important?

GS:

This year, we launched our first Climate

Transition Plan, setting a clear roadmap to

net zero. It focuses on emissions reduction,

investment in low-carbon technology, and

increasing resilience against climate risks,

aligning with UK and global climate goals.

It also outlines the ways that we will promote

modal shift by growing our services, allowing

customers to switch from cars and planes to

lower-emission buses and trains.

How is FirstGroup driving

modal shift?

GS:

Expanding sustainable travel options is

crucial. We acquired RATP London and a

number of well-established coach businesses

to strengthen our bus network, and our

partnership with FlixBus is boosting inter-city

coach travel. In Rail, we have entered into

a contract with Angel Trains and Hitachi Rail

for the lease of 14 new open access trains

and applied for services between Rochdale and

London, providing more low-carbon alternatives

to domestic flights and car journeys.

How is FirstGroup creating

opportunities through

apprenticeships?

CH:

Investing in skills is critical for the

future of transport. First Bus has partnered

with Reaseheath College to deliver industry-

leading engineering apprenticeships. There

are currently 75 apprentices learning at the

UK’s first engineering academy for the next

generation of zero emission buses and coaches,

specialising in mechanical and electrical

engineering. Meanwhile, Lumo is setting new

standards in rail, with 95% of its workforce

coming through apprenticeships and more

female apprentices than male, driving real

change in workforce diversity.

What steps are being taken for

diversity and inclusion?

CH:

Our Responsible Business Committee

plays a key role in reviewing the practices and

performance of the Group in supporting our

people, and in particular our progress towards

meeting the Group’s goals and objectives with

regard to equality, diversity and inclusion (ED&I).

We have set gender and ethnicity targets and run

a number of personal leadership development

programmes, aimed at women and ethnically

diverse colleagues, designed to build confidence,

capability and skills. Our advocate network

‘First Connections’ is comprised of nearly

500 colleagues from under-represented

groups who have completed one of our

development programmes.

Our views on

sustainability

What major environmental

milestones have been achieved?

GS:

We are investing significantly in fleet

electrification, including First Bus working with

our local authority partners to secure government

co-funding, and pioneering repowered buses,

removing the diesel engines to replace them

with battery electric alternatives. We now

operate three net zero emission depots and

have electrified ten more outside of London.

This investment has allowed for new revenue

opportunities with the expansion of our EV

charging network and third party partnerships

including with Openreach and Centrica.

In Rail, Avanti West Coast has been introducing

new bi-mode Evero trains, which can switch

between diesel and electric power, to significantly

cut emissions. GWR’s fast-charge battery train

trial is another step towards lower-emission

rail solutions, complementing our investments

in electric and bi-mode trains in our open

access division.

What’s next for FirstGroup

on sustainability?

CH:

We are scaling our efforts in modal shift,

fleet electrification and workforce development.

Our focus is on delivering net zero transport

while enhancing accessibility and safety. With

ongoing investments in open access rail, zero

emission buses and community initiatives, we

are committed to leading the industry towards

a more sustainable future.

Graham Sutherland

Chief Executive Officer

Claire Hawkings

Chair, Responsible Business Committee

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Year

Target

2050

Net zero emissions

in line with

the UK Government’s ambition

by FY

2035

63% reduction

Scope 1 and 2 emissions

(from a FY 2020 base year)

by FY

2028

20% reduction

in absolute

Scope 3 emissions from fuel

and energy-related activities

(from a FY 2020 base year)

by FY

2028

75% of suppliers with SBTs

by emissions, covering

purchased goods and

services and capital goods

FirstGroup ambitions and targets

Our progress and trajectories

Short-term

(2024-2027)

Medium-term

(2028-2035)

FY20

1,200,000

1,000,000

800,000

600,000

400,000

200,000

FY21

FY22

FY23

FY24

FY25

Total Scope 1 and 2 emissions (tCO2e)

FY26

FY27

FY28

FY29

FY30

FY31

FY32

FY33

FY34

FY35

First Bus

Open access rail

DfT TOCs

SBT pathway

Trajectory

Estimated emissions trajectory without DfT TOCs

Low and zero emission

transport

We are taking action to

combat climate change and

improve local air quality by

delivering low and zero

emission mobility solutions

for our customers.

Our Climate Transition Plan

In 2025 we published our first Climate Transition

Plan, setting out a comprehensive strategy for

achieving our climate transition goals. In it we

detail our approach to reducing GHG emissions,

managing climate-related risks, and contributing

to an economy-wide transition through encouraging

more people to switch to lower-impact forms of

transportation. It also covers our targets, actions and

dependencies across all FirstGroup’s operations.

Find out more about our Climate Transition Plan

on our website

Our climate ambitions and targets

FirstGroup is aligned to the UK Government’s

climate change strategy, and committed to making

the reductions to meet the Paris Agreement to limit

climate warming to 1.5°C by 2050. By encouraging

people to switch from private cars and air travel

to bus, coach and rail, we can also significantly

reduce the carbon footprint of the transport sector.

We have set three near-term science-based targets

(SBTs) covering Scope 1, 2 and 3 emissions. These

have been validated by the SBTi and are set out in

the table below. We are also committed to reaching

net zero emissions by 2050.

Our First Bus division and our First Rail open

access train operations and DfT TOCs are all

in the scope of the FirstGroup SBTs. First Bus

is committed to operating a 100% zero emission

commercial bus fleet by 2035. First Rail supports

the UK Government’s target to remove all diesel-

only trains from service by 2040 and to deliver a

net-zero railway network by 2050. SWR and West

Coast Partnership (Avanti) have also set SBTs,

which have been validated by the SBTi. GWR

is working to set targets that are aligned to the

science-based approach.

Progress against our

science-based targets

Our near-term target is to reduce Scope 1 and 2

GHG emissions by 63% by FY 2035 from a FY 2020

base year. We also commit to reduce absolute

Scope 3 GHG emissions from fuel and energy-

related activities (FERA) by 20% by FY 2028 from a

FY 2020 base year, and that 75% of our suppliers

by emissions covering purchased goods and

services and capital goods will have science-based

targets by FY 2028.

During FY 2025 we continued to progress our three

Group SBTs. Our Scope 1 and 2 emissions have

decreased 26% since our baseline year in FY 2020.

Our future decarbonisation pathway in the short to

medium term emissions will be impacted when the

DfT TOCs return to public ownership, as well as

other acquisitions and divestments such as RATP

London, full details of which can be found in our

Transition Plan. We are committed to achieving

the 63% decrease by 2035. We achieved a 4%

decrease in FERA emissions this year compared

with our baseline year in FY 2020, and actively

engaging suppliers to set their own targets aligned

with the science-based approach.

Zero carbon

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Greenhouse gas emissions

The Group’s overall Scope 1 and Scope 2 location-

based carbon emissions increased by slightly more

than 1% from FY 2024 to FY 2025 and were 26%

lower than in FY 2020. Continued investment in our

electric bus fleet and the introduction of the new

Evero fleet at Avanti decreased diesel use; this was

counterbalanced by an increase in rail traction

electricity consumption, driven by higher mileage

in First Rail. Carbon intensity per £m revenue has

improved due to strong revenue performance and

ongoing decarbonisation efforts across the Group.

Our market-based Scope 2 emissions increased

significantly compared to the previous financial

year, following Network Rail’s switch from nuclear

energy to the standard grid tariff, effective

October 2024.

The table below reflects the carbon emissions

associated with our global operations and aligns

with the UK’s Streamlined Energy and Carbon

Reporting (SECR) requirements. Our UK operations

represent 99% of both our global GHG emissions

and our global energy use in the table on page 36.

Our Aircoach operations in Ireland generate only

1% of our total emissions. Scope 1 emissions for

these operations amounted to 5,961 tCO

e (6,844

tCO

e in FY 2024), while Scope 2 emissions

(location based) totalled 18 tCO

e (25 tCO

e in FY

2024), a total for Scope 1 and Scope 2 emissions

of 5,979 tCO

e (6,869 tCO

e in FY 2024), and an

intensity ratio of 242 tCO

per million revenue

(304 in FY 2024). The energy consumption used

to calculate these emissions is 25,012 MWh

(27,805MWh in FY 2024).

For a more detailed analysis and an understanding

of our Group carbon performance, see our

Environmental Performance Report 2025.

Tonnes of carbon dioxide equivalent (tCO

for operations:

2025

2024

2023

2022

2021

2020

Scope 1

466,147

478,705

487,362

524,683

467,773

653,779

Scope 2 location based

238,508

216,508

197,271

214,967

236,592

303,628

Total Scope 1 and Scope 2

704,655

695,213

684,633

739,650

704,365

957,407

Total Scope 1 and Scope 2 per £m

revenue (tCO

e/£m)

140

149

159

178

179

255

Scope 3: Other indirect emissions

inclusive of business travel, waste

disposal, water use, upstream T&D

limited to First Travel Solutions

9,880

9,764

8,724

3,227

2,684

12,257

Scope 3: Fuel- and energy- related

activities (FERA)

208,186

196,753

186,421

216,738

228,549

217,066

Total all scopes (location)

922,721

†

901,730

879,779

959,615

935,598 1,186,730

Total all scopes (market)

817,528

†

685,513

682,758

744,673

699,162

884,782

Out of scope (combustion of biofuels)

33,834

34,895

32,513

28,496

23,819

22,636

Total all scopes exclusive of FERA

emissions plus Out of Scope per revenue

(tCO

e/£m)

149

†

159

169

185

265

Scope 1 and Scope 2 emission %

change (2020 baseline)

-26%

-27%

-28%

-23%

-26%

† All assured metrics are highlighted with a † symbol.

This includes the aggregated total of Scope 1, Scope 2 and selected Scope 3 (limited to emissions from business travel, waste

disposal, water supply and treatment, Fuel- and energy- related activities and upstream transportation and distribution amounts

limited to First Travel Solutions).

Methodologies and calculations

Our carbon and energy reporting approach is

prepared in accordance with the following

standards and guidelines:



Greenhouse Gas Protocol (GHG Protocol) for

Corporate Accounting and Reporting Standard



UK Government SECR Guidelines

FirstGroup uses an operational control boundary

covering 100% of its business activities, with an

estimation threshold of 5%.

The reporting period for our carbon data is the

same as that for our financial data.

The term ‘carbon emissions’ in this report refers

to GHG emissions as required for a GHG inventory.

This includes carbon dioxide alongside six other

GHGs calculated in mass of carbon equivalent (CO

e).

Our GHG inventory is reported in four categories or

‘scopes’, listing our direct and indirect emissions in

accordance with the GHG Protocol:

Scope 1:

Direct emissions from road and rail

vehicle fuel, heating fuel and fugitive refrigerant

gas emissions

Scope 2:

Indirect emissions from the generation

of electricity purchased for buildings and to power

electric road or rail vehicles (location based)

Scope 3:

In the Annual Report and Accounts this

is limited to categories (Waste, Water, Business

Travel, Fuel- and Energy-related activities and

upstream transportation and distribution limited

to First Travel Solution activities) for which we

are currently able to gather actual source data

from along our value chain and apply relevant

emissions factors.

Out of scope:

Relating to the combustion

of biofuels.

We have also worked with Watershed – a specialist

consultancy, to complete a full Scope 3 emissions

assessment and identify all material Scope 3

emissions. We are reporting on all our material

Scope 3 emissions in our Environmental

Performance Report 2025. For some Scope 3

categories in this assessment, we have relied upon

a spend based method to calculate emissions and

we will work towards gathering actual emissions

data from external partners in our value chain

over time.

Our UK carbon and energy emissions are

calculated using UK Government-issued

emission factors:



UK Government GHG reporting: Conversion

Factors 2024 from Department for Energy

Security and Net Zero

There are limited examples where emissions

factors have been developed as ‘bespoke’.

To calculate underlying energy use for Scope 1 and

2, liquid and gaseous fuels have been converted

from a volume to kWh (Gross Calorific Value). The

following source has been used to derive fuel

energy properties for these calculations:



UK Government GHG reporting: Conversion

Factors 2024 from Department for Energy

Security and Net Zero

A detailed understanding of our calculation

methodologies is available in our Environmental

Performance Report 2025.

Independent assurance

FirstGroup plc has engaged Grant Thornton UK

LPP to provide independent limited assurance in

accordance with International Standards on

Assurance Engagements 3000 (Revised),

Assurance Engagements other than Audits or

Reviews of Historical Financial Information

(ISAE 3000 (Revised)), and in accordance with

International Standard on Assurance Engagements

3410, Assurance Engagements on Greenhouse Gas

Statements (ISAE 3410), issued by the International

Auditing and Assurance Standards Board (IAASB).

All externally assured metrics are highlighted with a

† symbol.

Grant Thornton UK LLP issued an unqualified

assurance report over the selected metrics and its

full report can be found on our website.

Zero carbon

continued

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Delivering on our Transition Plan

Our recently published Climate Transition Plan sets

out the implementation timelines and associated

actions we have in place to decarbonise our

operations and deliver against our SBTs. In the

boxes below we describe some of the key actions in

our plan by division and associated achievements

during FY 2025.

Total energy use (MWh) megawatt hours of energy:

Total by energy source and renewable content

2025

2024

2023

Non-renewable sources

2,932,971

2,867,623

2,929,421

Renewable energy sources

202,531

†

193,152

163,899

Total all

3,135,502

†

3,060,776

3,093,320

% change (year-on-year)

-1%

Per £m revenue

(MWh/£m)

623

656

719

First Bus

2025

2024

2023

Zero emission buses

(electric or hydrogen powered)

20.5%

†

13%

Total bus fleet

5,450

4,425

4,441

Carbon emission per vehicle distance (gCO

e/vkm)

(Scope 1, 2 location based and Out of scope)

869

†

897

1,103

† All assured metrics are highlighted with a † symbol.

Zero carbon

continued

Replace diesel vehicles with zero

emission alternatives, including

diesel vehicle repowers

First Bus is on track to achieving a fully zero

emission commercial bus fleet by 2035. By the

end of FY 2025, our fleet includes 1,115 zero

emission buses.

Significant investments in key regions are

accelerating this transition. A key FY

2025 milestone was our acquisition of RATP

London, a major bus operator in the capital. This

acquisition expands our fleet by approximately

1,000 buses, a third of which are electric. We

are also investing £70m in a further 160 zero

emission buses in the West of England, growing

the zero emission local fleet to over 250 vehicles.

We aim to scale up new innovations where

possible. First Bus introduced 32 repowered

buses into service across the UK early in 2025.

These are formerly diesel buses that have been

converted into electric buses, which extends

their lifespan by six to nine years.

Replace diesel vehicles with low

emission alternatives

A major highlight this year was the introduction

of the new £350m Evero fleet at Avanti, replacing

diesel-powered Voyagers with bi-mode trains

capable of switching between electric and diesel,

supporting the transition to a lower-carbon

rail network.

A significant investment in sustainable rail travel

came through our agreement with Angel Trains

and Hitachi Rail to lease 14 new five-car electric,

battery electric or bi-mode trains. Manufactured

in the UK, these trains will increase capacity on

Hull Trains and Lumo services and support our

new London to Carmarthen route, further

enabling modal shift to lower-emission rail travel.

Please read more about our how we’ve been

growing our upgrading our rolling stock and

piloting battery train technology in our

Environmental Performance Report.

Expand our route portfolio and

networks to support the economy-

wide transition

We have also expanded our route portfolio. Our

acquisition of Grand Union Trains WCML and

GWML Holdings secures new London to Stirling

and London to Carmarthen services. Hull Trains

has applied to launch a new London to Sheffield

service, which could provide sustainable

transport options for 350,000 passengers

annually. Additionally, Lumo has applied to

restore the Rochdale to London rail link, a move

that could benefit up to 1.6 million people.

Through these strategic investments, FirstGroup

is driving the transformation of public transport,

making it more sustainable, efficient and

accessible. By prioritising low-carbon

technologies and expanding high-quality

services, we are empowering passengers to

choose greener travel options while contributing

to the UK’s broader net-zero ambitions.

Invest in bus depot power

connections and electric vehicle

charging infrastructure

Depot infrastructure upgrades are key to

supporting our expanding electric fleet. To

date, we have electrified ten depots, with work

underway at five more, and our York, Leicester

and Norwich depots have now achieved verified

net-zero status.

First Bus

First Rail

Actions

Read more about our zero emission fleet and

depot upgrades in our Environmental

Performance Report

Energy initiatives

FirstGroup tracks and monitors energy-saving

initiatives to ensure we continue to focus on energy

efficiency alongside switching to low- and zero-

carbon energy choices. Major initiatives to drive

continuous improvement in our energy and carbon

performance are listed below. In addition we have

undertaken various energy-efficiency initiatives

across our depots and wider property portfolio,

including investments in solar panels, energy-

efficient bus washes and air compressors, upgraded

building control systems and low-energy lighting.

For a more detailed analysis and understanding

of our Group energy performance, please see our

Environmental Performance Report 2025.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Driving modal shift

In this section we detail the actions we are taking

to encourage modal shift, including making

journeys more accessible, affordable and suited

to customers’ needs, and expanding some of

our operations.

In First Bus we are repositioning our core customer

proposition to promote the bus as an affordable,

digitalised, accessible and reliable transport option.

We are also increasing our share in the adjacent

services market, where the car is becoming

less attractive.

In our First Rail open access operations, Hull Trains

and Lumo, we continue to see strong demand and

we are growing our capacity through enhancing

our existing services, acquiring access rights for

new routes and applying for new routes where

there is proven demand. Our DfT TOCs are focused

on offering affordable and flexible ticketing,

accessibility improvements and integrated onward

travel plans to make services more attractive

to customers.

Affordability

Affordable public transport is essential for

promoting modal shift and supporting the

economy-wide transition. We continue to offer a

range of ticket options, discounts, offers, rewards

and ways to pay.

Discounts and rewards

Customers can benefit from regular discounts

and railcards across our services, including for

commuters, students, families, groups, disabled

persons, veterans, jobseekers and for different

ages and locations. Avanti’s low-cost Superfares

won the ‘Passenger experience’ category at the

2024 Railway Innovation Awards and was extended

to more destinations in 2025. All our rail operators

take part in the annual Great British Rail Sale,

offering up to 50% ticket discounts including

150,000 tickets at GWR and 100,000 at SWR.

Discounts are complemented by offers and

rewards, including the Club Avanti loyalty scheme

which offers customers discounted travel, food and

Innovating for our

customers and society

We are focused on providing

accessible, convenient,

innovative and sustainable

services to encourage more

people than ever to travel on

our services and to take cars

off the road.

drink and free tickets to customers. The scheme

has attracted 375,000 members since its launch

two years ago.

First Bus continued to support the DfT’s fare cap

scheme, which aims to help the sector support

customers at a time when the cost of living has

increased whilst also seeking to encourage greater

bus use. The £2 fare cap in England was raised to

a £3 fare cap in January 2025 and extended until

31 December 2025. First Bus has also continued

to operate the free travel for under 22s scheme

in Scotland.

Digital and flexible ticketing

We offer our customers bespoke mobile apps to

help them find journeys and tickets. The apps save

booking fees, finding the cheapest fare available,

offering rewards and discounts, and in rail, provide

automatic delay repay payments.

These apps often work with TOTO contactless

payment technologies and tickets that are being

rolled out to new rail and bus services across our

networks, including at a further 12 SWR stations

during FY 2025. LumoFlex, a digital flexible

ticketing service on Lumo’s London to Edinburgh

routes continues to grow in popularity, allowing

users to reserve seating and cancel or

amend journeys.

Improving accessibility

We are committed to making our services

accessible and continue to support customers

with disabilities or restricted mobility through

innovative and inclusive initiatives. We publish

accessible travel policies and guidance documents

on our websites, available in a variety of formats

including Braille, audio, large print and easy read

upon request.

Accessible by design

Across our networks, we work with industry

partners to introduce improvements such as

accessible boarding facilities, changing places

toilets, lowered service counters, tactile surfaces,

and sensory-friendly features. This year SWR has

commenced feasibility studies for accessibility

upgrades at eight locations as part of the

Government’s latest Access for All (AfA) funding

programme. These improvements, which could

unlock up to £60 million in investment, will include

new lifts and bridges to enhance station accessibility.

Our bus and rail vehicles include spaces for

wheelchairs, mobility aid and scooter users, which

comply with the respective industry guidelines.

Passenger assistance

We train colleagues to support passengers with

a range of disabilities, including those who have

sensory needs, autism, hearing loss and vision

impairments. Lumo offers an innovative 360-degree

tour of its fleet to help passengers plan journeys,

and for passengers who are deaf or have hearing

loss, we have introduced schemes to make

communication, planning and journeys more

accessible, including Avanti partnering with

InterpretersLive! for on demand video interpreters.

In First Rail many stations allow passengers to

contact a passenger assistance team, or use

available Help Points. Once onboard, staff can

assist with any customer-related matters and make

contact with the driver or destination stations.

Empowering new customers

Our rail companies offer free ‘Try the Train’ days

to community groups, empowering individuals

with specific needs to feel confident using rail

services. These sessions include guided tours of

stations, assistance with purchasing tickets, and

an opportunity to experience train travel in a

supportive environment. This year, Avanti expanded

the ‘Train Buddies’ initiative, giving young people,

including disabled children and young carers, the

confidence to navigate stations and experience

train travel. Supported by the Customer and

Communities Investment Fund, this programme

provides young people with opportunities to

explore new destinations and learn essential

travel skills.

Across the Group we set targets for accessibility

and monitor progress as part of the Annual Service

Quality Reports.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Digitalisation

We provide a range of digital services and apps

to make journeys more accessible. We are also

developing digital solutions to help staff run train

operations more efficiently. For example, Solano

is a staff engagement app created by First Rail’s

Mistral Data that enhances communication and

coordination among dispatchers, on-train and

platform staff, maintenance, and office teams.

First Bus updated its customer app. Journey

planning was improved and real-time information

made available, and customers can now see their

bus live on a map. Ticket sales using digital

payment methods account for 80% of First Bus

ticket transactions. Customer usage on our First

Bus app and platform has grown to 35% of ticket

revenue and through the app we interact with our

customers to provide information on service

disruption, timetable and fares changes as well as

special offers and loyalty programmes.

Whilst Artificial Intelligence (AI) presents new and

emerging risks for our business, it also presents

opportunities. In First Rail, for example, AI systems

have been introduced at stations to improve

accessibility. Following a successful six-month trial

with SWR at London Waterloo Station, which

provided live travel information in British Sign

Language for deaf customers, this technology is

being rolled out across the wider First Rail network.

In First Bus, we continue to partner with

Prospective, an AI company, to optimise timetables,

schedules and real-time fleet instructions. This

software significantly reduces the time needed

to create or adjust timetables and schedules,

improving service quality and punctuality. It also

identifies where bus priority interventions such as

parking restrictions, bus lanes, priority signals and

traffic removal would most impact travel times.

Data privacy

At FirstGroup, we are committed to maintaining

the highest standards of data privacy and

security across our entire operations, including

our suppliers. Our comprehensive privacy policy

is designed to protect the personal information

of our customers, employees and partners,

ensuring compliance with all relevant regulations

and industry best practices, and applies to all

aspects of our operations, including our suppliers

and customers.

We have designated a Data Protection Officer who

is responsible for overseeing all data and privacy-

related issues. Our divisions have also set out

their own privacy policies and assigned their own

Data Protection Officers. These Officers work

closely with our Group-wide Risk and Compliance

Management team to ensure that our privacy

policy is embedded within our overall risk

management framework.

To ensure compliance with our privacy policy,

we conduct regular third party and internal audits.

These audits help us identify and address any

potential vulnerabilities, ensuring that our privacy

practices remain robust and effective. We maintain

a zero-tolerance policy for breaches of our privacy

policy. Any violations are subject to strict disciplinary

actions, up to and including termination of

employment or contracts.

See the FirstGroup Privacy Policy on our website.

Cybersecurity

Businesses are facing heightened and ever more

complex cybersecurity risks both in their own

operations and along their wider value chain. The

Group’s cybersecurity strategy is led by the Chief

Information Security Officer (CISO), who reports

directly to the Executive management team. The

CISO brings expertise in information governance,

technology compliance and cybersecurity, with

experience across both public and private

sectors — including work with critical national

infrastructure bodies such as Network Rail and

Avanti West Coast.

In addition to internal leadership responsibilities,

the CISO actively participates in industry-leading

cybersecurity committees and risk forums aligned

with the UK transport sector. These include direct

engagement with the DfT, Network Rail’s cyber

forums, and collaborative work with the National

Cyber Security Centre (NCSC) and the British

Transport Police (BTP) Cyber Team. These

partnerships enable the Group to access timely

national threat intelligence, contribute to sector-

wide cyber resilience efforts, and coordinate

effectively in the event of a significant incident.

The Group maintains a comprehensive

cybersecurity governance framework, underpinned

by a suite of policies covering information security,

data protection, privacy and cybersecurity. This

year, the Group further enhanced its governance

by introducing a dedicated AI Policy. See further

details in the risk management section on pages 60

and 66.

A strong security culture is promoted across the

organisation through regular cyber awareness

training and phishing simulations. A clear escalation

process is in place to facilitate swift and effective

internal reporting of any suspicious activity or

cyber threats.

Through strong leadership, collaborative

engagement with national cybersecurity bodies,

independently verified security standards, and a

commitment to continuous improvement, the Group

remains well positioned to manage cyber risks,

protect digital assets, and support the delivery of

secure, resilient services across all business areas.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Diversity and inclusion

To better understand and meet the needs of the

diverse customers and communities we serve, we

are committed to increasing the diversity of our

workforce. We recognise that attracting and

retaining people with different backgrounds and

experiences requires an inclusive culture where

everyone feels valued and respected. While we are

proud of the progress being made in many areas,

we acknowledge there is still more to do, therefore,

we are committed to making our workplaces

inclusive for all our colleagues, regardless of their

gender, ethnicity or any other characteristics.

Our Responsible Business Committee plays a key

part in reviewing the practices and performance

of the Group in supporting our people, and in

particular our progress towards meeting the

Group’s goals and objectives with regard to ED&I,

including the Parker Review. We have set targets

to be achieved by 2028 for our senior leadership

population, where we aim to have 40% of roles

filled by women, and to have 11.0% of roles filled

by colleagues from a minority ethnic background.

The composition of the Group continues to evolve.

As of 31 March 2025, women occupied 20.4%

of all roles across the Group and 32.4% of senior

leadership roles

. Minority ethnic colleagues

occupied 12.9% of all roles and 5.9% of senior

leadership roles

. Over the last 12 months, 20.2%

of all hires were women and 29.7% were from

a minority ethnic group.

In collecting this sensitive data from our colleagues,

over 68% of our colleagues are comfortable to

share their ethnicity with us, over 43% their ability

status and 46% their sexual orientation. Whilst we

still have a way to go, we continue to be committed

to increasing disclosure of protected characteristics

across the Group, to have a better understanding of

the composition of our workforce. We are working

with our newly acquired Bus and Coach businesses

to capture and report on sensitive data.

The above ‘senior leadership’ population is an expanded

population from the reported Hampton-Alexander population

which allows us to evaluate the success of our development

programmes and track our progress against targets.

FY 2025

Women

Men

Total

Number

Total

population

7,260

20.3

28,457

79.7

35,717

Senior

management

32.7

67.3

Board

56.6

44.4

FY 2024

Women

Men

Total

Number

Total

population

6,442

20.8

24,553

79.2

30,995

Senior

management

32.8

67.2

Board

44.4

55.6

Development programmes

We run a number of personal leadership development

programmes, aimed at women and ethnically diverse

colleagues. Our Senior Women’s Leadership programme

was refreshed and relaunched in 2023, and our ‘Step’

and ‘Reach’ programmes continue to successfully

provide a pipeline of talent for our senior and middle

management roles.

Our advocate network ‘First Connections’ has gone from

strength to strength this year, with further sessions being

held in June 2024 and in February 2025 which were

attended by over 250 colleagues. The network includes

nearly 500 colleagues from under-represented groups

who have completed one of our personal leadership

development programmes. The network creates a self-

supporting, diverse community of talent to support each

other in their careers.

Supporting

our people

We employ around 30,000

people in depots, stations

and offices, providing vital

services which connect

people and communities.

Our people are at the heart

of our business, and we are

extremely proud that they

keep customers moving.

Ethnicity – FY 2025

White

54%

Ethnic minority group

13%

Unknown

33%

Disability status – FY 2025

Not disabled

39%

Disabled

Unknown

57%

Sexual orientation – FY 2025

Heterosexual

42%

LGBT

Unknown

54%

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Attraction and recruitment

We have an external careers website which collates

all live job opportunities from across the Group into

one place. It enables visitors to contact our

FirstGroup ‘Insiders’, current colleagues who have

volunteered to share their career experiences and

answer questions about what it’s like working for

our brand companies across the Group.

We also have an internal opportunities page,

to allow current colleagues to explore what job

opportunities exist across the Group, including

live roles, secondment and project opportunities.

Our careers website and social media channels

are continually updated to showcase examples

of colleagues from under-represented groups.

We continue to utilise specialist recruitment

programmes such as Routes into Rail, Vercida

and Diversifying Group, to recruit diverse talent

and inspire new transport professionals.

We organise various events to attract and recruit

diverse talent. Hull Trains teamed up with Northern

to inspire the next generation of female train

drivers, with a Women in Rail event at its recently

launched Learning and Development Academy.

College students from across Yorkshire got the

chance to learn more about driver careers and to

use the operator’s new train driver simulator.

Driving inclusion

We have a variety of inclusion networks that

colleagues can participate in, which provide a safe

space for colleagues to support each other. Many

of these networks have senior leader sponsorship.



First Bus launched a LIFE network to support

inclusion and Elevate, an Intentional Allyship

programme for ethnic minority colleagues to

match them with senior leader mentors



First Bus hosted an industry first, ‘the Inclusive

Cab’ summit, partnering with Women in

Transport to create a gold charter for inclusive

bus cab design, which was shortlisted for the

National Transport Awards



GWR launched an inclusion hub with guides,

webinars and videos on inclusion, anti-racism,

Allyship, LGBTQ+ and gender identity



In FY 2025 GWR won the Rail Business Award

for ‘Diversity & Inclusion in Rail’ for its

achievements in gender inclusion



FCC established 12 diversity champions to

support ED&I

Skills for the future

The changing nature of transport and mobility

requires a healthy, engaged, agile and diverse

workforce with the skills and expertise for a

zero-carbon economy and to deliver mobility for

the future.

Our apprenticeship programmes are an important

way of growing the engineering and operational

skills which are vital to our business. We are

running industry-leading programmes that are

fully integrated into the fabric of our organisation,

working in key areas of the business such as

operations engineering, human resources,

customer service and business administration.

We have 1,014 apprentices in training across First

Bus and First Rail, with 21.8% of apprentices

recruited over the last year being women.

95% of Lumo’s operational workforce began on

apprenticeships. Lumo has partnered with provider

Train’d Up for the past five years to deliver

apprenticeships for train drivers and other roles.

In August 2024, a new cohort of 36 engineering

apprentices began their First Bus journey at our

dedicated training academy at Reaseheath College.

Reaseheath College offers a unique depot-style

environment to help our apprentices transition

between college and the workplace. By working

with replica equipment, our apprentices can then

put the skills they learn straight into practice at

our depots. A key part of the apprenticeship is a

focus on zero emission vehicles, providing our

apprentices with the skills to progress their careers

whilst enabling us to future-proof our business.

Diversity and inclusion

continued

Wellbeing

The wellbeing of our people remains a key priority

for FirstGroup. Our achievements this year include

the following:



Group-wide our employees can access various

resources from the wellbeing hub



We have over 650 Mental Health First Aiders

across the Group, with 400 in First Rail and 250

in First Bus



First Bus rolled out Money First Aid training to

colleagues in support roles, enabling them to

support colleagues facing financial difficulties



First Bus has become a Period Positive

Workplace, supplying free period products

to colleagues



Tram Operations launched a colleague

support service in FY 2025 with strong

monthly engagement



Lumo has expanded its ‘Work Well Wednesday’

initiatives to promote wellbeing



Avanti has established wellness action plans for

all colleagues, provided mental health eLearning

for managers and holds face-to-face training

sessions for senior managers and leaders



SWR was highly commended at the Rail Business

Awards for ‘Wellbeing in Rail’

Real Living Wage

To attract and retain the skills we need, we offer a

competitive wage reflecting local market demands

and conditions. In First Rail, Avanti and Tram

Operations Ltd. are accredited Living Wage

Employers and pay the Real Living Wage (RLW) to

employees and to third party contractors working

directly for the Group, in accordance with the Living

Wage Foundation rates of pay. First Bus also

became a RLW employer in 2024 and, in line with

this new commitment, there is also a commitment

(outside of accreditation requirements) to include all

First Bus apprentices. GWR and SWR also pay the

RLW to directly employed colleagues.

Employee engagement

All our businesses carry out regular ‘Your Voice’

surveys, giving employees the opportunity to share

their views on the way they are managed, and how

likely they are to recommend FirstGroup as an

employer. These surveys are anonymous and

managed by an external specialist company to

encourage candid feedback. Surveys from across

our businesses conducted in 2025 have shown

some improvement in response rates and in

engagement levels. In February, First Bus

conducted its latest survey, which showed a

year-on-year increase of 4% increase in

engagement levels to 64%. For all rail divisions that

conducted a survey in 2024, engagement levels

were all above 60%, with GWR and the open

access train operators, Hull Trains and Lumo,

all having engagement levels at 70% or above.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Communities

Foundations of a

responsible business

Social value

Throughout our businesses we report on the social

value we create in local communities around the

UK. This year Hull Trains and Lumo partnered with

the Purpose Coalition to launch the ‘Breaking Down

Barriers in Rail’ impact report which showcases

how these open access operators drive social

mobility, economic growth and environmental

sustainability through their services.

Meanwhile our DfT TOCs also publish annual social

value reports and measure their impact using the

Rail Safety and Standards Board’s (RSSB’s) social

value tool. Key highlights from this year include

supporting young people through schools’

programmes, improving accessible travel,

enhancing health and wellbeing initiatives for

colleagues, and driving up the number of small

businesses in our supply chain. Further information

can be found in their respective reports as follows:

Our communities | Avanti West Coast

Social Value | Great Western Railway

Social Value Report | South Western Railway

Charitable giving

As a vital part of people’s daily lives, our bus and

rail networks help amplify charitable efforts. We

offer employee matched funding, empowering staff

to support causes they care about, and in FY 2025,

222 employees took part in our matched funding

scheme, raising funds for over 91 charities.

Furthermore, employees can donate directly to

a charity of their choice using our payroll giving

scheme, which raised over £174,000 in FY 2025

and was awarded a Payroll Giving Silver Award.

Our charity partners, Macmillan (First Bus),

Samaritans and Railway Children (First Rail), are

chosen by our employees and align with our

business values. To support our partners, we run

various schemes, including gift-in-kind donations

for advertising space totalling £800,000 in media

value, customer and employee donations from

fundraising initiatives totalling over £210,000, and

provide spaces to run events and awareness-

raising across our networks. Overall, our total

charitable contributions across the Group came to

over £1.3m.

Community investment

Community Rail Partnerships (CRPs) are not-for-

profit organisations that connect railways with

local communities, promoting social inclusion,

sustainable travel and economic development.

With over 70 partnerships and numerous station

adopters, CRPs deliver a range of activities that

benefit local communities.

Our DfT TOCs also support communities through

the DfT’s Customer and Community Improvement

Fund (CCIF), funding small and medium-sized

rail-related projects on our networks, including

accessibility schemes, educational projects and

heritage schemes.

Station adopters, including community groups,

charities and businesses, play a vital role in local

social, cultural and economic development. Our

DfT TOCs fund their membership in the Community

Rail Network, providing access to grants, training,

advice and resources.

Case study

Avanti’s Feel-Good

Field Trips

Avanti’s Feel Good Field Trips initiative

provided enriching experiences for school

children aged 4-18, promoting social inclusion

and educational enrichment. Over 5,250 pupils

participated in 215 trips in FY 2025, enhancing

learning opportunities and cultural awareness.

The initiative successfully connected young

people to valuable learning experiences,

exemplifying Avanti’s commitment to

community investment.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

12.00

10.00

8.00

6.00

4.00

2.00

0.00

2021

2022

2023

2024

2025

Fiscal Year

16.00

14.00

12.00

10.00

8.00

6.00

4.00

2.00

0.00

2021

2022

2023

2024

2025

Fiscal Year

6.00

5.00

4.00

3.00

2.00

1.00

0.00

2021

2022

2023

2024

2025

Fiscal Year

The transport industry, by its nature, involves

a high volume of journeys across our networks.

We take seriously our duty of care to ensure that

our customers can safely use our services and

that our employees work in an environment where

they can perform their duties safely.

We maintain robust safety management systems

throughout the Group, ensuring compliance

with legislation, policies and procedures. Our

Responsible Business Committee oversees

our safety performance across all operating

companies. We regularly review our health

and safety risk profile to ensure continuous

improvement and integration of lessons learned.

We also leverage technological advancements to

mitigate risks and reduce the likelihood of incidents.

Our aim is to reduce our passenger and employee

incident and injury rates from their current levels,

something we hope will be achieved by these

actions, and those in First Bus and First Rail.

Safety

First Bus continues to enhance safety management, with a strong focus

on training, compliance, and engagement. This year:



Over 800 managers and supervisors completed our industry-leading

IOSH-approved Road Passenger Transport-Specific Health & Safety

training programme



We maintained our ISO 45001 and ISO 14001 accreditations,

demonstrating our commitment to independently verified

safety and environmental standards



We launched a trade union safety representatives’ support programme,

equipping representatives with training and a dedicated toolkit



We aligned safety management systems across new acquisitions

to maintain consistency across all sites and services



We continued to support new drivers through our Thru-Care programme,

which provides phased learning and performance tracking



We strengthened contractor safety with an improved permit system



Our ‘Hold, Look, Land’ campaign was reinforced to reduce slips,

trips and falls during boarding and alighting



We concluded an urban fatigue trial, highlighting the need for a proactive

focus on wellbeing, shift patterns and preventative measures



We initiated a review of our ageing driver profile, ensuring our controls

remain robust while supporting driver health and wellbeing

First Rail

Lost time injury rate

Passenger injury rate

Fatigue risk

management

We concluded a fatigue urban

trial, finding low but present

fatigue-related risks in urban

operations. Our response

focuses on driver wellbeing,

shift pattern management, and

maintaining our stringent drug

and alcohol testing procedures.

High-speed services will

continue using fatigue

detection technology.

First Bus

Case study

Our rail businesses maintain a comprehensive safety management

system, ensuring:



Regular risk assessments based on changes in legislation,

operations and incident learnings



A focus on a strong health and safety culture through structured

induction, training and best practice sharing



Independent certification of our safety management system,

ensuring compliance with ISO 45001 standards



Safety initiatives targeting the most common risks, such as slips,

trips and falls, with tailored campaigns and staff training



Continuous monitoring and mitigation of Signals Passed at Danger

(SPADs) through driver-focused engagement and our ‘Respect the

Red’ campaign



Enhanced internal railway integrity inspections, ensuring

infrastructure safety.



External recognition such as Hull Trains receiving an ‘excellent’

rating from the ORR

Violence against

women and girls

(VAWG) initiative

First Bus took significant steps

to strengthen our response to

VAWG across the bus and coach

industry. We mobilised safety

representatives with training and

resources to support depot-level

safety management. We also

upgraded ticket machines

to record crime incidents,

integrated crime reporting apps

for colleagues and customers,

and developed partnerships with

Strut Safe for real-time support.

(per 1,000 employees)

(per million miles)

(per million journeys)

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Ethics

Our policy framework

Our Group-wide policies are available on our

website and cover the whole Group to ensure

that all our businesses are performing to the

highest ethical standards and are accountable

for their performance.

These include our Code of Ethics and Supplier

Code of Conduct. These Group-wide policies

must be attested to by employees and suppliers

respectively on an annual basis. Both policies cover

topics including anti-bribery and corruption,

modern slavery, health and safety, environment,

and other areas of legal and ethical compliance.

Both the Code of Ethics and Supplier Code of

Conduct are supported by separate detailed

Group-wide policies and procedures, including a

Bribery Policy, Fraud Policy, Gifts and Hospitality

Policy, Insider Dealing Policy, Procurement Policy

and a Modern Slavery Statement. Certain

individuals and departments have additional

policies such as a Share Dealing Code, which

are published on our intranet sites or respective

business websites.

These policies are implemented and managed

by the senior management team in each of our

divisions. Our Code of Ethics and other policies

describe the mechanisms employees can take

for reporting and investigating concerns about

unlawful behaviour or behaviour contrary to the

respective policies, further details of which can be

found in our whistleblowing section on page 44.

Our employee appraisal system considers

compliance with our Policies, including the Code of

Conduct. Employees who breach these policies will

face disciplinary actions, with potential dismissal

for the most serious breaches.

Anti-bribery, fraud and corruption

We have a zero-tolerance approach to bribery,

fraud and corruption, and are committed to acting

professionally, fairly and with integrity in all our

business dealings. We never offer or accept any

form of payment or incentive intended to improperly

influence a business decision including any political

contributions, donations or payments, as outlined

under our Group-wide Anti-Bribery and Corruption

Policy, Fraud Policy and Code of Ethics, to which all

colleagues must attest on an annual basis. Our

policies are consistent with our commitments to the

UN Global Compact and national commitments to

the United Nations Convention against Corruption.

The Group’s Anti-bribery Steering Committee has

the primary and day-to-day responsibility to ensure

that our internal control systems and procedures

are effective in countering bribery and corruption.

We expect our suppliers to undertake their work

with a similar zero-tolerance approach. This is

outlined in the Supplier Code of Conduct that all

suppliers must sign. This Code outlines the

expectations that suppliers must adhere to all laws,

implement and enforce effective systems, and not

accept bribes. This year we enhanced the anti-

bribery and corruption screening criteria in our

supplier onboarding platform, further information

of which can be found on page 44.

Human rights

We recognise our responsibility to ensure that

FirstGroup operates in a manner that respects,

protects and promotes the human rights of all

individuals who interact with our operations. We

have several Group-wide policies that govern our

Human Rights and Modern Slavery commitments

to employees, customers, suppliers, contractors

and any other stakeholders who interact with our

business. The Board has ultimate responsibility for

these policies, and they are made in line with the

International Bill of Human Rights, the UN Guiding

Principles on Business and Human Rights, the

United Nations Universal Declaration of Human

Rights and the Children’s Rights and Business

Principles. They cover fundamental human rights,

including human trafficking, forced and child labour,

freedom of association, right to collective bargaining,

fair and equal remuneration, discrimination and

harassment, and safe workplaces.

Our annual Modern Slavery and Human Trafficking

Statement outlines our policies and the steps we

take to address modern slavery risks in our

business and supply chains. You can find this

statement on our website. In alignment with our

commitment to continuous improvement, we apply

this statement to all our businesses, regardless of

size, location or turnover, even those not legally

required to make such a statement under the

Modern Slavery Act or equivalent legislation.

Our Modern Slavery Working Group meets regularly

to review the steps being taken by the Group to

detect and remedy modern slavery and human

rights within our own organisation and our supply

chain. We conduct assessments of our human

rights and modern slavery risks. This year particular

attention was focused on risks associated with

human rights in our supply chain, full details of

which can be found on page 44.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Ethics

continued

Value chain

Whistleblowing

Our Whistleblowing Policy covers all full-time

and part-time employees, officers, consultants,

contractors, casual workers and agency workers

in all FirstGroup companies. It also covers

whistleblowing allegations raised by external

agencies, including suppliers and customers.

The Policy outlines the measures, safeguards and

protections put in place to allow an individual to

report suspected wrongdoing, irregularities or

dangers at work in a confidential and independent

manner, along with the process, protection and

support they will receive. The policies and

procedures include processes to avoid retaliation,

respect rights of privacy, data and other protections

for anyone whistleblowing.

We have an independent and externally managed

whistleblowing service available 24/7, 365-days-a-

year across the Group with an international,

multi-language helpline (online and phone-based),

email and web portal, for the anonymous reporting

of suspected wrongdoing or dangers at work

available to anyone including colleagues,

contractors, customers, suppliers and other third

parties. The hotline is actively communicated all

stakeholder groups via several digital and physical

channels, as well as being available via the Code of

Ethics, Supplier Code of Conduct and other policy

and training materials. Whistleblowing events are

logged by the third party and an independent

person will be nominated to investigate the matter.

Depending on the nature of the matter, the

investigator will be an independent manager or

someone from our internal audit function or HR

team. We aim to complete the investigation within

30 days and provide feedback to the individual who

has made the report throughout the process. The

Board receives reports on the operation of the

whistleblowing hotline and whether reports lodged

have been upheld and, if so, how they have been

dealt with.

See our Whistleblowing Policy Statement on

our website.

Governance, training and

implementation

We have mandated centrally a set of minimum

requirements for training, testing and policy

attestation across a range of ethical and

compliance topics, including anti-bribery and

corruption, human rights and modern slavery.

All non-frontline staff are required to complete an

annual attestation confirming that they understand

and comply with each of the policies. In addition,

senior managers and higher-risk individuals are

required to complete training and pass tests

annually on topics including bribery and anti-

corruption, fraud, insider dealing, human rights,

modern slavery and more. Rates of compliance

with the mandatory training and attestation

requirements are reported monthly to the senior

management team and to the Board on a periodic

basis. The minimum requirements are reviewed

and updated as appropriate to address new or

evolving risks.

Divisional management teams are responsible

for ensuring that these core requirements are

implemented and adhered to within their

respective businesses. They are also responsible

for assessing whether stricter or additional

requirements are appropriate to the particular

ethical and legal compliance risks faced by their

respective businesses and implementing such

further measures as are deemed necessary to

mitigate those risks.

Sustainable supply chain

We work with more than 4,500 suppliers across

our business, spending around £3.2bn each year

on goods and services. Collaboration and the

sharing of best practice with our key partners

helps us understand and respond to the needs

of our customers and stakeholders to deliver

increased value.

Policies

The Supplier Code of Conduct aligns to our Code

of Ethics and sets out the standards our suppliers

are expected to adopt in relation to health and

safety, business ethics, legal requirements, human

rights, labour practices, the environment and

reporting concerns. It applies to all suppliers and

partners, including subcontractors, service

providers, consultants, intermediaries and agents,

who supply products or services to FirstGroup

and its subsidiaries. All suppliers and employees

must also operate in adherence to the Group

Procurement Policy, which includes elements

relating to environmental and social sustainability.

Screening

We have a robust supplier onboarding process in

place to assess a supplier’s suitability, financial

stability and risk. Critical suppliers are invited

to join our supplier assurance platform, where

additional information is collected based on their

risk level.

This year we have onboarded many of our existing

suppliers to the platform, allowing greater

transparency. Overall, we have 1,077 registered

suppliers, representing 23% of all suppliers in

FY 2025, 700 of which are at membership level,

providing detailed assurance information, 300 of

which are low-risk suppliers onboarded at a lower

assurance level.

What this gives us is a detailed view of ESG

risks associated with our supply chain, as well as

other risk indicators, which enable us to establish

collaborative action plans in partnership with our

suppliers and internal stakeholders.

Supplier audits

Our supplier assurance platform allows suppliers

to be audited for different criteria, including those

relating to ESG. The platform provides audit

documentation, outcomes and any non-

conformances. Audit results are shared not only

within the Group but also with other companies

on the platform (where appropriate), enabling

transparency and collective action.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Responsible business

continued

Our commitments, actions and

focus areas

We were the first UK public transport operator to

support the Task Force on Climate-related Financial

Disclosures (TCFD), and this will be our fifth year

of reporting against the framework in our Annual

Report. Our business strategy was updated in

2024 to reflect our progress and ambition. Driving

modal shift and leading in environmental and social

sustainability were both placed at the heart of this

new strategy, forming two of the four pillars. This

strategy was built upon in 2025 with the release

of our first ever Climate Transition Plan (CTP) in line

with the Transition Plan Taskforce (TPT) framework,

detailing our approach to reducing GHG emissions,

managing climate-related risks, and contributing to

an economy-wide transition through modal shift

and encouraging more people to switch to

lower-impact forms of transportation. This plan sets

out a comprehensive strategy for achieving our

climate transition goals, describing our governance,

dependencies, financial planning and risk

management approach. It also outlines

our ambitious goals and targets along with our

progress and future trajectories. These include

our science-based targets outlined on page 34

and progress reported on pages 34 and 35.

To ensure the success of our business for the long

term, we are focused on climate change adaptation

and resilience – understanding the physical and

transition impacts climate change can have our

business over the short, medium and long term,

and taking action to mitigate the risks and capture

the opportunities. Climate change is managed and

reported as one of our principal risks and has been

an integral part of our risk management framework

for many years.

Following a qualitative review of climate-related

risks and opportunities in FY 2021, and a

quantitative scenario analysis and financial impact

assessment in FY 2022, for the past three years

we have worked with key internal functions to

build further understanding of climate risks and

opportunities and understand how they are being

addressed. This year the publication of our

Group-wide CTP takes this a step further by clearly

outlining trajectories and plans over the short,

medium and long term to 2050.

This TCFD update therefore provides a summary

of the key climate-related risks and opportunities

already reported for the first time in our Annual

Report 2022 (pages 62 to 64), and an overview of

what we are doing to continue to reduce our carbon

footprint and build climate resilience. We report

against the four pillars of TCFD – Governance,

Strategy, Risk Management and Metrics & Targets

– and the individual requirements of each (see

the table on page 46 for the location of relevant

disclosures). In line with the UK Listing Rules, we

confirm that disclosures are consistent with the

TCFD recommendations. Under the metrics and

targets section, we explain how limited Scope 3

emissions calculated using actual source data from

our value chain are included in the Annual Report

and all material Scope 3 emissions calculated

using a spend-based method are included in

our Environmental Performance Report 2025 which

can be found on our website.

In preparing these disclosures, we considered

the 2021 TCFD Guidance ‘Implementing the

Recommendations of the Task Force on Climate-

related Financial Disclosures’, including the

supplementary guidance for the Transportation

group. However, we recognise that climate-related

risk assessments are subject to data availability,

trend projections and underlying business

assumptions. It is therefore important to continue

to monitor climate-related risks and how they

evolve over time, and we will periodically

assess the need to update our 2022 impact

assessment to account for any significant

changes in key parameters.

Finally, we look at our TCFD work not just as a vital

mechanism to build long-term business resilience,

but also as an important step towards increased

transparency around climate as well as broader

sustainability-related risks and opportunities, in

line with recommendations by the International

Sustainability Standards Board. To this end,

we have formed a working group comprising

Corporate Responsibility and Finance teams

that work collaboratively to prepare for any

future disclosure requirements for our company

that could emerge based upon these newly

launched standards: (i) IFRS S1: General

Requirements for Disclosure of Sustainability-

related Financial Information; and (ii) IFRS S2:

Climate-related Disclosures.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

TCFD recommendations

Subheading

Page

Governance

a) Describe the Board’s oversight of climate-related risks and opportunities.

Board oversight

Read more on page 53

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Management of climate-related risks is aligned

with the robust corporate governance frameworks

and processes in place throughout the Group.

The Board, Executive Committee and our individual

bus and rail divisions regularly review climate-

related risks in accordance with the Group’s risk

management framework and consider broader

sustainability matters in line with duties included

in the Corporate Governance Code and Section 172

(see page 57).

Board oversight

The Board is responsible for promoting the

Company’s long-term sustainable success for the

benefit of its shareholders. This aim extends to the

setting of our approach to climate-related risks and

opportunities and our decarbonisation ambitions,

which now form a key part of our broader business

strategy. Driving modal shift and leading in

environmental and social sustainability are both

placed at the heart of this strategy, forming two of

the four pillars.

Our Responsible Business Committee of the Board

meets four times a year to review the practices and

performance of FirstGroup, its companies and joint

ventures, with respect to health and safety, our

people and communities, the environment and

our decarbonisation transition. The Chair has

overall responsibility for the Committee, which

comprises several Board members with specific

climate-related and energy transition expertise,

described in more detail on pages 74 to 76.

Governance

TCFD recommendation:

Disclose the organisation’s governance

around climate-related risks and opportunities

At each meeting, the Committee receives a detailed

performance update from First Bus and First Rail

against specific commitments and targets and

discusses strategic priorities going forward.

Over the last year, the Committee reviewed and

guided, for example FirstGroup’s plans for further

embedding the TCFD recommendations across

the business, our work undertaken to integrate

sustainability into our procurement approach

and our annual performance against our science-

based targets.

To further support Board-level oversight of

climate-related matters, during FY 2025 we ran

an in-depth briefing session for the Board covering

the development of our first-ever Group-wide CTP

and how it aligns with the reporting requirements of

the UK’s new TPT framework.

In addition, the Audit Committee supports the

Board in the management of risk, including

climate-related risks, and is responsible for

reviewing the effectiveness of risk management

and internal control processes. The Audit

Committee reviews climate-related risks as

relevant in relation to going concern, viability

statement and the assessment of impairment.

See page 72 for more information on Board

Committees and how our Board operates and

pages 58 to 60 for more details on how risks

are reviewed and considered in strategic

business decisions.

Management’s role

The Executive Committee provides leadership

and direction for the Group on sustainability

matters, including climate change, with material

issues presented by the Group Corporate

Responsibility and Finance teams for discussion

and decision making as they arise throughout

the year. The Executive Committee also

integrates decarbonisation commitments into

strategic decisions, major transactions and risk

management, carefully considering any trade-offs.

Executive responsibility for sustainability matters

is held by the CEO. Executive responsibility for

climate-related financial risks and opportunities

is held by the CFO, who represents these matters

at Board level.

First Bus and First Rail have executive management

individuals responsible for driving environmental

sustainability across the divisions, leading on

the development and implementation of

decarbonisation strategies and risk mitigation

actions. In First Bus, the Chief Sustainability

and Compliance Officer sits on its Executive

Committee to oversee this agenda and participates

in a cross-functional decarbonisation forum that

meets monthly to set policy, drive action and review

progress. Similarly, First Rail has a sustainability

working group, including senior leaders from

sustainability, operations and engineering, who

meet quarterly to discuss climate-related matters

as part of a broader sustainability strategy for

Rail. The Group Executive Committee receives

regular divisional updates from Bus and Rail

leadership teams.

To strengthen ownership and accountability,

climate-related KPIs are embedded into our

variable remuneration practices. For example, our

Long-Term Incentive Plan (LTIP) awards, made to

the CEO, CFO and other senior leaders, include

two measures – one related to the number of zero

emission vehicles in our bus fleet, and one linked

to a reduction in our absolute Scope 1 and 2

emissions (see page 99 for more details).

Performance against these targets is reviewed

half yearly by the Remuneration Committee of

the Board.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Climate change is managed as one of our principal

risks and is a core consideration in business

strategy and decision making. Physical risks

include more intense precipitation and extreme

temperatures, whilst transition risks include

changes in policy, technology, customer and

investor expectations. Alongside potential

risks, we view a shift in customer preferences

towards lower-carbon alternatives and strong

governmental and regulatory support for

transport decarbonisation and modal shift as

key business opportunities.

Climate-related risks and

opportunities and scenario analysis

In FY 2022, we worked with a specialist

consultancy to model potential physical and

transition risks and opportunities to our business

over the short, medium and long term, and to

estimate cumulative Enterprise Value at Risk over

a five-year period (2022-2027). With no significant

change to key business parameters and underlying

assumptions since our 2022 assessment, this

TCFD update provides a summary of impact areas

already reported in 2022, and an overview of what

we are doing to continue to reduce our carbon

footprint and build climate resilience across

our operations.

Strategy

TCFD recommendation:

Disclose the actual and potential impacts of climate-related risks and opportunities

on the organisation’s businesses, strategy and financial planning where such information is material.

Using a digital twin of FirstGroup, we modelled

impacts across five different climate scenarios,

from a world where there is little to no climate

policy in place and global temperatures increase

by a catastrophic 4°C, to a world where there is

rapid transition to a low-carbon economy and

global temperature increase is limited to 1.5°C

above pre-industrial levels. See Table 1 and refer

to our ARA 2022 (at pages 61 to 63) for more details

on individual scenarios.

Whilst in some of our modelling we considered

five individual scenarios, this report focuses on

the two most extreme ones and the ‘Stated Policy’

scenario, to consolidate some of the findings, but

still illustrate the full range of estimated impacts.

Across these scenarios, we looked at potential

transition and physical impacts to our business

from 2022 until 2027 (short term), 2035 (medium

term) and 2050 (long term). The medium- to

long-term scenarios align with First Bus’s target

of a zero emission commercial bus fleet by 2035

and the UK’s net-zero goal by 2050.

Transition risks and opportunities

Our analysis of transition risks considered potential

impacts on our business from changes in policy

(such as carbon pricing), technology (additional

capital expenditure required to meet more stringent

environmental standards), brand reputation

(customer expectations and FirstGroup’s

environmental credentials and ability to meet

carbon-reduction goals), and capital markets

(investor expectations and impact on funding

access/costs).

Given our industry, we also expect growing

opportunities over the coming years to counteract

some of these risks, mainly linked to a more rapid

modal shift supported by customers’ increasing

climate consciousness and more stringent climate

policy and market incentives. We are working with

our bus and rail divisions to understand how the

pace at which we electrify our fleet and progress

towards our net-zero goals could affect our ability

to capture these opportunities.

Our modelling work identified impacts from policy,

technology, investor and customer behaviour as

the most material to our business, as outlined in

Table 2. There is also a detailed description of the

impact of each risk or opportunity on our business

within the Risk Management section. Risks or

opportunities were considered material if they

had at least a ‘medium’ impact under at least one

scenario in Table 2. It is important to note that

these potential impacts focus on direct risks to

FirstGroup, recognising that under the current

NRCs some of the wider risks and opportunities

for our Rail operations would be shared with or

transferred to third parties.

Physical risks

When looking at physical risks, we considered the

potential impacts of acute climate events, such as

more frequent and more severe floods, storms,

rainfall, heatwaves and droughts, as well as the

impacts of more chronic and long-term changes

such as rising sea levels and a global increase in

temperatures. Financial impacts from these events

range from operational disruptions and asset

damage to health and safety risks, insurance costs

and revenue loss.

Table 1: Climate scenarios considered in risk modelling

Policy Pathway

Policy

Current

Policy

Stated

Policy

Paris

Agreement

Paris

Aspiration

Global temperature increase

>4°C

3°C

2.5°C

2°C

1.5°C

Global emissions reduction target

by 2100

50%

by 2100

75%

by 2100

Net zero

by 2070

Net zero

by 2050

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Our analysis identified flooding as our most

immediate and material risk due to potential

operational disruptions and asset damage. We

therefore carried out a separate, in-depth flood

modelling exercise covering riverine, surface water

and coastal flooding in FY 2022. The model

considered the top 240 most critical property

assets owned, leased or managed by FirstGroup

or our subsidiary companies and assessed the

maximum metres of flooding expected at these

locations over different timeframes. The purpose

of this exercise was to identify assets at high risk

of flooding, assess potential financial impact and

strengthen mitigation measures going forward.

The model showed that the majority of FirstGroup-

owned assets have limited/low exposure to flood

risks in the short term and estimated potential

financial impacts, cumulative over the period from

2022 until 2027, to range from £20m in a 4°C world

to £4m in a 1.5°C world. We have engaged with

our bus and rail divisions since this analysis was

first carried out in FY 2022 and we remain ready

to respond by drawing upon our pre-existing

flood response plans and procedures should an

incident occur.

Our assessment focused on potential impacts to

assets that we own, lease or manage, but our

exposure to climate risks critically also depends

on assets that are owned and managed by third

parties, such as rail tracks owned and managed

by Network Rail. In FY 2025, we have worked ever

more closely on this agenda with key stakeholders

across the rail industry, as part of a new forum on

climate change adaptation convened by the DfT,

to start sharing our approach to climate risks and

facilitate closer collaboration on risk mitigation and

climate adaptation.

We plan to again review and assess physical risk

across our operations in FY 2026 and will provide

an update on this assessment in our disclosures

next year.

Strategy

continued

Impact on strategy, investment

decisions and financial planning

We set out the four pillars of our business strategy

on pages 3 to 16. Our First Bus and First Rail

divisions have aligned around these strategic

drivers with clear priorities now in place.

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 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.

Transitioning to a 100% zero emission bus fleet

involves significant capital expenditure and

potential impairment costs, which are both factored

into long-term business strategy and financial

planning cycles of the Group. Our decisions on

capital allocation for new zero emission buses are

driven by considering a total cost of ownership

(TCO) model. This considers both the upfront

purchasing costs and the ongoing operational

costs over the typical lifecycle of a vehicle. Our

operational teams, vehicle manufacturers and

infrastructure partners are working collaboratively

to reduce the TCO for electric buses as compared

with diesel alternatives, particularly in high-capacity

city operations.

Investment will be strategically focused on depots

and routes that are most suitable for deployment

of electric buses and associated infrastructure,

facilitating further emission reductions through

cascades across our wider depots of newer Euro VI

diesel buses to replace older models. Financing the

bus transition will involve generating cash from

operations, requiring higher operating margins to

support the necessary capital expenditure. We

expect this to be achieved through passenger

revenue growth, efficiencies from transitioning

to an electric fleet, route and fare optimisation,

and maximising the use of decarbonisation

infrastructure. Please read page 18 of our CTP for

more details.

In addition, our earlier TCFD work highlighted a

potential increase in future costs from, for example,

new environmental regulatory requirements (such

as carbon pricing) or technology and supply chain

challenges (such as an increase in the cost of zero

emission vehicles and green electricity if demand

outstrips supply). These factors are considered

in our Viability and going concern statement

(see pages 69 and 70).

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.

With rail tracks and infrastructure owned and

managed by Network Rail, any exposure to

climate-related physical risks is shared with them.

Any approach to mitigation actions therefore

requires close industry collaboration.

Strategy resilience

Within our business strategy, our pillar on leading

in environmental and social sustainability includes

clear decarbonisation goals, from running a 100%

zero emission bus fleet by 2035 to reducing our

overall Scope 1 and 2 emissions from bus and rail

by 63% by the same year (from a 2020 base year

and in line with a 1.5°C science-based carbon

reduction pathway). Our pillar on modal shift

includes clear goals to add capacity to our First Rail

open access business and to reposition the First

Bus customer proposition to drive demand away

from car usage and increase Adjacent services

where car usage is becoming less attractive.

Our first-ever Group-wide Climate Transition Plan

sets out in more detail the steps we are taking to

deliver on these ambitions and build resilience

into our overall business strategy. This includes

a description of the specific actions being

taken, accountability for these actions and the

dependencies we are addressing. The plan also

outlines the policy support we feel is required and

the engagement we are undertaking with industry

bodies and public sector stakeholders to bring it

about. Please read our CTP for more details.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Strategy

continued

Table 2: Transition risks – potential Enterprise Value at Risk, cumulative over five-year period (2022–2027), assessed against different emissions pathways scenarios

Transition risks/opportunities

No Policy

Stated Policy

Paris Aspiration

How we are responding

Policy

Action by central

government/regulators,

including carbon pricing

Low impact



Expected carbon price of ~£2 per

tonne by 2025 in some regions



Low emission zones leading to some

route constraints

Medium impact



Expected carbon price of ~£30 per

tonne by 2025 across the UK



Zero emission zones leading to

further route constraints and

potential loss of license to operate

Medium impact



Expected carbon price of ~£65 per

tonne by 2025 across the UK



Zero emission zones leading to

significant route constraints and

potential loss of licence to operate

Please see pages 14, 33, 42

and 48 of our CTP that describe

our approach to public sector

engagement

Technology

Cost and availability

of new technology to

support a lower

carbon economy

Low impact



Potential impairment of carbon

intensive vehicles



Ongoing investment in zero emission

fleet to meet current commitments

Medium impact



Increasing impairment of carbon

intensive vehicles



Some investment in zero emission

fleet ahead of current schedule



Some increase in cost of zero-carbon

vehicles and green electricity

High impact



Significant investment in zero emission

fleet ahead of schedule



Substantial increase in cost of zero-

carbon vehicles and green electricity,

due to demand outstripping supply

Please see pages 27 to 30, 38

to 39 and 37 of our CTP that

describe our decarbonisation

actions

Investors

Financing influenced by

environmental credentials

Low impact



Low focus from investors on green

credentials

Medium impact



Moderate focus by investors



More favourable interest rates for

green companies

High impact



Significant focus by investors



Expected green covenants in financing

Please see page 18 of our CTP

that describes our approach to

financial planning

Customers

Demand driven by

sustainability of products

and services, leading to

increased modal shift

towards public transport

Low opportunity



Small shift to public transport, due

to increasing environmental impacts

and customers’ climate awareness



No transport policy to encourage

modal shift to public transport

Medium opportunity



Increasing shift to public transport

due to customers’ growing climate

consciousness



Some transport policy to encourage

modal shift to public transport

High opportunity



Substantial shift to public transport due

to customers’ high climate

consciousness



Substantial transport policy to

encourage modal shift

Please see pages 17, 31 to 32,

40 to 41 and 48 of our CTP that

describe our approach to

driving modal shift

Low impact

<£20m

Medium impact

£20m–£50m

High impact

>£50m

Limited opportunity

<£20m

Medium opportunity

£20m–£50m

High opportunity

>£50m

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Risk management

TCFD recommendation:

Disclose how the organisation identifies,

assesses and manages climate-related risks.

Approach to risk management

We take a holistic approach to risk management, first building a picture of the principal risks at divisional level, then consolidating these alongside Group-level risks into a Group-wide view (see page 60). The Board

assesses the effectiveness of the Group’s risk management system and receives reports on principal risks, including climate change. It also reviews the external risk environment, scrutinises assessment of key risks

and determines strategic action points.

The Group’s Sustainability teams provide regular ESG updates and insights on market developments to relevant stakeholders and functions across the Group. Climate change is managed as a principal risk, with the

aspects below identified as most material. We have summarised our mitigation actions below, but these are set out in more detail against clear timelines in our recently launched Group-wide CTP.

Policy

risks

More stringent climate policy could result in increased

carbon taxes, road pricing in low-emission zones,

policy-driven compliance costs and enhanced

emissions reporting requirements. An increase in

carbon pricing is expected to drive increases in energy,

facility and material costs. This would be exacerbated

by increasing mandates on the carbon intensity of our

fleet and a diminishing secondary market for legacy

diesel vehicles. At the same time, transport policies

such as road pricing could support an accelerated

modal shift from private cars to public transport and

create key opportunities for our business.

Risk mitigation actions

We have set ambitious decarbonisation goals, including achieving a zero emission bus fleet and a 1.5°C aligned science-based carbon

reduction target for FirstGroup as a whole, with clear progress reported year-on-year. See pages 34 to 36 for more details.

We continue to work closely with governments, industry bodies and other stakeholder groups to monitor regulatory developments, affect

and foresee policy changes, and proactively respond to evolving conditions. In summer 2024, First Bus launched a new white paper ‘Let’s

inspire the nation to love and use the bus’. Its key headline was that buses are key to unlocking economic, social and environmental benefits

– as they can deliver quickly and effectively across many different challenges, including congestion, carbon and air quality. It set out several

fundamental issues with direct relevance to our climate transition with clear asks of government on a policy framework and describes how

bus operators can play their part. Please read page 33 of our CTP for more details.

First Rail is strongly represented on the Sustainable Rail Executive, convened by RSSB, and also chairs its Sustainable Rail Leadership

Group. This has enabled us to be heavily involved in the development of the industry-wide Sustainable Rail Blueprint, the first industry-wide

sustainability plan, co-created and facilitated by RSSB with industry and overseen by DfT. The Blueprint provides a framework for aligning

strategies and commitments across the industry to establish rail as the backbone of a cleaner future transport system. We are also active

members of the industry-wide Climate Change Adaptation Working Group, which leads and defines a collaborative industry approach to

weather resilience and climate change.

Technology

risks

As we move towards a ‘Paris Aspiration’ scenario

(in which policies are put in place to limit global

temperature increase to 1.5°C above pre-industrial

levels), the transformation to net-zero operations would

have to be significantly accelerated, leading to potential

write-offs, asset impairments and/or early retirement

of existing fossil fuel-related infrastructure and vehicle

assets. There could also be additional supply chain

challenges and costs if the transport sector starts

competing for the same technology and specialist

resources and demand outstrips supply. On the other

hand, prices of battery packs are expected to fall due

to continuous innovation and increasing economies

of scale. In addition, with an increasing number of

businesses looking to decarbonise their operations,

our investments in electric vehicles and charging

infrastructure create significant B2B opportunities.

Risk mitigation actions

In First Bus, careful planning is taking place to ensure an efficient and effective conversion of our existing infrastructure to one powered by

electricity. To help guide our investment decisions, we have constructed a total cost of ownership model that compares an electric bus and

infrastructure with the diesel equivalent over its full lifecycle.

The total cost of ownership over the life of the electric vehicle, for now, is a little more expensive than diesel. We are aiming to bring this

TCO down for our electric buses through several initiatives, including: i) a joint venture with Hitachi to support the purchase of up to 1,000

electric bus batteries; ii) smart charging software; iii) optimisation of ‘in day operated’ mileage; iv) making our chargers available for use by

other businesses and the general public; and v) standardising our fleet. Please read page 28 of our CTP for more details.

Within First Rail, a key focus is upgrading our rolling stock to electric or bi-mode trains wherever possible. This year, Avanti launched the

new £350 million Evero fleet, replacing diesel-powered Voyagers with bi-mode trains capable of switching between electric and diesel.

We have also acquired track access rights to run new open access rail services from London Euston to Stirling and London Paddington

to Carmarthen. As part of this, we have entered into a contract with Angel Trains and Hitachi Rail for the lease of 14 new five-car electric,

battery electric or bi-mode trains at a cost of around £500m over a ten-year lease period.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Risk management

continued

Customer

and investor

risks

Growing awareness of climate change amongst

the public is expected to drive demand for more

sustainable travel options, whilst climate-related risks

and opportunities may increasingly affect investors’

priorities and access to capital funds. For our industry,

this creates key opportunities to grow our customer

base as well as the volume of transport services

delivered to our existing customers, subject to the

pace of our fleet electrification and the perception of

the sustainability of our brand and services in relation

to other operators and transport alternatives.

Risk mitigation actions

Driving modal shift by encouraging a step change from car and air travel to bus and train is a key pillar in our new business strategy. First

Rail is focused on growing our open access business by adding capacity, enhancing timetables and applying for new and complementary

routes where there is proven demand. Since its launch, Lumo has carried more than four million passengers and Hull Trains has had a faster

post-pandemic passenger recovery than any other operator.

First Bus is focused on driving modal shift by repositioning its core customer proposition and aligning with changing travel patterns. Its

commercial strategy is all about getting people out of their cars and onto the bus. Passenger volumes increased by 2% in FY 2025

compared to FY 2024 as it introduced new routes, improved connections and increased the span of the day for some services. It is

promoting the bus as reliable, affordable, digitalised and accessible, such that people choose it over cars to make journeys. Please read

pages 31 to 32 and 42 of our CTP for more details.

We anticipate that, with the continuing decarbonisation of our bus and rail operations, and the critical role we play in helping to reduce

carbon emissions through modal shift to public transport, our business will be considered an increasingly attractive option for ‘green’

investment and will be well positioned to access green financing. The launch of our CTP this year is an important tool for engaging with

investors on climate-related risks and opportunities.

Physical

risks

Acute and chronic weather events can affect our

infrastructure and operations. More frequent extreme

weather events could increase disruption to our

services, affecting customer satisfaction and potentially

longer-term customer inclination to use bus or rail

services. Potential costs include loss of revenue,

compensation for disrupted services, increased asset

repair and maintenance costs as well as insurance

costs for infrastructure and vehicles. Severe weather

events could also pose risks to the health, safety and

wellbeing of our employees and customers.

Risk mitigation actions

Robust business continuity plans are in place across the Group to manage the risks from severe weather conditions, including frost

and flooding.

In First Bus, while physical risks to assets might be limited and buses can be rerouted to avoid road blockages, extreme weather conditions

can significantly increase driver absences due to sickness or inability to reach depots. Our weather preparedness plans therefore include

both operational as well as behavioural guidance to help employees stay safe and cope with extreme weather events.

In First Rail, severe weather events such as storms and heat waves can impact the tracks and overhead lines, and cause significant service

disruption. We work closely with Network Rail, which owns and manages the tracks, to resolve disruptions as effectively as possible.

We have also started to carry out site-specific impact assessments at individual rail stations to better understand the impact of physical

risks and develop focused mitigation plans.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Metrics and targets

TCFD recommendation:

Disclose the metrics and targets used to assess and manage

relevant climate-related risks and opportunities where such information is material.

When looking at the results of our 2022 financial

impact assessment of climate-related risks and

opportunities, the key metric used was Enterprise

Value at Risk (EVR), as the measure of the total

estimated financial impact of a given scenario over

a five-year period, discounted to 2022 values. This,

in turn, was affected by other metrics such as our

GHG emissions, used to assess our potential

exposure to carbon pricing.

We have been measuring and reporting our energy

and carbon performance for many years. Please

see details of these metrics on pages 34 to 36,

including:



Our absolute carbon footprint and carbon

intensity (tCO

e per £m revenue)



Our energy consumption and the proportion

of renewables in our energy mix



Our progress against our target of operating

a zero emission commercial bus fleet by 2035

The above KPIs give an indication of our exposure

to policy risks such as carbon taxes, as well as

technology risks related to electric vehicles. They

also strengthen our sustainability credentials with

customers and investors, enabling us to capture

opportunities from modal shift and green financing.

To strengthen ownership and accountability,

climate-related KPIs are embedded into our

variable remuneration practices. For example, our

LTIP awards, made to the CEO, CFO, and other

senior leaders, include targets linked to the number

of zero emission vehicles in our commercial bus

fleet and the reduction in our absolute Scope 1

and 2 emissions. See more details on page 99.

We have set a near-term science-based emissions

reduction target aligned with a 1.5°C ambition

and approved by the SBTi. Our target is to reduce

Scope 1 and 2 GHG emissions by 63% by FY 2035

from a FY 2020 base year. We also commit to

reduce absolute Scope 3 GHG emissions from fuel

and energy-related activities by 20% by FY 2028,

from a FY 2020 base year, and that 75% of our

suppliers by emissions, covering purchased

goods and services and capital goods, will have

science-based targets by FY 2028.

The reporting on our annual performance against

all of these targets can be found on pages 34 to 36.

Our Scope 1, Scope 2 and limited Scope 3 GHG

emissions are reported in line with the GHG

Protocol methodology (see page 35). These metrics

have also been subject to independent limited

assurance by Grant Thornton. Scope 3 reporting

is limited to categories (Waste, Water, Business

Travel, Fuel and Energy-related activities and

Upstream transportation and distribution amounts

limited to First Travel Solutions emissions) for which

we are currently able to gather actual source data

from along our value chain and apply relevant

emissions factors.

For some Scope 3 categories in this assessment,

we have relied upon a spend-based method to

calculate emissions and we will work towards

gathering actual emissions data from external

partners in our value chain over time. Our

Sustainable Procurement Working Group is

currently working to develop a more targeted

approach to gathering emissions data and

promoting carbon reductions in our value chain.

Please see our Environmental Performance Report

2025 for a more detailed update on our key

environmental metrics, performance trends and

progress against targets.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Climate-related financial disclosures

continued

Engaging with our stakeholders

See page 57 for our Section 172 statement

and decisions taken by the Board during

the year.

We interact with a huge range of stakeholders every single day.

Building strong relationships with them involves listening and working in partnership.

Customers

Delivering for our customers is at the heart of what we do.

Their needs are unique to each journey and requirements

constantly evolve. Listening, identifying future needs and being

able to respond quickly is critical. Our teams use a variety of

channels and approaches to engage with customers and

passengers, assessing satisfaction and gathering feedback.

Why we engage with them

We engage them in order to respond to

feedback and improve customer experience

and satisfaction. Longer term, this enables

us to continuously be aware of, and adapt

to, changing customer needs and build

long‑lasting and trusted relationships.

How we engage with them



Regular customer and passenger satisfaction

surveys to identify what we do well and where

we can improve



Robust customer feedback processes

through online and traditional channels



Customer panels and events



Ongoing dialogue with customer

representative groups



Regular customer updates by the CEO

to the Board

Our response to matters raised and

key activities



Our second year of achievement under our

customer‑focused strategic pillar: Deliver day

in, day out. See page 13 for more information



Introduced new customer loyalty schemes,

discounts and live train tracking initiatives at

our rail operators



Investment in 14 new five‑car electric,

battery‑electric, or bi‑mode trains will increase

capacity on Hull Trains and Lumo services



Avanti introduced the new £350m Evero fleet,

replacing diesel‑powered Voyagers with bi

mode trains capable of switching between

electric and diesel



Implemented various initiatives to increase

accessibility of bus and train travel on

our networks



We worked closely with partners to provide

travel connections for large events on our

networks, for example the Cheltenham

Festival; major football matches and Six

Nations rugby matches; and Glastonbury, and

these events saw bespoke travel campaigns

and additional services where necessary

Investors

We welcome open, meaningful discussion with shareholders

on all matters. Being fully aware of the range of our

shareholders’ views is a key aspect of good corporate

governance and supports our commitment to ensuring

that we promote the success of the Group for the long‑term

benefit of our members as a whole. We proactively engage

throughout the year with institutional, private and employee

shareholders on a range of matters.

Why we engage with them

We keep investors informed of key business

activities and decisions and we listen and

respond to questions and concerns in order

to support the long‑term success of the Group.

How we engage with them



Presentations from Executive Directors



Annual Report, Environmental

Performance Report, Group website

and regulatory statements



Ongoing dialogue and individual engagement

with shareholders by the Directors, including

the Chair



Engagement via the Investor Relations function

with current and potential investors and other

market participants



Attendance at investor and industry conferences



Annual General Meeting

Our response to matters raised and

key activities



Declaration and payment of FY 2025 full year

and FY 2025 half year dividends



Approved and launched additional share

buyback programmes



Regulatory announcements and management

calls following publication of Full Year and Half

Year Results and acquisitions completed

during the year



Attendance at a number of investor and

industry conferences

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our stakeholders

Government

Strong engagement with governments at all levels is essential

to our business model, advocating for policy solutions which

ensure optimal operation of public transport by private operators.

At both Group and operational level, we have long‑established

relationships with local and national government officials.

Read more on pages 11 and 12

Why we engage with them

We are focused on achieving policy

solutions that support sustainable economic

growth, social mobility, modal shift and

environmental performance.

Engaging with governments ensures clear

communication and understanding of the

consequences of policy decisions at different

levels, and aids effective delivery of public

transport at the operational level.

How we engage with them



Direct engagement with policymakers



Links with national, devolved, regional and

local governments



Regular surveys of political stakeholders



Membership of UK and international sector

trade bodies who, in turn, engage with

governments and regulators to promote a

positive policy environment for private sector

public transport

Our response to matters raised and

key activities



Engaged with business advocacy

organisations, lobby groups and public

transport campaigns. Welcomed senior

Government and opposition politicians to view

our operations, including Chancellor Rachel

Reeves and Buses Minister Simon Lightwood



Prime Minister Sir Keir Starmer and Transport

Secretary Heidi Alexander visited Hitachi Rail’s

Newton Aycliffe factory in December 2024 to

celebrate our £500m investment in new trains

for open access



Secured ZEBRA funding for electric buses in

several areas including Taunton, Weston‑

super‑Mare and Bristol

Employees

Many thousands of FirstGroup employees work in depots,

stations and offices. They are the face of FirstGroup, delivering

great service to our millions of passengers. We have a broad

range of mechanisms through which our employees have the

opportunity to make their voices heard and inform the direction

and governance of our business.

Read more about our people on page 39

Why we engage with them

We will achieve success by maximising the

benefits of the expertise and experience of our

employees in delivering services and improving

customer experience and satisfaction.

We engage to ensure our people have the skills

and knowledge needed to deliver our services

now and in the future; to create a safe and

inclusive working environment for all of our

employees; and to increase participation and

equal opportunities.

How we engage with them



Regular ‘Your Voice’ employee

engagement surveys



Dialogue with employee representatives,

including Employee Directors and trade unions



Inductions, onboarding sessions and

employee handbooks



Multiple internal communications channels,

including our intranet, briefings, newsletters

and our employee mobile apps



Individual performance reviews and

development discussions



Board and Executive Committee visits to

operational sites, and opportunities for direct

discussions with employees

Our response to matters raised and

key activities



Second year of delivery under our strategic pillar:

Lead in environmental and social sustainability.

See page 15 for more information



Since April 2024, we are now paying all First

Bus directly employed staff at or above the

Real Living Wage, with a commitment to

include all apprentices by April 2026 – the

largest bus operator to do so



Continued growing the ‘First Connections’

network, a Group‑wide personal development

programme aimed at women and minority

ethnic colleagues



Embedded our new careers website which

collates all live job opportunities across

FirstGroup and facilitates contact with current

employees to share career opportunities



Increased collection of diversity data from

colleagues: ethnicity, disability status and

sexual orientation



Launched Holiday ‘buy and sell’ scheme

across First Bus and FirstGroup colleagues

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our stakeholders

continued

Communities

We are at the heart of our communities and we need to

understand community needs in order to improve our services.

We have well‑developed mechanisms in place to help us listen

to and understand the needs of our communities, and we

incorporate their feedback into our decision‑making processes.

Read more about our communities on page 41

Why we engage with them

We engage with our communities to support

social inclusion and respond to local needs for

the long‑term success of our business.

How we engage with them



We conduct regular surveys to help us

understand a range of views and enhance

our activities



We also commit our time, skills and resources

to help charitable causes that are important to

our communities, both locally and nationally



We support national schemes such as the

Community Rail Partnerships, not for profit

organisations that connect the railways with

local communities, and the DfT’s Customer

and Community Improvement Fund (CCIF)

which funds small and medium‑sized

community projects on our networks



We commission reports and research to

understand the social and economic impacts

and value of our operations



We work with local and national groups to

understand and improve affordability and

accessibility, to empower our customers

Our response to matters raised and

key activities



First Bus launched a new employee

volunteering policy



Our DfT TOCs created over £1.6bn in social

value in 2024 (GWR £638m; SWR £700m;

Avanti £346m)



Hull Trains and Lumo worked with the Purpose

Coalition to launch the ‘Breaking Barriers in

Rail for a Better Future’ report



The Group donated over £1.3m in charitable

contributions throughout the year including

gift‑in‑kind, fundraising activities and payroll

giving



Our DfT TOCs supported over 70 Community

Rail Partnerships and provided funding

through the DfT’s Customer and Community

Improvement Fund for projects on our networks

Strategic partners and suppliers

We work with more than 4,500 suppliers driving innovation,

expertise and value for money from our supply chain to

provide the goods and services required to meet and exceed

the expectations of our customers and shareholders.

Our suppliers range from small, independent companies

to global corporations, and we have dedicated teams of

procurement specialists centrally, and within our divisions,

who develop and maintain strong relationships with our

supply chain to drive value and reduce risk.

Why we engage with them

Engaging with suppliers and strategic partners

builds long‑term relationships and enables us to

identify, manage and mitigate risks and ensure

environmental and ethical standards in our

supply chain.

How we engage with them



Key suppliers are engaged through

collaborative relationship management

systems to provide us with clear, consistently

applied processes to track performance and

generate additional value



Regular supplier relationship meetings and

business reviews are held to strengthen

relationships and identify and manage risks



Our core principles are shared across the

entire supply chain via the FirstGroup Supplier

Code of Conduct



We use digital supplier assurance and

management tools to allow for onboarding and

due diligence



We offer support, advice and audits for

suppliers to meet our expectations

Our response to matters raised and

key activities



Zero breaches of the Supplier Code of

Conduct identified in FY 2025



Our Group Procurement Policy outlines our

expectations, processes and due diligence

for current and new suppliers including for

ESG factors



The Group has onboarded more than 1,000

suppliers to our new supplier management

platform to monitor ESG risks



Our supplier assurance platform is

being fully integrated into the Supplier

Onboarding Process



Our supplier assurance platform allows

suppliers to be audited for different criteria,

including those relating to ESG

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Our stakeholders

continued

The Directors are obliged under

Section 172 to promote the success

of the Company over the long term for

the benefit of shareholders as a whole

and having due regard to a range of

other key stakeholders.

The Directors take their duties under Section

172 of the Companies Act very seriously, not

only because it is a legal requirement but also

because the obligations make good business

sense and are consistent with the Group’s

Values. If decisions do not adequately take

account of the views of our different

stakeholder groups, the Company is unlikely

to be successful or sustainable in the medium

to long term.

Details of engagement with key

stakeholders are set out on

pages 54 to 56

The Board is mindful of the matters set out in

Section 172 of the Companies Act in all of its

discussions and decision making processes.

The table to the right and on page sets out

how the Company complies with the Act and

provides some additional detail, together with

the Board’s oversight and monitoring of these

areas. Additionally, we provide examples of

some key decisions taken where the Board

was particularly mindful of one element of

Section 172, although in reality many of the

decisions are nuanced and require the

Board to balance outcomes across a

number of stakeholders.

Section 172 principles

a) Likely consequence

of any decision in the

long term

The Board realises that strategic decisions will impact the

long‑term future, direction and success of the Company

and is mindful of the long‑term implications of decisions.

b) Foster business

relationships with

suppliers, customers

and others

Oversight provided through the Responsible Business Committee

and the Board. At each meeting the Board reviews, at a high level,

operational performance throughout the Group, which is aligned

to the first strategic pillar and the service provided to customers.

In March 2025 a member of the procurement team joined the

Responsible Business Committee to explain supplier engagement,

particularly in respect of their emissions, and we are working with

them to reduce our Scope 3 emissions.

c) Interest of the Company’s

employees

Janette Bell and Steve Montgomery have updated the Board

regarding the initiatives to support employee engagement

throughout the year, together with employee engagement scores

for the bus division. Ant Green, the Group Employee Director,

helps the Board to understand views from the front line of our

workforce. Ant spends much of his time visiting different parts

of the business to understand the views of the workforce and

presents a report on his activities at each Board meeting.

d) Impact of the Company’s

operations on the

community and the

environment

The Group delivers key services to its communities, providing

public transport and employment in the communities in which

we operate.

The environmental impact of the Group’s operations is at the

forefront of the Board’s mind.

e) The desirability of the

Company maintaining

a reputation for high

standards of business

conduct

The Board recognises the importance of maintaining high

standards of conduct. The Board has oversight of the Company’s

Values, Code of Ethics, and the training programmes led by the

legal team covering business ethics, anti‑bribery policies, gifts

and entertainment.

At least twice a year, the Board reviews matters reported to the

confidential whistleblowing hotline together with any investigation

findings and actions taken.

f) The need to act fairly

between members of

the Company

The Executive Directors lead the Group’s engagement with

shareholders, with support from the Investor Relations team.

These meetings give investors the opportunity to share their

views on the Group’s operations, capital allocation policies and

strategies. These views are reported to the Board so that they

understand the context for their decision making. Additionally, the

Chair has met with a number of investors during the year. The

AGM provides an opportunity for some of the Company’s smaller

shareholders to meet the Directors and put questions to the Board.

Key decisions

Buyback

In November 2024, the Board decided to launch

an additional buyback programme of £50m.

The Board, mindful of shareholder views,

considered either a special dividend or

buyback and decided that a buyback was

most appropriate for shareholders.

Open access acquisitions and train order

The Board considered a range of stakeholders

when deciding to purchase the open access

rights and making ordering the new trains for

the open access business. From a strategic

perspective it diversifies future earnings.

ZEBRA funding applications

The Board took the opportunity to apply for

funding to accelerate capital expenditure

and increase the size of our fleet of zero

emission vehicles.

Review of corporate structure

In light of the transition of the DfT TOCs to public

ownership the Board took the decision to review

and make changes to the Group’s corporate

structure to ensure a suitable level of resource

going forward.

First Bus London acquisition

The Board considered a range of stakeholders

when deciding to purchase the business from

RATP. From a strategic perspective it diversifies

future earnings.

Appointment of Chair

The Board recognised the importance of the

appointment and was mindful to select a new

Chair who had the ability to lead the Board and

create an environment for open debate and the

taking of nuanced decisions.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Section 172 statement

To successfully deliver on the Group’s four strategic

pillars it is essential that we effectively manage the

risks facing the business and capitalise on new

opportunities. Our risk management framework

considers the evolving transportation market and

related impacts from government policy changes,

together with developments in the wider

environment in which our businesses operate. We

stay ahead of potential risks by regular horizon-

scanning for emerging risks, investing in external

expert advice, conducting targeted risk awareness

campaigns, implementing risk mitigations and

enhancing control procedures, and equipping our

people to succeed while reviewing opportunities

that emerge as public transport models in the UK

evolve. Our principal risks and uncertainties are

listed on page 60 and detailed on pages 61 to 68.

Our risk management approach

We take a holistic approach to risk management,

first building a picture of the principal risks at the

divisional level, then consolidating these with Group

risks into a Group view. The Executive Committee

continues to dedicate regular meetings to monitor

the wider risk environment and review and assess

developments impacting the Group’s principal

risks. These assessment meetings include the

identification and analysis of risks and related risk

appetites, all of which are considered and approved

before being presented to the Audit Committee and

Board for review and approval. The objective of this

process is to ensure that all key risks to the Group,

including emerging risks, are identified and

reviewed regularly, are actively monitored and

effectively mitigated to ensure that the impact on

the organisation is managed within the risk appetite

levels set by the Board.

Responsibility

The Board has overall responsibility for the

Group’s systems of internal control and

their effectiveness.

The Audit Committee has a specific

responsibility to review and validate

the systems of risk management and

internal control.

Process

The Board reviews and confirms Group and

divisional risks and the Audit Committee

reviews the Group’s risk management process.

Responsibility

The Executive Committee acts as the

Executive Risk Committee and reviews the

Group’s risk management processes. Internal

Audit provides assurance on the key risk

mitigating controls and ensures that the audit

plan is appropriately risk-based.

Process

The Executive Committee meet quarterly to

review and challenge Group and divisional

risk submissions, including emerging risks.

Responsibility

Management of the divisions and corporate

functions have responsibility for the

identification, assessment and management

of risks, developing appropriate mitigating

actions, and the maintenance of risk registers.

Process

Divisional and Group risk champions maintain

and update risk registers for their function or

division. Risks and mitigating actions are

monitored through normal business

management processes.

Board and

Audit Committee

Divisions

Executive

Committee

Internal

Audit

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

Emerging risks

Our risk management approach and methodology

include the review and identification of risks which

may develop or already exist that may be difficult

to quantify and may lead to a significant impact

on the Group. Emerging risks are reported to the

Executive Committee and the Board to consider

whether to establish them as principal risks. To

identify and assess emerging risks, we conduct

risk workshops and run deep-dive sessions with

divisional and Group leadership teams, engage

specialists, perform scenario analysis and track

industry trends.

Our risk management framework

and structure

Whilst some risks, such as the financial resources

risk, are managed at a Group level, all our

businesses are responsible for identifying,

assessing and managing the risks they face with

appropriate assistance, review and challenge

from Group functions. Our businesses empower

front line staff to take ownership of risks within a

framework, supported by dedicated risk owners

who oversee key operational risks.

Our risk management processes are dynamic, and

we continually drive improvements to the quality

of risk management processes and information

generated by our divisions. The Group has a

developed risk appetite framework, which is

reviewed annually and communicates the Board’s

tolerance for certain risks, and a framework for

assessing opportunities, guiding the businesses’

risk assessment, strategic decisions and

mitigation activities.

Our risk management framework is shown in the

adjacent diagram.

Our risk management framework

Top down

Strategic risk management

Bottom up

Operational risk management

Review external environment

Robust assessment of principal and emerging risks

Set risk appetite and parameters

Determine strategic action points

Regular meeting dedicated to risk management to identify

principal and emerging risks

Direct delivery of strategic actions in line with risk appetite

and tolerance levels

Monitor key risk indicators and provide direction for risk

mitigating activities

Execute strategic actions

Report on key risk indicators

Consider completeness of identified risks and adequacy

of mitigating actions

Assess investment in risk assurance activity

Consider aggregation of risk exposure across the business

Report current and emerging risks

Identify, evaluate and mitigate operational risks recorded

in risk register

Assess effectiveness of risk management system

Report on principal and emerging risks and uncertainties

Board/Audit Committee

Executive Committee

Divisions

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risks associated with artificial

intelligence (AI)

Technological developments, including AI, continue

to accelerate and are impacting the workplace,

business operations, and our wider environment.

FirstGroup continually evaluates and addresses

these wider impacts, identifying both opportunities

and threats, including their impacts on existing and

new risks. The Group seeks to capitalise on

commercially appropriate technological

opportunities and adapt its responses to mitigate

threats posed by technological developments from

competitors and in the wider environment, whilst

continuing to promote the culture of innovation

across the businesses.

This year we launched a new Group-wide AI Policy

to support stakeholders in the safe and effective

adoption of emerging AI technologies. The Policy

provides clear guidance on the secure and

responsible use of AI, with particular focus on

Generative AI. Use of this technology amplifies

a number of risks, including the potential for

misinformation, data privacy breaches, and

intellectual property concerns. The Policy

establishes guard rails for acceptable AI use

cases, and sets out compliance and risk

management requirements, promoting responsible

technology use. The AI Governance Board, a

cross-functional team of experts, oversees AI

adoption and associated risk mitigation, fosters

organisational AI competencies, and evaluates and

approves Generative AI use cases. A formal training

programme covering the Policy, AI risks and

opportunities is in development and will be rolled

out during 2025 to further aid and equip teams

to deploy AI responsibly. Additionally, we will

implement enhanced AI usage monitoring tools to

enable further improvements in controls, including

cyber and information security practices.

Principal risks and uncertainties

We detail our principal risks on page 61 onwards,

with an overview of the associated mitigation

activities and corresponding development in the

risk. The Board defines the risk appetite for each of

these principal risks. The overall risk appetite for

the Group is balanced between risk averse for

safety and regulatory compliance risks to neutral

or risk accepting for strategic areas that drive

future growth for the Group.

Our risk management methodology continues to

focus on identifying the principal and emerging

risks that could:



adversely impact the safety or security of the

Group’s people, customers and assets



have a material effect on the financial or

operational performance of the Group



impede achievement of the Group’s strategic

objectives and financial targets



adversely impact the Group’s reputation or

stakeholder expectations

Further information on our risk management

processes is contained in the Governance reports

on pages 71 to 90.

Principal risks

The following table provides an overview of our principal risks, their risk direction and severity at the

year end, using individually assessed impact, likelihood and velocity scores. Understanding these risk

parameters aids effective risk management and delivery of our strategy.

Key

FY 2025 risk is stable

FY 2025 risk is decreasing

FY 2025 risk is increasing

Severity: (Impact x Likelihood x Velocity)

External risks

Economic conditions

Geopolitical

Climate

Strategic risks

Growth and diversification

Operational risks

Safety

Legal and regulatory compliance

Information security, including cyber and resilience

People

Financial resources

Pension scheme funding

How to use this scale:

During execution of the review and placement of the principal risks on the above table, the Executive

Committee and the Board considered financial impacts to the divisions and the Group. Specifically, the

‘High’ end of the scale represents a combination of a catastrophic annual financial impact at a level that

is expected to be difficult to mitigate being repetitive and the ‘Low’ end considers financial impacts that

are not material.

Low

High

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

External risks

Economic conditions

The Group’s success depends on adapting to economic fluctuations or

uncertainties which may negatively impact performance by increasing costs,

changing customer needs, reducing demand and/or reducing opportunities for

growth. The global economic outlook is overshadowed by uncertainty in US

trade policy, including tariffs. In the UK, the economic outlook continues to be

challenging, specifically due to fiscal pressures from non-transport budgets

that the Government is committed to funding, as well as uncertainties

regarding global trade tariffs. Whilst inflationary pressures have eased, wage

expectations continue to exceed CPI. All these market developments have the

potential to impact the Group’s financial performance and available financial

resources to invest capital in innovative solutions that drive demand.

Whilst passenger demand in our key markets has been stable, a challenging

economic environment could lead to changes in passenger behaviours in the

medium term.



We actively engage with government departments and sector

bodies to ensure an appropriate level of passenger services are

delivered whilst at the same time designing and running our

operations based on current demand levels



We prioritise a customer-focused perspective and seek to provide

innovative transport solutions, by adapting to market uncertainties

and driving demand



We continue to apply our fuel and energy hedging strategy to

offset temporary economic impacts driven by inflation and supply

chain challenges



We continue to focus on developing new innovative service

offerings to our customers to diversify our earnings, such as the

open access fares model, and deliver on both organic and

acquisitive growth to further diversify our businesses to mitigate

against the impacts of changing economic conditions

The macroeconomic landscape remains uncertain and,

although the inflation outlook has improved over the medium

term, the potential impact of tariffs on global trade, together

with the limitations of the UK Government’s fiscal envelope,

pose risks to both domestic demand and future transport

funding by the Government. The Group continues hedging

exposure to certain foreign exchange, energy and fuel price

fluctuations to minimise material impact on costs. This has

allowed for a certain level of visibility that can be built into the

Group’s forecasting models.

The reduction in demand for bus services following the

Government’s reduction in fiscal support for fares in February

2025 has been effectively managed through pricing and

yield initiatives.

Geopolitical

The Group operates in a political landscape with a Labour Government in

power since the July 2024 general election. The Government is progressing its

transport policy at pace. The ‘Better Buses Bill’, once enacted, will give local

authorities greater control over bus services, including the option to establish

municipalised bus services. The Government has also progressed towards the

creation of GBR, the central ‘directing mind’ for the railways that will ultimately

manage the operation of the existing DfT TOCs which are planned to return to

government control as the existing NRCs expire. GBR is also currently

proposed to oversee the approval and allocation of track access rights for new

open access services. The GBR developments, together with the Better Buses

Bill and the uncertainty of government transport funding, have the potential to

cause instability where the Group’s operations have a degree of reliance on

government funding and local infrastructure initiatives, as well as infrastructure

initiatives, as well as on the planned expansion of its open access rail

operations. Significant industry reform may result in the contraction of bus

services in certain areas and rail contract opportunities. Further, given the

current uncertainty in the political landscape, failure to attract and retain

resources with the knowledge and skills necessary to maintain/develop

government partnerships for rail operations and local government partnerships

for bus contracts, may result in an adverse financial impact for the Group.

Developments in international affairs, such as international tensions, including

trade tariffs and conflicts around the world, as well as changes in regulations

in Europe and the UK, may impact the Group’s commitments to deliver key

investments, or impact the Group’s supply chain, resulting in financial loss and

potential reputational damage.



Whilst the Group collaborates with industry bodies to help

influence and anticipate government policy and/or funding regime

changes in order to adjust operations, the Group is an apolitical

organisation and does not have the ability to control or

substantially influence government policy



Specifically in Rail, the Group has responded to the consultation

on the future Railways Bill, which will enable the establishment

of GBR, and will continue to engage with the Government and

industry bodies to influence the policies and reforms included

in GBR



Bus has engaged extensively with government ministers, officials

and MPs over the Bus Services Bill and our spending review asks



The Group has been able to mitigate resourcing challenges by

partnering with third party consultants to support this area



Outside of the NRCs which earn fees, flexible operating models

enable the business to react quickly and mitigate the impacts from

changes in government funding and related customer demand



We deploy hedging techniques to counterbalance potential

negative impact on certain costs due to adverse developments in

international affairs



We regularly review and assess our risk environment to ensure

that we are able to adapt to any geopolitical developments

including focus on supply chain disruption



We continue to actively engage with both local and national

stakeholders and partners on transport policy that delivers best

outcomes for our customers

While the UK political environment is settled following the

Labour victory in July 2024 and initial enactment of Labour

transport policies, uncertainty remains on future government

policy and related funding decisions. Wider afield, this

uncertainty is exacerbated by developments from the Trump

presidency in the USA, as well as ongoing international

tensions and implications for domestic government budgets.

Further developments in these areas could impact the Group’s

operations via a reduction in economic growth and consumer

confidence and disruptions in supply chains or inflation.

Nonetheless, passenger demand for our services has

remained stable, and both national and local governments in

the UK continue to support public transport service providers.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

External risks

continued

Climate

Businesses globally continue to experience increasing pressure and scrutiny

from all stakeholders, particularly policymakers and investors, to demonstrate

strong progress on their climate-related commitments and performance.

Inadequate attention to our climate-related risks and opportunities, as well

as emerging technologies, could negatively impact the Group’s performance,

reputation and growth.

The UK Government has set a legally binding target for net zero GHG

emissions by 2050, to which we were the first public transport operator to

formally commit. Delays in implementing our strategic plans to mitigate

climate-related risks, including transitioning our fleets to zero emissions,

could result in lost business, reduced revenue, reputational impacts and

reduced opportunities from modal shift.

Climate change poses both physical and transition risks to our business,

from weather events impacting our assets, operations, service delivery and

customer demand, to changes in policy, technology and market expectations

impacting our capital and operational costs, our reputation and access

to funding.

Read more on page 45



Climate change has been an integral part of our risk management

framework for many years and is included within our strategic

framework for sustainability ‘Mobility Beyond Today’. Our

business strategy was updated in 2024 to reflect our progress and

ambition on addressing climate change. Driving modal shift and

leading in environmental and social sustainability were both

placed at the heart of this new strategy, forming two of the four

key pillars of the Group’s strategy



FirstGroup was the first bus and rail operator in the UK to formally

commit to setting ambitious science-based targets aligned with

limiting global warming to 1.5°C and reaching net zero emissions

by 2050 or earlier. During FY 2023, we completed our submission

of a science-based target and had our target formally approved

by the SBTi. Avanti and SWR have also successfully submitted

science-based targets



We continue to embed the TCFD recommendations to assess and

mitigate impacts from climate change onto our business and build

long-term climate resilience across our operations



More details on our climate-related targets, commitments,

mitigation and actions can be found in the TCFD section of this

report from page 45

The Group recognises the continued responsibility and

opportunity to create a more sustainable world and we

maintain our commitment to invest in new technologies and

collaborate with partners to help create a cleaner future. Our

TCFD implementation work, the climate-related commitments

we have made and the strategies we are developing to meet

them will ensure we are managing our climate transition risks

effectively and continuing to build business resilience for the

long term.

We continue to focus on opportunities from modal shift and

the vital role we play in reducing congestion on the roads,

improving air quality and facilitating the transition to a

zero-carbon world, whilst recognising the climate and

transition risks which impact us as a public transport provider

FirstGroup is the only UK Transport operator included in this

year’s S&P Sustainability Yearbook.

During March 2025, the Group published a Group-wide CTP

which sets out our comprehensive strategy to meaningfully

reduce emissions, manage climate-related risks, drive modal

shift and contribute to growth and prosperity in the

communities we serve. The CTP can be found on our website.

Further highlights on climate and related sustainability

initiatives during the year can be found in the responsible

business section of this report from page 31, with further

details set out on pages 34 to 36.

More details on our climate-related performance can be

found in our Environmental Performance Report 2025 on

our website.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Strategic risks

Growth and diversification

The Group’s ability to grow and diversify its businesses is dependent on

identifying and converting opportunities to add to our portfolio into operational

delivery, which then lead to the delivery of the Group’s growth and financial

objectives. This includes being able to effectively respond to customer

demand, delivering operational efficiencies, identifying and executing

acquisitions and transactions in both the Bus and Rail passenger markets,

together with the Group’s ability to secure and renew contracts on profitable

terms, and manage these contracts effectively by delivering in accordance with

contractual terms and avoid termination.

Failure to identify and/or execute on these opportunities in a timely manner and

in accordance with agreed terms could result in negative impact on business

operations (contracts, employee retention, etc.), reduced revenue and

profitability, the inability to meet financial goals, reputational impacts, and

inability to deliver on the Group’s strategic objectives.



The Group actively seeks out and reviews M&A opportunities that

would be beneficial to our portfolio, ensuring existing funding

facilities are sufficient



We maintain an active dialogue with our shareholders and

investors, and gather insights from our strategic advisers and

contacts within the business to evaluate potential transactions.

In particular, we have strong relationships with banks, which

enable us to move fast when opportunities are identified



When necessary, we continue to seek external advice and input

(e.g., from corporate brokers and other experts)



We have evaluation frameworks that include a disciplined and

researched approach to acquisitions



We actively participate in the wider opportunities arising from the

electrification and decarbonisation of First Bus, including the

strategic partnership with Hitachi Zero Carbon, and B2B and B2C

charging using our charging infrastructure



First Rail’s Hull Trains and Lumo open access operations have

track access agreements in place to 2032 and 2033 respectively



We have the extensive operational expertise needed to meet

requirements for the contract performance incentives



In First Bus, the contracted element of the business has

historically been low, although this is likely to rise materially over

the coming years as franchising is introduced in more areas,

commencing with the Rochdale franchise in the TfGM area in

2024. At Leicester, First Bus delivered an all-electric depot under

an Enhanced Partnership model with the City Council

The Group completed the bolt-on acquisitions of Matthews

Coach Hire, Lakeside Group and Anderson Travel businesses

during the year, broadening the markets of the coach and B2B

portfolio, following the acquisition of York Pullman last year.

The Group also completed the acquisition of RATP’s London

Bus business during February 2025, providing access to TfL’s

London contract market.

First Rail continues to leverage its operational structure and

depth of experience, and has delivered on opportunities to

diversify its portfolio with the acquisition of two track access

rights to run open access rail services between London

Paddington and Carmarthen, and London Euston to Stirling,

with Stirling services expected to commence during spring

2026. The Group also submitted further applications to the

ORR to expand open access services and two further routes

into London.

Rail will continue to participate in bids for new rail contracts.

In support of the new open access rights and in preparation

for the expansion of Hull Trains and Lumo existing services,

the Group placed an order for 14 new trains from Hitachi, with

an option to acquire 13 additional units subject to the success

of the existing applications with the ORR.

Both First Bus and First Rail are expected to benefit from

ongoing acquisition opportunities supported by a healthy

pipeline in evaluation.

We continue to engage with shareholders on strategic

direction and growth opportunities. Any material transactions

are announced on a timely basis.

The remaining two NRC contracts with the DfT will continue

to provide consistent cash generation until their transfer to

the Government by 2028.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

Safety

The Group is strongly committed to fostering and maintaining a culture of

safety. However, public transport inherently includes safety-related risks,

many of which are out of our control. A safety incident, or a threat of such

an incident, could be caused by human error and/or mechanical failures, or

malicious intent. Such events may result in reputational damage, and an

adverse financial impact due to reduced confidence in public transport

services reducing demand for our services.

Read more on page 42



All divisions have extensive safety plans which focus on mitigating

risk across the business



Safety training is provided for our employees to ensure they are

equipped with the knowledge and skills necessary to maintain

a safe work environment



We work with industry peers to share lessons learnt and

collaborate on shared risks



Incidents are thoroughly investigated to maintain a learning culture

where we continuously improve our safety standards



Mechanical safety controls (speed monitoring, cameras, etc.)

are implemented across our fleet of vehicles and trains



We follow the regulatory regime and comply with statutory

inspections and monitoring



Whilst the Group has implemented preventative safety measures

and procedures, we recognise that certain incidents are ultimately

out of our control and do at times result in legal claims. As a

result, the Group has dedicated departments, utilising third party

experts when needed, to analyse and maintain effective insurance

structures and levels



The Responsible Business Committee not only reviews and

challenges safety performance targets but also delves into

material safety matters and risks across the Group



Across all our divisions, we implement targeted biannual

assurance reviews of our safety management systems,

improvements and performance. We use data analysis and

insights to prioritise our efforts in improving safety through both

technology and behaviour

The Group continues to assess, update and implement safety

procedures across our businesses, mitigating risks to reduce

the likelihood of safety incidents from occurring, taking into

consideration any technological advancements.

Specific initiatives include the final implementation phase

of the ‘Golden Rules’ initiative in First Rail focusing on

the prevention of specific injury events and associated

behaviours, and the rollout of the IOSH accredited ‘Safety

Management of Road Passenger Transport’ training in First

Bus, focusing on competence compliance.

We continue to invest in safety management systems

(including safety audits), engagement and smarter, more

efficient safety procedures, such as using Mistral Data’s

systems for remote condition monitoring, low adhesion and

train/track interface.

Collaboration within the rail and bus sectors continues to

enhance safety by fostering industry-wide learning and

sharing innovative solutions for safety improvements.

Our safety procedures and protocols continue to be assessed

on a regular basis, including certification and accreditation by

relevant safety bodies and external expertise.

We continue to maintain our ISO 45001 accreditation for our

Safety Management System (SMS) across the businesses

which currently have it, and are working towards accreditation

in others.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

Legal and regulatory compliance

The Group’s operations are subject to a wide range of legislation and

regulation. Failure to comply could lead to financial penalties or other

sanctions, investigation expenses, legal costs and/or reputational damage.

The need to comply with new or amended laws and regulations may increase

the Group’s operating costs.

The main legal and regulatory compliance risks specific to the Group that are

not covered in other principal risks include compliance with data protection

legislation, employment law and regulation compliance (employee wages and

other terms and conditions of employment, including expanded rights for

employees), health and safety compliance, responding to the development of

ESG regulations, and key corporate compliance risks such as competition and

anti-bribery and corruption legislation.

The Group continues to see an increase in its digital interaction with its

employees, customers and other stakeholders, including through digital ticket

sales. These interactions necessitate the processing of personal data which

require safeguards to protect personal data and comply with applicable data

protection legislation, including the Data Protection Act 2018 and the UK and

EU General Data Protection Regulations (GDPR).



To help the Group comply with all applicable legislative and

regulatory requirements, we have an in-house legal function

which includes dedicated subject-matter experts, who help to

ensure relevant national and international laws and regulations

are followed



Our in-house team is supported by other internal colleagues

(including the Information Security and divisional Health & Safety

functions) and external legal experts where necessary



We have a comprehensive suite of Group-wide policies and

procedures, which are implemented and managed locally.

These include data protection, modern slavery, anti-bribery

and competition law policies



To protect our data and comply with our integrity and

confidentiality obligations under data protection legislation, the

Group has implemented robust IT infrastructure controls across

the Company. Additional information about how this risk is

managed can be found on page 66



The Group administers a mandatory training and policy attestation

programme to employees across key areas of compliance risk,

communicating their roles and responsibilities in preventing and

mitigating compliance breaches



We have a named compliance officer in each division with

responsibility for ensuring the delivery of the compliance

programme



We monitor new legislation across the jurisdictions in which

we operate and adapt or introduce policies and processes as

required to help ensure compliance



We provide a confidential reporting hotline for employees and

third parties to report concerns – the hotline is hosted by an

independent third party to ensure objectivity and anonymity

Although the Group’s legislative and regulatory environment

continues to change, the Group maintains its commitment

to adapt policies and procedures to detect and prevent

non-compliance.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

Information security, including cyber and resilience

The transport sector is increasingly reliant on technology and data, which has

led to an increase in both cybersecurity risks and non-malicious IT failures.

We continue to monitor the cyber landscape at Group level, across our

divisions, as well as third party suppliers, to ensure we continually enhance

our cyber security defences and resilience procedures as new risks emerge.

Recent attacks on major retail chains have highlighted the growing volatile

threat landscape.

Social engineering attacks, which exploit human behaviour to bypass security

measures, have seen a significant increase. These attacks manipulate

individuals into revealing confidential information or making security mistakes.

The human factor in security is crucial, and we emphasise the importance of

social engineering resistance.

These incidents underscore the importance of robust cybersecurity measures

to protect sensitive data and maintain consumer trust.

Both malicious and non-malicious cyber and technology incidents could

impact our ability to operate services for our customers, increase costs, and

have adverse impacts across our businesses.

The safeguarding and integrity of data remains a central issue relating to the

emerging AI technologies.



Business continuity plans continue to evolve and are updated as

the transition to greater dependency on technology continues,

minimising the impact of both malicious cyber and non-malicious

IT failures that have the potential to impact the continuity of

our operations



We have ransomware procedures and have tested our

incident response across Group businesses in the event

of a ransomware attack



We have a comprehensive Information Security Policy, standards

and procedures in place aligned with industry best practice.

Several of our businesses have achieved ISO 27001 certification

and Cyber Essentials



We run regular cyber risk awareness training and phishing

prevention campaigns emphasising social engineering resistance



Robust due diligence is performed for new critical IT suppliers

and IT programmes, with information security obligations as a

prerequisite to be included in third party IT contracts



Our commitment to continuous improvement in our cyber

resilience is further supported by cyber insurance

The risk of a cyber attack for all UK companies remains high.

The official UK Government ‘Cyber Security Breaches Survey

2024’ reported that 74% of UK large businesses were subject

to a cyber attack in 2024. 84% of these instances were

phishing attacks for large businesses, and around one in five

of the respondents identified a more sophisticated attack type

such as malware attacks.

Amongst those that have identified any breaches or attacks,

33% of large businesses have had some sort of negative

outcome from these. Amongst these large businesses, 9%

reported user accounts being compromised and 45% said

assets, trade secrets or intellectual property were stolen.

The NCSC has recently issued (May 2025) a new warning

about the threat from state-sponsored cyber attackers

targeting critical national infrastructure. These attackers

use sophisticated techniques to camouflage their activity

on victims’ networks, making detection difficult.

This highlights the importance of remaining vigilant and

implementing advanced security measures to protect

against such threats. In 2024, we completed the rollout

of sophisticated network detection monitoring.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

People

Employee costs represent the largest component of the Group’s operating

costs. These costs include expenses related to recruitment, retention and

talent development and are affected by changes in employment markets,

regulatory requirements and diversity and inclusion programmes.

A failure to effectively recruit and retain a diverse and talented workforce could

have adverse financial, operational and reputational impacts.

The employment market for drivers and engineering technicians remains

challenging under an increasing consumer travel demand and tight labour

market. Our employee turnover is also impacted by the wider economic

circumstances, particularly wage inflation and wider labour mobility.

Read more on page 39



We continue to focus on improving communication and engaging

our employees. We have focus on investing in a compelling

employee value proposition, including diversity and inclusion,

linked with market competitive wages and benefits



The wellbeing of our employees remains a key priority for

FirstGroup. Our employees have access to various wellbeing

resources, such as the Wellbeing Hub, accessed through our

intranet. First Rail has introduced webinars on neurodiversity

and stress awareness and marked Stress Awareness Month.

First Bus hosts a weekly Wellbeing Wednesday, and appointed a

new Company-wide occupational health provider in the past year

and tripled the number of mental health first aiders. We continue

to offer training for colleagues who may wish to take up these

roles in the future



First Rail continues to develop its people strategy, including

effective talent management and succession planning, ongoing

commitment to apprenticeship and graduate schemes, and a

focus on diversity



First Rail continues to support efforts to resolve continued

industrial action at a national level



The First Bus people strategy has a focus on workforce

development and culture, including improving communication

and frontline management capability, with emphasis on reducing

attrition and effective absence management



We have an ongoing programme for monitoring KPIs,

including leveraging exit interview data in designing improved

recruitment activity



Employee engagement survey results are reviewed to develop

actions to address low-performing depots to further help retain

our talent

We continue to focus on our bus and train driver recruitment

and retention programmes, and on managing our multi-year

pay deals with our union partners.

We have developed new programmes to ensure effective

communications so that we improve both individual and

collective performance.

First Bus, Avanti and Tram Operations Ltd (TOL), operator

of London Trams on behalf of Transport for London, are

accredited Living Wage Employers and pay the RLW

to employees.

TOL’s commitment extends to its supply chain, ensuring third

party contractors working directly for the company are paid in

accordance with the Living Wage Foundation rates of pay as a

minimum, with the London Living Wage being paid for those in

London. Living Wage Foundation rates of pay also apply as

contracts renew for First Bus and Avanti’s third party

contractors working directly for the company.

GWR also pays the RLW to directly employed colleagues.

First London Cableway is a Living Wage Employer and pays

London Living Wage.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

Financial resources

The ability of the Group to service its current debt or other financial obligations

relies on the cash generation from the business and its capability to refinance

debt as it becomes due and the capital allocation policy being applied.

The Group is investment grade credit rated by Standard & Poor’s and Fitch.

A downgrade in the Group’s credit ratings to below current investment grade

may lead to increased financing costs and other consequences and affect

the Group’s ability to obtain financing if required to invest in its operations.

The Group’s banking arrangements contain financial and other covenants

with financial covenants tested semi-annually on 30 September and 31 March.

In the event a covenant test level is breached, the Group may not be able to

negotiate sufficient debt capacity to allow it to continue to trade.



The Group monitors leverage ratios and overall liquidity

consistently to ensure we remain within our target range and

have adequate financial resources on a two- to three-year period

looking forward



As at March 2025, the Group has adjusted net debt of £87m and

£295m of undrawn committed borrowing available under its

revolving credit facility that matures in January 2030 together with

a further committed undrawn headroom of £85m on a term loan

facility maturing March 2027, and £92m on the Green Hire

Purchase Finance Facility that is available to draw to December

2026 for 1,000 EV bus bodies, and £41m undrawn committed

borrowing through Hitachi joint venture, a £41m debt facility for

the financing of up to 1,000 EV bus batteries



We conduct a bi-annual viability assessment of the headroom

and ensure this is sufficiently resilient, including cash and

financing facilities

The Group maintains strong bank relationships, with good

awareness and understanding of debt market trends and

regular monitoring of banking covenants and headroom.

Our credit rating was affirmed by Fitch on 25 March 2025

and Standard & Poor’s on 12 September 2024 as stable ‘BBB’.

We have experience in raising material amounts of credit

facilities, ensuring we plan alternative solutions to mitigate

liquidity risk in the event of wider refinancing requirements.

Pension scheme funding

The Group sponsors three closed defined benefit pension schemes:



The FirstGroup Pension Scheme



The Hull Trains Section of the Railways Pension Scheme



Greyhound Canada Retirement Income Plan

As at the balance sheet date, the Group sponsored four sections of the

Railways Pension Scheme in respect of TOCs operating under NRCs. Following

the termination of the SWR contract, the number of TOC sections sponsored

by the Group reduced to two.

The Group’s future cash contributions and funding requirements in respect of

each of the schemes are dependent on investment performance, movements in

discount rates, expectations of future inflation and life expectancy, and relevant

regulatory requirements.

In order to maintain adequate funding for its pension liabilities and prevent

adverse financial impacts or reputational damage, the Group continues to

monitor the performance of pension fund investments and movements in the

factors that affect the value of the related pension liabilities.



The Group’s pension schemes are adequately funded



The Canadian pension plan is in the process of terminating.

Its liabilities are fully covered by a group annuity contract



The Group uses third party experts to advise on investment

strategies and liability management and monitor movements

in discount rates, mortality and inflation expectations



Interest rate and inflation risks are hedged to a high degree

with the use of liability-driven investment strategies



The Group TOCs which operate under the NRCs are not

responsible for any residual deficit at the end of a contract

and First Rail bears no cost risk during the contract



Apart from the DfT TOCs operating under NRCs, pension

provision for all new employees is provided via defined

contribution arrangements



We work closely with experienced Trustee boards that are

ensuring effective systems of governance are in place to

manage risk



Pension risks are carefully scrutinised before any new contract

or acquisition is approved

The two legacy pension schemes in the UK continue to reduce

in risk as they mature (a result of closing to accrual) through

ongoing dialogue with Trustees over investment and liability

management strategies designed to ensure low dependency

on the Group.

c.£100m continues to be retained in Limited Partnerships for

the Group and Bus schemes following the sale of the North

American businesses in 2021. The cash in these arrangements

could be returned to the Group in certain scenarios,

depending on achieving agreed funding targets over the

period 2025–2030.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Risk management

continued

Viability

Time horizon

The Directors have assessed the viability of the

Group over a three-year period. This period

reflects the Group’s corporate planning processes

and is considered appropriate for a fast-moving

competitive environment such as passenger

transport. Beyond three years, forecasts may be

affected by changes in government transport policy

and/or major contract wins and losses.

Scenario testing

In making their assessment, the Directors have

taken into account the potential financial and

operational impacts, in severe but plausible

scenarios, of the principal and emerging risks

which might threaten the Group’s viability during

the three-year period to 31 March 2028 and the

likely degree of effectiveness of current and

available mitigating actions that could be taken

to avoid or reduce the impact or occurrence of

such risks (details of the risks and mitigating

actions are set out on pages 60 to 68). The

assessment of the available mitigating actions

includes the Group’s ability to manage its cost

base and capital expenditure.

The broad details of the scenarios that were

considered in the assessment are:



a protracted period of weak passenger volumes

comprising reductions of up to 10% in First Bus

and 25% in non-contracted rail and performance

fees on NRCs being 50% lower than budgeted.



heightened operational, policy and environmental

pressures, including increased inflation up to 3%

higher than budgeted levels and risk from

changes to governmental transport policy

(including decarbonisation) of £10m per annum,

with operating profit impact increasing to £39m

per annum in FY 2028



one-off safety, regulatory non-compliance,

climate or technology incidents leading to

short-term reduced revenue and/or additional

costs of up to £30m



loss of NRCs at the end of their core contractual

periods, reducing operating profit and cash

inflows to the Group

The Group has already renewed the £300m

revolving credit facility with a maturity date of

January 2030 and put into place additional

financing facilities, and considers that it will

continue to have access to debt markets to

negotiate additional new credit facilities if required.

The results of this scenario testing showed that the

Group would be able to remain viable and maintain

liquidity over the assessment period.

Climate change

The Board has also considered how climate risks

could impact the Group’s viability. More detail on

the Group’s assessment of risks and opportunities

from climate change is contained in our TCFD

disclosure on pages 45 to 53. The key conclusions

relating to the viability assessment were that, given

the Group’s geographic diversity across the UK,

the financial impact of extreme weather events over

the three-year viability period was not judged to

be material.

Transitional risks, related to changes to the

Government’s decarbonisation policy, were unlikely

to cause any material adverse impact over the

viability period given that, whilst the vast majority of

the Group’s emissions are from vehicles, the Group

is already targeting industry-leading timescales

for transitioning its vehicles to zero emissions.

Corporate planning processes

The Group’s corporate planning processes include

completion of a strategic review for the rail and bus

divisions, preparation of a medium-term business

plan and a quarterly reforecast of current year

business performance. The plans and projections

prepared as part of these corporate planning

processes consider the Group’s cash flows,

committed funding and liquidity positions, forecast

future funding requirements, banking covenants

and other key financial ratios, including those

relevant to maintaining the Group’s existing

investment grade status. The planning processes

also consider the ability of the Group to deploy

capital. A key assumption underpinning these

corporate planning processes is that credit and

asset backed financing markets will be sufficiently

available to the Group to put additional new

facilities in place, if required.

Viability statement

Based on the results of the analysis explained

above, including scenario testing, the Directors

confirm that they have a reasonable expectation

that the Group will be able to continue in operation

and meet its liabilities as they fall due over the

period to 31 March 2028 and that the likelihood of

extreme scenarios which would lead to a breach of

covenant is remote.

The Board confirms that, in making this statement,

it carried out a robust assessment of the principal

and emerging risks facing the Group, including

those that would threaten its business model,

future performance, solvency and/or liquidity.

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Viability and going concern

Going concern

The Board carried out a review of the Group’s

financial projections for the 18 months to

30 September 2026 and evaluated whether it

was appropriate to prepare the full year results

on a going concern basis. In doing so, the Board

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 macroeconomic

considerations on the operating environment,

assumptions on passenger volumes and

government support, as well as the impact of

actions required to address the Group’s climate-

related targets and ambitions, and having regard

to the risks and uncertainties to which the Group

is exposed.

Base case scenario

The Board considered the annual budget to

31 March 2026 and medium-term plan to be the

base case scenario for the purpose of the going

concern assessment for the FY 2025 year end.

These projections were the subject of a series of

executive management reviews and were used to

establish the base case scenario that was used for

the purposes of the going concern assessment.

The base case assumes modest growth in bus

passenger volumes and yields in FY 2026, with

some offset from a reduction in direct government

funding from the £3 fare cap which end in

December 2025. The rail base case also reflects

the expiry in May 2025 of the SWR contract and

assumes the GWR contract continues beyond

March 2026. The macro projections in the updated

base case assume that the UK operates in a

low-growth economy. The annual budget and

medium-term plan also capture the expected

financial impact of the actions required to support

the Group’s climate-related targets and ambitions.

Downside scenario

In addition, a downside case was also modelled

which assumes a more adverse macroeconomic

recovery profile. In First Bus, the downside case

assumes a reduction in passenger volumes driving

a 25% reduction in profitability, as well as reduction

in First Bus London EBITDA of 50% and the impact

of other unexpected cost inflation. In First Rail, the

downside case assumes TOC performance fee

awards at 50% of expected levels, and volume and

revenue reductions in Hull Trains and Lumo driving

a 25% reduction in open access profitability.

The downside scenario also considers potential

impacts of significant climate-related event or

unbudgeted decarbonisation costs, as well as the

risk of one-off safety, regulatory non-compliance

or technology incidents.

Mitigating actions

If the performance of the Group were to be more

adversely impacted 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 review of the financial forecasts for

the period to September 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 at least the

12-month period from the date on which the

financial statements were approved. Accordingly,

they continue to adopt a going concern basis of

accounting in preparing the consolidated financial

statements in this full year report.

The Strategic report was approved on behalf

of the Board on 10 June 2025.

Graham Sutherland

Chief Executive Officer

10 June 2025

395 King Street

Aberdeen

AB24 5RP

Governance report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Strategic report

Introduction

Viability and going concern

continued

I am looking forward to leading

the Board to deliver positive

sustainable outcomes for all

our stakeholders.”

Lena Wilson CBE

Chair

Dear Shareholder,

I am delighted to have joined in February and am

writing to introduce the Corporate Governance

report for FY 2025.

In my statement starting on page 04, you will

already have read about the reasons I joined the

Group and the opportunities we have available. We

have provided some more information about my

induction on page 79. I have been very encouraged

with what I have seen so far. This report focuses

on governance and how your Board operates and

makes decisions.

The performance in FY 2025 has been strong and

we have further diversified our earnings. The Board

is very pleased with the strategic progress and the

financial results.

The majority of our meetings are held in London. In

September 2024, we incorporated a visit to Ealing

to review the battery train testing within our GWR

business. In January 2025, the Board meeting was

held in Leeds, where the Board met local team

members and visited our Bramley depot.

Our Board evaluation exercises are covered in this

report on page 81. We provide an update on the

areas of focus identified in the external review

conducted last year and we report on this year’s

internal review and the areas of focus for FY 2026.

In this Corporate Governance report you will find

an introductory letter from the Chair of each of

the Board Committees followed by their report

on the Committee.

I welcome your comments on this Corporate

Governance report and on the 2025 Annual Report

more generally. I have appreciated the time I spent

with shareholders and look forward to more

engagement in the coming year.

I’d like to thank my colleagues on the Board and

all the employees of FirstGroup for making me

feel welcome. I look forward to working with them

to deliver positive sustainable outcomes for all

our stakeholders.

Lena Wilson CBE

Chair

10 June 2025

Compliance with the

UK Corporate Governance Code

We have broadly complied with

the Provisions of the UK Corporate

Governance Code (the Code) throughout

the 52 weeks to 29 March 2025.

In this Annual Report, we have included a

commentary running throughout the

Governance report that summarises how

we have complied with the Code and helps

guide shareholders to sections of the report

where we provide more detail on our approach

to compliance with the Code. The Code

Principles are represented by letters and the

Provisions by numbers. Both the Principles and

the Provisions are paraphrased in the interests

of space – a copy of the Code can be found on

the Financial Reporting Council’s website at

www.frc.org.uk.

The areas of non-compliance are all associated

with the previous Chairman’s departure and

the interim arrangements put in place. Short

explanations are provided in the commentary

under the relevant Provisions of the Code.

A Led by an effective Board

The Board’s effectiveness review (details of

which are set out on page 81) indicates that

the Board has operated effectively during the

period under review.

B Purpose, values and strategy

This is covered throughout the Strategic report.

The Values are on the website and are set out

in the Culture section of this Corporate

Governance report.

Sustainable

stakeholder

outcomes

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Corporate Governance report

Board of FirstGroup PLC

Executive Committee

Chair: Lena Wilson CBE

Nomination

Committee

Audit

Committee

Responsible

Business

Committee

Remuneration

Committee

Disclosure

Committee

Chair: Lena Wilson CBE

Chair: Jane Lodge

Chair: Claire Hawkings

Chair: Sally Cabrini

The Board is responsible for the long-term success of the Company for the benefit of its shareholders and stakeholders.

The matters reserved to the Board are set out in writing. They were reviewed in March 2025 and cover the most important decisions that will be taken within the Group.

These include strategy, capital structure, capital allocation, financial reporting and controls, risk appetite and risk management, stakeholder engagement, Board membership,

remuneration, corporate governance and key policies. The Board Committees assist by reviewing certain matters before recommendations are put to the Board for approval.

The matters not reserved to the Board are delegated to the Chief Executive Officer, with the Board retaining responsibility for oversight and holding management to account. The Chief Executive

Officer has formed an Executive Committee, which is not a Board Committee, to assist him in the day-to-day running of the Company. The Executive Committee meets monthly and its main

responsibilities include: developing, implementing and monitoring operational plans; reviewing financial performance, forecasts and targets; prioritising initiatives and allocating resources;

developing strategy for submission to the Board; overseeing risk management, including identifying risks and developing risk mitigation strategies; developing and monitoring the internal

control strategies; and leading the Group’s culture and safety programmes.

The split of responsibilities between the Chair and Chief Executive Officer is set out in writing.

Board and Committee

membership

Talent and succession

Financial

disclosures

Risk management

Safety

Environment

Communities

People

Suppliers

Executive remuneration

Structure and fairness of pay

Meets periodically to identify

inside information and to oversee

the timely and accurate

disclosures when required.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Governance at a glance

Roles and responsibilities

The Board has agreed a clear division of responsibilities between the Chair and the Chief Executive Officer, and these roles, as well as those of other Directors and the Company Secretary, are clearly defined so that

no single individual has unrestricted powers of decision. At the end of the year the Board comprised the Chair, two Executive Directors, an Employee Director and five Non-Executive Directors.

Chair

Lena Wilson



Leads and manages the business

of the Board



Provides advice, support and

constructive challenge to the

Chief Executive Officer



Provides direction and focus and

ensures sufficient time is allocated

to promote effective debate and

sound decision making



Promotes the highest standards of

integrity and probity and ensures

effective governance



Manages Board

composition, performance

and succession planning



Maintains effective communication

with shareholders and ensures their

views are understood by the Board



Facilitates effective and

constructive relationships

and communications

between Executive and

Non-Executive Directors

Chief Executive Officer

Graham Sutherland



Provides leadership to the

executive and senior management

team in the day-to-day running of

the Group’s businesses



Develops the Group’s objectives

and strategy for consideration

and approval by the Board, taking

into account the interests of

shareholders and stakeholders



Implements the agreed strategy



Promotes a safe working

environment and a safety-focused

culture across the Group



Maintains an active dialogue with

shareholders and other stakeholders



Responsible for implementing

effective internal controls and

ensuring risk management systems

are in place

Chief Financial Officer

Ryan Mangold



Responsible for the

financial stewardship of

the Group’s resources



Responsible for the Group’s

finance, tax, treasury, insurance,

legal, risk management and internal

control functions



Supports the Chief Executive

Officer in providing executive

leadership and developing strategy



Supports the Chief Executive

Officer to implement the

agreed strategy



Reports to the Board on

operational and financial

performance of the businesses

Senior Independent Director

Peter Lynas



Acts as an additional point of

contact for shareholders to discuss

matters of concern



Provides a sounding board for

the Chair and serves as an

intermediary for the other Directors



Leads the annual review of the

Chair’s performance taking

into account the views of the

Non-Executive Directors and

Executive Directors

Non-Executive Directors (NEDs)

Sally Cabrini

Myrtle Dawes

Claire Hawkings

Jane Lodge

Peter Lynas



Provide a strong independent

element to the Board and

collectively provide a broad range

of experience, knowledge and

individual expertise



Constructively support and

challenge management



Review management’s

performance in meeting agreed

objectives and deliverables



Review the integrity of financial

information and determine whether

internal controls and systems of

risk management are robust

Group Employee Director

Anthony Green



Brings insight into employee

engagement and perspectives from

the front line to Board deliberations



Chairs the Employee

Director’s Forum



Promotes employee involvement

and participation in the affairs

of the Group through share

ownership, employee surveys

and other means of

employee involvement



Promotes the Group’s policies and

procedures amongst employees,

in particular those related to

safety, diversity and inclusion,

and business ethics

Company Secretary

David Blizzard

(not a Board member)



Provides advice and support

to the Board, its Committees,

the Chair and other Directors

individually as required, primarily

in relation to legal and corporate

governance matters



Responsible, with the Chair, for

setting the agenda for Board and

Committee meetings and for

high-quality and timely information

and communication between the

Board and its Committees and

the Executive Directors and

senior management

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Governance at a glance

continued

Appointed:

1 February 2025

Key areas of expertise:

CEO, International, Public Sector and Government, Energy,

Transport, Financial Services, Real Estate, Technology

Governance, Transformation

Skills and experience:

Lena joined the FirstGroup plc Board as Chair on 1 February 2025.

Lena is an experienced Director and Chair having held roles on

listed and private companies for more than 15 years. She has

served on the boards of Scottish Power Renewables Limited and

Intertek Group plc and chaired AGS Airports Limited and Picton

Property Income Limited. Lena was Chief Executive of Scottish

Enterprise from 2009 to 2017 and prior to that, was a Senior

Investment Adviser to The World Bank in Washington DC working

in over 40 countries. She has chaired and been a member of

numerous Government taskforces and was a member of the

Prime Minister’s Business Council. Lena has advised a range of

international companies on strategy, leadership and governance

and is a Visiting Professor at the University of Strathclyde.

Other appointments:

Non-executive director, Senior Independent Director and

Remuneration Committee Chair at NatWest Group plc.

Member of the Workday EMEA advisory Board

Nationality:

British

Appointed:

16 May 2022

Key areas of expertise:

Business Strategy, Performance Improvement, Government

Contracting, Engineering and Infrastructure, Digital Transformation,

Corporate Finance/M&A, Governance

Skills and experience:

Graham has a strong track record in the delivery of critical

services and in creating value for shareholders in rapidly evolving

regulatory and technological environments. Previously, he was

Chief Executive Officer of KCOM Group plc, an LSE-listed

telecommunications company. Prior to this, Graham held a number

of senior executive roles within BT Group PLC over 12 years. These

included as Chief Executive Officer of the BT Business and Public

Sector division, where he was responsible for profitable growth

and led the integration of EE’s Business unit, creating a division

with £4.6bn in annual revenues and 13,000 employees. Graham

was also Chief Executive of BT Ireland where he was responsible

for all consumer, business and network activities. Prior to that,

he was Chief Executive of NTL Ireland and has also held senior

financial roles, including at Bombardier. Graham has an

established record in strategic development, as well as delivering

enhanced financial and operational performance and engaging a

diverse range of stakeholders, including consumer, business and

public sector customers.

External appointments:

Non-executive director at HICL Infrastructure PLC

Nationality:

British

Appointed:

31 May 2019

Key areas of expertise:

Corporate Finance/M&A, Turnaround, Pensions, Governance

Skills and experience:

Ryan was appointed as CFO in May 2019, having previously

been Group Finance Director of Taylor Wimpey Plc for eight years.

Ryan has a strong track record of building financial discipline in the

organisations he has worked at. During his time at Taylor Wimpey,

Ryan played a leading and integral role in strengthening the

balance sheet, driving operational improvements, rebuilding the

business post the financial crisis (to become a constituent of

the FTSE 100), the sale of the North American business and the

improvement of its pensions position. Ryan was previously at

the Anglo American group of companies, where he was Group

Financial Controller at Mondi and played a significant role in its

demerger from Anglo American in 2007. Ryan is a chartered

accountant and has recent and relevant financial experience.

External appointments:

None

Nationality:

South African/British

Lena Wilson CBE

Chair

Graham Sutherland

Chief Executive Officer

Ryan Mangold

Chief Financial Officer

Key

Audit Committee

Responsible Business Committee

Remuneration Committee

Executive Committee

Nomination Committee

Chair

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

Appointed:

24 January 2020

Key areas of expertise:

Human Resources, Information Technology, Transformation

Skills and experience:

Sally brings valuable experience in UK regulated utilities, services

and manufacturing. She has expertise in delivering business

transformation programmes often including internal restructuring,

cultural and significant technological changes. As Transformation,

IT and People Director at Interserve Group Limited she had a

strong focus on effective operational delivery and led a major

transformation programme which had significant financial and

strategic challenges and prior to that she was a senior executive at

FTSE 100 constituent United Utilities with responsibilities for IT,

cyber security and people. She was a Non-executive Director and

Chair of Remuneration committee at Lookers plc from 2016 to

2020 and at Appreciate Group plc from 2019 to 2023.

Sally is a Fellow of the Chartered Institute of Personnel and

Development.

External appointments:

Non-executive director and Chair of the Remuneration committee

of Barchester Healthcare Limited. Pro-Chancellor, Senior

Independent Governor and Chair of the Remuneration committee

at the University of Exeter.

Nationality:

British

Appointed:

1 April 2022

Key areas of expertise:

Engineering, Safety, Technology and Digital Transformation,

Project Management and Energy Transition

Skills and experience:

Myrtle is an established leader with extensive experience in

the Energy sector both in the UK and internationally. A chartered

Chemical Engineer, she has held a number of senior safety and

engineering project management roles in the offshore Oil and Gas

industry, including for BP and BHP Petroleum. Moving to Centrica

in 2009, Myrtle performed a number of senior executive roles

encompassing engineering, project management, technology and

digital transformation, including leading the team responsible for

safety-critical, customer-facing residential assignments. She holds

a Masters in Chemical Engineering and Chemical Technology from

Imperial College. She is a Fellow of the Institution of Chemical

Engineers, the Energy Institute, the Forward Institute and Honorary

Fellow of the Association for Project Management.

External appointments:

Chief Executive Officer of the Net Zero Technology Centre and

Non-executive director for Aquilla European Renewals plc

Nationality:

British

Appointed:

15 September 2020

Key areas of expertise:

Transportation, Employee Engagement, Safety, Learning

and Development

Skills and experience:

Ant is a bus driver and a trainer for First Bus. He has been

the Employee Director of First Essex Buses Ltd since 2014,

a company he joined in 2009. In 2015, he was seconded to roll

out Be Safe, the Group’s safety behavioural change programme.

Since then, Ant has trained more than 1,900 colleagues and

coached leaders on the implementation of successful safety

techniques. Prior to joining First Essex, he worked at retailer

Homebase for 16 years, including in several managerial positions,

and also volunteered at St John Ambulance.

External appointments:

None

Nationality:

British

Sally Cabrini

Independent Non-Executive Director

Myrtle Dawes

Independent Non-Executive Director

Anthony Green

Group Employee Director

Key

Audit Committee

Responsible Business Committee

Remuneration Committee

Executive Committee

Nomination Committee

Chair

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Appointed:

21 January 2022

Key areas of expertise:

Sustainability Strategy, Business Transformation, Governance,

Commercial Transactions, Performance Management and

Energy Transition

Skills and experience:

Claire has more than 30 years’ business experience, principally

in the Energy sector, and has held UK and international leadership

positions, most recently with Tullow Oil plc and, prior to that, with

BG Group plc and British Gas plc. Claire is an environmental

scientist and an experienced ESG professional and holds a degree

in Environmental Studies awarded by Northumbria University and

an MBA from Imperial College Management School. She is also a

Fellow of the Energy Institute and a Fellow of Chapter Zero.

External appointments:

Non-executive director and Chair of the ESG Committee of Ibstock

plc, a Non-executive director and Senior Independent Director

of James Fisher and Sons plc and a Non-executive director of

Defence Equipment and Support, a bespoke trading entity and

arm’s length body of the Ministry of Defence

Nationality:

British

Appointed:

30 June 2021

Key areas of expertise:

Transportation/Travel/Engineering and Infrastructure,

Corporate Finance/M&A, Governance

Skills and experience:

Jane spent her executive career with Deloitte, where she spent

more than 25 years advising multi-national companies, including

businesses in transport, leisure, consumer and technology

sectors. Since 2012, she has served as a Non-executive director

and audit committee Chair at several UK public companies in a

range of sectors. Previous roles include Non-executive director of

Sirius Minerals plc (2015–2020), when the company was acquired

by Anglo American plc), Costain Group plc and of Devro plc

(2012–2020), and Non-executive director and Audit Committee

Chair of DCC plc (2012–2022). In addition to broad international

experience in a range of sectors, Jane brings substantial audit,

risk and audit committee expertise to the Board.

External appointments:

Non-executive director, Audit Committee Chair and member of the

ESG Committee of Bakkavor Group plc; Non-executive director

and Remuneration Committee Chair of Glanbia plc; and Non-

executive director of Morgan Advanced Materials plc.

Nationality:

British

Appointed:

30 June 2021

Key areas of expertise:

Defence and Aerospace, Government Contracting, Turnaround,

Corporate Finance/M&A, Pensions, Governance

Skills and experience:

Peter was Group Finance Director of BAE Systems plc (and a

Director of BAE Systems, Inc.) from 2011 until his retirement in

2020, having previously served in increasingly senior financial and

M&A roles since joining the company in 1999. Peter’s early career

was spent at De La Rue Systems, which he joined as a trainee

accountant, and then, GEC Marconi, where he became Finance

Director of Marconi Electric Systems. In addition to his strong

strategic and financial background, Peter brings to the Board

extensive experience in heavily regulated industries with

significant contractual relationships with government.

External appointments:

Non-executive director of Cohort plc

Nationality:

British

Claire Hawkings

Independent Non-Executive Director

Jane Lodge

Independent Non-Executive Director

Peter Lynas

Senior Independent

Non-Executive Director

Key

Audit Committee

Responsible Business Committee

Remuneration Committee

Executive Committee

Nomination Committee

Chair

Executive Committee members

Graham Sutherland

Chief Executive Officer

Ryan Mangold

Chief Financial Officer

David Blizzard

Group Company Secretary

Janette Bell

Managing Director, First Bus

Steve Montgomery

Managing Director, First Rail

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Directors

The Company has formal procedures to review and,

if appropriate, authorise conflicts of interest. These

procedures have operated effectively throughout

the year.

The Board carries out an annual review of the

independence of its Non-Executive Directors. All

the Non-Executive Directors are considered to have

the appropriate skills, knowledge, experience and

character to bring independent and objective

judgement and insight to the Board’s deliberations.

The Chair was considered to be independent on

appointment and we are committed to ensuring

that the Board comprises a majority of independent

Non-Executive Directors.

Ant Green has served as an Employee Director

throughout the year and has continued to act as

a channel to put the voice of the workforce into the

Boardroom. Ant Green and the Executive Directors

are not considered to be independent.

The biographies of all the current Board members

are set out on pages 74 to 76.

Following a recommendation from the Nomination

Committee, the Board recommends that all

Directors are reappointed at the AGM, where they

will offer themselves for re-election.

As noted above, the Board has documented a

split of responsibilities between the Chair and

the Chief Executive Officer, and we have agreed

responsibilities for the Committee Chairs, Senior

Independent Director and Non-Executive Directors.

The Board reviewed and reconfirmed these

arrangements in March 2025, and they are

summarised on page 73 and available in full on

our website.

Culture

FirstGroup is values-based and has five Values:



Committed to customers



Dedicated to safety



Supportive of each other



Accountable for performance



Setting the highest standards

These Values underpin decisions taken at all levels

of the organisation and are wholly consistent with

the duties of Directors. The operating companies

also have their own values, consistent with the

above but expressed differently for their respective

workforces. The Board monitors culture in a variety

of ways, receiving information from many sources

to enable them to understand and monitor the

culture of the organisation.

The primary sources are:



Regular updates from the CEO, CFO and

divisional MDs within their reports to the Board



The reports from the Group Employee Director



The results from engagement surveys



Review calls to the confidential

whistleblowing hotline



People sections of reports to Responsible

Business Committee



Meeting people when the Board visits the

Group’s operating locations

Additionally, the Board receives updates on

adherence with the Ethics and Compliance training

programmes, which require employees to complete

an ongoing programme of training relevant to their

role and includes IT security training, anti-bribery,

modern slavery and competition law training.

The Responsible Business Committee met five

times during the year and considered a range of

very important topics. The two divisions report on

four main areas at each meeting – safety, people,

environment, and community and social impact –

which helps them understand the culture within the

businesses. The broader work of the Responsible

Business Committee is set out in the Strategic

report from page 31 and the governance

arrangements for the Responsible Business

Committee are set out on page 90.

Commitment

All Directors are expected to attend each Board

meeting and each Committee meeting for which

they are members, unless there are exceptional

reasons preventing them from attending. The

attendance levels were excellent in FY 2025 and

are shown in the table below. The Nomination

Committee adopted an over-boarding policy in

early 2022 and further detail is provided in the

report of the Nomination Committee.

Compliance with the

UK Corporate Governance Code

1 Basis on which the company

generates and preserves value

This is covered in the Strategic report on pages

04 to 70.

2 The Board should assess and

monitor culture

Throughout the year, the Board monitors

culture through a variety of sources, and an

explanation is given in the columns to the left.

3 Engagement with major shareholders

The regular engagement with shareholders is led

by Executive Directors, and regular roadshow

events are held with larger shareholders

following results announcements. Lena Wilson

met major shareholders as part of her induction.

The Chair, Committee Chairs and the

Senior Independent Director are available to

shareholders on request, and if there is a matter

requiring shareholder input, the most appropriate

Director will engage with shareholders.

4 Action if 20% of shareholders vote

against a proposal

Not applicable in FY 2025 – shareholders

overwhelmingly supported all the resolutions at

the AGM. The Board would expect to comply

with the Code if any resolution received less

than 80% support.

5 Views of key stakeholders and

S172 Statement

A comprehensive Section 172 statement

is set out on page 57 within the Strategic report.

Board and Committee attendance

Chair

Non–Executive Directors

Employee

Director

Executive Directors

Director

David

Martin

Lena

Wilson

Sally

Cabrini

Myrtle

Dawes

Claire

Hawkings

Jane

Lodge

Peter

Lynas

Ant

Green

Graham

Sutherland

Ryan

Mangold

Board

3/3

1/1

7/7

Audit Committee

–

4/4

–

Remuneration Committee

–

5/5

–

5/5

4/4

–

Nomination Committee

1/1

5/5

–

Responsible Business Committee

–

5/5

–

5/5

–

David Martin stepped down as Chairman on 10 September 2024.

Lena Wilson was appointed to the Board on 1 February 2025.

Mr Lynas was not eligible to attend an additional Remuneration Committee meeting convened to discuss his remuneration arrangements while acting as Chairman and accordingly that meeting has

been excluded from his attendance record shown above.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Board meetings

Board meetings focus on strategy and financial and business performance. At each meeting, the Board

receives an update from any of the Board Committee meetings that have been held since the last meeting

together with a presentation from the CEO, the CFO, the head of the rail division, the head of the bus

division, the Group Employee Director and the Company Secretary. Other key matters considered by the

Board during the scheduled meetings are set out in the table below.

In September 2024, the Board meeting included a visit to Greenford, West London to meet the GWR team

responsible for testing the battery train.

In January 2025, the Board met in Leeds and received a presentation from the management team of the

North and West Yorkshire team and visited the Bramley Bus Depot to observe the operations and meet

colleagues, including some new drivers at the training school.

Deliver

day in,

day out

Drive

modal

shift

Lead in

environmental

and social

sustainability

Diversify

our

portfolio

Governance/

Other

June

Year-end matters, approval of Results

and Annual Report, including the risk

disclosures

•

Cybersecurity update

•

Strategic review

•

Review of whistleblowing

•

Modern Slavery Statement and actions

•

July

Strategic update

•

Deep dive into the Group’s public

affairs strategy

•

AI update

•

September

Strategic update

•

Battery train visit

•

Pension, Treasury, Tax and anti-fraud

policy updates

•

October

Strategy day – detailed strategy review

•

Review of the RATP transaction and

open access opportunities

•

November

Half year results

•

Open access approvals

•

Review of whistleblowing

•

January

Budget assumptions

•

Target operating model review

•

Business presentation from the North and

West Yorkshire bus leadership team

•

Budget review and approval

•

March

Board evaluation

•

Terms of reference and delegations

•

C Necessary resources and

control framework

The Board has delegated the day-to-day running

of the Company to the Chief Executive Officer

who, with the Executive Committee, ensures

that teams have the necessary resources to

meet their objectives.

6 Workforce concerns

(known as whistleblowing)

The Board reviews the process and a report

covering the matters raised by the workforce

twice each year. If a serious concern was

substantiated between the reviews, it would be

escalated to the Board immediately, rather than

waiting until the next report was due.

D Responsibilities and engagement with

shareholders and stakeholders

There is a comprehensive programme to engage

with shareholders and stakeholders, led by the

Executive Directors. The engagement with the

different stakeholders is set out in the Strategic

report, with the relevant section starting on

page 54.

E Workforce policies and practices

The Group has a comprehensive framework

of policies and practices that are aligned with

the Values and the long-term success of the

Company. Examples of the practices are set

out within the ‘Supporting our people’ section

of the Strategic report that starts on page 39.

The relevant policies are owned by the

Human Resources teams and cover the full

range of employment issues expected for a

diverse workforce.

Compliance with the Corporate Governance Code

F Chair leads the Board and is

responsible for its effectiveness

The Chair is responsible for leading the Board

and its effectiveness. Peter Lynas acted as

Chairman from September 2024 until January

2025. The duties are set out in a document

published on the Company’s website. The

Chair reviewed the outputs from the Board

effectiveness exercise with the Company

Secretary as a precursor to agreeing the areas

of focus with the Board.

G Appropriate combination of Executive

and Non-Executive Directors

There is an appropriate division of

responsibilities between the Executives and

Non-Executives. The matters reserved to the

Board are clearly defined and the matters

reserved to the Board would ensure that any

significant potential transaction is put to the

Board for approval.

7 Conflicts of interest

The Board reviews all Directors’ external

appointments twice each year to confirm that

they do not create a conflict of interest. If a

Director had a conflict in respect of a particular

contract or arrangement being considered by

the Board, there is a process for the Director

to declare that conflict and the Board would

decide whether or not it was appropriate for

the Director to be involved in discussions on

that matter. In most cases, it is likely that the

Director would recuse themselves for that item

of business.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Induction

On appointment, all new Directors receive a

comprehensive induction tailored to their

experience, background and areas of focus.

The programme is designed to help each new

Director become fully effective in their role as

quickly as possible and provide them with a good

understanding of the Group’s businesses, key

drivers of operational and financial performance,

the role of the Board and its Committees, the

approach to corporate governance and the duties

and responsibilities of being a Director of a publicly

listed company.

The induction programme for Lena Wilson

recognised her extensive experience as a Non-

executive director and focused on meeting key

advisers, shareholders and individuals within

the business.

Lena met a number of the largest shareholders in

her first few weeks with the Group to understand

their views on the business and the opportunities

available to the Group.

Meetings were arranged with key external advisers,

including the Group’s lead audit partner, the

corporate brokers and legal advisers.

Lena held one-to-one meetings with each of

the Directors and members of the Executive

Committee. The meeting with Steve Montgomery

included a visit to Lumo Trains in Newcastle to visit

its head offices and meet the leadership team.

Janette Bell hosted Lena at the Caledonia depot in

Glasgow. Lena has also spent time with the GWR

team at Paddington.

In addition to the meetings above, Lena has had

one-to-one meetings with over a dozen senior

leaders in the two divisions and has further

meetings arranged for the coming months.

Continuing professional development

From time to time, training sessions are

organised for the Board, and in FY 2025 the

sessions focused on transition plan requirements

and other ESG developments.

From time to time, the Directors attend seminars

and round table discussions aligned to their areas

of responsibility or interest.

Shareholder engagement

Primary responsibility for shareholder engagement

sits with the Executive Directors.

The Executive Directors meet with larger

shareholders twice each year, normally shortly

after publication of the annual or interim results,

and at other times if required. As noted above,

Lena Wilson met a number of the top shareholders

as part of her induction.

8 Concerns held by a NED on resignation

No resignations or any such concerns have been

raised during the period.

9 Chair independent on appointment

David Martin was independent on appointment.

The Board recognises that Mr Martin served

as Executive Chair from September 2021 until

30 June 2022. Lena Wilson, appointed

on 1 February 2025, was independent

on appointment.

10 Identification of independent NEDs

The Board has concluded that Sally Cabrini,

Myrtle Dawes, Claire Hawkings, Jane Lodge

and Peter Lynas are independent in character

and judgement.

11 At least half the Board is independent

Five of the nine Directors (55.6%) are

independent and are considered by the Board

to be independent.

12 Appointment of Senior Independent

Director and review of Chair

Peter Lynas was appointed as the Senior

Independent Director on 30 June 2021. During

the year, Mr Lynas acted as Chairman in the

period of time between David Martin’s departure

and Lena Wilson joining the Board. Given the

timing of the change of Chair, the Board did not

review the effectiveness of the Chair, during

FY 2025.

Compliance with the Corporate Governance Code

13 Non-Executives’ role

The Non-Executives hold Executive Directors

to account and regularly meet, normally at the

conclusion of each Board meeting, without any

members of the Executive team. Refer to page

73 for further details.

14 Roles of Chair, Chief Executive and

Senior Independent Director and

Committee terms of reference

The responsibilities for these roles are set out

in writing and the document is available on the

Company’s website. Each Committee reviewed

its terms of reference in March 2025, and

recommended changes were approved by

the Board. The updated terms of reference

for the Committees are also available on the

Company’s website.

15 See page 83

I The Board, supported by the Company

Secretary, should ensure that it has

resources to function effectively

16 Access to and appointment of the

Company Secretary

The appointment or removal of the Company

Secretary is reserved to the Board. Since

appointment on 1 April 2022, David Blizzard has

worked with the Chair and Committee Chairs to

help them discharge their responsibilities.

All Directors have direct access to the Company

Secretary, and governance matters are raised

with the Board as they arise.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Diversity and inclusion

We believe that a diverse workforce that represents

the communities in which we operate is vital to the

Group’s success. We value the differences each

colleague brings to their role, making the Group

stronger and better able to meet the needs of

our customers and the communities in which

we operate.

Board diversity

The Group has selected 29 March 2025 as the

reference date for the data provided below.

Throughout the period under review and on the

selected reference date, the Company has

complied with the requirements that at least 40% of

the Board are women and also at least one member

of the Board is from a minority ethnic background,

aligned with the Parker Review recommendation.

Following the appointment of Lena Wilson on

1 February 2025, the Company has complied with

the external target that at least one of the senior

Board positions (Chair, Chief Executive Officer,

Senior Independent Director or Chief Financial

Officer) is a woman. The Audit Committee, the

Remuneration Committee and the Responsible

Business Committee are all also chaired by women.

The Nomination Committee is committed to a

meritocratic appointment process, and as and if

any Board role becomes available, it will ensure a

diverse longlist of candidates.

There have been no changes to the composition of

the Board since 29 March 2025. All Directors and

members of the Executive management team are

based in the UK and have been willing to freely

disclose the information required for the disclosures

below. Our approach to collecting the data has

been to ask the relevant people for the information.

The required tables reporting on sex/gender and

ethnic representation are set out below.

The diversity data for levels below the Board is set

out in the Supporting our people section starting on

page 39.

Reporting table on sex/gender representation

FirstGroup plc Board of Directors

Specified senior positions

Executive management

(defined as the Executive Committee)

Number of Board members

Percentage of the Board

Number of senior positions

on the Board (CEO, CFO,

SID and Chair)

Number in executive

management

Percentage of the

executive management

Men

44.4%

80%

Women

55.6%

20%

Not specified/prefer not to say

–

Reporting table on ethnicity representation

FirstGroup plc Board of Directors

Specified senior positions

Executive management

(defined as the Executive Committee)

Number of Board members

Percentage of the Board

Number of senior positions

on the Board (CEO, CFO,

SID and Chair)

Number in executive

management

Percentage of the

executive management

White British or other white (including minority-white groups)

88.9%

100%

Mixed/Multiple ethnic groups

–

Asian/Asian British

–

Black/African/Caribbean/Black British

11.1%

–

Other ethnic group, including Arab

–

Not specified/prefer not to say

–

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Board evaluation

In FY 2024, the Board conducted an external review and this year conducted an internal review.

2024 Board evaluation

In FY 2024, Clare Chalmers conducted an external Board evaluation. The areas of focus for FY 2025 were set out in last year’s Annual Report and an update on

progress is set out below. The review conducted in respect of FY 2025 provided evidence of progress.

2025 Board evaluation

In respect of the FY 2025 evaluation, the Company

Secretary was asked to conduct the review.

Each of the Directors was asked to complete

a questionnaire covering the Board and each

Committee. The same broad question set was used

in 2025, as in the previous year, and the average

score (on a five-point scale) was up slightly at 4.3

(4.2: 2023). Additionally, the Chair discussed the

effectiveness of the Board with each of the

Non-Executive Directors as part of her induction,

and the Company Secretary and Chair prepared

a report for discussion at the Board meeting in

March 2025.

Strengths

Amongst other things, the report identified the

following strengths:



There was strong alignment on the key

strategic issues

Areas of focus

Further steps to be taken to enhance Board

reporting in both the papers and content

of the verbal presentations at the meeting

The narrative comments in the 2025 effectiveness review acknowledge improvements made over the last

12 months, with two Directors citing specific improvements with the introduction of a KPI dashboard and

a recognition that the heat maps for risk have improved the discussions and the debate. As described

below, this will remain an area of focus.

Increase opportunities for the Non-Executive

Directors to meet senior leaders below

the Executive Committee

Following the evaluation in 2024, there have been opportunities for the Board to meet those below

the Executive Committee at each meeting. In 2024, Claire Hawkings and Myrtle Dawes joined the

First Connections events to meet some staff on the internal development programmes. In March 2025,

Lena Wilson and Sally Cabrini joined the Women@First networking lunch via a Teams call.

Additionally, the Board visited the GWR battery train test site at Greenford and met several members of

North and West Yorkshire team in January.

The narrative comments from the 2025 review acknowledge improvements and a desire to do more.

In light of the potential renationalisation

of rail, accelerate continuing discussions

on strategic options for the future

The strategic thinking continued at pace in the first half of the year. The earlier than anticipated general

election brought issues forward more quickly than expected. The strategy session held in October was

recognised by several Directors as being very helpful and the strong execution since then was also

recognised in the responses to this year’s survey.

Following a complete refresh of the

Non-Executives in the period to July 2023,

review the succession planning for the Board

and Executive Committee during the year

The Chief Executive presented succession plans for the Executive Committee in June 2024. With the

Chairman leaving in September, it was agreed that the Board succession planning would be deferred.



Relationships between the Executives

and Non-Executives are generally recognised

as being good.



The findings for the Board Committees are

all positive, with strong quantitative scores and

positive comments.



Good oversight and monitoring of the

strategic delivery.

Areas of focus

The Board agreed the following areas of focus

for FY 2026:



Quality of papers – further enhancements,

with specific clear requests, visual presentation

(such as RAG ratings), and generally shorter and

more focused papers. There were comments

suggesting further improvements, with greater

standardisation and shorter clearer requests.

Compliance with the

Corporate Governance Code

L Annual evaluation process

21 Formal and rigorous annual

evaluation

An internal evaluation was conducted in FY 2025

and the process is set out in this report.

22 Act on results of evaluation

The Board agreed actions following the 2024

evaluation and updates are provided on the

agreed actions. The areas of focus resulting

from the FY 2025 report are set out in this report

and the Board intends to report on progress in

the Annual Report next year.



Increased focus on stakeholders, particularly:



Shareholders



Customers



Employees



Suppliers



Deep dives/spotlights at Board/Board Committee

level into key issues and principal risks to

support strategic oversight



Succession/talent management at Board level

(to pick up last year’s action) and also look at

succession for Executive Committee and those

reporting to the Executive Committee. Continue

finding opportunities to meet members of senior

management team below Executive Committee.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Board

continued

Lena Wilson CBE

Chair, Nomination Committee

Main responsibilities

The primary role of the Nomination Committee

is to ensure that the Board and its Committees

have the appropriate skills, knowledge,

experience and diversity to operate effectively

and deliver strategy. The Committee is

responsible for identifying the skills required,

leading the Director appointment process, and

considering succession planning for Directors

and other senior executives.

The terms of reference are available on the

Group’s website.

Committee members:

Lena Wilson (Chair)

Sally Cabrini

Myrtle Dawes

Ant Green

Claire Hawkings

Jane Lodge

Peter Lynas

Dear Shareholder,

The main task for the Nomination Committee

this year was my appointment. Clearly, all such

meetings took place before I joined the Board,

and Peter Lynas chaired the Committee for those

meetings. Early in the year, the Nomination

Committee reviewed the succession plans for the

Executive team. The succession plans for the

Non-Executive Directors were not reviewed in the

second half of the year, as planned, given that

former Chair left the business in September.

I am looking forward to working with the

Nomination Committee this coming year and we

anticipate dedicating time to a detailed review of

succession plans to support the delivery of the

next stage in the Company’s strategic delivery.

Lena Wilson CBE

Chair

10 June 2025

17 Establish a Nomination committee

The Board has established a Nomination

committee and its membership complies with

the Code requirements.

18 Annual re-election of all Directors

Following the year end and having reviewed the

output from the Board effectiveness review, it

was agreed that all Directors would stand for

re-election at the Company’s AGM in July 2025.

19 Chair’s tenure less than nine years

David Martin, the former Chairman, was

appointed to the Board in August 2019, and his

tenure remained well within the limit set out in

the Code until he stepped down in September

2024. Lena Wilson was appointed as Chair of the

Board on 1 February 2025.

20 Open advertising/search consultancy

for NED roles

An external search consultancy was used for the

Chair appointment made during 2024 and the

Committee appointed Sam Allen Associates to

support the search. The Nomination Committee

anticipates that a similar approach would be

adopted for future appointments to the Board.

L 21 and 22 see page 81

23 Work of the Nomination Committee

The work of the Nomination Committee is set

out in this report.

H Non-Executives have sufficient time

to meet responsibilities

The over-boarding policy adopted by the

Nomination Committee in 2022 helps ensure

that Directors are not too busy to effectively

discharge their responsibilities. The high

attendance levels at the Board and Committee

meetings held during the year also supports this.

15 Time demands considered on

new appointments

The over-boarding policy provides guidance

which means these issues can be considered

consistently and objectively. The table on this

page demonstrates that all Directors are in

compliance with the policy.

J Appointments subject to a formal,

rigorous and transparent process.

An effective succession plan should

be maintained for the Board and

senior management

During the year the Committee undertook a

review of succession plans for the senior

executive roles in the organisation.

K Board and Committees have

combination of skills, experience

and knowledge

The Board effectiveness reviews confirmed

that the Board and Committees felt they

had an appropriate combination of skills,

experience and knowledge to discharge their

functions. The Directors’ key skills are set out

in their biographies.

Compliance with the Corporate Governance Code

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Nomination Committee report

In March 2025, the Committee reviewed the Board

composition and that of the Board Committees in

light of the Board evaluation and recommended to

the Board that the independent Non-Executive

Directors who were not already members of the

Audit Committee and Remuneration Committee

join them, and these changes were effective from

30 March, the first day of our new financial year.

The Committee also considered and recommended

to the Board the reappointment of Myrtle Dawes for

a further three-year term.

The Executive Directors and the divisional

Managing Directors attend meetings by invitation of

the Chair. The Committee is supported by the

Company Secretary, who has attended all meetings

during the year.

Policy on appointments to the Board

The Committee recognises the value that

individuals from diverse backgrounds can bring to

Board deliberations. The Committee considers

diversity in its wider sense, including gender,

length of tenure and nationalities. In line with the

Committee’s diversity policy, when considering

the appointment of a new Director, the Committee

adopts a formal, rigorous and transparent

procedure and due regard is given to ensuring

fairness and diversity through the consideration

of skills, experience, competencies, sector

knowledge, independence and individual

characteristics. Prior to any appointment, the

Committee evaluates the composition of the Board

and, in light of that evaluation, prepares a full

description of the role and capabilities required.

In identifying suitable candidates, the Committee:



uses open advertising or the services of external

advisers to facilitate the search



considers candidates on merit and against

objective criteria ensuring appointees have

sufficient time to fulfil their Board and

Committee responsibilities (giving due

consideration to the Company’s over-boarding

policy described below)



considers candidates from a wide range

of backgrounds

Over-boarding policy

The policy was adopted in 2022 and has been

applied when reviewing additional external

appointments and will be applied to appointments

to the Board. Under the policy, Directors may hold

five mandates on publicly listed companies. For the

purposes of calculating this limit:



a non-executive directorship counts as

one mandate



a non-executive chair counts as two mandates



a position as executive director (or a comparable

role) is counted as three mandates

The Company will consider the nature and

scope of the various appointments and the

companies concerned, and if any exceptional

circumstances exist.

The table below shows tenure and total mandates held by the current Directors, including their appointment to the FirstGroup Board.

Position

Members

Appointment date

End of current three-year term

Mandates held

Chair

Lena Wilson

1 February 2025

February 2028

Non-Executive Directors

Sally Cabrini

24 January 2020

January 2026

Myrtle Dawes

1 April 2022

April 2028

Claire Hawkings

1 January 2022

January 2028

Jane Lodge

30 June 2021

June 2027

Peter Lynas

30 June 2021

June 2027

Employee Director

Ant Green

15 September 2020

March 2027

Executive Directors

Graham Sutherland

16 May 2022

N/A

Ryan Mangold

31 May 2019

N/A

A non-executive directorship on a listed company counts as one mandate; a chairman of a listed company counts as two mandates and a position as an executive director counts as three mandates.

Activities during the year

In June 2024, the Nomination Committee

considered the Board effectiveness review,

the other commitments that the Directors had

(in accordance with the over-boarding policy)

and recommended to the Board that all Directors

standing for re-election had performed well.

The Committee reviewed and confirmed the

independence of the Non-Executive Directors and

recommended to the Board that all Directors

should be re-elected at the AGM.

On 26 July 2024, we announced to the market that

David Martin had decided to retire from the Board.

It was agreed that Peter Lynas would chair the

Nomination Committee and lead the search for

a new Chair of the Board. The Committee

appointed Sam Allen Associates to assist with

the search process. The Committee held a formal

meeting to consider a longlist of candidates and

produced a shortlist for interview. The Committee

members interviewed candidates during August

and early September. Following another formal

meeting of the Committee and the Board, we

announced on 11 September the appointment of

Lena Wilson. Given other commitments, a start date

of 1 February 2025 was agreed.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Nomination Committee report

continued

Jane Lodge

Chair, Audit Committee

Main responsibilities

The primary role of the Audit Committee is to

review and monitor the integrity of the financial

reporting by the Company, to review the

Group’s internal control and risk management

systems, to oversee the Group’s Internal Audit

function, to oversee the relationship with the

external auditor and to report to shareholders

on its activities.

The terms of reference are available on the

Group’s website.

Committee members:

Jane Lodge (Chair)

Claire Hawkings

Peter Lynas

Dear Shareholder,

I am delighted to introduce the report from

the Audit Committee for the 52 weeks ended

29 March 2025.

The report provides an overview of the activities

undertaken by the Committee during the year and

explains the significant issues and judgements that

the Committee considered during the year and,

in particular, when approving this Annual Report.

The Audit Committee has a key governance role

and, on behalf of the Board and shareholders,

reviews important matters relating to financial

reporting, internal controls, risk management and

compliance with regulations and legislation.

An overview of the Committee’s principal activities

and areas of focus during the year, together with

the priorities for the year ahead. As part of the half

year reporting process, the Committee carefully

considered, amongst other things, an assessment

that an impairment to the investment in the bus

operations was not required, a review of the going

concern and viability assessments, a review of

the judgements associated with pensions, the

insurance and legal exposures, the IFRS 16 lease

expiry dates given the Government’s plans to

nationalise the DfT TOCs adjusting items, and

taxation. The Committee also made the required

recommendations to the Board.

The primary issues considered at the year end are

set out in a table on page 86.

The work on internal controls across the Group

which was a priority for this year, has progressed

well. The work is ongoing as the new governance

regulations come online and we will continue to

work on this in the coming year.

We reviewed the Financial Reporting Council’s

Minimum Standards for Audit Committees and have

undertaken activities to meet the requirements.

Jane Lodge

Chair, Audit Committee

10 June 2025

Composition and

Committee attendance

The membership of the Committee is set out in

the column to the left and attendance is set out on

page 77. Jane Lodge and Peter Lynas have recent

and relevant financial experience and the requisite

competence in accounting. Claire Hawkings,

the other member of the Committee, has the

necessary skills and financial literacy to discharge

her responsibilities.

The Chair of the Board, the Chief Executive Officer,

the Chief Financial Officer, the Company Secretary,

the Director of Finance, the Head of Internal Audit,

the Group Head of Financial Reporting and the

external audit partner routinely attend meetings of

the Committee. In addition, others are invited to

attend all or parts of meetings as required, to

provide the Committee with additional insight on

relevant matters. Other members of the Board have

an open invitation to attend Committee meetings

and they did so on a number of occasions during

the year. The Committee holds private sessions

without management present and regularly meets

with the internal and external auditors (again

without management present).

Summary of Committee activities

throughout the year

The Committee has an extensive agenda of items

of business focusing on financial reporting, internal

control, risk management, and internal and external

audit, in addition to certain standing matters that

the Committee considers at each meeting, as well

as any specific topical items that arise during the

course of the year.

Compliance with the

Corporate Governance Code

24 Establish an Audit Committee

The Board has established an Audit Committee.

Currently it has three members, all of whom

are independent Directors, two of whom

(Jane Lodge and Peter Lynas) have recent and

relevant financial experience and the requisite

competence in accounting to meet the Code

requirements. The Committee believes it has

sufficient sector-relevant competence to

discharge its duties.

25 Committee’s role

The Committee’s role is summarised in the

report that follows. The terms of reference are

on the Company’s website. The Committee is

comfortable that its role meets the Code

requirements.

26 Annual Report to describe work

of Committee

This report discharges this Code Provision.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Audit Committee report

During the year, the Committee fully discharged its

responsibilities under the terms of reference, and

these broadly fall under three areas:

Accounting, tax and financial reporting



Reviewed and approved the half year and annual

results considering the significant accounting

policies, principal estimates and accounting

judgements used in their preparation, the

transparency and clarity of disclosures and

compliance with financial reporting standards



Reviewed the basis for preparing the half year

and full year accounts on a going concern basis

with input from the external auditors



Considered and approved management’s

assessment of the Group’s prospects and longer-

term viability contained within the Annual Report



Received reports from management and the

external auditors on accounting, financial

reporting regulation and tax issues



Reviewed and assessed whether the Annual

Report, taken as a whole, was fair, balanced

and understandable



Reviewed the Non-Audit Services Policy, Tax

Strategy, Treasury Policy and the application

of the Adjusted Items Policy



Reviewed the assumptions such as future growth

rates, cash flows and discount rate used in the

impairment models and the output from the

impairment review



Reviewed the non-GAAP measures in the

Company’s reporting



Reviewed the assumptions used to calculate

the pension liabilities

Internal control, risk management and

internal audit



Reviewed the structure and effectiveness of the

Group’s system of risk management and the

related disclosures in the Annual Report and

financial statements



Reviewed the Group’s risk management activities

undertaken by the divisions and at Group level

in order to identify, measure and assess the

Group’s principal and emerging risks and

reviewed the risk appetite statement, developed

by management, for recommendation to

the Board



Approved the annual Internal Audit plan and

reviewed reports from the Internal Audit team

relating to control matters; monitored progress

against the plan and any deviations were agreed



Monitored the Group’s insurance arrangements,

insured and uninsured claims and

material litigation



Reviewed plans and progress to enhance the

internal control environment ahead of expected

regulatory and legislative changes

External audit



Considered and approved the scope, audit plan,

terms of engagement and fees for the external

audit work to be undertaken in respect of

FY 2025



Received reports from the external auditor on its

findings during the half year review and the full

year audit



Considered the objectivity and independence of

the external auditor and the effectiveness of the

external audit process, taking into account its

policies to maintain independence, non-audit

work undertaken by the auditors and compliance

with the Company’s policy on the provision of

non-audit services and applicable regulations



Considered and approved the letters of

representation to the external auditors



Considered and recommended to the Board the

reappointment of the external auditor at the AGM

Compliance with the

Corporate Governance Code

M Formal transparent policies to ensure

independence of audit

The auditors’ policies and the Company’s

Non-Audit Services Policy help ensure the

independence of the auditor. The non-audit

services policy is reviewed by the Committee

on an annual basis and was last reviewed in

March 2025.

There is additional commentary on the

assessment of the internal auditor on page 89.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Audit Committee report

continued

Significant issues and key accounting judgements reviewed during the year

The matters the Committee considers to be significant for the FY 2025 Annual Report and financial statements are as follows:

Significant issues and judgements

How the Audit Committee addressed these issues

Acquisition accounting relating to First Bus London

On 28 February 2025, the Group completed its acquisition of London bus operator RATP Dev Transit

London Limited. The management team completed a purchase price allocation and acquisition accounting

exercise. Key judgements comprised identification and valuation of intangible assets, onerous contract

provisions, identification of other liabilities, and tax implications including treatment of brought forward

tax losses.

The Committee received accounting judgement papers from the management team and the external

auditors. The Committee challenged management’s assumptions regarding discount rates used, the

classification of goodwill and intangible assets, the magnitude of the onerous contract provision, and

the recoverability of deferred tax assets. The Committee considered the disclosure of acquisition

accounting exercise as provisional, given the proximity of the transaction date to the Group’s year end.

The Committee concluded that the acquisition accounting adjustments were reasonable, and the

disclosures were appropriate.

National Rail Contract expiry dates

During the year, the new Labour Government announced plans to take National Rail Contracts (NRCs) back

into public ownership. Judgement relates to the assessment of likely end dates for the NRCs held by the

Group’s DfT TOCs. This judgement impacts the accounting for useful economic lives of property, plant and

equipment, assessment of IFRS 16 lease liabilities, as well as the base case assumptions for the Group’s

going concern and viability reviews.

The Committee discussed the likely end date with management and the external auditors at several

meetings. The Government’s NRC timeline proposals for SWR, c2C and Greater Anglia and their

implications for subsequent NRCs were considered. The Committee reviewed judgement papers from

management and external auditors. In relation to lease liabilities, the Committee considered whether the

lessee has “control” over the lease end date and any conditions regarding notice periods. The Committee

concluded that management’s assumptions were reasonable, and that these had been appropriately

incorporated into the going concern and viability reviews.

Pension assumptions and funding

The Group participates in a number of defined benefit pension schemes. Management exercises

significant judgement when determining the assumptions used to value the pension liabilities as these are

particularly sensitive to changes in the underlying assumptions. Scheme valuations were conducted during

the year and changes were made to the assumptions which were considered to be in acceptable ranges.

Management engaged with external experts and the Committee considered and challenged

the assumptions used for estimating the liabilities. Sensitivity analysis was performed on the

key assumptions: inflation, discount rate and mortality. The overall liabilities were assessed

for reasonableness. Further detail on pensions is provided in note 35 in the consolidated

financial statements.

Going concern and viability

The Group regularly prepares an assessment detailing available resources to support the going concern

assumption and the long-term viability statements. Management concluded that the financial statements

should be prepared on a going concern basis and there were no material uncertainties which require

disclosure. We continue to provide essential services to our customers and the communities we serve and

anticipate doing so for the foreseeable future.

The Committee reviewed and challenged management’s funding forecasts and sensitivity analysis and the

impact of various possible downside scenarios, which took into account passenger volume growth in First

Bus, Hull Trains and Lumo; DfT TOC NRC contract end dates, the level of performance fees in the Rail

Division, and ESG-related risks including climate change. Following the review, which the Committee

carried out at its meeting in June 2025, the Committee recommended to the Board the adoption of both

the going concern and viability assessment, and the related statements for inclusion in this report.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Audit Committee report

continued

Internal control framework/assurance

While the Board retains ultimate responsibility

for risk management and the internal control

environment, the Committee is responsible for

reviewing the robustness and effectiveness of the

Group’s risk management and internal control

systems, including financial, operational, regulatory

and compliance controls. Periodic review and

ongoing monitoring of risk management and

internal control frameworks are essential

components of any system of risk management

and internal control.

The Committee monitors the Company’s risk

management and internal control systems and, in

addition to periodic reviews by the Committee, the

Board undertakes an annual in-depth review of

the effectiveness of internal controls, including

the operation of financial, operational and

compliance controls.

The Committee also guides the Board on the nature

and extent of the principal and emerging risks the

Company may be willing to take in order to achieve

its long-term strategic objectives. The output from

this system is the Company’s risk appetite policy,

which is subsequently reviewed by the Board.

The process the Committee applied in reviewing

the effectiveness of the system of risk management

and internal control is set out below, together with a

summary of the actions that have been or are being

taken to improve the overall control environment.

Internal controls

The Committee receives regular updates on the

Group’s system of internal control, including

progress made to the overall programme and

conclusions on the design and effectiveness of

key controls, mitigating financial, operational

and compliance risk. Significant progress has

been made to standardise the internal controls

framework to give the Committee greater

comfort around the effectiveness of the

control environment.

During the course of the financial year, any control

weaknesses identified through the operation of our

risk management and internal control processes

were subject to monitoring and resolution in line

with our normal business operations. In 2025,

no material control weaknesses were identified.

Overall, the Committee is satisfied that the Group’s

internal control framework was operating effectively

as at the year end.

The project to set up the ongoing controls

assurance in line with regulatory reforms is

progressing well, and will continue to be assessed

by the Committee. Material financial, operational,

compliance and reporting controls have been

identified and minor weaknesses addressed.

Mitigating alternative controls and processes

are in place for any improvements which remain

in progress. The attestation methodology is

established, and initial testing of material controls

will begin in 2027.

Assurance

FirstGroup plc maintains a broad range of

assurance over its internal controls through

regulatory compliance, governance structures,

and oversight mechanisms. This includes internal

audits, management reviews, and risk assessments

aimed at ensuring key controls are effective in

protecting assets, ensuring accurate financial

reporting, and meeting legal requirements.

As part of the audit process, external auditors

provide independent assurance over the accuracy

and integrity of financial statements and review

the Annual Report. Additionally, Grant Thornton

provides independent assurance over the

company’s climate-related metrics.

Risk management

The Board, through the Committee, is responsible

for determining the nature and extent of any

significant risks the Group is willing to take in order

to achieve its strategic objectives, as well as the

nature and extent of the external risk environment.

To fulfil this responsibility, the Committee oversees

a Group-wide system of risk management and

internal control that identifies and enables

management and the Board to evaluate and

manage the Group’s principal and emerging risks.

The system is tailored to the particular needs and

risks to which the Company is exposed and is

designed to manage rather than eliminate risk.

Owing to the limitations inherent in any system

of internal control, this system provides robust,

but not absolute, assurance against material

misstatement or loss.

The Committee assessed the Group’s risk

management methodology, which is used to

identify and manage the principal and emerging

risks, as well as the reporting and categorisation

of Group risks, and made recommendations for

improvement. Changes were implemented with the

Committee’s oversight. See the Risk management

section of the Strategic report starting on page 58

for further information on the Group’s risk

management system.

The Committee also reviewed the process for

assessing the principal and emerging risks that

could threaten the Company’s business model,

future performance, risk appetite, solvency or

liquidity to make the long-term viability statement

on page 69 and considered the appropriate period

for which the Company was viable.

The Company’s policies on financial risk

management, including the Company’s exposure to

liquidity risk, credit risk and certain market-based

risks, including foreign exchange rates, interest

rates and fuel and electricity prices, can be found

in note 23 to the consolidated financial statements.

Compliance with the

Corporate Governance Code

N Fair, balanced and understandable

assessment of prospects

27 The report is fair, balanced and

understandable

The Committee, on behalf of the Board, reviews

the Annual Report to confirm that it believes it to

be fair, balanced and understandable. In addition

to its own knowledge and assessment, the

Committee takes comfort from the reviews

conducted by the Executive Committee,

particularly in respect of fairness and balance.

The external reviews as part of the preparation

and sign-off process give comfort in respect

of understandability.

The Board reviewed the Annual Report and

each Director confirmed to the best of his or

her knowledge that the Annual Report and

Accounts, taken as a whole, is fair, balanced and

understandable, and provides the information

necessary for shareholders to assess the

Company’s and the Group’s position and

performance, business model and strategy.

O Procedures to oversee internal

control framework and identification

of principal risks

The procedures are described left.

28 Assessment of emerging and

principal risks

The emerging and principal risks are disclosed

in the Risk management section of the Strategic

report starting on page 58 and the assessment

process is also set out in detail in that part of the

Annual Report. The Audit Committee reviews the

detailed outputs from the work completed by the

Executive team.

29 Monitor risk management and

internal control

The monitoring of risks together with a

description of the internal control system in

place is set out in the Strategic report and also

within the report from the Audit Committee.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Audit Committee report

continued

Key elements of the Group’s risk management

framework that operated throughout the year are:



A centrally coordinated internal audit programme

to verify that policies and internal control

procedures are being correctly implemented and

operate to identify any risks at an early stage



An agreed methodology for ranking the level of

risk in each of its business operations and the

principal and emerging risks



Divisions identifying and reviewing their principal

and emerging risks, the adequacy of controls for

monitoring and managing risks, including and

reviews by senior management



Implementation of appropriate strategies to

mitigate principal and emerging risks, including

careful internal monitoring, and ensuring external

specialists are consulted where necessary



Updated divisional and Group risks, which are

reviewed by the Chief Executive Officer and Chief

Financial Officer, are presented to the Executive

Committee for assessment on a regular basis



Reviewing and monitoring the confidential

reporting system to allow employees to raise

concerns about possible legal, regulatory,

financial reporting or any other improprieties



A Remuneration Policy for executives that

motivates them, without delivering excessive

benefits or encouraging excessive risk-taking

Twice a year, the Board is presented with an update

for its assessment of the principal and emerging

risks facing the Group, together with a risk map,

highlighting any changes made since the prior

update together with the relevant rationale. Each

Committee that reports regularly to the Board also

provides update on the status of risks considered

within its remit.

Financial and business reporting

The Board recognises its responsibility to present

a fair, balanced and understandable assessment of

the Group’s position and prospects in its reporting

to shareholders. This responsibility encompasses

all published information including, but not limited

to, the half year and full year financial statements,

regulatory news announcements and other publicly

disclosed information.

The quality of the Company’s reporting is ensured

by having procedures in place for the review of

information by management. There are also strict

procedures to determine who has authority to

release information. A statement of the Directors’

responsibilities for preparing the financial

statements can be found on page 118.

The Group adopts a financial reporting and

information system that complies with generally

accepted accounting practice. The Group Finance

Manual details the Group’s accounting policies and

procedures with which subsidiaries must comply.

Budgets are prepared by subsidiary company

management which are then consolidated into

divisional budgets. These are subject to review

by both senior management and the Executive

Directors followed by formal approval by the Board.

Regular forecast updates are completed during

the year and compared against actions required.

Each subsidiary unit prepares a monthly report of

operating performance with a commentary on

variances against budget and the prior year, which

is reviewed by senior management. Similar reports

are prepared at a Group level. KPIs, both financial

and operational, are monitored on a weekly basis.

In addition, business units participate in strategic

reviews, which include consideration of long-term

financial projections and the evaluation of

business alternatives.

Reviews of internal controls within operating units

by Internal Audit have sometimes highlighted

control weaknesses, which are discussed with

management and, where appropriate, the

Committee, and remedial action plans are agreed.

Action plans are monitored by Internal Audit and, in

some cases, follow-up visits to the operating entity

are conducted until such time as the controls that

have been put in place are working effectively. No

material losses, contingencies or uncertainties that

would require disclosure in the Annual Report have

been identified during the year by this process.

The Committee, in conjunction with the Executive

team, regularly reviews and develops the internal

control environment to make continual

improvements. No significant internal control

failings were identified during the year. Where

any gaps were identified, processes were put in

place to address them and these are monitored.

In addition, as stated above, management intends

to continue to improve the standardisation,

documentation and testing of internal controls to

give the Committee greater comfort around the

effectiveness of the control environment.

The process is designed to provide assurance

by way of cumulative assessment. It is a

risk-based approach.

Compliance with the

Corporate Governance Code

30 Going concern basis of accounting

The Audit Committee considered the going

concern basis of accounting statement set out

on page 70 complies with the Code provision.

31 Assessment of the current position

and principal risks/Viability

Statement

The principal risks are set out in the Strategic

report on pages 60 to 68, together with a

description of the risk management processes

in place.

The Viability statement complies with the

Code Provision and is set out on page 69.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Audit Committee report

continued

Internal Audit

The Internal Audit function advises management on

the extent to which systems of internal control are

adequate and effective to manage business risk,

safeguard the Group’s resources, and ensure

compliance with the Group’s policies and legal

and regulatory requirements. It provides objective

assurance on risk and controls to senior

management, the Committee and the Board.

Internal Audit’s work is focused on the Group’s

principal and emerging risks.

The mandate and programme of work of the

Internal Audit function is considered and approved

by the Committee annually and includes a number

of internal audits and health checks across the

Group’s divisions. Findings are reported to relevant

operational management and to the Committee.

The Internal Audit function follows up on the

implementation of recommendations and reports

on progress to senior management and to the

Committee at each meeting.

The Internal Audit function is a combination of

outsourced and insourced resource. The Head of

Internal Audit reports functionally to the Chair of

the Committee and administratively to the CFO.

The effectiveness of the Internal Audit function’s

work is continually monitored using a variety of

inputs, including the ongoing audit reports

received, the Committee’s interaction with the

function’s head, an annual review of the function’s

internal quality assurance report, a quarterly

summary dashboard providing a snapshot of the

progress against the Internal Audit plan tabled at

each Committee meeting as well as any other

ad-hoc quality reporting requested.

Taking all these elements into account, the

Committee concluded that the Internal Audit

function was an effective provider of assurance

over the Company’s risks and controls and

appropriate resources were available as required.

External audit

External auditor independence and

objectivity

PricewaterhouseCoopers LLP (PwC) was appointed

the Company’s external auditor following a

competitive tender process in 2020, and it

undertook the FY 2021 audit. Matthew Mullins is

the Senior Statutory Auditor.

The independence of the external auditor is

essential to the provision of an objective opinion

on the true and fair view presented in the financial

statements. PwC’s independence and objectivity

are safeguarded by a number of control

measures including:



Limiting the nature of non-audit services

performed by the external auditor



The external auditor’s own internal processes to

vet and approve any requests for any non-audit

work to be performed by the external auditor



Monitoring changes in legislation related to

auditor independence and objectivity to assist

the Company to remain compliant



The rotation of the lead audit partner after

five years



Independent reporting lines from the external

auditor to the Committee and ensuring the

external auditor is afforded the opportunity for

in-camera sessions with the Committee



Placing restrictions on the employment

by the Group of certain employees of the

external auditor



Providing a confidential helpline that employees

can use to report any concerns, including those

relating to the relationship between Group

employees and the external auditor



An annual review by the Committee of the

policy in place to ensure the objectivity

and independence of the external auditor

is maintained

Assessing the effectiveness of the

external audit process

The Committee, other Board members, senior

management in both the corporate functions

and within the operations and the Internal Audit

team evaluated PwC’s performance, and the

effectiveness of the external audit process

during FY 2025. The Committee also considered

the independence and objectivity of PwC.

The following factors were considered:



The quality of the interactions between the audit

team and the Committee, other Board members,

management and those involved in the

preparation of the accounts



Whether the scope of the audit and the planning

process were appropriate for the delivery of an

effective audit



The external auditor’s progress achieved against

the agreed audit plan and communication of any

changes to the plan, including changes in

perceived audit risks



The competence with which the external auditor

handled the key accounting and audit

judgements and communication of the same with

management and the Committee



The external auditor’s compliance with relevant

regulatory, ethical and professional guidance on

the rotation of partners



The expertise and resources of the external audit

team conducting the audit



Whether the statutory audit contributed to the

integrity of the Group’s financial reporting

Taking into account the factors above and feedback

from management, members of the Committee

and the Board, the Committee concluded that the

external audit process and services provided by

PwC were satisfactory. The feedback was shared

with PwC and any opportunities for improvement

will be considered and agreed.

Policy on the provision of non‑audit services

The Committee’s policy on the use of the external

auditor for non-audit services includes the

identification of non-audit services that may be

provided and those that are prohibited. The policy

requires that the external auditor will only be used

for non-audit services where regulation permits, the

Group benefits in a cost-effective manner and the

external auditor maintains the necessary degree of

independence and objectivity. The policy provides

for a cap on fees for non-audit work of 70% of the

average of fees paid to the audit firm over the

previous three years for audit services.

The Committee receives regular reports on any

non-audit assignments awarded to the external

auditor and a breakdown of non-audit fees

incurred. The Committee is satisfied that the

Company was compliant during the year with both

the Code and the FRC’s Ethical Standard in respect

of the scope and maximum permitted level of fees

incurred for non-audit services provided by PwC.

Details of amounts paid to the external auditor for

audit and non-audit services for the 52 weeks

ended 29 March 2025 are set out in note 6 to the

consolidated financial statements.

Tax strategy

We believe we have a responsibility to manage our

tax affairs in a way that sustainably benefits the

customers and communities we serve. We also have

a responsibility to shareholders to ensure we pay the

right amount of tax and ensure compliance with the

tax rules in each country in which we operate. In

the UK, HMRC has categorised the Group as low

risk given our systems, processes and governance

structures. Further information on our tax strategy,

which was reviewed by the Committee and

subsequently approved by the Board in September

2024, is available on our website. The tax strategy is

reviewed annually by the Committee.

Compliance with the Competition and

Markets Authority Order

Pursuant to Article 7.1 of The Statutory Audit

Services for Large Companies Market Investigation

(Mandatory Use of Competitive Tender Processes

and Audit Committee Responsibilities) Order 2014,

the Company confirms that it has complied with

the provisions during FY 2025, including Part 5 in

relation to the role of the Committee.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Audit Committee report

continued

Claire Hawkings

Chair, Responsible Business Committee

Main responsibilities

The Committee has oversight of safety,

the people strategy, the environmental impact

of the Group’s activities, sustainability

and community engagement.

The terms of reference are available

on the Group’s website.

Committee members:

Claire Hawkings (Chair)

Sally Cabrini

Myrtle Dawes

Ant Green

Peter Lynas

Dear Shareholder,

Leading in environmental and social sustainability

is a key pillar within the Group’s new business

strategy, which is overseen and led by our

Responsible Business Committee.

The Committee’s remit is broad, but has key

focus areas: safety; climate and environment;

governance; disclosures; and social value

covering our people, communities and broader

stakeholder groups.

One highlight in the year under review was the

publication of our Climate Transition Plan (CTP) in

early March 2025. You can read more about the

CTP on page 34 of this Annual Report. The

publication of our CTP marks a pivotal step in our

journey to net zero, providing a clear, science-

based roadmap that aligns with the UK’s climate

goals. This plan is not only a strategic framework

but also a demonstration of our commitment to

transparency, accountability, and long-term value

creation. It sets out how we will decarbonise our

operations through targeted investments in

zero-emission technologies, electrification of our

bus depots, and the deployment of electric and

bi-mode rail fleets.

Since 2020, we have already achieved a 27%

reduction in Scope 1 and 2 emissions and made

meaningful progress on Scope 3. In 2024 over 80%

(£108m) of our capital expenditure went to

decarbonisation projects. With over 1,115 zero-

emission buses in service and three verified

net-zero depots, we are delivering tangible results.

The Plan also outlines how we are enabling a

broader economy-wide transition by promoting

modal shift, encouraging more people to choose

lower-impact public transport options. This is a

critical lever in reducing transport emissions and

supporting the UK’s net-zero ambitions.

The Group continued to make progress with

commitments to its people, communities and

diversity and inclusion targets. This was driven by

strong activities at local level.

The Committee ensures our responsible business

activities are supported by robust plans and

performance metrics. Performance reports are

shared with the Committee at each meeting and

provide an essential mechanism for understanding

progress and taking action.

This report focuses on the governance of the

Responsible Business Committee and the

key governance matters are set out in the

paragraphs below.

I look forward to working with the Executive team

in the coming year as we continue to implement

the four-pillar strategy for the Group.

Claire Hawkings

Chair, Responsible Business Committee

10 June 2025

Membership and attendance

The Committee membership is set out in the

column to the left and the attendance records

are shown on page 77.

The Company Secretary attended all meetings

during the year and, at the invitation of the

Committee Chair, the Chair of the Board, the

Chief Executive Officer, the Group HR Director,

the Director of Corporate Responsibility, the

Divisional Managing Directors, the General Counsel

and the Head of Internal Audit attended relevant

sections of meetings to support the work of the

Committee with inputs on their areas of

responsibility or expertise.

Meetings during the year

The Responsible Business Committee met on four

occasions and in each meeting received a report

from the Chief Executive Officer on safety matters.

Senior representatives from First Rail and First Bus

attended and each presented progress in four

areas: safety, people, environment and community.

The Committee oversees the focus on safety

performance across the Group, with positive trends

in most key indicators. The Committee received

detailed reports on significant safety matters and

reviewed investigation findings including root

causes and corrective action plans. Lessons learnt

were also routinely discussed.

In addition, when the Committee met in March 2024

and June 2024 it reviewed the Responsible

Business disclosures in the Annual Report for 2024.

In June 2024, the Committee reviewed the Group

safety policy and received a report on TCFD

alignment and steps being taken to develop a

Group-wide CTP.

In September 2024, the Committee received an

update on Transition Planning. The Committee also

received a briefing on the key considerations for

setting new targets following the implications of

major divestments. The Committee also reviewed

the external recognition from external bodies and

areas in which to focus effort to improve any

such ratings.

In November 2024, the Committee received an

extensive training session on transition planning

and the Transition Plan Taskforce from EY.

In January 2025, the Committee met in Leeds.

The formal meeting covered a follow-up on the

new Group strategy. The Committee also reviewed

the Group’s ethnic, diversity and inclusion targets

and the Group’s ethnic and gender pay gap

reporting, with noting the Group’s commitment

to the Parker Review.

In March 2025, the Committee received an update

on science-based targets, along with a review of

Scope 3 and our supply chain, approved the

Group’s Safety Policy, and received an update on

the publication of the CTP.

Throughout the year, the Committee has worked

with the Remuneration Committee to oversee the

development of and performance against key

performance measures that form part of the

variable remuneration of the Executive team.

FY 2026

At the meeting in June 2025, the Committee

reviewed the Responsible Business disclosures, the

TCFD reporting and reviewed the carbon footprint

disclosures and the assurance work undertaken by

Grant Thornton. During FY 2026, the Committee will

continue to provide oversight on safety, the people

strategy, the environmental impact of the Group’s

activities and our community engagement.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Responsible Business Committee report

Dear Shareholder,

I am pleased to present the Directors’

Remuneration report for the 52 weeks

ended 29 March 2025.

The Directors’ Remuneration report covers the

required regulatory information and provides further

context and insight into our pay arrangements for

Directors and other Group employees. We set out

our key decisions since last year, the assessment

of FY 2025 performance and determination of pay,

and our approach to ensuring executive pay

outcomes are fair in the context of wider

employee pay.

FY 2025 was another year in which we have had

strong operational and financial performance as

well as strong cash conversion for the Group. The

strong performance has been driven by successful

execution of the Group’s strategy, leading to

increased profit and further diversification.

With the acquisition of RATP London, now named

First Bus London, in February 2025, we now have a

c.12% share of the London bus market. First Bus

London contributed revenue of c.£23m in FY 2025,

and we anticipate annual revenues of £300–350m

as the route contracts evolve over the next five

years. Adjacent services revenue increased to

£270.8m (FY 2024: £219.8m), as a result of contract

wins and extensions as well as recent acquisitions

of coach companies, further supporting the

Group’s strategy of growing and diversifying our

revenue base.

First Bus passenger volumes increased by c.2%

(excluding the extra week in FY 2024). In FY 2025

we had underlying passenger revenue growth of

7% compared with FY 2024, despite a c.£17m

reduction in funding. In First Bus we have continued

our significant investment in sustainable growth

and decarbonisation. At the end of March 2025 we

had c.1,115 electric buses in operation (c.20% of

our fleet).

In First Rail, open access continues to perform

extremely well with strong demand and high-

levels of customer satisfaction. Open access

revenue increased to £106.4m (FY 2024: £99.8m)

and adjusted operating profit of £34.1m (FY 2024:

£30.0m). We have also acquired access rights for

two new open access services between London

Euston and Stirling and London Paddington and

South Wales, doubling existing capacity. Following

a period of mobilisation we anticipate annual

revenue of c.£50m from each of these services.

In First Rail, our Additional services businesses,

First Customer Contact, Mistral Data and First Rail

Consultancy continue to perform well and will

continue to support the DfT TOCs in FY 2026,

including TPE, which left the Group in May 2023,

and SWR, which we ceased operating on

25 May 2025.

The UK rail and bus industries will see significant

change over the next few years as National Rail

Contracts move to public ownership as well as a

significant increase in bus franchising outside of

London. Over the past few years we have worked to

transform, grow and diversify our businesses. With

a strong balance sheet and leading positions, we

are well placed to navigate the industry changes.

Directorate changes

David Martin retired from the Board as Chairman

on 10 September 2024. Peter Lynas, Senior

Independent Director, acted as Chairman from

10 September 2024 until the appointment of Lena

Wilson as Chair on 1 February 2025. Full details of

fees paid are set out in the table on page 101.

Principles

The principles that underpin the Committee’s

approach to executive remuneration are set out

in the Directors’ Remuneration Policy. Our new

Remuneration Policy was put to shareholders

for approval at the 2024 AGM and received the

support of the vast majority of shareholders.

A summary of shareholder voting is on page 108.

A summary of the Policy is on pages 109 to 112.

The full Policy can be found on the FirstGroup plc

website and pages 144 to 155 of the 2024

Annual Report.

Overview of financial performance,

operating achievements

and strategic progress

FY 2025 has been another year of strong

operational and financial performance:



Group adjusted operating profit increased

significantly to £222.8m (FY 2024: £204.3m)



FY 2025 final dividend of 4.8p recommended

in line with the progressive dividend policy



We completed the £115m share buyback

programme in August 2024 and the subsequent

£50m programme in March 2025



We entered the London bus market with the

acquisition of RATP London, now named First

Bus London



Revenue and profits from open access

rail businesses exceeded expectations

As a Committee, we believe it is imperative to

strike the right balance between incentivising

the management team, rewarding strong

performance and being equitable in the broader

context, taking into account the experience of

our wider stakeholders, including our employees

and shareholders.

We remain committed to our ED&I initiatives, as

evidenced by diversity and inclusion metrics in our

2024 and 2025 Long-Term Incentive Plans (LTIPs).

FY 2025 Executive Annual Bonus Plan (EABP):

The FY 2025 EABP was based 70% on financial

metrics (60% Group adjusted operating profit, 10%

Group adjusted cash flow), 30% on non-financial

metrics (20% operational scorecard), and 10% on

personal objectives.

The Committee carefully considered performance

against each of the financial and non-financial

targets and then a broader consideration of overall

performance. Group adjusted operating profit

and cash flow were both between on-target and

maximum for an achievement of 87.5% of maximum

and 96.4% of maximum, respectively. We introduced

an operational scorecard in the FY 2025 EABP,

made up of key business priorities. Overall

achievement against the operational scorecard

was 60% of maximum. In respect of personal

objectives, the Committee awarded both Graham

Sutherland and Ryan Mangold 80% of maximum.

Sally Cabrini

Chair, Remuneration Committee

Main responsibilities

The Remuneration Committee is primarily

responsible for determining the policy for

Executive Director remuneration and setting

the remuneration for the Chair, the Executive

Directors and senior management.

The Committee also reviews wider workforce

remuneration, related policies and the

alignment of incentives and rewards with

culture, taking these into account when setting

the policy for Executive Director remuneration.

The terms of reference are available

on the Group’s website.

Committee members:

Sally Cabrini (Chair)

Claire Hawkings

Jane Lodge

Peter Lynas

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Remuneration Committee report

The formulaic EABP award for the Executive

Directors resulted in awards of 82.1% of maximum

for both Graham Sutherland and Ryan Mangold.

The Committee reviewed the overall outcome in the

context of the Group’s underlying performance and

was satisfied with this level of payout.

Full details of targets and performance achieved

are set out on pages 97 and 98.

2022 LTIP:

The vesting of the LTIP granted in

2022 was subject to the following performance

measures:



50% EPS



35% relative total shareholder return

(TSR) vs FTSE 250



7.5% zero emission (ZE) fleet transformation



7.5% Scope 1&2 emissions (tCO

e) reduction

Performance against the 2022 measures is

as follows:



The Company delivered strong earnings growth,

with EPS of 19.4p, resulting in 100% vesting

under this element (50% of the overall award)



Relative TSR vs FTSE 250 performance was

at the 93rd percentile versus the peer group,

resulting in 100% vesting under this element

(35% of the overall award)



The Company outperformed against our ZE fleet

transformation target, with a total of 951 new

ZE buses by 29 March 2025, resulting in 100%

vesting under this element (7.5% of the

overall award)



The Company outperformed against our

emissions reduction target, with an outturn of

704,655 tCO

e, resulting in 100% vesting under

this element (7.5% of the overall award)

Therefore, the formulaic vesting of the 2022 LTIP

award was 100%. The Committee carefully

reviewed the overall formulaic vesting outcome in

the context of the Group’s underlying financial

performance and was satisfied that there was no

need to exercise discretion. The shares will be held

for an additional two years to provide alignment

with our shareholders.

Full details of the 2022 LTIP are set out on page 98.

2024 LTIP:

The Committee determined that

the 2024 LTIP award made to the CEO, CFO

and other senior leaders would be measured

against EPS, relative TSR and an ESG Scorecard

(comprising two environmental measures and

two ED&I measures), over a three-year period.

Full details of targets are set out on page 99.

Remuneration for FY 2026

The Committee carefully considered base salary

increases for the Executive Directors holistically,

taking into account FY 2026 base salary increases

applied to the wider workforce, the competitive

market and investor guidance that base salary

increases for Executive Directors should be aligned

with those provided to the wider workforce.

Therefore, the Committee approved an increase of

2.8% for Graham Sutherland and Ryan Mangold,

effective 1 April 2025. See page 102 for

more information.

The Executive Directors have an opportunity

to receive a maximum of 150% (half of which

is deferred into shares for three years) of base

salary under the FY 2026 EABP.

The FY 2026 EABP is based on the

following metrics:



50% Group adjusted operating profit



20% Group adjusted cash flow



20% operational scorecard



10% personal objectives

Details on the metrics are set out on page 102.

The Committee considers the forward-looking

annual bonus targets to be commercially sensitive,

but full disclosure of targets and performance

outcome will be set out in next year’s Annual report

on remuneration.

It is the Committee’s intention to make awards

under the LTIP this year, and it is anticipated that

the approach regarding metrics will be similar to

the 2024 LTIP. The 2025 LTIP consists of 50% EPS,

30% relative TSR and 20% on an ESG Scorecard.

The targets for these awards are set out on

page 102.

Remuneration fairness

As a Remuneration Committee, we consider senior

team pay in the context of wider workforce pay,

policies and practices, and a number of items are

tabled at Committee meetings every year to ensure

the approach throughout the Group is fair.

The ‘Remuneration in context’ section of the report

on pages 94 and 95 provides a summary of the

items and the factors that the Committee considers

when making executive reward decisions.

What the Remuneration Committee

has looked at in the last 12 months

The Committee has:



approved a temporary increase in fees for

Peter Lynas in his role acting as Chairman



approved the fee for Lena Wilson CBE as Chair,

effective 1 February 2025



approved FY 2025 EABP payout for Executive

Directors and other senior employees



determined the vesting of the 2022 LTIP



reviewed and approved the FY 2025 Directors’

Remuneration report



approved the 2024 LTIP awards



agreed the FY 2026 EABP approach



reviewed wider workforce remuneration

and related policies



approved the launch of the 2024 Save as You

Earn (SAYE) scheme



reviewed its terms of reference

Governance

The Committee actively monitors developments in

corporate governance and the guidelines produced

by shareholders and their representative bodies.

We have provided further details on our approach

to pay throughout the Group on pages 94 and 95.

In conclusion

We will continue to monitor governance

developments and are committed to maintaining

an open and transparent dialogue with our

shareholders on executive remuneration. We

consider ongoing engagement to be vital in

ensuring that our approach to remuneration

continues to be aligned with the long-term

interests of the Group’s shareholders and

wider stakeholders.

We welcome the feedback received during

the year and hope to receive your support at our

upcoming AGM.

Sally Cabrini

Chair, Remuneration Committee

10 June 2025

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Remuneration Committee report

continued

Key to our strategic pillars

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social sustainability

Diversify

our portfolio

Base salary

19%

Pensions

and beneﬁts

EABP

24%

LTIP

56%

£3,055

Base salary

20%

Pensions

and beneﬁts

EABP

25%

LTIP

51%

£2,445

222.2

84.2

38.9

1,710.9

5.5

This section summarises the pay our Executive Directors received in FY 2025.

Read more on pages 96 to 98

CEO

CFO

FY 2025 Executive Annual Bonus Plan (EABP)

2022 Long-Term Incentive Plan (LTIP) vesting outcome

Weighting

Measure

Threshold

(0% payment)

Target

(50% payment)

Maximum

(100% payment)

Outcome

as % of

maximum

award

Link to

strategy

60%

Group adjusted operating profit

52.5%

Target

149.2

161.3

177.4

Performance

10%

Group adjusted cash flow

9.6%

Target

110.8

117.6

135.7

Performance

20%

Operational score card

12.0%

Performance

10%

Personal objectives

CEO

8.0%

CFO

8.0%

Total bonus achieved (as % of maximum)

CEO

82.1%

CFO

82.1%

Weighting

Measure

Threshold

(0% payment)

Maximum

(100% payment)

Outcome

as % of

maximum

award

Link to

strategy

50%

EPS

100%

Target

9.4

13.6

Performance

35%

Relative TSR

100%

Target

Median

Upper quartile

Performance

7.5%

ZE Fleet

100%

Target

340

550

Performance

7.5%

Emissions Reduction

100%

Target

1,030,000

990,000

Performance

Total (as % of maximum)

100%

£173.4m

19.4p

951

704,655

£134.4m

60%

93rd percentile

80%

FY 2025 single figure total

remuneration (£’000s)

Spend on pay (£m)

FY 2025 single figure total remuneration

Shareholding requirement

– progress in FY 2025

Requirement

200

of base salary within 5 years of

appointment

At 29 March 2025

CEO

143%

CFO

715%

Total employee pay

Adjusted operating profit

Distributions to shareholders

Spend on zero emission vehicles

Total Executive Director Pay

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Remuneration at a glance

In setting the remuneration for Executive Directors,

the Committee takes account of the overall

approach to rewarding employees across the

Group. Due to the varied nature of the operations

of our divisions and their respective employment

markets, we have a range of remuneration practices

across the organisation. These are designed to be

relevant to each individual market. Almost 85% of

our employees are covered by collective

bargaining arrangements.

A number of items are tabled at Committee

meetings each year to ensure the approach

throughout the organisation is consistent and fair:



A report summarising wider workforce pay

policies and practices, with updates provided

on a regular basis



Gender and ethnicity pay gap reports, including

statistics from each UK reporting entity



The actions management is taking to improve

diversity in the workforce and close pay gaps

where they exist



The CEO pay ratio and underlying statistics

The table on page 95 (Wider workforce

remuneration) summarises the approach to

pay at FirstGroup. The main difference between

the structure of our most senior employees’

remuneration and that of the wider workforce

is that senior employee remuneration is more

heavily weighted to variable pay, linked to

business performance.

Treating our people fairly

Effective 1 April 2024, First Bus became a

Real Living Wage employer. As a result, on 1 April

2025, any colleague on hourly pay below £12.60

had their pay increased to £12.60, in line with

the recent announcement from the Living

Wage Foundation. Outside the accreditation

requirements, we have committed to pay all

apprentices the Real Living Wage by 1 April 2026.

We have varied approaches to pay across

the Group. The approach to pay rises for

non-collectively bargained employees in First Bus

has been to position the salary increase budget

to have a greater impact on lower earners in

recent years.

In addition to base salary, we also offer other

benefits to our employees, including extensive

retail discounts through our shopping portal and

discounts of 4-5% at several large supermarkets.

In FY 2025, colleagues saved over £521,600 on

their shopping bills.

For FY 2025, we continued the annual invitation

to the SAYE scheme, which allows colleagues

to purchase discounted shares at the end of

a three-year savings contract. We had applications

for c.10 million options from c.3,000 applicants in

FY 2025, and will be launching the scheme again

for FY 2026.

TOCs provide free travel for employees and their

families across their own network. First Bus

provides employees and their families with free

travel on the First Bus network. All employees,

regardless of employer, receive discounted rail

travel across our network. All employees have

access to our Employee Assistance Programme

which, among other things, provides free, individual

and confidential financial advice.

We have two healthcare benefit schemes that are

available to all of our First Bus colleagues. The

Simply Health scheme allows First Bus colleagues

to claim back healthcare costs, including optical,

dental and muscular health, as well as contributions

for health diagnostics. The SmartHealth scheme

is a free app that provides access to a number of

services, including GP appointments, mental health

support, second medical opinion, nutrition advice,

fitness plans and health checks.

Employee engagement

While the Committee does not formally

consult with employees on Executive Director

remuneration, a number of different mechanisms

are in place to gather feedback and insights from

employees across a range of issues.

Information on how we engage our employees

is set out on page 55.

The Group also engaged with its workforce through

our Employee Directors. The Group Employee

Director is invited to attend all of the Committee’s

meetings, and regularly does so. Our Committee

Chair, Sally Cabrini, attended the Employee

Director Forum meeting in September 2024 to

explain how executive remuneration is structured

and answered questions.

The Committee believes that it is important for our

employees to understand how the remuneration of

our Executive Directors is determined and utilises

the different communication channels operating

across the Group to ensure our employees are

aware of the information available in the Directors’

Remuneration report.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Remuneration in context

Wider workforce remuneration

Eligibility

Element

Overview

All employees

(c.30,000)

Base salary



Base salaries are reviewed annually



When considering salary for Executive Directors and Executive Committee members, the Committee considers increases available

to the wider workforce

Pension



We are committed to helping our colleagues save for retirement through a variety of Company pension arrangements, designed in

line with market practice. We operate a number of different pension plans, including defined benefit pension schemes, that reflect

the history and requirements of our various businesses

All-employee share scheme



All UK employees with at least six months of service are eligible to participate in our HMRC-approved all-employee share plans.

Under SAYE, eligible employees can make monthly savings over a period of three years, with the option to purchase FirstGroup shares

at a discount of up to 20% of the market value of shares on grant. Under Buy as You Earn (BAYE), our Share Incentive Plan (SIP),

eligible employees can purchase shares from their pre-tax salary and become shareholders in the Company

Benefits



Our Employee Assistance Programme offers all employees access to free, 24/7 confidential telephone, online and face-to-face

advice for problems they may be experiencing at home or work. Other benefits include discounted travel on our rail and bus services,

discounts on shopping, entertainment and eating out



Our larger businesses have dedicated in-house Occupational Health teams and our other businesses use external specialist advisers

to support employees with health problems that may affect performance



All divisions run workplace health and wellbeing programmes to support employees in staying fit and healthy

Senior executives

and management

(c.1,250)

Annual bonus



Senior executives and management population – incentivises successful execution of our business strategy and operational goals

with participants, including both corporate centre and divisional roles



Our TOC businesses also offer commission schemes for Customer Hosts, Guards and Revenue Protection staff to drive revenue

Senior executives

(c.120)

LTIP



Senior executives with sufficient line of sight to drive long-term sustained value creation for our shareholders

Executive Committee

and Executive Directors

(5)

Shareholding guidelines



Senior executives are required to hold a material percentage of their salary in Company shares within five years of appointment,

ensuring alignment with the shareholder experience

Strategic alignment of remuneration

The table below sets out how each of the performance metrics used in our incentive plans for FY 2025 is aligned to the Company’s strategy. See pages 13 to 16 for more information on our strategy.

Measure

Deliver

day in, day out

Drive

modal shift

Lead in

environmental

and social

sustainability

Diversify

our portfolio

EABP

Group adjusted operating profit

Group adjusted cash flow

Operational performance

Personal objectives

LTIP

EPS

Relative TSR

ESG Scorecard

The Remuneration Committee makes a holistic safety assessment at each year end, which can reduce the formulaic outturn to

reflect safety performance.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Remuneration in context

continued

The annual report on remuneration sets out



Directors’ remuneration for FY 2025, on pages 96 to 101



The statement of the planned implementation of policy in FY 2026, on page 102

This part of the Directors’ Remuneration report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended).

The annual report on remuneration and Chair’s statement will be put to an advisory shareholder vote at the 2025 AGM.

Single total figure of remuneration for Executive Directors (audited)

Salaries

Taxable

benefits

Pension

Total fixed

remuneration

Annual bonus

cash

Annual bonus

value of

deferred

LTIP

1,2

Other

3,4

Total

variable

remuneration

Total

remuneration

Graham Sutherland – CEO

FY 2025 £’000s

589

619

363

1,709

2,436

3,055

FY 2024 £’000s

567

596

399

–

802

1,398

Ryan Mangold – CFO

FY 2025 £’000s

494

582

304

1,254

1,863

2,445

FY 2024 £’000s

475

560

335

1,650

2,324

2,884

The value of the 2022 LTIP, which had a three-year performance period ending 29 March 2025, was calculated using the average share price over the last three months of FY 2025 (164.7p). In line with reporting requirements, the LTIP values include dividend equivalent

amounts of £106,985 and £78,515 for the Chief Executive Officer and Chief Financial Officer, respectively. £501,963 and £368,383 of the value for the Chief Executive Officer and Chief Financial Officer, respectively, is attributed to share price growth as the share price

at award was 113.1p in 2022.

The value for FY 2024 relates to the 2021 LTIP, which had a three-year performance period ending 30 March 2024. The value of Ryan Mangold’s 2021 LTIP reported in the 2024 report (£1.623m) was an estimate based on the average share price over the last three

months of FY 2024 (167.3p). The actual value of the 2021 LTIP on the 2 August 2024 vesting date was £1.650m (based on adjusted closing share price of 166.2p); this includes actual dividend equivalents received of £97,164.

Graham Sutherland and Ryan Mangold both participate in the 2024 SAYE scheme. More detail on the scheme can be found on page 95. The value of their options under the 2024 scheme has been valued as the number of options subscribed for, multiplied by the

difference between the closing share price on the date before grant (153.4p) and the option price (123.0p), which is a 20% discount.

Graham Sutherland and Ryan Mangold both participate in the 2023 SAYE scheme. More detail on the scheme can be found on page 95. The value of their options under the 2023 scheme has been valued as the number of options subscribed for, multiplied by the

difference between the closing share price on the date before grant (137.6p) and the option price (111.0p), which is a 20% discount.

More detail can be found on pages 96 to 98.

Benefits (audited)

Benefits for Executive Directors include the provision of a company car allowance and private medical cover. Graham Sutherland’s benefits for the year comprised £911 for UK private medical insurance.

Ryan Mangold’s benefits for the year comprised a £12,000 car allowance and £2,279 for UK private medical insurance.

Pension (audited)

Graham Sutherland received a pension allowance of 5% of his base salary, £29,460. Ryan Mangold received a pension allowance of 15% of his base salary, £74,145.

We operate a number of different pension arrangements across the Group, including defined benefit pension schemes. No Director has a prospective benefit under a defined benefit pension.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Annual report on remuneration

FY 2025 annual bonus outcome

Measure

Weighting

Threshold:

On target:

50%

Maximum:

100%

Outturn

Bonus achievement

Payout %

Group adjusted operating profit (pre-IFRS 16 basis)

60%

£149.2m

£161.3m

£177.4m

£173.4m

87.5%

52.5%

Group adjusted cash flow

10%

£110.8m

£117.6m

£135.7m

£134.4m

96.4%

9.6%

Operational scorecard:

First Bus Net Promoter Score

3.5%

12.4

13.4

14.4

6.3

First Bus employee engagement score

3.5%

60%

62%

64%

100%

3.5%

First Bus overall fleet MPG

3.0%

7.9

8.0

8.1

8.2

100%

3.0%

First Rail average TOC scorecard score

10%

2.1

55%

5.5%

Personal objectives

10%

N/A

See below

80%

Group adjusted operating profit is assessed on a pre-IFRS 16 basis, as this more appropriately reflects the underlying risk given that the majority of IFRS 16 impacts are not for our account. Pre-IFRS 16 basis is readily understood by management teams and is used in

banking covenants. Group operating profit post-IFRS 16 is £222.8m. See note 4 for the reconciliation.

Group adjusted cash flow is assessed from continuing operations on a pre-IFRS 16 basis. It excludes growth investments (-£138.5m), interest and tax (-£1.7m), North America cash flows (-£11.3m), dividends to shareholders (-£34.2m), and share buyback (-£91.8m).

Personal objectives

The Committee considered performance against personal strategic objectives for both Graham Sutherland and Ryan Mangold. The Committee sought feedback from the Chair of the Board and the Senior Independent

Director in determining the achievement of the personal objectives element of the EABP for Graham Sutherland. It was noted that Graham Sutherland has had a strong year as CEO, where he has overseen strong

financial performance ahead of market and the completion of five acquisitions in the year. Some specific achievements include:



Strong progress in diversifying our portfolio, including leading on the successful completion of the RATP London acquisition, where we entered the London bus market with c.12% share as well as the acquisition of

track access rights for two new open access services



Significant progress towards our commitment for a 100% zero emission commercial bus fleet by 2035 with c.20% of our fleet now zero emission

Ryan Mangold has shown strong personal performance in the year. Some specific achievements include:



Significant developments on pension fund objectives, including fully discharging our remaining legacy Greyhound positions



Strong performance in leading on financial aspects of the five acquisitions completed in the year

As noted in the Chief Executive Officer’s review, performance on the financial measures was strong for the Group as a whole. There was also strong performance in respect of the non-financial measures (as detailed

above). The Committee determined that Graham and Ryan had delivered their personal objectives to a high standard. The Committee accordingly awarded both Graham Sutherland and Ryan Mangold 8% out of

a possible 10% for their personal objectives.

FY 2025 performance and reward decisions

As a Committee, we believe it is imperative to strike the right balance between incentivising the

management team, rewarding strong performance, and being equitable in the broader context.

When assessing the performance of the Executive Directors, the Remuneration Committee takes a

broad view of financial performance delivered, the shareholder experience and the outcome for

the Company’s stakeholders, including customers, employees and the communities in which we operate.

When considering remuneration outcomes, the Committee takes into account performance against

specific metrics on safety, including workplace fatalities and injuries, and customer satisfaction, as well

as environmental, social and governance matters such as significant environmental incidents, large or

serial fines or sanctions from regulatory bodies, and significant adverse legal judgements or settlements.

The Committee has broad discretion to ensure incentive outcomes are appropriate.

FY 2025 Executive Directors’ annual bonus (audited)

For FY 2025, the annual bonus maximum opportunity was 150% of salary for both Executive Directors.

As in previous years, the EABP aimed to incentivise improved performance against a range of financial

and non-financial metrics. The structure of the bonus was weighted so that 70% was based on financial

metrics and 30% on non-financial metrics. The Committee retains overriding discretion to adjust the

overall bonus outturn (including to £nil) if a serious safety failing or deterioration is identified.

The chart below sets out the targets, performance achieved and corresponding bonus outturns on a

formulaic basis against the financial and qualitative targets.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Annual report on remuneration

continued

Taking into account the above outcomes, the formulaic EABP award for both Graham Sutherland and Ryan Mangold resulted in a potential award of 82.1% of the maximum. The Committee considered this formulaic

performance in the context of the Group’s wider performance and decided that it did not need to exercise any discretion to reduce this outcome. Under the approved policy, 50% of the award is normally paid in cash,

with 50% deferred into shares (deferred share awards vest after three years, subject to continued employment, and are not subject to any further performance conditions).

The overall bonus payout for FY 2025 was therefore as follows:

Graham Sutherland

Ryan Mangold

Maximum EABP opportunity (% of salary)

150%

EABP achieved (as % of maximum)

82.1%

EABP (% of salary)

123.2%

Total EABP

£725,600

£608,730

EABP – Cash

£362,800

£304,365

EABP – Deferred shares

£362,800

£304,365

Long-Term Incentive Plan

The vesting of 2022 LTIP awards was subject to achieving the following performance conditions over a three-year performance period ending 29 March 2025.

Vesting of 2022 Long-Term Incentive Awards (audited)

Metrics

Weighting

Threshold:

20%

Maximum:

100%

Outturn

% of award

which vested

EPS

50%

9.4p

13.6p

19.4p

100%

Relative TSR vs FTSE 250

35%

Median

Upper quartile

93rd percentile

100%

Sustainability Scorecard

ZE fleet (# vehicles)

7.5%

340

550

951

100%

Emissions reduction: Scope 1&2 emissions (tCO

e) reduction

7.5%

1,030,000

990,000

704,655

100%

Total

100%

As a result of this outcome, awards vested as follows:

Executive Director

Total number of

shares granted

Proportion of

award vesting

(% max)

Face value of

shares vesting

(£’000)

Value attributable

to share price

movement

(£’000)

Value of

dividend

equivalents due

(£’000)

Value of

resultant

award

(£’000)

Graham Sutherland

972,590

100%

£1,602

£502

£107

£1,709

Ryan Mangold

713,770

100%

£1,176

£368

£79

£1,254

The face value of the 2022 LTIP at vesting has been calculated based on the average share price over the last three months of FY 2025 (164.7p).

At vesting, £501,963 and £368,383 of the value for Graham Sutherland and Ryan Mangold, respectively, is attributed to share price growth (the share price at award was 113.1p in 2022).

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Annual report on remuneration

continued

Long-Term Incentive Awards made during the year

The Committee determined that the 2024 awards would be measured against EPS, relative TSR and an

ESG Scorecard (comprising two environmental measures and two diversity and inclusion metrics), over a

three-year period. The measures of the 2024 LTIP are consistent with our recent LTIP awards. The only

difference is the inclusion of two diversity and inclusion metrics, aligned with our strategy.

Awards were made in June 2024 and are subject to an additional two-year holding period as well as malus

and clawback. Before an award vests, the Committee must be satisfied that the underlying performance of

the Group is satisfactory and has the ability to amend the formulaic vesting outcome if it believes this is

appropriate. The Committee believes that having a performance override is an important feature of the

plan, as it mitigates the risk of unwarranted vesting outcomes.

The targets in the 2024 LTIP were set based on information known at the time. The Committee is mindful of

the impact that renationalisation of the DfT TOCs may have on the 2024 LTIP targets. The Committee will

consider if any adjustments to the 2024 LTIP (either positive or negative) are necessary due to factors

outside of management’s control. Full disclosure of any adjustments made will be provided in the relevant

remuneration report.

Details of the performance metrics, targets and comparator group for the 2024 LTIP awards are set

out below.

2024 Long-Term Incentive Plan performance metrics (audited)

ESG Scorecard

Adjusted EPS

Relative TSR vs

FTSE 250

Additional ZE

buses

in service/on order

by 31 March 2027

Scope 1&2 emissions

(tCO

reduction

Gender diversity in senior

leadership

Ethnic diversity in senior

leadership

Weighting

50%

30%

7.5%

2.5%

Threshold (20% vesting)

16.7p

Median

700

24%

37.4%

8.2%

Maximum (100% vesting)

21.4p

Upper quartile

990

26%

38.7%

9.6%

Vesting will be on a straight-line basis between threshold and maximum.

EPS will be assessed on a pre-IFRS 16 basis, as this aligns with how performance is measured internally and is most readily understood by management teams (Group adjusted operating profit in the EABP is measured on a pre-IFRS 16 basis for the same reason).

A reconciliation from IAS 17 to post-IFRS 16 EPS will be included in the FY 2027 Directors’ Remuneration report so as to provide clarity between the LTIP targets and achievement relative to the reported EPS on a statutory basis.

Relative TSR will be assessed against the FTSE 250 Index, excluding investment trusts.

4 Zero emission.

Tonnes of carbon dioxide equivalent (tCO

e).

From SBT base year 2020.

An LTIP award of 200% and 175% of salary were granted to Graham Sutherland and Ryan Mangold, respectively, on 12 June 2024.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

Governance report

Introduction

Annual report on remuneration

continued

Performance graphs

200

100

150

28/03/15

31/03/16

31/03/17

31/03/18

31/03/19

31/03/20

31/03/21

31/03/22

31/03/23

30/03/24

29/03/25

FirstGroup plc

Total shareholder return

FTSE 250 Index

Total shareholder return

2024 Long-Term Incentive Plan grants (audited)

Details of Graham Sutherland’s and Ryan Mangold’s awards (granted in the form of conditional share awards) are set out below:

Executive Director

Share price

at date of grant

Face value

(% of base salary)

Number

of shares

awarded

Face value

of award

% of award

which vests

at threshold

Performance

period

Graham Sutherland

164.8p

200%

715,048

£1,178,400

20%

1.4.24 – 31.3.27

Ryan Mangold

164.8p

175%

524,893

£865,025

20% 1.4.24 – 31.3.27

The share price at grant for the LTIP awards is closing mid-market share price for the day preceding the grant date.

The graph above shows the TSR performance of £100 invested in FirstGroup plc shares over the past ten years compared with an equivalent investment in the FTSE 250. The FTSE 250 Index has been selected as

it provides an established and broad-based index, of which the Company is a constituent.

As is normal practice, the Committee will ensure that any vesting is appropriate in the context of underlying

financial performance and the experience of our wider stakeholders. The Committee retains the ability to

apply discretion in the event that the value at vesting is considered to be an unjustified windfall gain taking

into account the performance of the Group.

Directorate changes

David Martin retired from the Board and his position as Chairman on 10 September 2024. Peter Lynas,

Senior Independent Director, acted as Chairman from 10 September 2024 until 1 February 2025 at which

time he returned to his role as Senior Independent Director. He received an additional fee of £22,005 (see

page 101 for further details.

Lena Wilson was appointed to the Board and became Chair on 1 February 2025. Lena’s fee was set at

£290,000, 10% lower than the previous Chairman’s. Lena’s fees are commensurate with a Group that is

now focused on UK public transport operations.

Payments for loss of office (audited)

No payments for loss of office were made during FY 2025.

Payments to past Directors (audited)

No payments to past Directors were made during FY 2025.

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Financial statements

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Annual Report and Accounts 2025

100

Governance report

Introduction

Annual report on remuneration

continued

Remuneration of the Chief Executive Officer

The table below shows the total remuneration figure for the Chief Executive Officer, during each of the past ten years. The total remuneration figure includes the annual bonus and LTIP awards that vested based on

performance in those years. The annual bonus percentages show the payout for each year as a percentage of the maximum.

2016

Tim

O’Toole

2017

Tim

O’Toole

2018

Tim

O’Toole

2019

Tim

O’Toole

2019

Wolfhart

Hauser

2019

Matthew

Gregory

2020

Matthew

Gregory

2021

Matthew

Gregory

2022

Matthew

Gregory

2022

David

Martin

2023

David

Martin

2023

Graham

Sutherland

2024

Graham

Sutherland

2025

Graham

Sutherland

Total remuneration (£’000s)

1,243

1,267

1,100

175

266

422

788

840

2,246

320

134

1,191

1,398

3,055

EABP (% of maximum potential)

15.9

–

N/A

33.4

–

N/A

82.1

LTIP vesting (% of maximum potential)

–

16.3

–

N/A

12.5

14.6

88.5

N/A

–

100

No EABP was paid to Tim O’Toole in 2017. He received a conditional deferred share award instead.

No EABP was paid to Tim O’Toole in 2018.

Remuneration for Tim O’Toole until he stepped down as CEO on 31 May 2018. Tim O’Toole was not eligible for an annual bonus or LTIP awards.

Remuneration for Wolfhart Hauser for his period as Executive Chairman, 1 June to 12 November 2018. Wolfhart Hauser was not eligible for EABP or LTIP awards.

Remuneration for Matthew Gregory as Chief Executive from 13 November 2018 to 31 March 2019.

Remuneration for Matthew Gregory as Chief Executive from 1 April 2021 to 13 September 2021.

Remuneration for David Martin for his period as Interim Executive Chairman from 13 September 2021. David Martin was not eligible for EABP or LTIP awards.

Remuneration for David Martin for his period as Interim Executive Chairman until 30 June 2022. David Martin was not eligible for EABP or LTIP awards.

Remuneration of Graham Sutherland from his appointment as Chief Executive Officer on 16 May 2022. Salary and EABP have been pro-rated for time served.

Chair and Non-Executive Directors’ fees (audited)

NED fees were increased by 4% effective 1 April 2024, resulting in NEDs’ fees of £62,130 p.a. with additional fees of £12,860 p.a. payable to the Senior Independent Director and the Chairs of the Audit, Responsible

Business and Remuneration Committees. From 1 April 2025 NED fees increased by 2.8%, taking the basic fee to £63,870 and additional fee for the Committee Chairs and Senior Independent Director to £13,220.

FY 2025

FY 2024

£’000

Basic fee

Committee

Chair

SID

Taxable

benefits

Total

Basic fee

Committee

Chair

SID

Taxable

benefits

Total

Lena Wilson

–

N/A

David Martin

142

–

156

310

–

340

Sally Cabrini

–

Myrtle Dawes

–

Claire Hawkings

–

Jane Lodge

–

Peter Lynas

–

Anthony Green

–

The Company meets all reasonable travel, subsistence, accommodation and other expenses, including any tax where such expenses are deemed taxable, incurred by the Chair of the Board and NEDs in the course of performing their duties.

Lena Wilson was appointed to the Board as Chair on 1 February 2025, with a fee of £290,000, and her fees for FY 2025 were pro-rated. Lena Wilson’s annual fee represents a 10% decrease in fee from the former Chairman, David Martin. The fee she receives is

commensurate with a Group now focused on UK public transport operations.

David Martin retired from the Board and his position of Chairman on 10 September 2024 and his fees were pro-rated.

Peter Lynas, Senior Independent Director, acted as Chairman from 10 September 2024 until the appointment of Lena Wilson on 1 February 2025. For this period, he was paid an additional fee of £22,005, bringing his total fees to £96,995.

Anthony Green was appointed as Group Employee Director on 15 September 2020. In addition to his fee as Group Employee Director, Anthony Green received earnings from the Group as an employee amounting to £29,810 in FY 2024 and £32,024 in FY 2025.

Strategic report

Financial statements

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Annual Report and Accounts 2025

101

Governance report

Introduction

Annual report on remuneration

continued

Implementation of Remuneration Policy for FY 2026

Annual base salary

The Committee carefully considered base salary increases for the Executive Directors holistically,

taking into account FY 2026 base salary increases applied to the wider workforce (see page 94 for

more information), investor guidance, the Group’s strong performance in FY 2025 as well as the

macroeconomic environment.

The Committee decided it would be appropriate to award a base salary increase of 2.8% for

Graham Sutherland and Ryan Mangold, increasing their base salary to £605,700 and £508,200,

respectively, from 1 April 2025.

FY 2026 Executive Directors’ annual bonus

For FY 2026, the EABP will continue to incentivise improved performance against a range of financial and

non-financial metrics. The financial targets are set by the Committee based on a number of factors such

as the Group’s business plan, individual business unit level performance, consensus and expectations for

FY 2026. Changes from FY 2025 include a change in the weighting of the Group adjusted operating profit

from 60% to 50% and of the Group adjusted cash flow from 10% to 20%, as well as the addition of a

First Rail open access operational metric to reflect the future of our rail business. The precise measures

under the operational scorecard may change each year depending on annual business priorities.

The performance measures for FY 2026 are:

Measure

Weighting

Group adjusted operating profit (pre-IFRS 16)

50%

Group adjusted cash flow

20%

Operational scorecard:

First Bus Net Promoter Score

3.5%

First Bus employee engagement score

3.5%

First Bus overall fleet MPG

3.0%

First Rail average TOC scorecard score

First Rail open access TOC on self cancellations

Personal objectives

10%

The targets for FY 2026 will be disclosed in next year’s report when they are no longer commercially

sensitive.

The FY 2026 annual bonus maximum and threshold levels of bonus as a percentage of base salary will be

as follows:

Executive Director

Maximum

Threshold

Graham Sutherland

150%

Ryan Mangold

150%

All payouts will be subject to the Committee’s discretion as well as malus and clawback provisions.

50% of any bonus earned will be deferred into the Company’s shares for three years, conditional upon

continued employment. The Committee has demonstrated, in assessing bonus outcomes, including in

respect of FY 2021 and FY 2020, that it is prepared to set aside the formulaic outcome and reduce awards

or introduce a further condition, to ensure that business performance or the impact of a significant event

is properly reflected.

2025 Long-Term Incentive Awards

It is the Committee’s intention to make awards under the LTIP this year. Awards of 200% and 175% of

salary will be made to the Chief Executive Officer and Chief Financial Officer, respectively. The measures

of the 2025 LTIP will be consistent with the 2024 LTIP.

Details of the performance metrics, targets and comparator group for the 2025 LTIP awards are set

out below. The Committee is mindful of the importance of ensuring that any awards under the 2025 LTIP

are aligned with shareholder value. Therefore, given the renationalisation of the DfT TOCs, which will

remove the equivalent of 6.6p from our FY 2025 EPS outturn of 19.4p, the Committee has set the EPS

target range from 17.5p to 21.5p.

ESG Scorecard

Adjusted

EPS

Relative

TSR vs FTSE

250

Additional

buses

in service/

on order by

31 March

2028

Scope 1&2

emissions

(tCO

reduction

Gender

diversity

in senior

leadership

Ethnic

diversity

in senior

leadership

Weighting

50%

30%

7.5%

2.5%

Threshold (20% vesting)

17.5p

Median

590

29%

reduction

38.7%

9.6%

Maximum (100% vesting)

21.5p

Upper

quartile

890

34%

reduction

40.0%

11.0%

Vesting will be on a straight-line basis between threshold and maximum.

Relative TSR will be assessed against the FTSE 250 Index (excluding Investment Trusts).

4 Zero emission.

Tonnes of carbon dioxide equivalent (tCO

e).

From SBT base year 2020.

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Financial statements

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Annual Report and Accounts 2025

102

Governance report

Introduction

Annual report on remuneration

continued

Directors’ interests in share awards (audited)

The outstanding LTIP, deferred share bonus awards of Directors are set out in the table below. There have been no changes to the terms of any share awards granted to Directors.

During year

Director

Plan

Date

of grant

Number of shares

under award

as at

31.03.24

Awards

granted

Awards

exercised

Awards

lapsed

Number of shares

under award

as at

29.03.25

Exercise

price

(£)

Face value

of awards

(£)

Date on which

awards vest/

become

exercisable

Expiry date

Graham Sutherland

LTIP

18.08.22

972,590

–

972,590

nil

1,100,000

18.08.25

N/A

09.06.23

838,017

–

838,017

nil

1,133,000

09.06.26

N/A

12.06.24

–

715,048

–

715,048

nil

1,178,400

12.06.27

N/A

Deferred

bonus shares

09.06.23

252,191

–

252,191

nil

340,963

09.06.26

N/A

12.06.24

–

242,343

–

242,343

nil

399,381

12.06.27

N/A

SAYE

13.07.23

13,621

–

13,621

1.11

18,743

01.09.26

01.03.27

11.07.24

–

2,413

–

2,413

1.23

3,701

01.09.27

01.03.28

Ryan Mangold

LTIP

02.08.21

934,274

–

934,274

–

nil

787,500

02.08.24

02.08.25

18.08.22

713,770

–

713,770

nil

807,275

18.08.25

N/A

09.06.23

615,088

–

615,088

nil

831,600

09.06.26

N/A

12.06.24

–

524,893

–

524,893

nil

865,025

12.06.27

N/A

Deferred

bonus shares

18.08.22

289,456

–

289,456

nil

327,375

18.08.25

18.08.32

09.06.23

240,545

–

240,545

nil

325,217

09.06.26

09.06.33

12.06.24

–

203,286

–

203,286

nil

335,015

12.06.27

N/A

SAYE

13.07.23

13,621

–

13,621

1.11

18,743

01.09.26

01.03.27

11.07.24

–

2,413

–

2,413

1.23

3,701

01.09.27

01.03.28

Anthony Green

SAYE

13.07.23

1,945

–

1,945

1.11

2,676

01.09.26

01.03.27

11.07.24

–

1,508

–

1,508

1.23

2,313

01.09.27

01.03.28

LTIP – granted in the from of nil cost options or conditional share awards granted under the Long-Term Incentive Plan. From FY 2023, awards were made as conditional share awards. Awards are subject to clawback and malus and subject to an additional two-year

holding period.

Deferred bonus shares – 50% of the bonus awarded. Awards made after FY 2023 are made as conditional share awards under the EABP. Awards are subject to clawback and malus.

SAYE – options granted under the all-employee share scheme.

Participants are entitled to receive accrued dividends or dividend equivalents under the LTIP and EABP pro-rated in proportion to the amount of the award that vests.

The table above shows the maximum number of shares that could be released if awards were to vest in full. In respect of LTIP and deferred bonus awards, participants are entitled to receive dividends or dividend equivalent amounts, once the share awards

have vested.

The face value of LTIP and deferred bonus awards made has been calculated by multiplying the maximum number of shares that could vest by or become exercisable by the average closing mid-market share price on the day preceding the grant date. For deferred

bonus and LTIP awards made on 12.06.24, this is 164.8p. For SAYE awards, the face value of options under the 2023 scheme is determined by multiplying the number of options subscribed for by the closing mid-market share price on the date before grant (137.6p).

The face value of the 2024 SAYE awards is determined by multiplying the number of options subscribed for, including the tax-free savings bonus, by the closing mid-market share price on the date before grant (153.4p).

LTIP awards will not vest until the date the Committee determines whether performance conditions have been met, or if later, the date specified above. If dealing restrictions apply on the date of vesting, then vesting will occur on the first date after dealing restrictions

cease to apply.

The market share price on the date of exercise, 7 August 2024, was 158.0p for a total market value of £1,484,283.

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Annual Report and Accounts 2025

103

Governance report

Introduction

Annual report on remuneration

continued

Directors’ shareholding, shareholding guidelines and summary of outstanding

share interests (audited)

Under the terms of the Policy approved by shareholders at the 2024 AGM, Executive Directors are

expected to hold shares, or rights to shares in the Company, equivalent to a minimum of 200% of base

salary within a five-year period from their date of appointment to create greater alignment of the Executive

Directors’ interests with those of shareholders. Executive Directors are also normally expected to hold the

in-employment guideline (or full actual holding if lower) in the first year following cessation of employment

and 50% (or full actual holding if lower) in the second year following cessation of employment.

The Committee reserves the right to relax or waive the application of such guidelines in certain

circumstances, including the impending retirement of an Executive Director.

The table below sets out the shareholdings of the Executive Directors and their connected persons’

shareholdings (including beneficial interests) and a summary of outstanding and unvested share awards as

at 29 March 2025. It shows that Graham Sutherland’s current shareholding is 142.5% of his base salary

and Ryan Mangold’s current shareholding is 715.2% of his base salary.

The Committee believes that it is an essential part of the Policy that Executive Directors build significant

shareholdings. The retention and build-up of equity is important in a long-term business such as

FirstGroup, as it encourages decisions to be made on a long-term, sustainable basis for the benefit of

customers and shareholders.

There has been no change in the Directors’ interests in the ordinary share capital of the Company between

those set out below and the date of approval of this report. The beneficial interests of Directors who served

during the year ending 29 March 2025 and their connected persons in the shares of the Company as at

that date and 30 March 2024 are shown below.

Ordinary shares beneficially owned

Directors

Date of

appointment

At 30.03.24 or

appointment

date if later

29.03.25

Unvested

EABP/SAYE/

SIP shares

3,4

Unvested

LTIP

Vested but not

exercised

EABP/

LTIP awards

Shareholding

requirement

as % of salary

Current

shareholding

as % of

salary

6,7,8

shareholding

requirement

achieved

Executive Directors

Graham Sutherland

16 May 22

230,005

250,005

510,568

2,525,655

N/A

200%

142.5%

71.3%

Ryan Mangold

31 May 19

1,270,689

1,766,290

750,092

1,853,751

N/A

200%

715.2%

357.6%

Non-Executive Directors

Lena Wilson

1 Feb 25

–

14,000

–

David Martin

15 Aug 19

–

Sally Cabrini

24 Jan 20

10,000

–

Myrtle Dawes

1 Apr 22

3,497

–

Anthony Green

15 Sep 20

1,615

1,674

3,453

–

Claire Hawkings

21 Jan 22

10,000

–

Jane Lodge

30 June 21

15,000

–

Peter Lynas

30 June 21

80,000

–

Or date of leaving, if earlier.

Ryan Mangold participates in the all-employee SIP. His partnership shares are held in trust and are not at risk of forfeiture. Ryan Mangold acquired an additional 178 partnership shares between 29 March 2025 and the date of approval of this Report.

EABP shares are deferred shares that are subject to continued employment, but not subject to further performance conditions.

SIP matching shares awarded to Ryan Mangold are held in trust and are at risk of forfeiture if the corresponding partnership shares are withdrawn from trust within three years. No matching shares were awarded between 29 March 2025 and the date of approval of

this Report.

LTIP awards are conditional share awards and nil cost options subject to ongoing performance conditions.

Based on the closing share price on 29 March 2025 (164.0p).

Graham Sutherland has until 16 May 2027 to meet his current shareholding guideline.

The percentage shown includes the after-tax value of vested but unexercised awards and the after-tax value of unvested EABP awards that are subject to continued employment.

Shares for Non-Executive Directors are held outright, with no attaching performance conditions.

10 A person closely associated with David Martin beneficially owned 200,000 shares on 30 March 2024 and also upon retirement from the Board on 10 September 2024.

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Annual Report and Accounts 2025

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Governance report

Introduction

Annual report on remuneration

continued

Dilution

The Company ensures that the level of shares granted under the Company’s share plans and the means

of satisfying such awards remains within best practice guidelines, so that dilution from employee share

awards does not exceed 10% of the Company’s issued share capital for all share plans and 5% in respect

of executive share plans in any ten-year rolling period. The Committee monitors dilution levels at least once

a year. At 29 March 2025, 3.75% of the Company’s issued share capital had been issued for the purpose of

the SAYE, BAYE and LTIP over a ten-year period.

Employee Benefit Trust (EBT)

The FirstGroup EBT has been established to acquire ordinary shares in the Company, by subscription or

purchase, from funds provided by the Group to satisfy rights to shares arising on the exercise or vesting of

awards under the Group’s share-based incentive plans. As at 29 March 2025, 19,401,442 shares were held

by the EBT to hedge outstanding awards of 48,284,221. This means that the EBT holds sufficient shares to

satisfy approximately 40.2% of outstanding awards.

External board appointments

Where Board approval is given for an Executive Director to accept an outside non-executive directorship,

the Director is entitled to retain any fees received, unless the appointment is in connection with the

business of the Group. None of the Executive Directors currently sit on any other external company boards

in FY 2025. Graham Sutherland was appointed as Non-Executive Director of HICL Infrastructure PLC with

effect from 21 May 2025.

Percentage change in remuneration levels

The table below shows the movement in the salary, benefits and annual bonus for all Directors between

the current and previous financial year compared with that for the average UK employee (First Bus and

First Rail, but excluding the Corporate centre). For the benefits and bonus per employee, the figures are

based on those employees eligible to participate in such schemes.

Executive Directors

Non-Executive Directors

Average UK

employees

5,6

8,9

change

FY 2025

Salary/fees

4.0%

N/A

3.2%

4.0%

4.0

4.0%

Benefits

135.6%

51.0%

5.7%

N/A

(53.9%)

10.9%

40.8%

(30.7)%

67.2%

67.6%

Annual bonus

(19.0)%

(9.2)%

(9.1)%

–

change

FY 2024

Salary/fees

6.0%

3.0%

N/A

0.0%

3.0%

Benefits

(15.6%)

(46.2%)

(2.6%)

N/A

(41.5%)

102%

(4.8%)

(30.9%)

48.8%

(47.5%)

0.0%

Annual bonus

9.1%

3.0%

–

change

FY 2023

Salary/fees

5.9%

N/A

2.4%

N/A

0.0%

N/A

0.0%

(14.6%)

0.0%

Benefits

(7.3%)

N/A

0.0%

N/A

56.5%

(41.8%)

N/A

24.0%

116.2%

0.0%

Annual bonus

(32.3%)

N/A

(0.7%)

–

change

FY 2022

Salary/fees

11.1%

N/A

7.1%

N/A

7.1%

6.1%

N/A

0.0%

Benefits

4.2%

N/A

0.0%

N/A

0.0%

Annual bonus

576.6%

N/A

–

change

FY 2021

Salary/fees

(2.4%)

N/A

(6.7%)

N/A

(6.7)%

(5.7)%

N/A

0.0%

Benefits

9.4%

N/A

0.0%

N/A

0.0%

Annual bonus

(66.2%)

N/A

–

We use all UK employees as a reference, as we believe this provides a more accurate reference point. Pay increases for the majority of UK employees in First Bus and First Rail are collectively bargained with trade unions in individual operating companies in First Bus

and First Rail. Some of these agreements are multi-year deals. The increase in benefits in FY 2021 reflects the inclusion of Avanti employees for a full year. The decrease in annual bonus in FY 2021 reflects no management bonuses being paid in the Rail business in

FY 2021.

Graham Sutherland was appointed to the Board as Chief Executive Officer on 16 May 2022. As such, no comparison to FY 2022 is available and his FY 2023 pay has been annualised for comparison purposes.

Ryan Mangold was appointed to the Board as Chief Financial Officer on 31 May 2019, therefore, his FY 2020 pay has been annualised for comparison purposes. Bonuses were not paid in FY 2020 or FY 2021, therefore, the percentage change in annual bonus to

FY 2022 is ‘N/A’, meaning that the year-on-year change cannot be calculated.

Lena Wilson was appointed as Chair on 1 February 2025. As such, no comparison to FY 2024 is available.

David Martin, Sally Cabrini and Anthony Green were appointed to the Board in FY 2020. FY 2020 fees have been annualised for comparison purposes.

David Martin was appointed Interim Executive Chairman on 13 September 2021 and he received a temporary fee increase to £535,000 per annum. David Martin resumed the role of Non-Executive Chairman from 1 July 2022 and his fees returned to £310,000 per

annum. For comparison purposes, FY 2022 and FY 2023 fees relate to the fees he receives as Non-Executive Chairman. David Martin did not have any taxable benefits relating to FY 2021, therefore, the percentage change in benefits to FY 2022 is ‘N/A’, meaning that

the year-on-year change cannot be calculated. David Martin retired from the Board and his position of Chairman on 10 September 2024. FY 2025 fees have been annualised for comparison purposes.

Myrtle Dawes was appointed to the Board on 1 April 2022. As such, no comparison to FY 2022 is available.

Claire Hawkings, Jane Lodge and Peter Lynas were appointed to the Board in FY 2022. FY 2022 fees have been annualised for comparison purposes.

Peter Lynas served as Chair of Board Safety Committee from September 2021 to March 2022 For comparison purposes, the fee he received as Committee Chair has been annualised. Peter Lynas’ fees decreased in FY 2023 compared with FY 2022 as he no longer

served as Chair of a Committee. Peter Lynas acted as Chairman from 10 September 2024 until the appointment of Lena Wilson as Chair on 1 February 2025. As such, he received a fee of £22,005 for this role. Peter Lynas resumed the role of Senior Independent

Director on 1 February 2025. For comparison purposes, FY 2025 fees relate to the fees he receives as a Senior Independent Director.

10 Private medical insurance premium rates for all employees, including the Executive Directors, were lower in FY 2024 compared with previous years due to a Covid rebate. Likewise, premium rates increased by 51% for all employees in FY 2025.

11 Directors’ salary/fee figures for FY 2021 reflect the voluntary 20% reduction between April to July 2020. There were no changes to NED fees between FY 2020 and FY 2023, but an increase of 3.0% in FY 2024 and 4.0% in FY 2025.

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Introduction

Annual report on remuneration

continued

CEO pay ratio

In line with reporting requirements, the table below sets out the ratio at the median,

25th and 75th percentiles of the total remuneration received by the Chief Executive Officer, compared

with the total remuneration received by our UK employees. The Company has calculated the ratios in

accordance with the methodology of Option B as it was deemed the most reasonable and practical

approach given the collation of data exercise required for gender pay gap reporting. There has been

no departure from this methodology and no element of pay has been omitted. It should be noted that the

pay ratio may vary year-on-year and the incentive outcomes for the Chief Executive Officer can impact

the results significantly. We will provide an explanation in each year’s report around the change in the

ratio as well as any additional context, where helpful, to understand variance. The UK employees at the

lower quartile, median and upper quartiles were identified as at 5 April 2024 and their salary and total

remuneration were calculated in respect of actual pay data from 1 April 2024 to 29 March 2025.

The Committee is satisfied that these pay ratios are consistent with our pay, reward and progression

policies and that these colleagues are representative of the relevant percentiles across the organisation,

as they represent frontline workers in our First Bus and First Rail divisions, i.e., the large majority

of our UK workforce receiving basic pay, overtime, holiday pay and employer pension contributions.

The figures also include sick pay (where relevant).

Pay ratio

Remuneration values

Year

Method

25th

percentile

50th

percentile

75th

percentile

Population

CEO

25th

percentile

Median

75th

percentile

FY 2025

Option B

96:1

74:1

50:1

Total remuneration

£3,054,852

£31,949

£41,025

£60,680

Salary only

£589,200

£25,966

£39,310

£49,736

FY 2024

Option B

42:1

40:1

26:1

Total remuneration

£1,397,817

£33,279

£35,182

£53,996

Salary only

£556,500

£28,715

£30,311

£49,240

FY 2023

Option B

34:1

30:1

22:1

Total remuneration

£1,190,865

£35,189

£40,145

£54,283

Salary only

£483,635

£23,018

£27,592

£46,518

FY 2022

Option B

68:1

62:1

41:1

Total remuneration

£2,246,181

£33,073

£36,395

£55,051

Salary only

£288,795

£22,179

£29,254

£45,703

FY 2021

Option B

30:1

25:1

16:1

Total remuneration

£839,822

£27,560

£34,002

£53,437

Salary only

£592,667

£22,274

£17,210

£38,480

There has been a significant increase in the CEO pay ratio between FY 2024 and FY 2025, this is largely

due to FY 2025 being the first year in which the current CEO has an LTIP vesting, which vested at 100%

of maximum (200% of base salary). Year on year changes in the pay ratio are driven by the fact that CEO

remuneration is heavily weighted towards performance-based pay.

The Committee is satisfied that the data included in the CEO Pay Ratio table reflect the goals of the

Group’s Remuneration Policy to support colleagues in the performance of their roles in collectively

delivering the Group’s strategy. In particular, the performance-based framework that rewards employees

for their individual efforts and the performance of the Company, and to structure pay in a simple and

transparent manner, have been applied consistently.

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Introduction

Annual report on remuneration

continued

Relative importance of spend on pay

The table below illustrates the Company’s expenditure on pay in comparison to adjusted operating profit and distributions to shareholders by way of dividend payments and share buyback.

FY 2025

£m

FY 2024

£m

change

Adjusted operating profit

222.2

202.4

9.8%

Distributions to shareholders

84.2

103.7

(18.8)%

Spend on zero emission vehicles

38.9

99.3

(60.8)%

Total employee pay

1,710.9

1,572.0

8.8%

Group adjusted operating profit, as reported in note 5 in the notes to the consolidated financial statements, has been used as a comparison as it is a key financial metric that the Board considers when assessing Company performance.

Distributions to shareholders, as reported in the consolidated statement of changes in equity, of £84.2m in FY 2025 consists of £34.2m in dividends (£37.6m including non-controlling interests) and £50m share buyback (£50.4m including related costs). Distributions to

shareholders in FY 2024 of £103.7m consists of £29.5m in dividends (£36m including non-controlling interests) and £74.2m share buyback (£74.7m including related costs). In FY 2024 there was an additional £41.1m in liability related to the share buyback, for a total

share buyback of £115.3m (£115.8m including related costs), this was completed in August 2024.

Spend on zero emission vehicles is our spend, net of grant funding.

Total employee pay is the total pay for all Group employees, including pension and social security costs. The average monthly number of employees in FY 2025 was 30,763 (FY 2024: 29,339).

Committee membership and attendance

The membership of the Committee is shown on page 91 and attendance is set out on page 77. After each

meeting, the Chair of the Committee presents a report on its activities to the Board. The Chair, Chief

Executive Officer, Group HR Director and Company Secretary will normally attend meetings by invitation,

to provide advice and respond to specific questions. Other attendees may include the Chief Financial

Officer, the Group Head of Reward, the Employee Director and the Committee’s external remuneration

adviser. Attendees are not involved in any decisions and are specifically excluded from any matter

concerning their own remuneration. The Company Secretary acts as secretary to the Committee.

Who supports the Committee?

The Committee continues to receive advice from independent external remuneration adviser, Willis Towers

Watson (WTW), which was appointed by the Committee in FY 2020. The Committee is solely responsible

for its appointment, retention and termination, and for approval of the basis of its fees and other terms.

The Chair of the Committee agrees the protocols under which WTW provides advice.

WTW is a member of the Remuneration Consultants Group Code of Conduct and adheres to this Code in

its dealings with the Committee. The Committee reviews the appointment of its advisers annually and is

satisfied that the advice it receives is objective and independent.

During the course of the year, WTW provided independent advice and commentary on a range of topics

including Directors’ remuneration discretionary share plans, and corporate governance and executive

remuneration trends. WTW fees for advice provided to the Committee were £60,040 (FY 2024: £136,670),

charged on a time-spent basis. WTW provides remuneration advice, including the provision of benchmark

data, to the Company.

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Introduction

Annual report on remuneration

continued

Shareholder voting on remuneration

At the 2024 AGM, shareholders approved the Directors’ Remuneration report and Directors’ Remuneration

Policy, which were published in the FY 2024 Annual Report and Accounts. The results of these votes are

shown below, as well as the result of previous shareholder votes on remuneration resolutions since 2017.

To approve the Directors’ Remuneration

report at the 2024 AGM

To approve the Directors’ Remuneration

Policy at the 2024 AGM

2024 AGM voting

Votes for

441,012,155

Votes against

15,310,095

Votes withheld

198,405

Votes for

426,755,092

Votes against

29,479,055

Votes withheld

286,508

Note: A ‘Vote withheld’ is not a vote in law and is not counted in the calculation of the votes ‘for’ and ‘against’ a resolution.

To approve the relevant Directors’ Remuneration report

Votes for

Votes against

2024 AGM

96.64%

3.36%

2023 AGM

95.85%

4.15%

2022 AGM

84.16%

15.84%

2021 AGM

98.43%

1.57%

2020 AGM

99.99%

0.01%

2019 AGM

76.32%

23.68%

2018 AGM

96.37%

3.63%

2017 AGM

91.32%

8.68%

Note: A ‘Vote withheld’ is not a vote in law and is not counted in the calculation of the votes ‘for’ and ‘against’ a resolution.

To approve the Directors’ Remuneration Policy

Votes for

Votes against

2024 AGM

93.54%

6.46%

2021 AGM

95.84%

4.16%

2018 AGM

84.52%

15.48%

Further engagement

The Committee values its continued dialogue with shareholders and engages directly with them and their

representative bodies at the earliest opportunity. Shareholder feedback received in relation to the AGM, as

well as any additional feedback and guidance received during the year, is considered by the Committee as

it develops the Company’s remuneration framework and practices.

In line with Provision 3 of the Code, the Committee Chair welcomes questions from shareholders on the

Committee’s activities.

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Introduction

Annual report on remuneration

continued

The current Remuneration Policy was approved at the 2024 Annual General Meeting on 26 July 2024. The full Policy can be found on the FirstGroup plc website and on pages 144 to 155 in the FY 2024 Directors’

Remuneration report.

The following table sets out how the agreed Remuneration Policy addresses the factors set out in Provision 40 of the 2018 UK Corporate Governance Code:

Clarity

The Committee considers that FirstGroup’s remuneration structures are transparent and welcomes open and frequent dialogue with shareholders on its approach to

remuneration. Major shareholders have been consulted on the Committee’s approach to remuneration.

Simplicity

The overall Remuneration Policy is designed to be comprehensive without becoming overcomplicated and to encourage the Executive Directors to concentrate on providing easy

and convenient mobility, improving quality of life by connecting people and communities, and delivering ongoing shareholder value through an attractive annual dividend.

Risk

One of the Committee’s principles is that the majority of the reward opportunity for Executive Directors should be provided through performance-related incentives linked to the

Group’s strategic goals and taking account of the Group’s attitude to risk. Reward under these incentives is linked to both individual and Group performance. The Committee is

satisfied that the structures of the incentive arrangements do not encourage inappropriate risk taking.

In addition, the following best-practice measures are in place to minimise risks:



EABP deferral, the LTIP holding period and shareholding requirement, including post-cessation provisions, provide a clear link to the Group’s ongoing performance and

shareholder experience



The Committee has discretion to adjust the formulaic incentive outcomes if it considers that they are not reflective of the underlying performance of the Group or any individual,

and has demonstrated in recent years that it is prepared to use its discretion to reduce a formula driven outcome where this does not reflect broader Group performance or the

shareholder experience



Malus and clawback provisions apply to EABP and LTIP awards

Predictability

The Remuneration Policy gives maximum values under the EABP and LTIP.

Proportionality

Performance measures and target ranges under the EABP and LTIP are designed to be sufficiently stretching in order to ensure outturns are fully aligned with Group

performance. As above, the Committee has discretion, and has demonstrated in recent years, that it is prepared to use its discretion to override formulaic outcomes in order

to ensure performance is reflective of FirstGroup’s underlying performance.

Alignment to culture

The Committee believes in an approach to executive pay that is commensurate with value creation for shareholders. The Remuneration Policy and the Company’s

incentive schemes have been designed to drive appropriate behaviours consistent with FirstGroup’s purpose, Values and strategy and are aligned to wider workforce policies

and practice.

The Company’s Policy remains to attract, retain and motivate its leaders and to ensure they are focused on delivering business priorities within a framework designed to promote the long-term success of

FirstGroup and align with shareholder interests. In order to prevent any conflicts of interest, the Committee is composed entirely of independent Non-Executive Directors. No individual is involved in deciding their

own remuneration.

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Annual Report and Accounts 2025

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Introduction

Remuneration Policy summary

The diagram below illustrates the balance of pay and time period of each element of the Policy for Executive Directors.

Total pay over five years

Year 1

Year 2

Year 3

Year 4

Year 5

Fixed pay

Salary

Fixed pay

Benefits, Pension

EABP

(Malus and clawback

provisions apply)

Up to 150% of salary

50% in cash

50% in shares. Three-year deferral period

No further performance conditions

LTIP

(Malus and clawback

provisions apply)

Up to 200% of salary

Three-year performance period

Two-year holding period

No further performance conditions

The table below sets out an overview of the key areas of the Policy and summarises how the Committee applied the Policy in FY 2025, together with details of how the Committee intends to implement the Policy in

FY 2026.

Purpose and link to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2025

How we plan to implement

the Policy in FY 2026

Salary

To attract and maintain

high calibre executives with

the attributes, skills and

experience required

to deliver the Group’s strategy.

Typically reviewed annually, effective from 1 April.

Any increases take account of:



Company and individual performance

and experience



role and responsibilities



market positioning



external indicators, such as inflation and market

conditions, and



pay increases made to the wider workforce

No recovery or withholding applies.

Salary increases (in percentage terms) for Executive

Directors will normally be with reference to increases

made to the wider workforce, however, there is no

formal maximum. Where the Committee considers it

necessary or appropriate, larger increases may be

awarded in individual circumstances, including, but not

limited to, factors such as an increase in the size or

scope of the role, or the individual’s development and

performance in the role.

The Committee has the flexibility to set the salary of

a new hire at a discount to the market level and to

realign it in subsequent years as the individual gains

experience in the role. In exceptional circumstances,

the Committee may agree to pay above market levels

to secure or retain an individual who is considered by

the Committee to possess significant and relevant

experience that is critical to the delivery of the

Company’s strategy.

An increase of 4% was applied

to the CEO and CFO from

1 April 2024. This increase

was aligned to the general

non-collectively bargained

employee salary increase.

An increase of 2.8% was

applied to the CEO and CFO

from 1 April 2025. This increase

was aligned to the increase for

the general non-collectively

bargained employee salary

increase. See page 102 for

more information.

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Governance report

Introduction

Remuneration Policy summary

continued

Purpose and link to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2025

How we plan to implement

the Policy in FY 2026

Benefits

Provide market competitive

benefits to assist in attracting

and retaining executives and

to support them in the

performance of their roles.

A range of benefits may be provided, including,

but not limited to, private medical insurance,

life assurance, long-term disability insurance,

company car allowance, general employee

benefits, including participation in our all-employee

share plans and travel and related expenses.

The cost of benefits is not pre-determined,

reflecting the need to allow for increases associated

with the provision of benefits. As such, there is no

formal maximum.

Normal Company

benefit provision.

No change to FY 2025.

Pension benefits

Allows executives to build

long-term savings for their

retirement and ensures the

total remuneration package

is competitive.

Payment may be made into a pension scheme

or delivered as a cash allowance.

Executive Directors receive a pension contribution, or

cash allowance, of up to the average pension benefit

for the wider UK workforce, up to a maximum of 15%

of base salary.

The CEO receives a pension

contribution or cash allowance

of 5% of base salary. The CFO

pension contribution remains at

15% of base salary.

No change to FY 2025.

Annual bonus

To focus on the delivery

of annual goals, to strive

for superior performance and

to achieve specific targets

which support the strategy.

The deferred share element

provides alignment with

shareholders and

supports retention.

Bonuses are awarded annually under the

Executive Annual Bonus Plan (EABP).

At least half the bonus awarded in any year will

be deferred into shares, normally for a period

of three years.

The EABP is reviewed annually to ensure

performance measures and targets are

appropriate and support the strategy.

Dividend equivalent payments may accrue on

shares which vest under the EABP.

The Committee retains the discretion, acting fairly

and reasonably, to alter the bonus outcome in

light of the underlying performance of the Group,

taking account any factors it considers relevant.

Malus and clawback provisions apply.

The maximum annual bonus opportunity for

the Executive Directors is 150% of salary.

Performance measures

(as a % of maximum):

Operating profit – 60%

Cash flow – 10%

Operational – 20%

Personal objectives – 10%

FY 2025 bonus awards of

123.2% of base salary (82.1%

of maximum) for both the CEO

and CFO. See pages 97 and 98

for further details.

No change to the maximum

opportunity for FY 2026.

Performance measures

(as a % of maximum):

Operating profit – 50%

Cash flow – 20%

Operational – 20%

Personal objectives – 10%

See page 102 for further

details.

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Introduction

Remuneration Policy summary

continued

Purpose and link to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2025

How we plan to implement

the Policy in FY 2026

Long-Term Incentive Plan

(LTIP)

Incentivises the execution of

strategy, and drives long-term

value creation and alignment

with shareholders.

Awards under the LTIP are conditional rights

to receive shares or nil cost options over shares,

subject to continued employment or good

leaver status and the achievement

of performance conditions.

Up to 20% of the maximum may be payable for

threshold performance, with maximum vesting

being equal to 100% of any award made.

Shares which vest under the LTIP are typically

subject to an additional holding period of

two years.

Dividend equivalent payments may accrue on

shares which vest under the LTIP.

The Committee retains the discretion, acting fairly

and reasonably, to alter the LTIP outcome in light

of the underlying performance of the Group,

taking account any factors it considers relevant.

Malus and clawback provisions apply.

Normal award policy is for a maximum annual

award opportunity of 200% of base salary for

the Chief Executive Officer and 175% for other

Executive Directors.

In exceptional circumstances, awards of up to 300% of

base salary may be made, such as to aid recruitment.

Performance measures

(as a % of maximum):

EPS – 50%

Relative TSR – 30%

ESG Scorecard – 20%

Grant levels:

CEO – 200% of salary

CFO – 175% of salary

See page 99 for details of the

targets for the 2024 LTIP

awards granted in the year.

The 2022 LTIP had a vesting

outcome of 100%. See page 98

for further details.

No change to maximum

LTIP opportunities or the

performance conditions.

See page 102 for detail on

LTIP awards to be granted

for FY 2026.

Shareholding guidelines

To ensure that Executive

Directors’ interests are aligned

with those of shareholders.

During employment

The Executive Directors are expected to hold

shares, or rights to shares, equivalent in value to a

minimum of 200% of base salary within a five-year

period from the later of their date of appointment.

Post-employment

Following cessation, Executive Directors are

normally expected to hold:



The in-employment guideline (or full actual

holding if lower) for the first year following

cessation of employment, and



50% of the in-employment guideline (or full

actual holding if lower) for the second year

following cessation of employment

The post-employment guideline will apply to share

awards granted under incentive plans from the

2021 AGM onwards and will not include shares

purchased outright by an Executive Director.

Not applicable.

CEO – 200% of salary

CFO – 200% of salary

See page 104 for further details

on shareholding requirements

and outstanding share awards.

No change to requirements.

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Introduction

Remuneration Policy summary

continued

Compliance with the Corporate Governance Code

P Remuneration policies and practices designed to support strategy

The Directors’ Remuneration Policy, which was approved at the 2024 AGM, was designed with consideration of the UK Corporate Governance Code. The majority of the Executive Directors’ remuneration is through

performance-related incentives linked to the Group’s strategic goals. Half of any Executive Director’s annual bonus that vests under the EABP is deferred into shares that vest after three years. Any awards that vest

under the LTIP are subject to a further two-year holding period. Additionally, the Executive Directors have shareholding guidelines and post-cessation shareholding guidelines provide a clear link to the Group’s

ongoing performance and shareholder experience. See pages 144 to 155 of the 2024 Annual Report for the 2024 Policy.

Q Formal and transparent procedure for developing policy on executive remuneration

FirstGroup welcomes open and frequent dialogue with shareholders on its approach to remuneration. Major shareholders have been consulted on the Committee’s approach to remuneration.

R Directors to exercise independent judgement and discretion when authorising remuneration outcomes

The Remuneration Policy allows for the use of discretion to adjust the formulaic incentive outcomes if they are not reflective of underlying performance of the Group. As noted under Provision 37, discretion has been

applied to reduce formulaic outcomes under the EABP in FY 2020 and FY 2021, resulting in no bonus being awarded in either year. The Committee also used its discretion to apply a downward adjustment resulting

in an overall reduction of 10% of the 2020 LTIP award that vested in June 2023.

32 Establish a remuneration committee

The Company has a Remuneration Committee in accordance with the requirements of the Code.

33 Delegation of responsibilities and review of workforce remuneration and related policies

When determining senior team pay, the Committee considers it in the context of wider workforce pay, policies and practices. Each year, a number of items are tabled at Committee meetings to ensure the approach

throughout the Group is fair. See pages 94 and 95 for further information.

34 Non-executive director remuneration

The Company’s NEDs each receive an annual fee reflecting the time commitment for their roles. An additional fee is paid to the Senior Independent Director and Chairs of the Audit, Remuneration and Responsible

Business Committees to reflect the additional time commitment associated with these roles. The NEDs do not receive any performance-related pay or equity awards. NEDs are permitted to buy shares in the

Company, subject to the Company’s share dealing code. See page 101 for fees paid to NEDs and the Chair.

35 Consultants appointed by the committee

Willis Towers Watson was appointed by the Committee in FY 2020.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

113

Governance report

Introduction

Remuneration Policy summary

continued

Compliance with the Corporate Governance Code

36 Remuneration schemes should promote long-term holdings by executive directors

Executive Directors are required to hold shares to the value of 200% of base salary within five years of appointment. Post-cessation, Executive Directors must maintain 100% of their in-employment shareholding

guideline in the first year following employment, dropping to 50% in the second year (or the full actual holding if lower).

37 Use of discretion

As noted in Principle R, the Committee has the ability to use discretion to override formulaic outcomes.

The Committee used its discretion to reduce formulaic outcomes under the FY 2020 and FY 2021 EABP, resulting in no payout in both years, to ensure performance is reflective of the Company’s underlying

performance and aligned with the shareholder experience. The Committee also used its discretion to apply a downward adjustment resulting in an overall reduction of 10% of the 2020 LTIP award that vested in

June 2023. Additionally, malus and clawback provisions apply to both the EABP and LTIP.

38 Only basic salary to be pensionable

The Company complies with this provision and pension contributions are aligned with the wider workforce. See page 95 for further information.

39 Notice and contractual periods

The notice and contractual periods for the Executive Directors are for one year.

40 Matters to be addressed by the committee when determining remuneration

The current remuneration structures address the principles of clarity, simplicity, risk, predictability, proportionality and alignment to culture. See page 109 for further detail on how the agreed Remuneration Policy

addresses these factors.

41 Report on the work of the committee and reporting requirements

The strategic rationale for our Executive Director remuneration policies and structures is set out in the Remuneration Committee Chair’s letter on pages 91 and 92 and in the Annual report on remuneration

on pages 96 to 108. The Committee is satisfied that the remuneration outcomes are appropriate, considering internal and external measures and the wider workforce pay.

We encourage an open dialogue with shareholders on executive remuneration matters.

In developing the Remuneration Policy, we consider alignment with the wider workforce pay policies. The Remuneration Committee Chair regularly attends Employee Director Forums and answers questions

about executive remuneration.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

114

Governance report

Introduction

Remuneration Policy summary

continued

The Directors present their report on the affairs

of the Group, together with the audited financial

statements and the report of the auditor for the 52

weeks ended 29 March 2025. Information required

to be disclosed in the Directors’ report may be

found below and is incorporated into the Directors’

report by cross-reference to the following sections

of the Annual Report and financial statements in

accordance with the Companies Act 2006 (the 2006

Act) and Listing Rule 9.8.4R of the Financial

Conduct Authority.

Information

Page

Sustainability governance

Greenhouse gas emissions

Proposed final dividend

Likely future developments in

the business

01 to 70

Risk factors and principal risks; going

concern and viability statements

58 to 70

Governance arrangements; human

rights and anti-corruption and

bribery matters

Long-term incentive schemes

112

Financial instruments and related

market transactions

171 to 176

Directors

The Directors of the Company who served during

the year are shown on pages 74 to 76.

Details of the Directors’ interests in shares can be

found in the Directors’ Remuneration report on

page 104.

During the year, no Director had any interest in

any shares or debentures in the Company’s

subsidiaries, or any material interest in any

contract with the Company or a subsidiary

being a contract of significance in relation to

the Company’s business.

Powers of the Directors

The Directors are responsible for the management

of the business of the Company and may

exercise all powers of the Company subject

to applicable legislation and regulation and

the Company’s Articles of Association (Articles).

Conflicts of interest

The Directors have a statutory duty under the

Companies Act 2006 to avoid situations in which

they have, or can have, a direct or indirect interest

that conflicts, or may conflict, with the interests

of the Company. This duty is in addition to the

existing duty that a Director owes to the Company

to disclose to the Board any transaction or

arrangement under consideration by the Company.

The Company’s conflict of interest procedures are

reflected in the Articles. In line with the Companies

Act 2006, the Articles allow the Directors to

authorise conflicts and potential conflicts of interest

where appropriate. The decision to authorise a

conflict can only be made by non-conflicted

Directors. Directors do not participate in decisions

concerning their own remuneration or interests.

The Company Secretary minutes the consideration

of any conflict or potential conflict of interest and

authorisations granted by the Board. On an ongoing

basis, the Directors inform the Company Secretary

of any new, actual or potential conflict of interest

that may arise or if there are any changes in

circumstances that may affect an authorisation

previously given. Even when authorisation is given,

a Director is not absolved from their duty to

promote the success of the Company.

Furthermore, the Articles include provisions relating

to confidential information, attendance at Board

meetings and availability of Board papers to protect

a Director from breaching their duty if a conflict of

interest arises.

These provisions will only apply where the

circumstance giving rise to the potential conflict

of interest has previously been authorised by the

Directors. The Board considers that the formal

procedures for managing conflicts of interest

currently in place have operated effectively during

the year under review.

Election and re-election of Directors

Directors are required under the Articles to submit

themselves for election by shareholders at the AGM

following their appointment by the Board. Also, in

accordance with best practice and the Code, all

Directors put themselves forward for re-election by

shareholders annually. This year they will do so at

the AGM on 25 July.

Directors’ indemnities and

liability insurance

FirstGroup maintains liability insurance for its

Directors and Officers. The Company has also

granted indemnities to the extent permitted by law

to each of the Directors, the Company Secretary

and a number of other executives and senior

managers. These indemnities were in place

throughout the period, are uncapped in amount in

relation to certain losses and liabilities which they

may incur to third parties in the course of acting as

a Director or Officer of the Company or any of its

associated companies. Neither the indemnity, nor

insurance cover provides protection in the event

a Director or Officer is proved to have acted

fraudulently or dishonestly. The indemnity is

categorised as a ‘qualifying third party indemnity’

for the purposes of the Companies Act 2006 and

will continue in force for the benefit of Directors and

Officers on an ongoing basis.

Research and development

The Group does not conduct any meaningful

research or development.

Disclosure of information to the

external auditor

Each of the Directors who held office at the date of

approval of this report confirm that, so far as they

are aware, there is no relevant audit information

(being information needed by the auditor in

connection with preparing its audit report), of which

the Company’s auditor is unaware, and each of the

Directors has taken all the steps that they ought

reasonably to have taken as a Director in order to

make themselves aware of any relevant audit

information and to establish that the Company’s

auditor is aware of that information.

This confirmation is given and should be interpreted

in accordance with the provisions of Section 418 of

the Companies Act 2006.

Share capital

As at 29 March 2025, the Company’s issued share

capital was 750,695,015 ordinary shares of 5 pence,

each credited as fully paid, and the Company held

165,724,514 of these shares in treasury. The issued

share capital of the Company which carries voting

rights of one vote per share comprised 584,970,501

ordinary shares. Further details of the Company’s

issued share capital are shown in note 26 to the

Company’s financial statements.

The Company’s shares are listed on the London

Stock Exchange.

Articles of Association

The description in this section summarises certain

provisions of the Company’s Articles and applicable

Scottish law concerning companies. This summary

is qualified in its entirety by reference to this

Company’s Articles and the Companies Act 2006.

The Company’s Articles may be amended by a

special resolution of the Company’s shareholders.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

115

Governance report

Introduction

Directors’ report and additional disclosures

Substantial shareholdings

As at 29 March 2025, the Company had been notified under the FCA’s Disclosure, Guidance and

Transparency Rule of the following interests in its total voting rights of 3% or more:

Name of shareholder

Number of

ordinary shares

% of total

voting rights

Date of

notification

Ameriprise Financial, Inc.

70,766,822

11.84

19 February 2025

Schroders Plc

63,587,135

9.99

29 April 2025

BlackRock, Inc

34,378,093

5.79

5 March 2025

Majedie Asset Management Limited

60,915,714

4.99

3 February 2021

Aberforth Partners LLP

33,717,348

4.97

6 September 2023

Coast Capital Management LP

25,169,383

3.35

20 May 2022

No further notifications have been received since 29 March 2025 and the signing of this report.

The rights attached to the ordinary shares of the

Company are defined in the Company’s Articles.

No person has any special rights of control over the

Company’s share capital and all issued shares are

fully paid.

Voting rights

Shareholders are entitled to attend and vote at

any general meeting of the Company. It is the

Company’s practice to hold a poll on every

resolution at general meetings. This means that

each member present in person or by proxy has

one vote for every share held. In the case of joint

holders the vote of the senior shareholder who

tenders a vote, whether in person or by proxy, shall

be accepted to the exclusion of the votes of the

other joint holders and, for this purpose, seniority

shall be determined by the order in which the

names stand in the Register of Members in respect

of the joint holding.

Dividend rights

The Directors may declare an interim dividend and

shareholders may by ordinary resolution declare

final dividends but the amount of the dividend may

not exceed the amount recommended by the Board.

Transfer of shares

There are no specific restrictions on the size of a

holding, nor on the transfer of shares which are

both governed by the general provisions of the

Company’s Articles and prevailing legislation.

The Directors are not aware of any agreements

between holders of the Company’s shares that may

result in restrictions on the transfer of securities or

on voting rights at any meeting of the Company.

Going concern and viability

Directors are required to consider if it is appropriate

to adopt the going concern basis of accounting.

Disclosure of the Directors’ deliberations to

determine whether it is appropriate to adopt the

going concern basis of accounting in addition to

consideration of whether there are any material

uncertainties which may affect the Group’s ability

to continue to adopt this basis can be found in the

Going concern statement on page 70, the Audit

Committee report on starting on page 84 and in

note 2 to the financial statements. In summary,

the Directors have concluded that it is appropriate

to prepare the financial statements on a going

concern basis.

Directors are also required to provide a broader

assessment of viability over a longer period, which

can be found on page 69.

Employee share plans

The Company operates a number of employee

share plans, details of which are set out in note 34

and in the Directors’ Remuneration report that

starts on page 91.

All of the Company’s employee share plans contain

provisions relating to change of control. On a

change of control, options and awards granted to

employees may vest and in the case of options

become exercisable, subject to the satisfaction of

any applicable performance conditions at the time.

Employment of disabled persons

Applicants with disabilities are given full and fair

consideration during recruitment processes.

We are committed to supporting employees

with disabilities with regard to training, career

development and promotion. Our policies on

employee consultation and on equal opportunities

for all employees can be found on pages 39 to 40.

Employee engagement

We remain committed to employee involvement

throughout the Group. Employees are kept well

informed of the performance and strategy of the

Group and other matters of concern through a

variety of means, including personal briefings,

regular meetings, email and broadcasts by the

Group Chief Executive and other senior managers.

Refer to page 40 for further information.

Stakeholder engagement

The Board has determined that the Group’s

stakeholders are customers, investors, government,

employees, communities and our strategic partners

and suppliers. The Board is aware that its actions

and decisions impact our stakeholders. Effective

engagement with stakeholders is important to the

Board as it strengthens the business and helps to

deliver a positive result for all our stakeholder

groups. In order to comply with Section 172 of the

Companies Act, the Board is required to take into

consideration the interests of stakeholders and

include a statement setting out the way in which

Directors have discharged this duty during the year.

The Group’s stakeholders are identified on pages

54 to 56 of the Strategic report and the statement

of compliance with Section 172 is set out on page

57. Further information on workforce engagement

can also be found on page 40.

Purchase of own shares

During the year, the Company completed a

buyback programme of £115m of ordinary

shares that was announced on 8 June 2023 and

commenced on 3 August 2023. The programme

completed on 2 August 2024 and this was

completed under authority granted at the

2023 AGM.

At the AGM of the Company in 2024, authority was

granted for the Company to purchase up to 14.99%

of its ordinary shares. The Company announced a

£50m buyback programme on 14 November 2024

under the authority granted at the 2024 AGM and

restricted this to 14.99% of the issued share capital

on the day before the programme commenced. The

£50m buyback programme completed on 20 March

2025. The Company anticipates seeking authority

to purchase up to 14.99% of its ordinary shares at

the AGM in 2025.

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

116

Governance report

Introduction

Directors’ report and additional disclosures

continued

Political donations

At the 2024 AGM, shareholders passed a resolution

to authorise the Company and its subsidiaries to

make political donations to political parties or

independent election candidates, to other political

organisations, or to incur political expenditure

(as such terms are defined in Sections 362 to 379

of the 2006 Act), in each case in amounts not

exceeding £100,000 in aggregate. As the authority

granted at the 2024 AGM will expire, renewal of this

authority will be sought at this year’s AGM. Further

details are available in the Notice of AGM.

As a result of the broad definition used in the 2006

Act of matters constituting political donations, it is

possible that normal business activities, which

might not be thought to be political expenditure in

the usual sense, could be covered. Accordingly,

authority is being sought as a precaution to ensure

that the Company’s normal business activities do

not infringe the 2006 Act, but it is not the policy of

the Company to make donations to UK or EU

political organisations, nor to incur other political

expenditure in the UK or EU.

No political donation nor expenditure was incurred

by the Company and its subsidiaries during

FY 2025.

Change of control – significant

agreements

Financing agreements

As at 29 March 2025, the Group had a £300m

multi-currency revolving credit and guarantee

facility between, amongst others, the Company and

The Royal Bank of Scotland plc dated 30 January

2025, maturing in January 2030. Following any

change of control of the Company, individual

lenders may negotiate with the Company with a

view to resolving any concerns arising from such

change of control. If the matter has not been

resolved within 30 days, an individual bank may

cancel its commitment and the Company must

repay the relevant proportion of any drawdown.

The Group also had a £150m term loan facility

between, amongst others, the Company and The

Royal Bank of Scotland plc dated 10 March 2025,

maturing in March 2027. Following any change of

control of the Company, individual lenders may

negotiate with the Company with a view to resolving

any concerns arising from such change of control.

If the matter has not been resolved within 30 days,

an individual bank may cancel its commitment and

the Company must repay the relevant proportion of

any drawdown.

The Group also had a £150m Green Hire Purchase

Finance Facility between, amongst others, the

Company and Lloyds Bank plc dated 21 December

2023, maturing in December 2026. Following any

change of control of the Company, individual

lenders may negotiate with the Company with a

view to resolving any concerns arising from such

change of control. If the matter has not been

resolved within 30 days, an individual bank may

cancel its remaining available commitment under

the facility and immediately terminate any hire

agreements already in place.

First Rail

As at 31 March 2025, the Group’s contracted

passenger rail operators, First Greater Western

Limited, First MTR South Western Trains Limited

(jointly owned with MTR Corporation) and First

Trenitalia West Coast Rail Limited (jointly owned

with Trenitalia) are each party to a contractual

agreement with the Secretary of State for

Transport. These agreements are subject to

termination clauses which may apply on a change

of control.

First MTR South Western Trains Limited, First

Greater Western Limited, First Trenitalia West Coast

Rail Limited and the Group’s non-contracted rail

operators, Hull Trains Company Limited and East

Coast Trains Limited, each hold railway licences as

required by the Railways Act 1993 (as amended);

these licences may be revoked on three months’

notice if a change of control occurs without the

approval of the ORR. All of these operators also

require and hold track access agreements with

Network Rail Infrastructure Limited under which

they are permitted to access railway infrastructure.

Failure by any of the operators to maintain its

railway licence is a potential termination event

under the terms of the track access agreements.

The Group’s railway operators also lease rolling

stock from specialist rolling stock leasing

companies such as Eversholt Rail Group, Rock

Rail Limited, Beacon Rail Limited, Porterbrook

Leasing Company Limited and Angel Trains

Limited. A material number of the individual leasing

agreements include change of control provisions.

The Group is also involved from time to time in

bidding processes for transport contracts in the

UK and further afield which customarily include

change in circumstance provisions which would be

triggered on a change of control and could result in

termination or rejection from further participation in

the relevant competitions.

Subsequent to the period reported on above, on

25 May 2025, the operations of First MTR South

Western Trains Limited were transferred to the

Department for Transport Operator (South Western

Railway Limited). SWR’s National Rail Contract will

remain in force until the final net assets of First MTR

South Western Limited have been settled and the

company wound down, this process is expected to

take a number of years, in line with experience on

previous franchises.

In addition, we are mobilising First Rail Stirling

Limited to operate services between Stirling &

Euston and First Wales & Western Ltd to operate

services between Paddington & Carmarthen. Both

of these operators hold track access agreements

with Network Rail Infrastructure Limited and we are

currently progressing the submission of First Rail

Stirling Limited’s safety certificate as part of its

application for the railway licence from ORR with

the submission for First Wales & Western Ltd to

follow. As with the Group’s other railway operators,

each of these operators have leases for rolling

stock from specialist rolling stock leasing

companies in place.

Significant shareholders’ agreements

The Group, through First Rail Holdings Limited, has

shareholders’ agreements governing its relationship

with MTR Corporation in relation to the SWR rail

operator, and with Trenitalia in relation to the West

Coast Partnership rail operator. As is customary,

these agreements include provisions addressing

change of control. Notwithstanding the transfer

of the SWR operations to the Department for

Transport Operator the shareholder agreement

with MTR Corporation survives this transfer.

FirstGroup plc entered into a strategic partnership

with Hitachi Zero Carbon (HZC), via a 50:50 joint

venture, to purchase up to 1,000 bus batteries as

part of its fleet decarbonisation journey.

Post balance sheet events

Information on material events that occurred from

29 March 2025 to the date of this report can be

found on page 11 and in note 37.

Branch disclosure

The Group has a branch in France (First Travel

Solutions Ltd), which was established on

28 March 2019.

Streamlined Energy and Carbon

Reporting (SECR) compliance

In compliance with the SECR requirements, our

GHG emissions and our energy consumption and

energy and emissions reduction initiatives are

reported on page 35.

Management report

The Strategic and Directors’ reports together are

the management report for the purposes of the

FCA’s DGTR 4.1.5R.

The Directors’ report was approved by a Board

Committee on behalf of the Board on 10 June 2025.

David Blizzard

Company Secretary

10 June 2025

395 King Street

Aberdeen AB24 5RP

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

117

Governance report

Introduction

Directors’ report and additional disclosures

continued

Statement of Directors’

responsibilities in respect

of the financial statements

The Directors are responsible for preparing

the Annual Report and Accounts 2025 and the

financial statements in accordance with applicable

law and regulation.

Company law requires the Directors to prepare

financial statements for each financial year. Under

that law the Directors have prepared the Group

financial statements in accordance with UK-

adopted international accounting standards and the

company financial statements in accordance with

United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards,

comprising FRS 101 “Reduced Disclosure

Framework”, and applicable law).

Under company law, Directors must not approve

the financial statements unless they are satisfied

that they give a true and fair view of the state of

affairs of the Group and Company and of the profit

or loss of the Group for that period. In preparing the

financial statements, the Directors are required to:



Select suitable accounting policies and then

apply them consistently;



State whether applicable UK-adopted

international accounting standards have been

followed for the group financial statements

and United Kingdom Accounting Standards,

comprising FRS 101 have been followed for the

company financial statements, subject to any

material departures disclosed and explained in

the financial statements;



Make judgements and accounting estimates that

are reasonable and prudent; and



Prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the Group and Company will

continue in business.

The Directors are responsible for safeguarding the

assets of the Group and Company and hence for

taking reasonable steps for the prevention and

detection of fraud and other irregularities.

The Directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and Company’s

transactions and disclose with reasonable

accuracy at any time the financial position of the

Group and Company and enable them to ensure

that the financial statements and the Directors’

Remuneration report comply with the Companies

Act 2006.

The Directors are responsible for the maintenance

and integrity of the company’s website. Legislation

in the United Kingdom governing the preparation

and dissemination of financial statements may

differ from legislation in other jurisdictions.

Directors’ confirmations

Each of the Directors, whose names and functions

are listed in Governance report confirm that, to the

best of their knowledge:



The group financial statements, which have been

prepared in accordance with UK-adopted

international accounting standards, give a true

and fair view of the assets, liabilities, financial

position and profit of the Group;



The company financial statements, which have

been prepared in accordance with United

Kingdom Accounting Standards, comprising

FRS 101, give a true and fair view of the assets,

liabilities and financial position of the Company;

and



The Strategic report includes a fair review of the

development and performance of the business

and the position of the Group and Company,

together with a description of the principal risks

and uncertainties that it faces.

In the case of each Director in office at the date the

Directors’ report is approved:



So far as the Director is aware, there is no

relevant audit information of which the Group’s

and Company’s auditors are unaware; and



They have taken all the steps that they ought

to have taken as a Director in order to make

themselves aware of any relevant audit

information and to establish that the Group’s and

Company’s auditors are aware of that information.

Ryan Mangold

Chief Financial Officer

10 June 2025

395 King Street

Aberdeen AB24 5RP

Strategic report

Financial statements

FirstGroup

Annual Report and Accounts 2025

118

Governance report

Introduction

Statement of Directors’ responsibilities

Financial

Statements

In this section

120

Independent auditors’ report

129

Consolidated income statement

130

Consolidated statement of comprehensive income

131

Consolidated balance sheet

132

Consolidated statement of changes in equity

133

Consolidated cash flow statement

135

Notes to the consolidated financial statements

207

Group financial summary

209

Company balance sheet

210

Company statement of changes in equity

211

Notes to the Company financial statements

215

Shareholder information

217

Glossary

Strategic report

Governance report

FirstGroup

Annual Report and Accounts 2025

119

Introduction

Financial statements

Report on the audit of the financial statements

Opinion

In our opinion:



FirstGroup plc’s group financial statements and company financial statements (the “financial

statements”) give a true and fair view of the state of the group’s and of the company’s affairs as at

29 March 2025 and of the group’s profit and the group’s cash flows for the 52 week period then ended;



the group financial statements have been properly prepared in accordance with UK-adopted

international accounting standards as applied in accordance with the provisions of the

Companies Act 2006;



the company financial statements have been properly prepared in accordance with United Kingdom

Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101

“Reduced Disclosure Framework”, and applicable law); and



the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts 2025 (the

“Annual Report”), which comprise: the Consolidated balance sheet and the Company balance sheet as

at 29 March 2025; the Consolidated income statement, the Consolidated statement of comprehensive

income, the Consolidated statement of changes in equity, the Company statement of changes in equity,

and the Consolidated cash flow statement for the period then ended; and the notes to the financial

statements, comprising material accounting policy information and other explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities

for the audit of the financial statements section of our report. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our

audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to

listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with

these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical

Standard were not provided.

Other than those disclosed in Note 6, we have provided no non-audit services to the company or its

controlled undertakings in the period under audit.

Our audit approach

Context

The Group consists of two main divisions, Rail and Bus. In the Rail division, all train operating companies

(‘TOCs’) have continued to operate under contracts with the Department for Transport (‘DfT’) with Great

Western Railway (‘GWR’), South Western Railway (‘SWR’) and Avanti West Coast (‘AWC’) on National Rail

Contracts for the full year. Under each contract this has meant a fixed management fee was received to

operate at agreed service levels, as well as a performance-based fee element. The structure of the

contracts within the Rail division reduces the revenue and cost risk compared to previous franchise

arrangements. As anticipated, the Government passed legislation in November 2024 allowing for the

nationalisation of passenger train operators. On 4 December 2024, the Government announced its

programme to transition passenger rail services into public ownership. The Government confirmed that

services currently operated by SWR would be the first to transfer into public ownership when their national

rail contract expired on 25 May 2025. The programme is expected to continue with the transfer of other

TOCs over the next few years. Outside of the TOCs the Rail Division also includes open access contracts

– Hull Trains and East Coast Trains (‘Lumo’) – which have experienced growth year on year. First Bus

continued to receive government support and has continued to receive funding but with a revised £3 bus

fare cap in England from December 2024.

Strategic report

Governance report

FirstGroup

Annual Report and Accounts 2025

120

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

Overview

Audit scope



The scope of our audit determines where we go and what we do, the best types of audit evidence to

obtain, the right areas of operations to focus on and the resources needed to deliver this. As group

auditors we are required to obtain sufficient audit evidence from the components of the group. We have

determined there are six in scope components for group reporting purposes:



Each Train Operating Company (‘TOC’) is a separate component, with all TOCs operating throughout the

whole year in scope for group reporting, being Great Western Railway (‘GWR’), South Western Railway

(‘SWR’), and Avanti West Coast (‘AWC’).



First Bus



Hull Trains



East Coast Trains (‘Lumo’)

Key audit matters



Valuation of pension liabilities driven by salary increase, mortality, discount rate and inflation level

assumptions (group)



Valuation of complex investments within the pension assets (group)



Recoverability of the company’s investments in subsidiary undertakings (parent)

Materiality



Overall group materiality: £20,000,000 (2024: £20,000,000) based on 0.4% of revenue.



Overall company materiality: £12,400,000 (2024: £13,600,000) based on 1% of total assets.



Performance materiality: £15,000,000 (2024: £15,000,000) (group) and £9,300,000 (2024: £10,200,000)

(company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement

in the financial statements.

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121

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most

significance in the audit of the financial statements of the current period and include the most significant

assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including

those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;

and directing the efforts of the engagement team. These matters, and any comments we make on the

results of our procedures thereon, were addressed in the context of our audit of the financial statements as

a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

The key audit matters below are consistent with last year.

Key audit matter

How our audit addressed the key audit matter

Valuation of pension liabilities driven by salary increase, mortality, discount rate and inflation level

assumptions (group)

The group has significant gross defined benefit

obligations in the UK and North America. The total

liabilities reduced largely due to the buy out of a US

Scheme (ATU), the merger of the UK Bus and the

First Group Pension Scheme (“FGPS”), and the

impact of rising bond yields. The valuation of

pension plan liabilities requires estimation in

determining appropriate assumptions such as

salary increases, mortality rates, discount rates and

inflation levels. Movement in these assumptions

can have a material impact on the determination of

the liability, and these assumptions are considered

to be the significant audit risk. Management uses

external actuaries to assist in determining these

assumptions, and management’s actuaries carry

out the valuation of the pension liabilities based on

these assumptions. In addition to the significant

audit risk, there are restrictions under IAS19 and

IFRIC 14 as to when a net pension surplus should

be recognised, as well as balance sheet

adjustments in respect of First Rail due to the Rail

contracts. Refer to note 35 and the critical

accounting judgements and key sources of

estimation uncertainty section in note 2. Refer to

the Audit Committee report for a description of its

assessment of this significant judgement.

We engaged our PwC Actuarial team as Auditor’s

Experts to help the audit team assess whether the

assumptions used in calculating the defined benefit

liabilities for the UK, US and Canadian Schemes

were reasonable and that the methodology aligns to

appropriate accounting standards. We assessed

whether mortality rate assumptions were

appropriate for each plan selected for testing and,

where applicable, incorporated considerations of

relevant national actuarial data. We also assessed

whether the discount rate and inflation rates were

consistent with our internally developed

benchmarks and in line with market information for

these schemes. We examined the salary increase

assumptions to consider whether they represent

management’s best estimate. In addition to our

significant risk areas, we reviewed the trust deeds

and statutory legislation relevant to each plan

where applicable. We also assessed management’s

judgement with regard to the rail ‘contract

adjustment’ and found no exceptions. We evaluated

the calculations prepared by the external actuaries

to assess whether the disclosed pension liabilities

are consistent with the assumptions used. We have

performed procedures on the ATU buy-out in the

year and obtained support to confirm the closing

position of £nil for both assets and liabilities, and

subsequent settlement cost related to this. For the

merger of the UK Bus and FGPS, we have reviewed

settlement payments as a result of the merger to

consider the accounting treatment of any payments

made and that they are appropriately included in

the Income Statement. Based on procedures

performed and our materiality, we consider that the

assumptions used to value the pension obligation

are within an acceptable range. We assessed the

appropriateness of the related disclosures in note

35 of the group financial statements and consider

them to be materially appropriate.

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122

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Key audit matter

How our audit addressed the key audit matter

Valuation of complex investments within the pension assets (group)

As set out in note 35, the group has significant

gross defined benefit plan assets in the UK and

North America. The pension schemes in which the

Group participates hold unquoted pooled

investment vehicles which invest in private equity,

infrastructure, and property funds. There is

significant estimation uncertainty in determining the

valuation of these investments which are based on

inputs that are not directly observable. The funds

where the valuation requires significant judgement

and has a higher risk of material error across the

group total £316.9m (2024: £475m). The funds are

present in the FirstGroup UK Bus Section of the

FirstGroup Pension Scheme. There is a potential

range of reasonable outcomes to the valuations of

these assets greater than our materiality for the

financial statements as a whole.

We obtained pricing confirmations directly from

investment managers as primary sources of

evidence. We performed additional procedures on

investments that are more complex in nature and

with a higher potential risk of material error to

evaluate whether there is any contradictory

evidence suggesting that the pricing confirmations

do not reflect an appropriate valuation as at the

balance sheet date. For those investments these

procedures included one or more of the following:



Obtained the most recent third party controls

assurance reports and bridging letters on the

valuation procedures and investment managers’

operations;



Reviewed the pricing of transactions taking place

close to the balance sheet date;



Performed look back testing of previous

valuations provided by investment managers to

their audited financial statements;



Performed independent internet based searches

for information suggesting any doubts in the

investment managers’ capability of pricing; and/or



Reviewed investment contributions and distributions

between the valuation date and the balance sheet

date and obtained affirmations from investment

managers that the price taken is the latest price

available where the valuation date is different to the

balance sheet date. Based on the procedures

performed we have no findings to report.

Key audit matter

How our audit addressed the key audit matter

Recoverability of the company’s investments in subsidiary undertakings (parent)

As set out in note 5 to the Company financial

statements,investments in subsidiaries are £759.3m

(2024: £738.2m). Of this balance, £659.3m relates to

the direct and indirect ownership of the Bus

division. The investments are accounted for at cost

less provision for impairment in the Company

balance sheet at 29 March 2025. The carrying value

of the investment in Bus is supported by the

recoverable amount which has historically been

calculated on a value in use basis. Investments are

tested for impairment if impairment indicators exist.

If such indicators exist, the recoverable amounts of

the investments in subsidiaries are estimated in

order to determine the extent of any impairment

loss. Refer to note 5 in the Plc company accounts

and the Key sources of estimation uncertainty

section in note 1. Management do not consider that

there has been an impairment trigger in the year.

First Bus performance in FY25 is in line with

budget, and the market capitalisation of the group

is broadly comparable to the previous year end

date, which suggests that there is not an

impairment trigger. As required on an annual basis,

management has prepared a value in use model for

the purposes of assessing the Bus goodwill. We

have reviewed the model, ensuring the calculations

were mathematically accurate. The model, once

adjusted to consider the fair value of debt within

First Bus, shows headroom of £136 million

compared to the carrying value of the investment.

We considered the key inputs in the value in use

calculation including the operating margins forecast

to be achieved. We also considered the impact of

the work we performed for the purposes of

Goodwill including where we used our PwC

valuation team as auditors’ expert to assess an

independent WACC rate range, with reference to

comparable businesses, and to assess whether

management’s rate is within a reasonable range,

and also to assess the long term growth rate

applied. We considered the extent to which the

considerations of climate change, such as capital

expenditure on battery, electric and hydrogen fuel

cell vehicle fleets had been reflected in the

underlying cash flows. We also verified adjustments

made to the value in use in respect of external and

intercompany debt within the subsidiaries. Based

on our procedures performed we did not identify

any matters indicating that management’s model

was inappropriate. Based on the above factors we

concur with management that there have not been

any impairment triggers in relation to the carrying

value of the investment in the Bus division. In

addition, we have assessed investments in other

statutory entities across the Group and concluded

that there are no impairment indicators which would

require an impairment assessment. Consideration

is also given to whether there are indications that

impairments previously booked should be reversed.

We have assessed the disclosures provided and

consider them to be appropriate.

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123

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion

on the financial statements as a whole, taking into account the structure of the group and the company, the

accounting processes and controls, and the industry in which they operate.

The Group is organised into two operating divisions, First Bus and First Rail. There are over 130 reporting

units within the consolidation, the majority of which are inactive although there is some trading activity in

nine reporting units in addition to those included in Group reporting scope. We have defined a component

as a business unit where legal entities have been grouped together based on the fact they have the same

management, the same control environment and also considering the way the component reports to the

group. We have determined there are six components required for Group reporting as follows: SWR, GWR,

AWC and First Bus as full scope components, with Hull Trains and Lumo reporting on certain financial

statement line items contributing to operating profit. We have also performed audit procedures over

significant or large balances outside of the in scope entities.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the process management adopted

to assess the extent of the potential impact of climate risk on the Group’s financial statements and support

the disclosures made within the Note 2 and Note 11.

In addition to enquiries with management, we also:



Read the governance processes in place to assess climate risk



Read additional reporting made by the entity on climate including its Environmental Performance Report

We challenged the completeness of management’s climate risk assessment by:



Reading external reporting made by management including the Carbon Disclosure Project submissions



Reading the entity’s website /communications for details of climate related impacts

Management has made commitments to operate a fully zero emission Bus fleet by 2035. Management

considers the impact of climate risk does give rise to a potential material financial statement impact.

The key areas of the financial statements where management evaluated that climate risk has a potentially

significant impact are disclosures relating to impairment assessment of goodwill and carrying value of

investments in subsidiaries.

Using our knowledge of the business we evaluated management’s risk assessment, its estimates as set

out in note 2 of the financial statements and resulting disclosures where significant. We considered the

following areas that could potentially be materially impacted by climate risk and consequently we focused

our audit work in these areas:



Valuation of goodwill



Carrying value of investment is subsidiaries

To respond to the audit risks identified in these areas we tailored our audit approach to address these, in

particular, we:



Challenged management on how the impact of climate commitments made by the Group would impact

the assumptions within the discounted cash flows prepared by management that are used in the Group’s

and Company’s impairment analysis.



Evaluated whether the impact of both physical and transition risks arising due to climate risk had been

appropriately included in the recoverable value of the Group’s assets.



Challenged whether the impact of climate risk in the Directors’ assessments and disclosures of going

concern and viability were consistent with management’s climate impact assessment.

We also considered the consistency of the disclosures in relation to climate change (including the

disclosures in the Task Force on Climate-related Financial Disclosures (TCFD) section) within the Annual

Report with the financial statements and our knowledge obtained from our audit.

Our procedures did not identify any material impact in the context of our audit of the financial statements

as a whole, or our key audit matters for the period ended 29 March 2025.

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124

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the

scope of our audit and the nature, timing and extent of our audit procedures on the individual financial

statement line items and disclosures and in evaluating the effect of misstatements, both individually and in

aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as

follows:

Financial statements – group

Financial statements – company

Overall materiality

£20,000,000 (2024: £20,000,000).

£12,400,000 (2024: £13,600,000).

How we determined it

Based on 0.4% of revenue

Based on 1% of total assets

Rationale for benchmark applied

Revenue is considered to be the

most appropriate benchmark for

the financial year. In the

engagement leader’s judgement

£20 million is an appropriate

materiality for a group of the

scale and size of FirstGroup plc.

The entity is a holding company

of the rest of the Group and is

not a trading entity. Therefore an

asset based measure is

considered appropriate.

For each component in the scope of our group audit, we allocated a materiality that is less than our

overall group materiality. The range of materiality allocated across components was between £2,075,200

and £19,00,000.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate

of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use

performance materiality in determining the scope of our audit and the nature and extent of our testing

of account balances, classes of transactions and disclosures, for example in determining sample sizes.

Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £15,000,000

(2024: £15,000,000) for the group financial statements and £9,300,000 (2024: £10,200,000) for the

company financial statements.

In determining the performance materiality, we considered a number of factors – the history of

misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded

that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our

audit above £1,000,000 (group audit) (2024: £1,000,000) and £620,000 (company audit) (2024: £680,000) as

well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt

the going concern basis of accounting included:



obtaining and agreeing management’s going concern assessment to the business’ board approved plan

and ensuring that the base case scenario indicates that the business generates sufficient cash flows to

meets its obligations within the going concern assessment period while complying with covenant

arrangements;



considering the extent to which the group’s and company’s future cash flows might be adversely

affected by discontinuation of Government support, return of National Rail Contracts to public

ownership, the impact of contingent liabilities, pending litigation, or cost of living;



reviewing management’s cash flow forecasts, assessing the existing sources of finance and considering

the overall impact on liquidity;



ensuring the mathematical accuracy of management’s models;



evaluating management’s severe but plausible scenario and ensuring this is appropriately modelled

through the cash flows;



considering the risk of breach of the covenant arrangements in place for external borrowings under the

severe but plausible scenario;



evaluating whether the cash flows in the going concern period include the costs associated with

achieving the group’s climate change goals such as capital expenditure on battery, electric and

hydrogen fuel cell vehicle fleet;



performing further sensitivity analysis on the severe but plausible scenario;



considering the adequacy of the disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s

ability to continue as a going concern for a period of at least twelve months from when the financial

statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis

of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee

as to the group’s and the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we

have nothing material to add or draw attention to in relation to the directors’ statement in the financial

statements about whether the directors considered it appropriate to adopt the going concern basis of

accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in

the relevant sections of this report.

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125

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information. Our

opinion on the financial statements does not cover the other information and, accordingly, we do not

express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of

assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we

identify an apparent material inconsistency or material misstatement, we are required to perform

procedures to conclude whether there is a material misstatement of the financial statements or a material

misstatement of the other information. If, based on the work we have performed, we conclude that there is

a material misstatement of this other information, we are required to report that fact. We have nothing to

report based on these responsibilities.

With respect to the Strategic report and Directors’ report and additional disclosures, we also considered

whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to

report certain opinions and matters as described below.

Strategic report and Directors’ report and additional disclosures

In our opinion, based on the work undertaken in the course of the audit, the information given in the

Strategic report and Directors’ report and additional disclosures for the period ended 29 March 2025 is

consistent with the financial statements and has been prepared in accordance with applicable legal

requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in

the course of the audit, we did not identify any material misstatements in the Strategic report and

Directors’ report and additional disclosures.

Directors’ Remuneration

In our opinion, the part of the Remuneration Committee report to be audited has been properly prepared in

accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term

viability and that part of the corporate governance statement relating to the company’s compliance with

the provisions of the UK Corporate Governance Code specified for our review. Our additional

responsibilities with respect to the corporate governance statement as other information are described in

the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of

the corporate governance statement is materially consistent with the financial statements and our knowledge

obtained during the audit, and we have nothing material to add or draw attention to in relation to:



The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;



The disclosures in the Annual Report that describe those principal risks, what procedures are in place to

identify emerging risks and an explanation of how these are being managed or mitigated;



The directors’ statement in the financial statements about whether they considered it appropriate to

adopt the going concern basis of accounting in preparing them, and their identification of any material

uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve

months from the date of approval of the financial statements;



The directors’ explanation as to their assessment of the group’s and company’s prospects, the period

this assessment covers and why the period is appropriate; and



The directors’ statement as to whether they have a reasonable expectation that the company will be able

to continue in operation and meet its liabilities as they fall due over the period of its assessment,

including any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company was

substantially less in scope than an audit and only consisted of making inquiries and considering the

directors’ process supporting their statement; checking that the statement is in alignment with the relevant

provisions of the UK Corporate Governance Code; and considering whether the statement is consistent

with the financial statements and our knowledge and understanding of the group and company and their

environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the

following elements of the corporate governance statement is materially consistent with the financial

statements and our knowledge obtained during the audit:



The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary for the members to assess the group’s and

company’s position, performance, business model and strategy;



The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems; and



The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating

to the company’s compliance with the Code does not properly disclose a departure from a relevant

provision of the Code specified under the Listing Rules for review by the auditors.

Strategic report

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Annual Report and Accounts 2025

126

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements,

the directors are responsible for the preparation of the financial statements in accordance with the

applicable framework and for being satisfied that they give a true and fair view. The directors are also

responsible for such internal control as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

company’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 the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to employment laws and regulations, and health and safety

legislation, and we considered the extent to which non-compliance might have a material effect on the

financial statements. We also considered those laws and regulations that have a direct impact on the

financial statements such as the Companies Act 2006 and UK tax legislation. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of

override of controls), and determined that the principal risks were related to posting inappropriate journal

entries including those to increase revenue and management bias within accounting estimates. The group

engagement team shared this risk assessment with the component auditors so that they could include

appropriate audit procedures in response to such risks in their work. Audit procedures performed by the

group engagement team and/or component auditors included:



Enquiries of management at the Group and divisional levels;



Enquiries of the Group’s legal teams;



Enquiries with component auditors;



Review of internal audit reports in so far as they related to the financial statements;



Identifying and testing journal entries, in particular certain journal entries posted with unusual account

combinations which result in an impact to revenue; and



Challenging estimates and judgements made by management in determining significant accounting

estimates, in particular in relation to valuation of pensions liabilities, valuation of complex investments

within the pension assets and recoverability of investments held by the parent.

There are inherent limitations in the audit procedures described above. We are less likely to become aware

of instances of non-compliance with laws and regulations that are not closely related to events and

transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement

due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate

concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances,

possibly using data auditing techniques. However, it typically involves selecting a limited number of items

for testing, rather than testing complete populations. We will often seek to target particular items for

testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to

draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s

website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body

in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not,

in giving these opinions, 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.

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127

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:



we have not obtained all the information and explanations we require for our audit; or



adequate accounting records have not been kept by the company, or returns adequate for our audit have

not been received from branches not visited by us; or



certain disclosures of directors’ remuneration specified by law are not made; or



the company financial statements and the part of the Remuneration Committee report to be audited are

not in agreement with the accounting records and returns; or



a corporate governance statement has not been prepared by the company.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on

5 November 2020 to audit the financial statements for the year ended 27 March 2021 and subsequent

financial periods. The period of total uninterrupted engagement is five years, covering the years ended

27 March 2021 to 29 March 2025.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules

to include these financial statements in an annual financial report prepared under the structured digital

format required by DTR 4.1.15R – 4.1.18R and filed on the National Storage Mechanism of the Financial

Conduct Authority. This auditors’ report provides no assurance over whether the structured digital format

annual financial report has been prepared in accordance with those requirements.

Matthew Mullins (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Watford

10 June 2025

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Annual Report and Accounts 2025

128

Introduction

Financial statements

Independent auditors’ report to the members of FirstGroup plc

continued

Continuing Operations

Notes

2025

£m

2024

£m

Revenue

3,5

5,066.3

4,715.1

Operating costs before LGPS pension settlement and related charges

(4,843.7)

(4,521.7)

LGPS pension settlement and related charges

–

(146.9)

Total operating costs

(4,843.7)

(4,668.6)

Operating profit

5,6

222.6

46.5

Investment income

7.7

16.7

Finance costs

(65.4)

(82.0)

Profit/(loss) before tax

164.9

(18.8)

Tax

(31.3)

15.1

Profit/(loss) from continuing operations

133.6

(3.7)

Profit/(loss) from discontinued operations

4.7

(5.7)

Profit/(loss) for the year

138.3

(9.4)

Attributable to:

Equity holders of the parent

127.5

(15.9)

Non‑controlling interests

10.8

6.5

138.3

(9.4)

Earnings per share

Earnings per share for profit/(loss) from continuing operations attributable to the ordinary equity holders of the Company

Basic earnings per share

20.5p

(1.5)p

Diluted earnings per share

19.7p

(1.5)p

Earnings per share for profit/(loss) attributable to the ordinary equity holders of the Company

Basic earnings per share

21.3p

(2.4)p

Diluted earnings per share

20.5p

(2.4)p

Adjusted results (from continuing operations)

Adjusted operating profit

222.8

204.3

Adjusted profit before tax

165.1

139.0

Adjusted EPS

19.4p

16.7p

Adjusted diluted EPS

18.6p

16.1p

Adjusted for certain items as set out in note 4.

The accompanying notes form an integral part of this consolidated income statement.

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Annual Report and Accounts 2025

129

Introduction

Financial statements

Consolidated income statement

For the 52 weeks ended 29 March 2025/53 weeks ended 30 March 2024

Notes

2025

£m

2024

£m

Profit/(loss) for the year

138.3

(9.4)

Items that will not be reclassified subsequently to profit or loss

Actuarial gains/(losses) on defined benefit pension schemes

32.9

(77.7)

Gain on termination of LGPS participation from restricted accounting surplus

–

161.0

Deferred tax on actuarial gains on defined benefit pension schemes

(7.5)

(20.2)

25.4

63.1

Items that may be reclassified subsequently to profit or loss

Hedging instrument movements

(4.0)

5.1

Deferred tax on hedging instrument movements

1.0

(0.5)

Cumulative loss on hedging instruments reclassified to the income statement

–

(2.7)

Exchange differences on translation of foreign operations – continuing operations

(2.1)

–

Exchange differences on translation of foreign operations – discontinued operations

3.1

(6.6)

(2.0)

(4.7)

Other comprehensive income for the year

23.4

58.4

Total comprehensive income for the year

161.7

49.0

Attributable to:

Equity holders of the parent

150.9

42.5

Non‑controlling interests

10.8

6.5

161.7

49.0

Total comprehensive income/(loss) for the year attributable to owners of FirstGroup plc arises from:

Attributable to:

Continuing operations

151.6

62.1

Discontinued operations

10.1

(13.1)

161.7

49.0

The accompanying notes form an integral part of this consolidated statement of comprehensive income.

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Annual Report and Accounts 2025

130

Introduction

Financial statements

Consolidated statement of comprehensive income

For the 52 weeks ended 29 March 2025/53 weeks ended 30 March 2024

Notes

2025

£m

2024

£m

Non‑current assets

Goodwill

148.2

111.0

Other intangible assets

16.1

10.4

Property, plant and equipment

2,028.0

2,155.4

Deferred tax assets

47.2

39.6

Retirement benefit assets

27.3

6.4

Derivative financial instruments

0.3

0.4

Financial asset

104.2

99.6

Investments

2.6

2,373.9

2,425.4

Current assets

Inventories

30.8

25.9

Trade and other receivables

761.6

852.6

Current tax assets

7.4

4.4

Cash and cash equivalents

487.1

496.5

Derivative financial instruments

0.2

2.0

1,287.1

1,381.4

Assets held for sale

–

0.6

Total assets

3,661.0

3,807.4

Current liabilities

Trade and other payables

1,208.2

1,258.6

Tax liabilities – Current tax liabilities

–

0.4

– Other tax and social security

59.6

39.6

Borrowings

482.9

626.5

Derivative financial instruments

3.0

3.4

Provisions

96.2

74.6

Current liabilities

1,849.9

2,003.1

Net current liabilities

(562.8)

(621.7)

Notes

2025

£m

2024

£m

Non‑current liabilities

Borrowings

979.0

1,018.3

Derivative financial instruments

1.0

1.3

Retirement benefit liabilities

4.6

31.7

Provisions

114.0

111.3

1,098.6

1,162.6

Total liabilities

2,948.5

3,165.7

Net assets

712.5

641.7

Equity

Share capital

37.5

Share premium

693.3

Hedging reserve

(2.2)

(1.8)

Other reserves

22.4

Own shares

(31.1)

(20.4)

Translation reserve

(21.9)

(22.9)

Retained earnings

(1.3)

(74.8)

Equity attributable to equity holders of the parent

696.7

633.3

Non‑controlling interests

15.8

8.4

Total equity

712.5

641.7

The accompanying notes form an integral part of this consolidated balance sheet.

Ryan Mangold

10 June 2025

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Annual Report and Accounts 2025

131

Introduction

Financial statements

Consolidated balance sheet

As at 29 March 2025/30 March 2024

capital

(note 26)

£m

premium

£m

Hedging

reserve

(note 27)

£m

Other

reserves

(note 27)

£m

Own

(note 27)

£m

Translation

reserve

(note 28)

£m

Retained

earnings/

(deficit)

£m

Total

£m

Non‑

controlling

interests

£m

Total

equity

£m

Balance at 26 March 2023

37.5

693.2

(0.7)

22.4

(15.4)

(16.3)

19.5

740.2

10.6

750.8

(Loss)/profit for the period

–

(15.9)

6.5

(9.4)

Other comprehensive income/(loss) for the period

–

1.9

–

(6.6)

63.1

58.4

–

58.4

Total comprehensive income/(loss) for the period

–

1.9

–

(6.6)

47.2

42.5

6.5

49.0

Hedging instrument movements transferred to balance sheet (net of tax)

–

(3.0)

–

(3.0)

–

(3.0)

Transactions with owners in their capacity as owners

Shares issued

–

0.1

–

0.1

–

0.1

Shares bought back but not yet cancelled

–

(74.7)

–

(74.7)

Liability for shares not yet bought back

–

(41.1)

–

(41.1)

Non‑controlling interest buy‑out

–

(2.2)

Dividends paid

–

(29.5)

(6.5)

(36.0)

Movement in EBT and treasury shares

–

(5.0)

–

(11.5)

(16.5)

–

(16.5)

Share‑based payments

–

15.6

–

15.6

Deferred tax on share‑based payments

–

(0.3)

–

(0.3)

Balance at 30 March 2024

37.5

693.3

(1.8)

22.4

(20.4)

(22.9)

(74.8)

633.3

8.4

641.7

Balance at 31 March 2024

37.5

693.3

(1.8)

22.4

(20.4)

(22.9)

(74.8)

633.3

8.4

641.7

Profit for the period

–

127.5

10.8

138.3

Other comprehensive income/(loss) for the period

–

(3.0)

–

1.0

25.4

23.4

–

23.4

Total comprehensive income/(loss) for the period

–

(3.0)

–

1.0

152.9

150.9

10.8

161.7

Hedging instrument movements transferred to balance sheet (net of tax)

–

2.6

–

2.6

–

2.6

Transactions with owners in their capacity as owners

Shares bought back but not yet cancelled

–

(50.4)

–

(50.4)

Dividends paid

–

(34.2)

(3.4)

(37.6)

Movement in EBT and treasury shares

–

(10.7)

–

(5.4)

(16.1)

–

(16.1)

Share‑based payments

–

10.5

–

10.5

Deferred tax on share‑based payments

–

0.1

–

0.1

Balance at 29 March 2025

37.5

693.3

(2.2)

22.4

(31.1)

(21.9)

(1.3)

696.7

15.8

712.5

The accompanying notes form an integral part of this consolidated statement of changes in equity.

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Annual Report and Accounts 2025

132

Introduction

Financial statements

Consolidated statement of changes in equity

For the 52 weeks ended 29 March 2025/53 weeks ended 30 March 2024

Notes

2025

£m

2024

£m

Cash generated by operations

828.2

626.6

Tax paid

(6.0)

(2.2)

Interest paid

(68.0)

(81.1)

Net cash from operating activities

754.2

543.3

Investing activities

Interest received

7.7

15.7

Proceeds from disposal of property, plant and equipment

17.9

42.8

Purchases of property, plant and equipment

(150.7)

(216.9)

Purchases of software

(5.7)

(2.4)

Proceeds from capital grant funding

66.4

94.8

Proceeds from contingent consideration

–

65.3

Settlement of foreign exchange hedge

–

4.1

Acquisition of businesses (net of cash acquired)

(86.5)

(13.6)

Net cash used in investing activities

(150.9)

(10.2)

Financing activities

Shares purchased by Employee Benefit Trust

(16.1)

(16.5)

Treasury shares purchased via share buyback scheme and directly associated costs

(91.8)

(117.6)

External dividends paid

(34.2)

(29.5)

Dividends paid to non‑controlling shareholders

(3.4)

(6.5)

Non‑controlling interest buy‑out

–

(3.1)

Term loan drawdown

65.0

–

Proceeds from rolling credit facility

80.0

–

Repayment of rolling credit facility

(75.0)

–

Repayment of bond issues

(96.2)

(88.0)

Repayment of lease liabilities

(503.5)

(506.9)

Repayment of asset backed financial liabilities

(9.8)

(19.3)

Proceeds from asset backed financial liabilities

36.7

–

Repayment of loan notes

–

(0.6)

Proceeds from NextGen facility

6.8

13.1

Fees for finance facilities

–

(1.4)

Net cash flow used in financing activities

(641.5)

(776.3)

Net decrease in cash and cash equivalents before foreign exchange movements

(38.2)

(243.2)

Cash and cash equivalents at beginning of year

468.7

708.5

Foreign exchange movements

0.2

3.4

Cash and cash equivalents at end of year

430.7

468.7

Cash flows of discontinued operations are shown in note 20.

Notes

2025

£m

2024

£m

Reconciliation to cash flow statement

Cash and cash equivalents – balance sheet

487.1

496.5

Bank overdraft

(56.4)

(27.8)

Cash and cash equivalents at end of year per consolidated balance sheet

430.7

468.7

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Annual Report and Accounts 2025

133

Introduction

Financial statements

Consolidated cash flow statement

For the 52 weeks ended 29 March 2025/53 weeks ended 30 March 2024

Notes

2025

£m

2024

£m

Net decrease in cash and cash equivalents in year

(38.2)

(243.2)

Decrease in debt excluding leases

19.4

75.5

Repayment of lease liabilities and asset backed financial liabilities

513.3

526.2

Inception and reassessment of leases and asset backed financial liabilities

(324.7)

(237.5)

Foreign exchange movements

0.2

3.4

Other non‑cash movements

–

(0.1)

Movement in net debt in year

170.0

124.3

Net debt at beginning of year

(1,144.8)

(1,269.1)

Net debt at end of year

974.8

(1,144.8)

The accompanying notes form an integral part of this consolidated cash flow statement.

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Annual Report and Accounts 2025

134

Introduction

Financial statements

Note to the consolidated cash flow statement – reconciliation of net cash flow to movement in net debt

Financial statements

Introduction

Strategic report

Governance report

FirstGroup

Annual Report and Accounts 2025

135

Notes to the consolidated financial statements

1 General information

FirstGroup plc is a company incorporated in the United Kingdom under the Companies Act 2006.

The address of the registered office is 395 King Street, Aberdeen, Scotland, United Kingdom AB24 5RP.

The nature of the Group’s operations and its principal activities are set out in the Strategic report on

pages 04 to 70.

These financial statements are presented in pounds sterling. Foreign operations are included

in accordance with the accounting policies set out in note 2.

2 Material accounting policies

Basis of accounting

The consolidated financial statements of FirstGroup plc comply with UK‑adopted international

accounting standards and with the requirements of the Companies Act 2006. There were no unendorsed

standards effective for the period ended 29 March 2025 affecting these consolidated and separate

financial statements.

The financial statements have been prepared on the historical cost basis, except for the revaluation of

certain financial instruments, and on a going concern basis as described in the going concern statement

within the Strategic report on page 70.

As set out on page 69, the Group has undertaken detailed reviews of a range of severe but plausible

financial and operational scenarios using financial outlook modelling. Based on their review of the financial

forecasts and having regard to the risks and uncertainties to which the Group is exposed, the Directors

believe that the Company and the Group have adequate resources to continue in operational existence for

at least a 12‑month period from the date on which the financial statements were approved. Accordingly,

the financial statements have been prepared on a going concern basis.

The financial statements for the 52 weeks ended 29 March 2025 include the results and financial position

of the First Rail businesses for the year ended 31 March 2025 and the results and financial position of all

the other businesses for the 52 weeks ended 29 March 2025. The financial statements for the 53 weeks

ended 30 March 2024 include the results and financial position of the First Rail businesses for the year

ended 31 March 2024 and the results and financial position of all the other businesses for the 53 weeks

ended 30 March 2024.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities

controlled by the Company (its subsidiaries). Control exists when the Company has power over an investee

entity, exposure to variable returns from its involvement with the entity and the ability to use its power over

the entity to affect its returns.

Non‑controlling interests in subsidiaries are identified separately from the Group’s equity interest therein.

The present ownership interests of non‑controlling shareholders entitle their holders to a proportionate

share of net assets upon liquidation, and may initially be measured at fair value, or at the non‑controlling

interests’ proportionate share of their fair value of the acquiree’s identifiable net assets. The choice of

measurement is made on an acquisition‑by‑acquisition basis. Other non‑controlling interests are initially

measured at fair value. Subsequent to acquisition, the carrying amount of non‑controlling interests is the

amount of those interests at initial recognition plus the non‑controlling interests’ share of subsequent

changes in equity. Total comprehensive income is attributed to non‑controlling interests even if this results

in the non‑controlling interests having a deficit balance.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income

statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting

policies used into line with those used by the Group.

All intra‑group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The acquisition of subsidiaries is accounted for using the acquisitions method. The consideration

for each acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets

given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control

of the acquiree. Acquisition‑related costs are recognised in the income statement as incurred.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for

recognition under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date.

Financial statements

Introduction

Strategic report

Governance report

FirstGroup

Annual Report and Accounts 2025

136

Notes to the consolidated financial statements

continued

2 Significant accounting policies

continued

Assets and disposal groups held for sale and discontinued operations

Non‑current assets, or disposal groups comprising assets and liabilities, are classified as held for sale

if it is highly probable that they will be recovered primarily through sale rather than through continuing

use. This condition is regarded as met only when the sale is highly probable and the asset is available

for immediate sale in its present condition. Management must be committed to the sale which should

be expected to qualify for recognition as a completed sale within one year of the date of classification.

Such assets, or disposal groups, are measured at the lower of their carrying amount and fair value less

costs to sell. Impairment losses on initial classification as held for sale and subsequent gains and losses

on remeasurement are recognised in profit or loss.

A disposal group qualifies as a discontinued operation if it is a component of an entity that either has been

disposed of, or is classified as held for sale, and:



represents a separate major line of business or geographical area of operations; or



is part of a single coordinated plan to dispose of a separate major line of business or geographical area

of operations; or



is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented

as a single amount as profit or loss after tax from discontinued operations in the income statement.

Goodwill and intangible assets

Goodwill arising on consolidation is recognised as an asset at the date that control is acquired. Goodwill

is measured as the excess of the sum of the consideration transferred, the amount of any non‑controlling

interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity

over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units

(CGUs) which are tested for impairment annually, or more frequently where there is an indication that the

CGU may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the CGU,

the impairment loss is allocated to the goodwill of the CGU and then to the other assets of the CGU

pro‑rata on the basis of the carrying amount of each asset in the CGU. An impairment loss recognised for

goodwill is not reversed in a subsequent period. On disposal of a subsidiary, associate or jointly controlled

entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Computer software is recognised separately as an intangible asset and is carried at cost less accumulated

amortisation and accumulated impairment losses. Costs include software licences, website development,

costs attributable to the development, design and implementation of the computer software and internal

costs directly attributable to the software. Software is amortised on a straight‑line basis over its useful

economic life (three to five years).

Revenue recognition

Under IFRS 15 revenue is recognised when control of a good or service transfers to the customer.

The point at which goods and services are transferred to the customer is based on the fulfilment

of performance obligations.

As the Group has the right to consideration corresponding directly with the value of performance

completed to date, customer contract revenue is recognised consistent with the amount that the Group

has a right to invoice. The Group is therefore exercising the practical expedient not to explain transaction

prices allocated to unsatisfied performance obligations at the end of the reporting period.

Revenue principally comprises revenue from train passenger services, road passenger transport, and

certain management and maintenance services in the UK. Where appropriate, amounts are shown net

of rebates and sales taxes. An explanation of the types of revenue is set out below.

Note that revenues include contractual and direct fiscal support. This is covered in more detail further

on in this note.

Passenger revenues

Passenger revenues primarily relate to ticket sales through First Bus and the First Rail businesses.

Passenger revenue is recognised at both a point in time and over time. Ticket sales for journeys of less

than one week’s duration are recognised on the first date of travel. Ticket sales for season tickets, travel

cards and open‑return tickets are initially deferred then recognised over the period covered by the relevant

ticket. Concessionary amounts are recognised in the period in which the service is provided.

Contract revenues

Contract revenues mainly relate to tenders and route contracts in First Bus. Revenues are recognised as

the services are provided over the length of the contract and based on a transaction price which is defined

in the terms of the contract.

Rail contract subsidy receipts

Revenue in the First Rail businesses includes subsidy receipts from the Department for Transport (DfT)

for National Rail Contracts (NRCs), with amounts receivable under these arrangements including

certain funded operational projects. Revenue also includes amounts attributable to the Train Operating

Companies (TOCs), predominantly based on models of route usage, by the Railway Settlement Plan in

respect of passenger receipts. Revenue is recognised over time as the performance obligations are met

as agreed between the individual TOCs and the DfT.

Other revenues

Other revenues mainly relate to non‑rail subsidies, revenue arising from ancillary services to other rail

and road passenger service providers for maintenance, refuelling and other associated services and to

sundry third parties for the use of space at terminals and on‑board vehicles for other business activities,

e.g. retail outlets, taxi ranks, catering and advertising. Other revenues are recognised at both a point in

time and over time.

Financial statements

Introduction

Strategic report

Governance report

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Annual Report and Accounts 2025

137

Notes to the consolidated financial statements

continued

2 Significant accounting policies

continued

Contractual and direct fiscal support

The principal direct fiscal support recognised during the year comprised £347.8m (2024: £383.5m) of NRC

funding in the First Rail businesses, and £15.5m (2024: £25.0m) of funding and concessions (including the

£3 fare cap in England) in First Bus. These are recognised within revenue in accordance with IFRS 15 when

control of the good or service is transferred to the customer and the Group is entitled to 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, reimbursing operators

for any revenue foregone as a result of the reduced ticket prices. This scheme ran until December 2024,

whereupon the fare cap increased 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.

The extent to which certain costs are eligible for inclusion in claiming bus support grant income and how

certain costs should be determined for the purposes of the schemes remains subject to reconciliation

processes. Income is recognised in the income statement in the same period in which the related shortfall

of revenue over costs is incurred to the extent there is reasonable certainty that: (a) the Group will comply

with the conditions attaching to the grant and (b) the grant will be received and retained by the Group,

taking account of the potential adjustments to grant payments as a result of any reconciliation process.

First Rail

The Emergency Measures Agreements (EMAs), the Emergency Recovery Measures Agreement (ERMAs)

and the National Rail Contracts (NRCs) transferred substantially all revenue and substantially all cost risk

to the government and for the current and prior periods our First Rail contracts were operated under the

terms of these arrangements:



GWR operated under an NRC to June 2028, with a minimum core period to June 2025.



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 25 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 contracts

subsidy receipts, in line with the revenue recognition policy for contract subsidy receipts from the DfT.

Disaggregated revenue by operating segment is set out in note 5.

Leasing

Lease identification

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is,

or contains, a lease if the contract conveys the right to control the use of an identified asset for a period

of time in exchange for consideration.

Right of use asset

At the commencement date, the right of use asset is initially measured at cost, which comprises the initial

amount of the lease liability adjusted for any lease payments made at or before the commencement date,

less any incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred

by the Group to dismantle and remove the underlying asset or restore the underlying asset or the site on

which it is located.

The right of use asset is depreciated on a straight‑line basis over the shorter of the estimated useful life

of the asset, the lease term or current expected contract terms for rail TOCs. In addition, the right of use

asset is periodically reduced by impairment losses, if applicable, and adjusted for certain remeasurements

of the lease liability.

Lease liability

At the commencement date of the lease, the lease liability is initially measured at the present value of

lease payments to be made over the lease term. The lease payments include fixed payments (including

in‑substance fixed payments) less any lease incentives receivable, variable lease payments that depend

on an index or a rate, and amounts expected to be paid by the Group under residual value guarantees.

The lease payments also include the exercise price of a purchase option if the Group is reasonably

certain to exercise that option. Payments of penalties for terminating a lease, if the lease term reflects

the Group exercising the option to terminate the lease, are also included. The payments are discounted

at the incremental borrowing rate since the rates implicit in the leases are not readily available.

The lease liability is measured by increasing the carrying amount to reflect the interest on the lease liability

and reducing the carrying amount to reflect the lease payments made. The carrying value is remeasured

when there is a change in future lease payments arising from a change in an index or rate, if there is a change

in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the

Group changes its assessment of whether it will exercise a purchase, extension or termination option.

Lease incentives

The Group assesses reimbursements from lessors, to establish whether these represent lease incentives.

Where a lease incentive is identified, the income is spread over the term of the related lease.

Short‑term leases and leases of low‑value assets

The Group applies the short‑term lease recognition exemption to selected leases that have a lease term of

12 months or less from the commencement date and do not contain a purchase option and where it is not

reasonably certain that the lease term will be extended. It also applies the low‑value assets recognition

exemption to leases of assets of low value based on the value of the asset when it is new, regardless of the

age of the asset being leased. Lease payments on short‑term leases and leases of low‑value assets are

recognised as an expense on a straight‑line basis over the lease term.

On the balance sheet, right of use assets have been included in property, plant and equipment and lease

liabilities have been included in borrowings.

Financial statements

Introduction

Strategic report

Governance report

FirstGroup

Annual Report and Accounts 2025

138

Notes to the consolidated financial statements

continued

2 Significant accounting policies

continued

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary

economic environment in which it operates (its functional currency). For the purpose of the consolidated

financial statements, the results and financial position of each Group company are expressed in pounds

sterling, which is the functional currency of the Company, and the presentation currency for the

consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the

functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At

each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are

retranslated at the rates prevailing on the balance sheet date. Non‑monetary assets and liabilities carried

at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date

when the fair value was determined. Non‑monetary items that are measured in terms of historical cost in

a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary

items, are included in profit or loss for the period. Exchange differences arising on the retranslation of

non‑monetary items carried at fair value are included in profit or loss for the period, except for differences

arising on the retranslation of non‑monetary items in respect of which gains and losses are recognised

within other comprehensive income. For such non‑monetary items, any exchange component of that gain

or loss is also recognised within other comprehensive income.

In order to hedge its exposure to certain foreign exchange risks, the Group holds currency swaps and

borrowings in foreign currencies (see note 23 for details of the Group’s policies in respect of foreign

exchange risks).

On consolidation, the assets and liabilities of the Group’s overseas operations are translated at the

closing exchange rates on the balance sheet date. Income and expense items are translated at the

average exchange rates for the period. Exchange differences arising from the average exchange rates

used and the period end rate, if any, are classified as equity and transferred to the Group’s translation

reserve. Such translation differences are recognised as income or as expenses in the period in which the

operation is disposed of.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,

which are assets that necessarily take a substantial period of time to get ready for their intended use or

sale, are added to the cost of those assets, until such time as the assets are substantially ready for their

intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

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. 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 may 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.

Management considers that this overall basis supports year‑on‑year business performance comparisons,

to underpin planning and decision making on resource allocation. The Group does not consider the

non‑GAAP measures to be more important than, or superior to, IFRS measures. See note 4 for the

reconciliation to non‑GAAP measures and performance.

Retirement benefit costs

The Group operates or participates in a number of pension schemes, which include both defined benefit

schemes and defined contribution schemes.

Payments to defined contribution plans are charged as an expense as they fall due. There is no further

obligation to pay contributions into a defined contribution plan once the contributions specified in the plan

rules have been paid.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit

Method, with actuarial updates being carried out at each balance sheet date. Actuarial gains and losses

are recognised in full in the period in which they occur. They are recognised outside the income statement

and presented in the consolidated statement of other comprehensive income.

All past service costs are recognised immediately in the consolidated income statement.

Where changes to the benefits in payment on defined benefit pension schemes require a change

in scheme rules or ratification by the Trustees, the change is recognised as a past service charge or credit

in the income statement. Where changes in assumptions can be made without changing the Trustee

agreement, these are recognised as a change in assumptions in other comprehensive income.

The retirement benefit position recognised in the balance sheet represents the present value of the defined

benefit obligation as reduced by the fair value of scheme assets. Any residual asset resulting from this

calculation is limited to refunds economically available to the Company, in the form of either a public sector

payment or the present value of future service costs recognised via suspension of cash contributions.

Various TOCs in the First Rail business participate in the Railways Pension Scheme (RPS), which is an

industry‑wide defined benefit scheme. The Group is obligated to fund the relevant section of the scheme

over the period for which the contract is held. The full liability is recognised on the balance sheet, which is

then reduced by a ‘contract adjustment’ so that the net liability reflects the Group’s obligations to fund the

scheme over the contract term, subject to any changes in the schedule of contributions following a

statutory valuation.

Retirement benefits are also covered in the Key sources of estimation uncertainty section of note 2 below.

Tax

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as

reported in the income statement because it excludes items of income or expense that are taxable or

deductible in other years and it further excludes items that are never taxable or deductible. The Group’s

liability for current tax is calculated using tax rates that have been enacted or substantively enacted by

the balance sheet date and includes an estimate of the tax which could be payable as a result of differing

interpretation of tax laws.

Financial statements

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Deferred tax is the tax expected to be payable or recoverable on differences between the carrying

amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the

computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax

liabilities are generally recognised for all taxable temporary differences and deferred tax assets are

recognised to the extent that it is probable that taxable profits will be available against which deductible

temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary

difference arises from the initial recognition of goodwill, or from the initial recognition (other than in a

business combination) of other assets and liabilities in a transaction that affects neither the taxable profit

nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in

subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the

reversal of the temporary difference and it is probable that the temporary difference will not reverse in the

foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the

extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the

asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability

is settled or the asset is realised and is based on the estimated tax consequences of items that are subject

to differing interpretations of tax laws. Deferred tax is charged or credited in the income statement, except

when it relates to items charged or credited in other comprehensive income or directly to equity, in which

case the deferred tax is also dealt with within other comprehensive income or directly in equity respectively.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax

assets against current tax liabilities and when they relate to income taxes levied by the same tax authority

and the Group intends to settle its current tax assets and liabilities on a net basis.

The Group follows IFRIC 23 Uncertainty over Income Tax Treatments. IFRIC 23 sets out how to determine

the accounting tax position when there is uncertainty over income tax treatments. The interpretation

requires the Group to determine whether uncertain tax positions are assessed separately or as a Group,

and



Assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed

to be used, by an entity in its income tax filings:



If yes, the Group should determine its accounting tax position consistently with the tax treatment used

or planned to be used in its income tax filings.



If no, the Group should reflect the effect of uncertainty in determining its accounting tax position using

either the most likely amount or the expected value method.

Property, plant and equipment

Properties for provision of services or administrative purposes are carried at cost, less any recognised

impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in

accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other

property assets, commences when the assets are ready for their intended use.

Passenger carrying vehicles and other plant and equipment are stated at cost less accumulated

depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, other than freehold land, the land element

of long leasehold properties or on assets in the course of construction, over their estimated useful lives,

using the straight‑line method, on the following bases:

Freehold buildings	50 years straight‑line
Passenger carrying vehicles	seven to 17 years straight‑line
Other plant and equipment	three to 25 years straight‑line

Assets specific to Train Operating Companies are depreciated over the lesser of their estimated useful

lives or the expected rail contract term.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between

the sales proceeds and the carrying amount of the asset and is recognised in income.

Capital grants

Capital grants relating to property, plant and equipment are held in other payables and released to the

income statement over the expected useful lives of the assets concerned. Capital grants are

not recognised until there is a reasonable assurance that the Group will comply with the conditions

attaching to them and that the grants will be received.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets

to determine whether there is any indication that those assets have suffered an impairment loss. If any

such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of

the impairment loss (if any). Where the asset does not generate cash flows that are independent from other

assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,

the estimated future cash flows are discounted to their present value using a pre‑tax discount rate that

reflects current market assessments of the time value of money and the risks specific to the asset for

which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying

amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised as an

expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to

the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed

the carrying amount that would have been determined had no impairment loss been recognised for the

asset or CGU in prior years. A reversal of an impairment loss is recognised as income immediately.

Financial statements

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Inventories

Inventories of spare parts and consumables are stated at the lower of cost and net realisable value, after making

appropriate allowances for obsolete and slow‑moving items. Cost comprises direct materials and, where

applicable, those overheads that have been incurred in bringing the inventories to their present location and

condition. Cost is calculated using the weighted average cost method. Where the purchase of inventory was the

hedged item in a cash flow hedge relationship, the initial carrying amount of the recognised inventory is adjusted

by the associated hedging gain or loss transferred from the hedging reserve (a basis adjustment). There are no

material inventory allowances.

Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a

party to the contractual provisions of the instrument.

Financial assets

Financial assets can be measured at amortised cost, fair value through profit or loss or fair value through other

comprehensive income. The measurement basis is determined by reference to both the business model for

managing the financial asset and the contractual cash flow characteristics of the financial asset.

Financial assets are classified into one of three primary categories:

Financial assets at amortised cost

Financial assets at amortised cost are non‑derivative financial assets held for collection of contractual cash flows

where those cash flows represent solely payments of principal and interest. Financial assets at amortised cost

are subsequently measured using the effective interest method and are subject to impairment. Gains and losses

are recognised in profit or loss when the asset is derecognised, modified or impaired.

Fair value through profit and loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets

designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to

be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose

of selling or repurchasing in the near term. Derivatives are also classified as held for trading unless they are

designated as effective hedging instruments.

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value

with net changes in fair value recognised in the income statement within finance costs. Transaction costs arising

on initial recognition are expensed in the income statement.

Fair value through other comprehensive income

The Group does not have any financial assets held at fair value through other comprehensive income.

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets

of the Group after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the

proceeds received net of direct issue costs.

Financial liabilities

Bank borrowings

Interest‑bearing bank loans and overdrafts are measured on an amortised cost basis.

Bonds and loan notes

These are measured either on an amortised cost basis or at fair value, if designated.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the

effective interest rate method.

Derivative financial instruments and hedge accounting

The Group uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate and

commodity risks. Use of such financial instruments is governed by policies and delegated authorities approved

by the Board. The Group does not hold or issue derivative financial instruments for trading purposes. The main

derivative financial instruments used by the Group are interest rate swaps, fuel swaps, and cross currency

interest rate swaps. Such instruments are initially recognised at fair value and subsequently remeasured to fair

value at the reported balance sheet date. The fair values are calculated by reference to market exchange rates,

interest rates and fuel prices at the period end, and supported by counterparty confirmations. Where derivatives

do not qualify for hedge accounting, any gains or losses on remeasurement are immediately recognised in the

Group income statement. Where derivatives qualify for hedge accounting, recognition of any resultant gain or

loss depends on the nature of the hedge relationship and the item being hedged. At inception of designated

hedging relationships, the Group documents the risk management objective and strategy for undertaking the

hedge, the nature of the risks being hedged and the economic relationship between the item being hedged and

the hedging instrument.

Fair value hedging: The fair value change on qualifying hedging instruments is recognised in profit or loss.

The carrying amount of a hedged item not already measured at fair value is adjusted for the fair value change

attributable to the hedged risk with a corresponding entry in profit or loss.

Cash flow hedging: The effective portion of changes in the fair value of derivatives and other qualifying hedging

instruments that are designated and qualify as cash flow hedges is recognised in other comprehensive income

and accumulated under the heading of hedging reserve, limited to the cumulative change in fair value of the

hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised

immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in

equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line

as the recognised hedged item. However, when the hedged forecast transaction results in the recognition of

a non‑financial item such as inventory, the gains and losses previously recognised in other comprehensive

income and accumulated in equity are removed from equity and included as a basis adjustment in the initial

measurement of the cost of that item. This transfer does not affect other comprehensive income, however the

hedging gains and losses that will subsequently be transferred as basis adjustments are categorised as amounts

that may be reclassified subsequently to profit or loss, as such a reclassification may occur in the event that the

hedged transaction is no longer expected to occur. Furthermore, if the Group expects that some or all of the loss

accumulated in the cash flow hedging reserve will not be recovered in the future, that amount is immediately

reclassified to profit or loss.

Net investment hedging: Derivative financial instruments are classified as net investment hedges when they

hedge the Group’s net investment in an overseas operation. The effective element of any foreign exchange gain

or loss from remeasuring the derivative instrument is recognised directly in other comprehensive income and

accumulated in the foreign currency translation reserve. Any ineffective element is recognised immediately in the

Group income statement. Gains and losses accumulated in the foreign currency translation reserve are included

in the Group income statement on the disposal or partial disposal of the foreign operation.

Financial statements

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Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable

that the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of

the expenditure required to settle the obligation at the balance sheet date and are discounted to present value

where the effect is material.

Self‑insurance

The Group’s policy is to self‑insure high‑frequency, low‑value claims within the businesses. In addition there are

typically a smaller number of major claims during a financial year for which cover is obtained through third party

insurance policies subject to an insurance deductible. Where the Group holds legacy self‑insurance exposures

related to disposed businesses, insurance and re‑insurance policies have been purchased to de‑risk this

exposure. Provision is made under IAS 37 Provisions, Contingent Liabilities and Contingent Assets for the

estimated cost of settling uninsured claims for incidents occurring prior to the balance sheet date. The provision

is discounted to appropriately reflect the timing of future cash claims settlements. Self‑insurance is also covered

in the Key sources of estimation uncertainty section of note 2 below.

Share‑based payments

The Group issues equity‑settled share‑based payments to certain employees. Equity‑settled share‑based

payments are measured at fair value at the date of grant. The fair value is expensed over the vesting period,

based on the Group’s estimate of shares that will eventually vest and is adjusted for the effects of

non‑market‑based vesting conditions.

Fair value is measured by use of a Black‑Scholes or other appropriate valuation models. The expected life used

in the model has been adjusted, based on management’s best estimate, for the effects of non‑transferability,

exercise restrictions and behavioural considerations.

Joint operations

Where the Group assesses a joint arrangement to be a joint operation, it recognises its direct right to the assets,

liabilities, revenue and expenses of the joint operation, and its share of any jointly held or incurred assets,

liabilities, revenue and expenses. These have been incorporated in the financial statements under the

appropriate headings.

Dividend distributions

Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

Adoption of new and revised standards

The accounting policies adopted are consistent with those of the previous financial year except for the changes

arising from new standards and amendments to existing standards which have been adopted in the current year.

The following amended standards and interpretations were adopted by the Group during the year:



Amendments to IAS 1: Classification of Liabilities as Current or Non‑current



Amendments to IAS 1: Non‑current Liabilities with Covenants



Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements



Amendments to IFRS 16: Lease Liability in a Sale and Leaseback

There has been no material change as a result of applying these amendments. No significant impact is expected

from any of the future standards and amendments that are visible, with the exception of IFRS 18 Presentation

and Disclosure in Financial Statements, which is effective from 1 January 2027, which is expected to change the

presentation of the consolidated financial statements.

Key sources of estimation uncertainty and significant judgements

The preparation of financial statements in conformity with generally accepted accounting principles requires the

use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

financial statements and the reported amounts of revenues and expenses during the reporting period. 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. Revisions to

accounting estimates are recognised in the period in which the estimate is revised if the revision affects only

that period, or in the period of revision and future periods if the revision affects both current and future periods.

The following are the critical estimates and judgements that the Directors have made in the process of applying

the Group’s accounting policies and that have the most significant effect on the amounts recognised in the

financial statements.

Acquisition accounting adjustments relating to First Bus London

On 28 February 2025, the Group completed its acquisition of London bus operator RATP Dev Transit London

Limited and its subsidiaries (First Bus London).

The Group is currently undertaking the purchase price allocation exercise for First Bus London, and this has

identified a number of adjustments to reflect the fair value of the assets and liabilities acquired. IFRS 3 Business

Combinations allows the Group 12 months from the date of acquisition to finalise this exercise, and the standard

acknowledges that it will be necessary to estimate certain acquisition adjustments and fair values. Owing to

the proximity of the acquisition to the reporting date, the acquisition adjustments and closing fair values are

therefore disclosed in the financial statements as provisional. These will be finalised within the timeframe

permitted by IFRS 3.

The key sources of estimation uncertainty and significant judgements resulting from the transaction relate to

the acquisition accounting exercise, and the recognition and measurement of assets acquired and liabilities

assumed. Key areas of judgement include, but are not limited to, the measurement of contract intangibles

and onerous contract provisions, the valuations of property, plant and equipment (including freehold land

and buildings), recognition of other liabilities and provisions, recognition and valuation of deferred tax assets,

and the resulting goodwill arising from the transaction. Note 29 provides more details on the provisional

acquisition accounting.

Impairment of assets in CGUs

The key sources of estimation uncertainty in relation to the potential risk of impairment of assets in CGUs relate

to the cash flow forecasts including significant judgements in deciding what assumptions to make regarding the

future financial performance of the CGU, the ongoing macroeconomic uncertainty, and the Group’s future

climate‑related targets and ambitions. This is covered in more detail in note 11.

Defined benefit pension arrangements

Railway Pension Scheme

As at the balance sheet date, the Group sponsored four sections of the Railway Pension Scheme (RPS), relating

to its obligations for its contracted TOCs, and a further section for Hull Trains, its open access operator. The RPS

is a defined benefit pension scheme which covers the whole of the UK rail industry. The RPS is partitioned into

sections and, for the sections that relate to contracts, the Group is responsible for the funding of these sections

only while it operates the relevant contract. In contrast to the pension schemes operated by most businesses,

the RPS is a shared cost scheme which means that costs are formally shared 60% employer and 40%

employee. The Group only recognises amounts in relation to its share of costs in the income statement, and

for the contracted TOCs, those amounts are then reimbursed to the TOCs as part of the overall allowable

contracted operating expenses. Management of the RPS is not the responsibility of the Group, nor is it

able to benefit from any future surplus, or liable for any deficit, of those funds.

Financial statements

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At the end of the contract term, responsibility for funding the relevant section of the scheme, and consequentially

any deficit or surplus existing at that date, is passed to the next contractor. At each balance sheet date a contract

adjustment is recognised against the IAS 19 net pension asset or liability to reflect that portion expected to pass

to the next contractor.

The Directors view this arrangement as analogous to the circumstances described in paragraphs 92‑94 of IAS 19

(Revised) with a third party taking on the obligation for future contributions. As there is no requirement to make

contributions to fund the current deficit, it is assumed that all of the current deficit will be funded by another party

and hence none of that deficit is attributable to the current contractor. In respect of the future service costs, there

is currently no pension obligation in respect of those costs. When the costs are recognised in the income

statement, the extent to which the committed contributions fall short determines the amount that is to be

covered by contributions of another party in future, which is recognised as an adjustment to service cost in the

income statement. Under circumstances where contributions are renegotiated, such as following a statutory

valuation, an adjustment will be recognised in the income statement, whilst changes in actuarial assumptions

continue to be recognised through other comprehensive income.

The Directors consider this judgement to be the most appropriate interpretation of IAS 19 to reflect the specific

circumstances of the RPS where the contract commitment is only to pay contributions during the period in which

we run the contract.

Actuarial assumptions

The UK schemes’ retirement benefit obligations are discounted at a rate set by reference to market yields at the

end of the reporting period on high‑quality corporate bonds. Significant judgement is required when setting the

criteria for bonds to be included in the population from which the yield curve is derived. The most significant

criteria considered for the selection of bonds include the issue size of the corporate bonds, quality of the bonds

and the identification of outliers which are excluded. Management follows actuarial advice from a third party

when determining these judgements. Another key estimate is the longevity of members. We take specialist

advice on this from our actuarial advisers which aims to consider the likely experience taking into account each

scheme’s characteristics. Our approach is to review these assumptions for each scheme following completion of

their funding valuations, and more frequently only if appropriate to do so. Given pay increases for employees in

the rail division are under negotiation, the gross figures for the contract rail pensions disclosures may be

under‑ or overstated, but there will be nil impact on the balance sheet as a result of the contract adjustment.

The Pension Regulator (TPR) has been in discussions with the RPS (the Scheme) regarding the long‑term

funding strategy of the Scheme. Whilst TPR believes that the Scheme should be funded on a more prudent

basis, it is not possible at this stage to determine the impact to ongoing contribution requirements.

The carrying amount of the Group’s continuing retirement benefit arrangements at 29 March 2025 was an asset

of £22.7m (2024: liability of £(25.3)m). Further details and sensitivities are set out in note 35.

Self‑insurance

Provision is made for all known incidents for which there is self‑insurance using management’s best estimate of

the likely settlement of these incidents. The estimated settlement is reviewed on a regular basis with independent

actuarial advice and the amount provided (including the Incurred But Not Reported (IBNR) element) is adjusted

as required. Given the diversity of claim types, their size, the range of possible outcomes and the time involved in

settling these claims, a material change could be required to the carrying value of claims provisions in the next

financial year. These factors also make it impractical to provide sensitivity analysis on one single measure and its

potential impact on overall insurance provisions. The Group’s total self‑insurance provisions as at the balance

sheet date were £94.3m (2024: £100.2m) as set out in note 25. Of this £34.7m relates to North America of which

£31.0m is de‑risked with insurance, leaving £3.7m which is in excess of the actuarial range by £0.5m

(2024: £4.9m and actuarial range £4.7m to £5.3m). A receivable matching the value of the de‑risked provision of

£31.0m is recorded within Other receivables to account for the recovery from the third party insurer. While the

range of reasonably possible outcomes within the next 12 months is not expected to be materially different from

the estimate at the balance sheet date, there remains inherent risk as this balance is realised over time.

Determining the incremental borrowing rate used to measure lease liabilities

The Group is required to determine its incremental borrowing rate (IBR) to measure its lease liabilities.

Judgement is required to determine the components of the IBR used for each lease, including risk‑free rates,

credit risk and any lease‑specific adjustments.

IBRs applied to new (or modified) leases are determined quarterly or at the time of a new franchise. They depend

on the term, country and start and end date of the lease. They are estimated based on several factors which

include the risk‑free rate based on government bond rates, a country‑specific adjustment and a credit risk

adjustment based on the average credit spread of entities with similar ratings to the Group, and these IBR

components may be subject to future volatility and sensitivities based on macroeconomic factors such as

interest rate changes.

Determining First Rail National Rail Contract (NRC) expiry dates

On 28 November 2024, the Passenger Railway Services (Public Ownership) Act 2024 received Royal Assent,

allowing passenger train operators with contracts with the DfT to be brought into public ownership.

An initial timetable for this process was published in December 2024. Of the Group’s NRCs, only South Western

Railway was attributed a specific expiry date (May 2025, in line with the end of the NRC). The timetable indicated

that other TOCs would be taken into public ownership by October 2027, but with no dates specified for Great

Western Railway or West Coast Partnership. The Group is therefore required to make judgements to assess the

most likely expiry dates for these NRCs.

These expiry date judgements are then used to identify lease terms in certain situations and useful lives of

property, plant and equipment for TOCs. If there were to be a change in the judgement regarding lease expiry

dates, this would result in a reassessment of the right of use asset and lease liabilities. Similarly, a change in

useful lives for TOC property, plant and equipment would result in a change to the carrying value of those assets.

Climate change

In the preparation of the Group’s consolidated financial statements, management has considered the potential

impact of climate change, particularly in the context of the disclosures included in the Strategic report (including

the Task Force for Climate‑related Disclosures), and the Group’s own climate‑related ambitions and targets,

including its stated Sustainability strategic pillar. This includes an assessment of how the Group’s accounting

estimates and judgements are impacted by the Group’s pathway to achieving its stated ambitions and targets

and delivering on its Sustainability strategic pillar, as well as by climate‑related risks and opportunities for

the Group.

Actions required to drive the Group’s climate‑related ambitions and targets and to deliver on its Sustainability

strategic pillar, including their financial impacts, are factored into the longer‑term business planning cycles of the

Group. The following areas of estimation have been considered as part of these planning cycles, in addition to

those detailed in the Key sources of estimation uncertainty section. Management do not believe that these areas

will have a material impact on financial reporting estimates and judgements in the next year. Owing to the

inherent medium/longer‑term uncertainty with regard to climate‑related risks and opportunities, it is not currently

possible to assess whether in the future, these areas of estimation and judgement may have a more material

impact on carrying values of assets and liabilities. Management will continue to regularly assess climate‑related

risks in the context of the estimates and judgements made in the preparation of the Group’s financial statements.

Financial statements

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2 Significant accounting policies

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Going concern and viability

There may be a risk of increased future costs and capital investment requirements to ensure compliance

with environmental regulatory requirements (for example carbon taxes/charges, or other emissions‑related

restrictions), and to achieve the Group’s stated sustainability targets and ambitions. However, the Group

believes that there is likely to be an increasing modal shift towards public transport, as awareness grows

among customers of climate‑related issues, and with governmental support for transport decarbonisation,

which could create new opportunities for the Group.

Carrying value of non‑current assets

Environmental regulatory requirements, in parallel with the Group’s climate‑related targets and ambitions,

may further accelerate the transition to electrification of vehicle fleets. Transitional risks relating to the

evolution of climate‑related technologies may alter the expected obsolescence profile of existing vehicle

fleets. These factors may impact the Group’s estimates of the useful lives of existing assets, their residual

values, and the risk of asset impairment. The Group monitors closely the accounting estimates in relation

to its vehicle fleets to ensure they remain reasonable.

Provisions

Climate‑related legislative and regulatory changes may, in future, require the Group to assess whether

environmental provisions are necessary, for example the potential introduction of carbon taxes/charges.

In parallel with the work towards achieving its climate‑related ambitions and targets, the Group tracks such

legislative changes to ensure the impact on the business is well understood and managed effectively.

Other areas of the financial statements which may also be impacted by climate‑related risks and

opportunities include:



Share‑based payments – certain of the Group’s share‑based payments arrangements include

a sustainability target (see note 34), and the Group’s ability to meet these targets may impact the amount

or timing of any share‑based payments.



Deferred tax assets – recoverability of deferred tax assets is dependent on future profitability, which may

be impacted by climate‑related factors.



Borrowing facilities – during the year, the Group has entered into innovative funding arrangements for the

future purchase of both electric bus batteries and electric bus bodies (chassis and drivetrain). The timing

of the utilisation of these facilities to support the Group’s decarbonisation and sustainability targets may

impact levels of borrowing and finance costs for the Group.

Going concern

The Board carried out a review of the Group’s financial projections for the 18 months to 30 September

2025 and evaluated whether it was appropriate to prepare the full year results on a going concern basis.

In doing so, the Board 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 macroeconomic considerations on the operating environment, assumptions on passenger

volumes and government support, as well as the impact of actions required to address the Group’s

climate‑related targets and ambitions, and having regard to the risks and uncertainties to which the Group

is exposed.

Base case scenario

The Board considered the annual budget to 31 March 2026 and medium‑term plan including the period to

September 2026 to be the base case scenario for the purpose of the going concern assessment for the

FY 2025 year end. These projections were the subject of a series of executive management reviews and

were used to establish the base case scenario that was used for the purposes of the going concern

assessment. The Bus base case assumes a gradual increase in passenger volumes and yields in FY 2026,

with some offset from a reduction in direct government funding, the impact of the increase in employer’s

national insurance, as well as the impact of the acquisitions completed in FY 2025, including First Bus

London. The Rail base case also reflects the expiry in May 2025 of the South Western Railway contract

and the uncertainty relating to the expiry dates of the Group’s other NRCs. The macro projections in the

updated base case assume that the UK operates in a low‑growth, cautiously recovering economy. The

annual budget and medium‑term plan 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.

Downside scenario

In addition, a downside case was also modelled which assumes a more adverse macroeconomic

recovery profile. In First Bus the downside case assumes a reduction in passenger volumes as well as

the impact of other unexpected cost inflation, driving a 25% reduction in Bus profitability. In First Rail,

the downside case assumes TOC performance fee awards at 50% of expected levels and volume

and revenue reductions in Hull Trains and Lumo driving a 25% reduction in open access profitability.

The downside scenario also considers potential impacts of a significant climate‑related event or

unbudgeted decarbonisation costs, as well as the risk of one‑off safety, regulatory non‑compliance

or technology incidents.

Mitigating actions

If the performance of the Group were to be more adversely impacted 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 review of the financial forecasts for the period to September 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 at least the 12‑month period

from the date on which the financial statements were approved, including compliance with banking

covenants under both the base case and downside scenarios. Accordingly, they continue to adopt a going

concern basis of accounting in preparing the consolidated financial statements in this full year report.

Financial statements

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Notes to the consolidated financial statements

continued

3 Revenue

	2025	2024
	£m	£m
Services rendered	4,317.2	3,952.1
First Rail contract subsidy receipts	412.8	456.8
Other revenues	336.3	306.2
Revenue from continuing operations	5,066.3	4,715.1
Discontinued operations	–	–
Revenue	5,066.3	4,715.1

Disaggregated revenue by operating segment is set out in note 5.

Other revenues principally represent funding mechanisms in First Bus and the First Rail businesses.

4 Reconciliation 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 may 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.

The Group’s statutory revenue measure will be impacted as National Rail Contracts (NRCs) are taken

into public ownership. As a result, during FY 2025 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 to 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.

	2025	2024
Reconciliation of operating profit to adjusted operating profit on a continuing basis	£m	£m
Operating profit on a continuing basis	222.6	46.5
Adjustments for:
LGPS pension settlement and related charges	–	146.9
Legal claims in North America and the UK	–	10.5
Greyhound Canada	0.2	0.4
Total operating profit adjustments on a continuing basis	0.2	157.8
Adjusted operating profit on a continuing basis (note 5)	222.8	204.3
	2025	2024
Reconciliation of operating profit/(loss) to adjusted operating (loss) on a discontinued basis	£m	£m
Operating profit/(loss) from discontinued operations	4.9	(5.3)
Adjustments for:
CARES receipt	(0.4)	–
Retirement benefit restructuring (credits)/charges	(5.1)	1.1
Transit earnout charge	–	2.3
Total operating profit adjustments from discontinued operations	(5.5)	3.4
Adjusted operating loss from discontinued operations	(0.6)	(1.9)
	2025	2024
Reconciliation of profit/(loss) before tax to adjusted profit before tax and adjusted earnings	£m	£m
Profit/(loss) before tax (including discontinued operations)	169.6	(24.4)
Adjusting operating profit items – continuing operations	0.2	157.8
Adjusting operating profit items – discontinued operations	(5.5)	3.4
Adjusted operating profit items – total operations	(5.3)	161.2
Adjusted profit before tax including discontinued operations	164.3	136.8
Rail management fee‑based operations – IFRS 16 adjustment	(1.1)	10.2
Adjusted tax charge	(41.1)	(32.1)
Non‑controlling interests 1	(7.1)	(6.5)
Adjusted earnings including discontinued operations	115.0	108.4

Statutory non‑controlling interests in 2025 and 2024 reflect Avanti West Coast and South Western Railway.

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Notes to the consolidated financial statements

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4 Reconciliation to non‑GAAP measures and performance

continued

	2025	2024
Reconciliation of tax charge to adjusted tax charge	£m	£m
Tax charge/(credit) (note 9)	31.3	(15.0)
Tax effect of adjusting items (note 10)	–	42.5
Non‑recurring historical tax refund (note 9)	3.0	–
Write‑back of previously unrecognised deferred tax assets (note 9)	6.8	5.3
Write‑down of previously recognised deferred tax assets (note 9)	–	(0.7)
Adjusted tax charge (including discontinued)	41.1	32.1
Adjusted tax charge – continuing operations	41.1	32.0
Adjusted tax charge – discontinued operations	–	0.1

Adjusting items – 2025

The principal adjusting items in the year for the continuing business are as follows:

Greyhound Canada

A net £0.2m charge was incurred in the period relating to the continued winding down of Greyhound

Canada operations.

Adjusting items – discontinued operations

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 £5.1m in

the income statement as an adjusting item.

Adjusting items – 2024

The principal adjusting items in the prior year for the continuing business are as follows:

First Bus pension settlement charge and related items

In September 2023, First Bus concluded a period of consultation with regard to its two Local Government

Pension Schemes 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 £146.9m

relating to the settlement charge and other costs relating to the termination were recognised during

FY 2024. A gain of £161.0m was recognised in Other comprehensive income in relation to the restricted

accounting surplus.

Legal claims in North America and the UK

The Group has recognised legal provisions relating to claims in North America and the UK.

Adjusting items – discontinued operations

First Transit earnout

The final valuation of the First Transit earnout contingent consideration receivable was agreed and settled

during FY 2024, with the Group receiving cash of $83.8m (£65.3m). The Group incurred an adjusting

charge of £2.3m, reflecting the hedging of the cash receipt, translation of the US dollar asset into pounds

sterling before settlement, offsetting the small write‑off of the residual asset on settlement.

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Notes to the consolidated financial statements

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4 Reconciliation to non‑GAAP measures and performance

continued

	2025	2024
First Bus EBITDA comprises:	£m	£m
Pre‑IFRS 16 EBITDA	144.0	132.5
IFRS 16 adjustments 1	16.1	15.6
First Bus adjusted EBITDA per segmental results table (note 5)	160.1	148.1

	2025	2024
First Rail EBITDA comprises:	£m	£m
Non‑management fees‑based TOCs pre‑IFRS 16 EBITDA	40.8	37.6
Group’s share of management fee income available for dividends (net of tax and non‑controlling interest)	39.0	39.5
Tax on management fee income	15.4	15.0
Non‑controlling interest	7.2	6.5
IFRS 16 adjustments 1	537.3	521.9
First Rail adjusted EBITDA per segmental results table (note 5)	639.7	620.5
Group items EBITDA comprises:
Pre‑IFRS 16 EBITDA	(21.4)	(21.8)
IFRS 16 adjustments 1	2.0	1.9
Group items adjusted EBITDA per segmental results table (note 5)	(19.4)	(19.9)
First Rail adjusted operating profit comprises:
Non‑management fees‑based TOCs	40.3	36.4
Group’s share of management fee income available for dividends (net of tax and non‑controlling interest)	39.0	39.5
Tax on management fee income	15.4	15.0
Non‑controlling interest	7.2	6.5
IFRS 16 adjustments 1	46.9	45.9
First Rail adjusted operating profit per segmental results table (note 5)	148.8	143.3
Reconciliation of pre‑IFRS 16 adjusted EBIT to post‑IFRS 16 adjusted EBIT
Pre‑IFRS 16 adjusted EBIT	173.4	156.6
IFRS 16 adjustments 1	49.4	47.7
Post‑IFRS 16 adjusted EBIT	222.8	204.3

	2025	2024
Reconciliation of statutory revenue to adjusted revenue 2	£m	£m
Revenue – statutory basis	5,066.3	4,715.1
Deduct: DfT TOC revenue	(3,881.0)	(3,626.5)
Add back: DfT TOC management and performance fees	71.7	69.8
Add back: Intercompany eliminations related to DfT TOCs	113.0	121.2
Adjusted revenue	1,370.0	1,279.6

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Notes to the consolidated financial statements

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4 Reconciliation to non‑GAAP measures and performance

continued

	2025	2024
Reconciliation of reported net debt to adjusted net debt/(cash)	£m	£m
Reported net debt (note 31)	974.8	1,144.8
IFRS 16 lease liabilities (note 22)	(1,203.6)	(1,458.5)
Ring‑fenced cash (note 19)	315.7	249.6
Adjusted net debt/(cash)	86.9	(64.1)

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.

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.

5 Business segments and geographical 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 in which they operate. There is a clear distinction between each division and no judgement is

required to identify each reportable segment.

The segment results for the 52 weeks ended 29 March 2025 are as follows:

						Discontinued
	Continuing Operations					Operations
				Group items/	Continuing
	First Bus	First Rail	Greyhound	eliminations 1	Operations	Greyhound	Total
	£m	£m	£m	£m	£m	£m	£m
Passenger revenue	785.6	3,310.7	–	–	4,096.3	–	4,096.3
Contract revenue	249.2	–	–	(28.3)	220.9	–	220.9
Rail contract subsidy receipts	–	412.8	–	–	412.8	–	412.8
Other revenues	46.7	289.6	–	–	336.3	–	336.3
Revenue	1,081.5	4,013.1	–	(28.3)	5,066.3	–	5,066.3
Rail TOC revenue adjustments	–	(3,724.3)	–	28.0	(3,696.3)	–	(3,696.3)
Adjusted revenue 2	1,081.5	288.8	–	(0.3)	1,370.0	–	1,370.0
EBITDA 3	160.1	639.7	–	(19.4)	780.4	(0.6)	779.8
Depreciation	(77.0)	(541.1)	–	(2.1)	(620.2)	–	(620.2)
Software amortisation	(0.9)	(1.3)	–	(0.5)	(2.7)	–	(2.7)
Capital grant amortisation	13.8	51.5	–	–	65.3	–	65.3
Segment results	96.0	148.8	–	(22.0)	222.8	(0.6)	222.2
Other adjustments (note 4)	–	–	(0.2)	–	(0.2)	5.5	5.3
Operating profit/(loss) 4	96.0	148.8	(0.2)	(22.0)	222.6	4.9	227.5
Investment income	0.5	0.2	–	7.0	7.7	0.1	7.8
Finance costs	(9.5)	(47.8)	–	(8.1)	(65.4)	(0.3)	(65.7)
Profit/(loss) before tax	87.0	101.2	(0.2)	(23.1)	164.9	4.7	169.6
Tax							(31.3)
Profit after tax							138.3

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Notes to the consolidated financial statements

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5 Business segments and geographical information

continued

						Discontinued
	Continuing Operations					Operations
				Group items/	Continuing
	First Bus	First Rail	Greyhound	eliminations 1	Operations	Greyhound	Total
	£m	£m	£m	£m	£m	£m	£m
Capital additions	243.0	47.0	–	–	290.0	–	290.0

Capital additions comprises intangible asset additions and acquisitions (note 12) and property, plant and equipment acquisitions and additions (note 13).

	Total	Total	Net assets/
	assets	liabilities	(liabilities)
Balance sheet 5	£m	£m	£m
Greyhound retained	34.3	(44.8)	(10.5)
First Bus	1,194.4	(381.1)	813.3
First Rail	1,745.4	(947.0)	798.4
	2,974.1	(1,372.9)	1,601.2
Group items	145.2	(54.1)	91.1
Borrowings and cash	487.1	(1,461.9)	(974.8)
Taxation	54.6	(59.6)	(5.0)
Total	3,661.0	(2,948.5)	712.5

Group items comprise central management and other items.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk.

EBITDA is adjusted operating profit less capital grant amortisation plus depreciation plus software amortisation.

Although the segment results are used by management to measure performance, statutory operating profit by operating division is also disclosed for completeness.

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intercompany balances, net debt and taxation.

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Notes to the consolidated financial statements

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5 Business segments and geographical information

continued

The segment results for the 53 weeks ended 30 March 2024 were as follows:

	Continuing Operations					Discontinued Operations
				Group items/	Continuing
	First Bus	First Rail	Greyhound	eliminations 1	Operations	Greyhound	Group items 1	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Passenger revenue	769.1	3,030.1	–	–	3,799.2	–	–	3,799.2
Contract revenue	188.4	–	–	(35.5)	152.9	–	–	152.9
Rail contract subsidy receipts	–	456.8	–	–	456.8	–	–	456.8
Other revenues	54.7	251.5	–	–	306.2	–	–	306.2
Revenue	1,012.2	3,738.4	–	(35.5)	4,715.1	–	–	4,715.1
Rail TOC revenue adjustments	–	(3,470.6)	–	35.1	(3,435.5)	–	–	(3,435.5)
Adjusted revenue 2	1,012.2	267.8	–	(0.4)	1,279.6	–	–	1,279.6
EBITDA 3	148.1	620.5	–	(20.0)	748.6	(1.8)	–	746.8
Depreciation	(73.9)	(513.8)	–	(2.0)	(589.7)	(0.1)	–	(589.8)
Software amortisation	(1.0)	(1.7)	–	(0.6)	(3.3)	–	–	(3.3)
Capital grant amortisation	10.4	38.3	–	–	48.7	–	–	48.7
Segment results	83.6	143.3	–	(22.6)	204.3	(1.9)	–	202.4
Other adjustments (note 4)	(146.9)	–	(0.4)	(10.5)	(157.8)	(1.1)	(2.3)	(161.2)
Operating profit/(loss) 4	(63.3)	143.3	(0.4)	(33.1)	46.5	(3.0)	(2.3)	41.2
Investment income	1.7	1.6	–	13.4	16.7	0.1	–	16.8
Finance costs	(4.2)	(61.5)	–	(16.3)	(82.0)	(0.4)	–	(82.4)
(Loss)/profit before tax	(65.8)	83.4	(0.4)	(36.0)	(18.8)	(3.3)	(2.3)	(24.4)
Tax								15.0
Loss after tax								(9.4)

	Continuing Operations					Discontinued Operations
				Group items/	Continuing
	First Bus	First Rail	Greyhound	eliminations 1	Operations	Greyhound	Group items 1	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Capital additions	200.8	45.5	–	0.3	246.6	–	–	246.6

Capital additions comprises intangible asset additions and acquisitions (note 12) and property, plant and equipment acquisitions and additions (note 13).

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5 Business segments and geographical information

continued

	Total	Total	Net assets/
	assets	liabilities	(liabilities)
Balance sheet 5	£m	£m	£m
Greyhound retained	54.2	(78.9)	(24.7)
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 cash	496.5	(1,644.8)	(1,148.3)
Taxation	44.0	(40.0)	4.0
Total	3,806.8	(3,165.7)	641.1
Greyhound (held for sale)	0.6	–	0.6
Total	3,807.4	(3,165.7)	641.7

Group items comprise central management and other items.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk.

EBITDA is adjusted operating profit less capital grant amortisation plus depreciation plus software amortisation.

Although the segment results are used by management to measure performance, statutory operating profit by operating division is also disclosed for completeness.

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intercompany balances, net debt and taxation.

Geographical information

The Group’s operations are located predominantly in the United Kingdom, with the prior year also including residual United States of America and Canada segment assets.

The following table provides an analysis of the Group’s revenue by geographical market:

	2025	2024
Revenue	£m	£m
United Kingdom/Republic of Ireland	5,066.3	4,715.1
Total continuing operations	5,066.3	4,715.1
United States of America – discontinued operations	–	–
Total discontinued operations	–	–
Total revenue	5,066.3	4,715.1

The following is an analysis of non‑current assets excluding financial instruments, deferred tax and pensions, the carrying amount of segment assets, and additions to property, plant and equipment and intangible

assets, analysed by the geographical area in which the assets are located:

	Non‑current assets excluding		Additions to property,
	financial instruments deferred		plant and equipment and		Carrying amount of
	tax and pensions		intangible assets		segment total assets
	2025	2024	2025	2024	2025	2024
	£m	£m	£m	£m	£m	£m
United Kingdom/Republic of Ireland	2,296.5	2,376.4	290.0	246.6	3,572.1	3,708.6
Canada – continuing operations	–	–	–	–	0.5	1.1
Unallocated corporate items	–	–	–	–	54.6	44.0
Total – continuing operations	2,296.5	2,376.4	290.0	246.6	3,627.2	3,753.7
United States of America – discontinued operations	2.6	2.6	–	–	33.8	53.7
Total – discontinued operations	2.6	2.6	–	–	33.8	53.7
	2,299.1	2,379.0	290.0	246.6	3,661.0	3,807.4

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6 Operating profit

Operating profit has been arrived at after charging/(crediting):

	2025	2024
	£m	£m
Depreciation – owned assets	113.8	98.6
Depreciation – right of use assets	506.4	491.1
Operating commitments	505.8	496.6
Other intangible asset amortisation charges	2.7	3.3
Capital grant amortisation	(65.3)	(48.7)
Cost of inventories recognised as an expense	236.0	261.4
Employee costs (note 7)	1,710.7	1,572.0
Gain on disposal of property, plant and equipment	(0.2)	(5.7)
Impairment charges	–	3.8
Auditor’s remuneration (see below)	3.6	3.4
Rail franchise payments	0.6	1.1
LGPS pension settlement and related charges	–	146.9
Foreign exchange	0.3	2.8
Other operating costs 1	1,829.3	1,642.0
Operating costs – continuing operations	4,843.7	4,668.6
Operating (income)/costs – discontinued operations	(4.9)	5.3
Operating costs – continuing and discontinued operations	4,838.8	4,673.9

Other operating costs includes £40.9m (2024: £46.4m) received or receivable from government bodies in respect of bus service

operator grants and fuel duty rebates.

Amounts payable to PricewaterhouseCoopers LLP and its associates by the Company and its subsidiary

undertakings for continuing and discontinued operations in respect of audit and non‑audit services are

shown below:

	2025	2024
	£m	£m
Fees payable to the Company’s auditor for the audit of the Company’s
annual accounts	0.2	0.2
Fees payable to the Company’s auditor and its associates for the audit
of the Company’s subsidiaries pursuant to legislation	3.2	3.0
Total audit fees	3.4	3.2
Audit‑related assurance services	0.1	0.1
Other non‑audit services	0.1	0.1
Total non‑audit fees	0.2	0.2

Fees payable to PricewaterhouseCoopers LLP and its associates for non‑audit services to the Company

are not required to be disclosed because the consolidated financial statements are required to disclose

such fees on a consolidated basis.

Details of the Group’s policy on the use of auditors for non‑audit services, the reasons why the auditor was

used rather than another supplier and how the auditor’s independence and objectivity were safeguarded

are set out in the Corporate Governance report on page 89. No services were provided pursuant to

contingent fee arrangements.

Non‑audit services principally reflect the review of the half yearly financial information and other

regulatory reporting.

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7 Employee costs

The average monthly number of employees including discontinued operations (including Executive

Directors) was:

	2025	2024
	Number	Number
Operational	27,698	25,913
Administration	3,065	3,426
	30,763	29,339

The aggregate remuneration including discontinued operations (including Executive Directors) comprised:

	2025	2024
	£m	£m
Wages and salaries	1,486.4	1,354.9
Social security costs	149.1	136.0
Pension costs (note 35)	75.2	81.1
	1,710.7	1,572.0

Wages and salaries include a charge in respect of share‑based payments of £10.5m (2024: £15.6m).

Disclosures on Directors’ remuneration, share options, long‑term incentive schemes and pension

entitlements required by the Companies Act 2006 and those specified for audit by the Financial Conduct

Authority (FCA) are contained in the tables/notes within the Annual report on remuneration on pages 96 to

108. Directors’ emoluments in aggregate were £6.1m (2024: £5.0m).

8 Investment income and finance costs

	2025	2024
	£m	£m
Bank interest receivable	(7.2)	(14.7)
Interest on pensions	(0.6)	(2.1)
Total investment income (including discontinued operations)	(7.8)	(16.8)
Bonds	3.1	11.9
Bank interest and facility fees	8.2	5.8
Finance charges payable in respect of lease liabilities	49.6	62.1
Finance charges payable in respect of asset backed financial liabilities	3.7	1.4
Interest on long‑term provisions	1.0	0.8
Interest on pensions	0.1	0.4
Total finance costs (including discontinued operations)	65.7	82.4

Finance costs are stated after charging fee expenses of £1.1m (2024: £0.7m). There was no interest

capitalised into qualifying assets in either the current or prior period.

Investment income of £0.1m (2024: £0.1m) and finance costs of £0.3m (2024: £0.4m) relate to discontinued

operations (note 20).

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9 Tax on profit/(loss) on ordinary activities

	2025	2024
	£m	£m
Current tax charge	6.6	1.3
Adjustments with respect to prior years	(2.8)	(3.0)
Total current tax charge/(credit) (including discontinued operations)	3.8	(1.7)
Origination and reversal of temporary differences	36.2	(11.0)
Adjustment in respect of prior years	(1.9)	2.3
Writing down of previously recognised deferred tax assets	–	0.7
Write back of previously unrecognised deferred tax assets	(6.8)	(5.3)
Total deferred tax charge/(credit) (note 24)	27.5	(13.3)
Total tax charge/(credit) (including discontinued operations)	31.3	(15.0)
Tax charge/(credit) attributable to:
Profit/(loss) from continuing operations	31.3	(15.1)
Profit from discontinued operations	–	0.1

UK corporation tax is calculated at 25% (2024: 25%) of the estimated assessable profit for the year. Tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Deferred tax has been

provided at 25% on temporary differences at the balance sheet date.

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9 Tax on profit/(loss) on ordinary activities

continued

As the Group’s parent company is domiciled and listed in the UK, the Group uses the UK corporation tax rate to reconcile its effective tax rate. The tax charge for the year can be reconciled to the UK corporation tax

rate as follows:

	2025	2025	2024	2024
	£m	%	£m	%
Profit/(loss) from continuing operations before income tax expense	164.9	N/A	(18.8)	N/A
Profit/(loss) from discontinued operations before income tax expense	4.7	N/A	(5.6)	N/A
Profit(loss) from total operations	169.6	100.0	(24.4)	100.0
Tax at the UK corporation tax rate of 25% (2024: 25%)	42.4	(25.0)	(6.1)	25.0
Non‑deductible expenditure	–	–	0.7	(2.9)
Non‑taxable income	–	–	(5.8)	23.8
Tax rates outside of the UK	0.1	(0.1)	0.5	(2.0)
Unrecognised losses	0.3	(0.2)	0.9	(3.7)
Non‑recurring historical tax refund	(3.0)	1.8	–	–
Other adjustments in relation to prior years	(1.7)	1.0	(0.6)	2.5
Writing‑down of previously recognised deferred tax assets	–	–	0.7	(2.9)
Write‑back of previously unrecognised deferred tax assets	(6.8)	4.0	(5.3)	21.7
Tax charge/(credit) and effective tax rate for the year	31.3	(18.5)	(15.0)	61.5

Future years’ tax charges would be impacted if the final liability for currently open years is different from the amount currently provided for. The future tax charge may also be affected by the levels and mix of profits in

the countries in which we operate including differing foreign exchange rates that apply to those profits. Changes to the prevailing tax rates and tax rules in any of the countries in which we operate may also impact

future tax charges.

The UK’s enactment on 11 July 2023 of the Organisation for Economic Co‑operation and Development’s Global Anti‑Base Erosion Model Rules (Pillar Two) became effective for the Group for the first time in 2025 and

the Group is within the scope of these rules. Management has performed an assessment of the Group’s exposure to Pillar Two income taxes in the jurisdictions in which it operates and no material exposure to Pillar

Two taxes is expected.

A current tax expense of £nil has been recognised in the income statement in respect of Pillar Two income taxes. The Group has applied the mandatory exception to recognising and disclosing information about

deferred tax assets and liabilities relating to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.

In addition to the amount charged/(credited) to the income statement, deferred tax relating to actuarial gains/(losses) on defined benefit pension schemes of £7.5m (2024: £20.2m) and cash flow hedges of

£(1.0)m (2024: £0.5m) have been (credited)/charged) to comprehensive income together with a further £0.8m (2024: £(1.0)m) on cash flow hedges and £0.1m (2024: £0.3m) on share‑based payments taken directly to

equity. These amount to a total charge of £7.2m (2024: £20.0m) recognised in other comprehensive income and equity.

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10 Earnings per share (EPS)

EPS is calculated by dividing the profit/loss attributable to equity shareholders of £127.5m (2024: loss of £(15.9)m) by the weighted average number of ordinary shares of 597.7m (2024: 662.9m). 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.

	2025	2024
	Number	Number
	m	m
Weighted average number of shares used in basic calculation	597.7	662.9
Executive share options	25.0	26.2
Weighted average number of shares used in the diluted calculation	622.7	689.1

The adjusted EPS is intended to highlight the recurring operating results of the Group before certain other adjustments as set out in note 4, and before IFRS 16 charges relating to the Group’s management fee‑based

Rail operations. A reconciliation is set out below:

	2025		2024
		EPS		EPS
	£m	(pence)	£m	(pence)
Basic profit/(loss)/EPS	127.5	21.3	(15.9)	(2.4)
Management fee‑based Rail operations – IFRS 16 adjustments	0.5	0.1	10.2	1.5
Other adjustments (note 4)	(5.3)	(0.9)	161.2	24.3
Non‑controlling interest	2.1	0.4	–	–
Tax effect of other adjustments	–	–	(42.5)	(6.4)
Non‑recurring historical tax refund	(3.0)	(0.5)	–	–
Write down of previously recognised deferred tax assets	–	–	0.7	0.1
Write back of previously unrecognised deferred tax assets	(6.8)	(1.1)	(5.3)	(0.8)
Adjusted profit and EPS attributable to the ordinary equity holders of the Company	115.0	19.3	108.4	16.4
Adjusted (loss)/EPS from discontinued operations	(0.8)	(0.1)	(2.3)	(0.3)
Adjusted profit/EPS from continuing operations	115.8	19.4	110.7	16.7

	2025	2024
	pence	pence
Diluted EPS	20.5	(2.4)
Adjusted diluted EPS	18.5	15.7

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10 Earnings per share (EPS)

continued

The adjusted EPS on a continuing basis is set out below:

	2025		2024
		EPS		EPS
	£m	(pence)	£m	(pence)
Basic profit/(loss)/EPS	122.8	20.5	(10.2)	(1.5)
Management fee‑based Rail operations – IFRS 16 adjustments	0.5	0.1	10.2	1.5
Other adjustments (note 4)	0.2	–	157.8	23.7
Non‑controlling interest	2.1	0.4	–	–
Tax effect of other adjustments	–	–	(42.5)	(6.3)
Non‑recurring historical tax refund	(3.0)	(0.5)	–	–
Write‑down of previously recognised deferred tax assets	–	–	0.7	0.1
Write back of previously unrecognised deferred tax assets	(6.8)	(1.1)	(5.3)	(0.8)
Adjusted profit/EPS from continuing operations	115.8	19.4	110.7	16.7

	2025	2024
	pence	pence
Diluted EPS	19.7	(1.5)
Adjusted diluted EPS	18.6	16.1

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11 Goodwill

	2025
	£m
Cost
At 31 March 2024	111.0
Additions (note 29)	37.2
At 29 March 2025	148.2
Accumulated impairment losses
At 31 March 2024	–
At 29 March 2025	–
Carrying amount
At 29 March 2025	148.2
At 31 March 2024	111.0

Impairment testing

At the year end, the carrying value of goodwill was reviewed for impairment in accordance with IAS 36

Impairment of Assets.

In carrying out this review, climate‑related impacts were considered, in line with the TCFD disclosures.

This work assessed FirstGroup’s potential exposure to climate‑related transition and physical risks, across

different climate scenarios, over the short, medium and long term, and estimated cumulative Enterprise

Value at Risk over the period FY 2025 to FY 2029.

Transition risks included potential impacts from increased carbon prices and route constraints due to new

zero emission zones, as well as technology costs from an accelerated shift to a zero emission fleet and

the impairment of carbon‑intensive vehicles. Physical risks concentrated mainly on flooding as the most

material impact. Key findings are outlined on pages 48 to 52 of this Report and focus on direct risks

to FirstGroup.

For impairment calculations, the 2.5°C (Stated Policy) scenario modelled by Marsh was used,

which identified technology risks as ‘medium impact’ and flooding risks as ‘low impact’ over the next

four years.

Full detailed impairment testing has been performed on a value in use basis on First Bus. The value of

the Franchised TOC asset base is protected by the passthrough and termination arrangements of the

respective EMA/ERMAs or NRCs, such that no impairment is expected to arise on these assets.

The Group prepares cash flow forecasts derived from the Board‑approved plan for 2024/25 to 2026/27

which takes account of both past performance and expectations for future developments. Cash flows

beyond the plan period are extrapolated using estimated long‑term growth rates which do not exceed

the long‑term average growth rate for the market. Cash flows are discounted using a pre‑tax discount

rate derived from a market participant’s weighted average cost of capital, benchmarked to externally

available data.

Impairment testing – First Bus

First Bus value in use has been assessed based on the projected cash flows for 2025/26 to 2027/28 from

the Board‑approved forecasts. These have been extrapolated to perpetuity cash flows and discounted to

a net present value based on the following assumptions.

First Bus has £277m of positive headroom at 29 March 2025 (30 March 2024: £412m) based on a 11.2%

discount rate (2024: 10.3%) and 9.8% terminal margin (2024: 10.8%), which reflects the impact of expected

future passenger volumes and yields, as well as planned resizing of the network.

Break‑even would arise at:



14.5% discount rate (with a 9.8% terminal margin);



6.5% terminal margin (applying the cap to just the final year/terminal value) using a 11.2% discount rate;



7.6% terminal margin throughout the forecast period and terminal margin (applying the cap in all years at

7.6%, not just in the terminal years) using a 11.2% discount rate.

As the break‑even points lie outside management’s range of reasonable expectation, no impairment of

First Bus is proposed.

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12 Other intangible assets

	Customers
	contracts	Software	Total
	£m	£m	£m
Cost
At 26 March 2023	–	39.8	39.8
Additions	–	2.4	2.4
Disposals	–	(5.2)	(5.2)
Transfers	–	4.0	4.0
At 30 March 2024	–	41.0	41.0
At 31 March 2024	–	41.0	41.0
Acquisitions	3.6	0.3	3.9
Additions	–	5.7	5.7
Disposals	–	(1.2)	(1.2)
Reclassifications 1	–	(2.7)	(2.7)
At 29 March 2025	3.6	43.1	46.7
Accumulated amortisation and impairment
At 26 March 2023	–	29.0	29.0
Charge for year	–	3.3	3.3
Disposals	–	(4.2)	(4.2)
Transfers	–	2.5	2.5
At 30 March 2024	–	30.6	30.6
At 31 March 2024	–	30.6	30.6
Charge for year	–	2.7	2.7
Reclassifications 1	–	(2.7)	(2.7)
At 29 March 2025	–	30.6	30.6
Carrying amount
At 29 March 2025	3.6	12.5	16.1
At 30 March 2024	–	10.4	10.4

As part of the Group’s continuing efforts to streamline reporting processes it was identified that £2.7m had been incorrectly classified between cost and accumulated amortisation.

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13 Property, plant and equipment

Owned assets

		Passenger carrying	Other plant and
	Land and buildings	vehicle fleet	equipment	Total
	£m	£m	£m	£m
Cost
At 26 March 2023	213.1	753.5	711.6	1,678.2
Acquisitions	–	3.1	0.1	3.2
Additions	31.1	135.5	74.4	241.0
Disposals	(7.3)	(74.5)	(76.1)	(157.9)
Reclassifications	(1.8)	13.4	(5.7)	5.9
Transfers to right of use assets	–	(2.7)	(14.7)	(17.4)
At 30 March 2024	235.1	828.3	689.6	1,753.0
At 31 March 2024	235.1	828.3	689.6	1,753.0
Acquisitions (note 29)	49.5	56.4	14.0	119.9
Additions	31.4	60.0	69.1	160.5
Disposals	(1.4)	(44.1)	(10.9)	(56.4)
Reclassifications 1	16.3	–	(13.6)	2.7
Transfers to right of use assets	–	(2.3)	(8.4)	(10.7)
Foreign exchange movements	–	(0.3)	–	(0.3)
At 29 March 2025	330.9	898.0	739.8	1,968.7
Accumulated depreciation and impairment
At 26 March 2023	60.5	432.9	546.1	1,039.5
Charge for year	11.5	53.2	33.9	98.6
Disposals	(3.2)	(67.6)	(59.7)	(130.5)
Impairment 2	–	–	2.6	2.6
Reclassifications	(5.9)	8.3	(7.7)	(5.3)
At 30 March 2024	62.9	426.8	515.2	1,004.9
At 31 March 2024	62.9	426.8	515.2	1,004.9
Charge for year	10.8	53.4	49.6	113.8
Disposals	(0.6)	(41.1)	(7.4)	(49.1)
Reclassifications 1	–	–	2.7	2.7
Foreign exchange movements	–	(0.1)	–	(0.1)
At 29 March 2025	73.1	439.0	560.1	1,072.2
Carrying amount
At 29 March 2025	257.8	459.0	179.7	896.5
At 30 March 2024	172.2	401.5	174.4	748.1

As 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 that £2.7m had been incorrectly classified between cost

and accumulated depreciation.

The impairment charge in the prior year of £2.6m relates to Rail contracts.

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13 Property, plant and equipment

continued

An amount of £58.0m (2024: £0.8m) in respect of assets under construction is included in the carrying amount of land and buildings and other plant and equipment, mainly relating to development of electric charging

infrastructure in First Bus.

At 29 March 2025 the Group had entered into contractual capital commitments amounting to £341.5m (2024: £61.8m), principally representing purchase of passenger carrying vehicles, electrical infrastructure and TOC

and open access operation commitments.

Right of use assets

			Passenger carrying	Other plant and
	Rolling stock	Land and buildings	vehicle fleet	equipment	Total
	£m	£m	£m	£m	£m
Cost
At 26 March 2023	3,781.7	71.4	51.7	8.5	3,913.3
Additions	183.3	4.3	6.5	2.8	196.9
Disposals	(221.6)	(10.6)	(0.5)	(0.4)	(233.1)
Transfers from owned assets	–	–	2.7	14.7	17.4
At 30 March 2024	3,743.4	65.1	60.4	25.6	3,894.5
At 31 March 2024	3,743.4	65.1	60.4	25.6	3,894.5
Additions	6.5	6.2	8.0	1.2	21.9
Acquisitions	–	19.5	53.3	–	72.8
Disposals	(75.5)	(3.3)	(10.0)	(1.5)	(90.3)
Reassessment	124.6	1.0	–	–	125.6
Transfers from owned assets	–	–	2.3	8.4	10.7
At 29 March 2025	3,799.0	88.5	114.0	33.7	4,035.2
Accumulated depreciation and impairment
At 26 March 2023	2,144.7	30.9	40.3	6.4	2,222.3
Charge for period	470.3	8.7	10.2	1.9	491.1
Lease impairment	1.2	–	–	–	1.2
Disposals	(220.6)	(6.4)	(0.3)	(0.1)	(227.4)
At 30 March 2024	2,395.6	33.2	50.2	8.2	2,487.2
At 31 March 2024	2,395.6	33.2	50.2	8.2	2,487.2
Charge for period	485.4	8.8	8.3	3.9	506.4
Disposals	(75.2)	(3.3)	(9.9)	(1.5)	(89.9)
At 29 March 2025	2,805.8	38.7	48.6	10.6	2,903.7
Carrying amount
At 29 March 2025	993.2	49.8	65.4	23.1	1,131.5
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 22.

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13 Property, plant and equipment

continued

			Passenger carrying	Other plant and
	Rolling stock	Land and buildings	vehicle fleet	equipment	Total
Owned assets and right of use assets	£m	£m	£m	£m	£m
Carrying amount
At 29 March 2025	993.2	307.6	524.4	202.8	2,028.0
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 22.

	2025	2024
Amounts recognised in income statement (including discontinued operations)	£m	£m
Depreciation expense on right of use assets	506.4	491.1
Interest expense on lease liabilities	49.6	62.1
Impairment charge	–	1.2
Expense relating to leases of low‑value assets	–	0.1
	556.0	554.5

14 Investments

	2025	2024
	£m	£m
Other investments	2.6	2.6

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15 Inventories

	2025	2024
	£m	£m
Spare parts and consumables from continuing operations	30.8	25.9

In the opinion of the Directors there is no material difference between the balance sheet value of inventories and their replacement cost. There was no material write‑down of inventories during the current or prior year.

16 Trade and other receivables

Amounts due within one year (from continuing operations)

	2025	2024
	£m	£m
Trade receivables	364.1	400.1
Loss allowance	(10.6)	(41.7)
Trade receivables net	353.5	358.4
Other receivables	171.0	187.6
Amounts recoverable on contracts	57.5	38.9
Prepayments	37.2	38.7
Accrued income	142.4	229.0
	761.6	852.6

Movement in accrued income:

	2025	2024
	£m	£m
Balance as at 31 March 2024/26 March 2023	229.0	187.6
Additions	382.1	222.5
Accrued income invoiced during the year	(468.7)	(181.1)
Balance as at 29 March 2025/30 March 2024	142.4	229.0

The loss allowance relates solely to credit loss allowances arising from contracts with customers.

Other receivables includes £60.4m (2024: £64.5m) of VAT receivables, £13.8m (2024: £14.1m) of receivables from government bodies for fuel duty rebates, and £31.0m (2024: £50.8m) of insurance recoveries.

Amounts recoverable on contracts relates to amounts due from governmental and similar bodies for agreed contractual changes.

Accrued income principally comprises amounts relating to contracts with customers billed each month. Any amount previously recognised as accrued income is reclassified to trade receivables at the point at which it

is invoiced to the customer.

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16 Trade and other receivables

continued

Credit risk

Credit risk is the risk that financial loss arises from failure by a customer or counterparty to meet its

obligations under a contract.

Credit risk exists in relation to the Group’s financial assets, which comprise trade receivables, amounts

recoverable on contracts and accrued income of £564.0m (2024: £668.0m), cash and cash equivalents

of £487.1m (2024: £496.5m) and derivative financial instruments of £0.5m (2024: £2.4m).

The Group’s maximum exposure to credit risk for all financial assets at the balance sheet date was

£1,051.6m (2024: £1,166.9m). The exposure is spread over a large number of unconnected counterparties

and the maximum single concentration with any one counterparty was £228.0m (2024: £215.0m) at the

balance sheet date.

The Group’s credit risk is primarily attributable to its trade receivables, amounts recoverable on contracts

and accrued income. The amounts presented in the balance sheet are net of credit loss allowances,

estimated by the Group’s management based on prior experience and their assessment of the current

economic environment. The credit loss allowance at the balance sheet date was £10.6m (2024: £41.7m).

Most trade receivables, amounts recoverable on contracts and accrued income are with public or

quasi‑public bodies, principally the DfT, Network Rail and local authorities in the UK. The Group does not

consider any of these counterparties to be a significant risk. Each division within the Group has a policy

governing credit risk management on receivables.

The counterparties for bank balances and derivative financial instruments are mainly represented by

lending banks and large banks with a minimum of ‘A’ credit ratings assigned by international credit

rating agencies. These counterparties are subject to approval by the Board. Group Treasury policy limits

the maximum deposit with any one counterparty to £150.0m and limits the maximum term to three months.

Impairment of trade receivables amounts recoverable on contracts and

accrued income

The Group applies the IFRS 9 simplified approach to measuring expected credit losses for all trade

receivables, amounts recoverable on contracts and accrued income at each reporting date.

Provision matrices are used to measure expected losses. The provision rates are based on days past

due for groupings of various customer segments with similar loss patterns, such as geographical region,

service type, and customer type and rating. The calculation reflects the probability‑weighted outcome and

reasonable and supportable information that is available at the reporting date about past events, current

conditions and forecasts of future economic conditions.

Trade receivables, amounts recoverable on contracts and accrued income are written off when there is no

reasonable expectation of recovery.

Impairment losses on trade receivables are presented as net impairment losses within operating profit.

Subsequent recoveries of amounts previously written off are credited against the same line item.

The majority of the Group’s customers are governmental or similar bodies and hence there are not

considered to be any issues with the recoverability of these receivables. Further there have not been

any significant issues with the recoverability of non‑governmental receivables.

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16 Trade and other receivables

continued

The gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income for which the loss allowance is measured at an amount equal to the lifetime expected credit losses under the

simplified method, is analysed below:

			Days past due: 2025
	Carrying		Less than			Over
	amount	Current	30 days	30‑90 days	90‑180 days	180 days
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	1.9%	–	0.1%	–	–	19.8%
Gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income	564.0	354.3	98.3	44.1	14.2	53.1
Loss allowance (from continuing operations)	10.6	–	0.1	–	–	10.5

			Days past due: 2024
	Carrying		Less than			Over
	amount	Current	30 days	30‑90 days	90‑180 days	180 days
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	6.2%	–	0.4%	1.0%	1.2%	84.9%
Gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income	668.0	478.7	103.5	28.9	8.7	48.2
Loss allowance (from continuing operations)	41.7	–	0.4	0.3	0.1	40.9

The table above is an aggregation of different provision matrices for each of the customer segment groupings, as outlined above. The expected loss rate for each ageing category is the weighted average loss rate

across these groupings. The ‘current’ category consists primarily of receivables from groupings for which, based on historical losses and both the current and forecast economic conditions, the expected credit losses

are negligible, resulting in the application of a close to 0% loss rate.

	2025	2024
Movement in the loss allowance for trade receivables	£m	£m
At 31 March 2024/26 March 2023	41.7	49.0
Amounts written‑off during the year	–	(1.2)
Increase in allowance recognised in the income statement	2.5	13.6
Amounts recovered during the year	(1.6)	(0.6)
Reversal of provision	(32.0)	(19.1)
At 29 March 2025/30 March 2024	10.6	41.7

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.

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17 Assets held for sale

Movement in assets held for sale	£m
At 31 March 2024	0.6
Net book value of disposals	(0.6)
At 29 March 2025	–

18 Trade and other payables

	2025	2024
Amounts falling due within one year (from continuing operations)	£m	£m
Trade payables	352.2	277.4
Other payables	210.9	291.2
Accruals	480.1	539.9
Deferred income	140.2	129.0
Season ticket deferred income – Rail	24.8	21.1
	1,208.2	1,258.6

	2025	2024
Movement in deferred income	£m	£m
Balance as at 31 March 2024/26 March 2023	129.0	125.5
Additions	208.2	177.2
Recognised during the period	(198.4)	(162.9)
Business acquisitions	1.4	–
Loss of TPE operations	–	(10.8)
Balance as at 29 March 2025/30 March 2024	140.2	129.0

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. Deferred income and season ticket deferred income principally comprises amounts relating to contracts

with customers.

Other payables includes £32.0m (2024: £21.7m) for the purchase of property, plant and equipment where increased payment terms have been agreed with the supplier due to the nature of the payable. Other payables

also include deferred capital grants from government or other public bodies of £163.4m (2024: £162.2m).

The average credit period taken for trade purchases is 39 days (2024: 41 days). The Group has controls in place to ensure that all payments are paid within the appropriate credit timeframe. The Directors consider that

the carrying amount of trade and other payables approximates to their fair value.

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19 Cash and cash equivalents

	2025	2024
	£m	£m
Cash and cash equivalents	487.1	496.5

The fair value of cash and cash equivalents approximates to the carrying value. Cash and cash equivalents includes ring‑fenced cash of £315.7m (2024: £249.6m). Ring‑fenced cash is cash held in the Group which

has restrictions around its use or distribution. 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 Contract. Ring‑fenced cash balances of £6.9m (2024: £4.0m) are held outside the First Rail subsidiaries. These balances primarily reflect funds withheld from the

de‑risking insurer as permitted under the de‑risking agreement.

20 Discontinued operations

	2025	2024
Discontinued operations	£m	£m
Revenue	–	–
Operating income/(costs)	4.9	(5.3)
Operating profit/(loss)	4.9	(5.3)
Investment income	0.1	0.1
Finance costs	(0.3)	(0.4)
Profit/(loss) before tax	4.7	(5.6)
Tax	–	(0.1)
Profit/(loss) for the year after tax	4.7	(5.7)
Attributable to:
Equity holders of the parent	4.7	(5.7)
Non‑controlling interests	–	–
	4.7	(5.7)

	2025	2024
EPS	pence	pence
Basic EPS	0.8	(0.9)
Diluted EPS	0.8	(0.9)

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20 Discontinued operations

continued

	2025	2024
Cash flow	£m	£m
Net cash outflow from operating activities	(8.0)	(4.2)
Net cash inflow from investing activities	0.7	74.7
Net cash flow from financing activities	–	–
Net (decrease)/increase in cash generated	(7.3)	70.5

	2025	2024
Other comprehensive income/(loss)	£m	£m
Actuarial gain/(loss) on defined benefit pension schemes	1.9	(1.2)
Hedging instrument movements	–	0.4
Exchange differences on translation of discontinued operations	3.1	(6.6)
Total	5.0	(7.4)

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21 Borrowings

	2025	2024
	£m	£m
On demand or within one year
Lease liabilities (note 22) 1,2	410.3	492.8
Asset backed financial liabilities (note 22) 2	16.2	6.2
Bank overdraft	56.4	27.8
Bond 6.875% (repayable 2024)	–	99.7
Total current liabilities	482.9	626.5
Within one to two years
Lease liabilities (note 22) 1,2	393.6	385.0
Asset backed financial liabilities (note 22) 2	12.9	7.9
Syndicated loan facilities	64.3	–
	470.8	392.9
Within two to five years
Lease liabilities (note 22) 1,2	352.1	546.2
NextGen battery debt	15.0	3.0
Asset backed financial liabilities (note 22) 2	39.8	13.6
Syndicated loan facilities	2.4	–
	409.3	562.8
Over five years
Lease liabilities (note 22) 1,2	47.6	34.5
NextGen battery debt	4.9	10.2
Asset backed financial liabilities (note 22) 2	46.4	17.9
	98.9	62.6
Total non‑current liabilities at amortised cost	979.0	1,018.3

The right of use assets relating to lease liabilities are shown in note 13.

The maturity analysis of lease liabilities and asset backed financial liabilities is presented in note 22.

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21 Borrowings

continued

Fair value of bonds issued

				2025	2024
	Par value	Interest		Fair value	Fair value
Cash flow	£m	payable	Month	£m	£m
Bond 6.875% (repayable 2024)	nil	Annually	September	nil	100.1

The 6.875% bond matured in September 2024 and was repaid.

Effective interest rates

The effective interest rates at the balance sheet dates were as follows:

	2025	Maturity	2024	Maturity
Bank overdraft	SONIA +1%	–	SONIA + 1%	–
Revolving credit facility	SONIA + 0.75%	January 2030	SONIA + 0.73%	August 2026
Term loan facility	SONIA + 1.35%	March 2027	–	–
Bond 2024	–	–	6.94%	September 2024
Asset backed financial liabilities	Average fixed rate of	Various	Average fixed	Various
	4.6%		rate of 4.1%

	2025	2024
	£m	£m
Pounds sterling	916.6	1,644.7
Euro	0.2	–
	916.8	1,644.7

Borrowing facilities

The Group had £295.0m (2024: £300.0m) of undrawn committed borrowing available under its Revolving

Credit facility as at March 2025. In addition there was £92.4m (2024: £129.8m) committed headroom

available under the Husk Financer facility and £40.9m (2024: £54.9m) under the NextGen Battery facility,

and £85.0m (2024: £nil) under the term loan facility. Total undrawn bank borrowing facilities at year

end stood at £523.3m (2024: £501.0m) of which £513.3m (2024: £484.7m) was committed and £10.0m

(2024: £16.3m) was uncommitted.

Capital management

The Group aims to maintain an investment grade credit rating and appropriate balance sheet liquidity

headroom. The Group has a net debt to EBITDA ratio of 1.2 times as at March 2025 for the continuing

Group (2024: 1.5 times).

Liquidity within the Group has remained strong. At year end there was £628.3m (2024: £705.2m) of

committed headroom and free cash. The Group’s Treasury policy requires a minimum of £250m of

committed headroom at the year end and half year for the budget year, and £200m for year two of

the three‑year plan. The Group’s net debt, excluding accrued bond interest, at 29 March 2025,

was £974.8m (2024: £1,144.8m) as set out in the Financial review on page 29.

The Group’s primary objectives of capital management is to ensure that the Group is able to continue as

a going concern, to maintain an optimal capital structure and adequate liquidity headroom to deliver on

shareholder and stakeholder expectations. The Group’s capital structure consists of equity and net debt.

The Group actively manages its capital structure and will adjust it when appropriate should economic

conditions change. The Group’s debt is monitored on the basis of a gearing ratio, being net debt divided

by EBITDA, further details of which are provided in the Chief Financial Officer’s review.

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22 Lease liabilities and asset backed financial liabilities

The Group had the following lease liabilities and asset backed financial liabilities at the balance sheet dates, excluding liabilities relating to the discontinued operations:

			Asset backed
	Lease liabilities		financial liabilities
	2025	2024	2025	2024
Maturity analysis	£m	£m	£m	£m
Due in less than one year	450.9	539.4	16.9	6.5
Due in more than one year but not more than two years	418.5	414.1	14.2	8.5
Due in more than two years but not more than five years	370.0	574.6	47.8	16.2
Due in more than five years	64.4	44.9	68.7	23.7
	1,303.8	1,573.0	147.6	54.9
Less future financing charges	(100.2)	(114.5)	(32.2)	(9.3)
	1,203.6	1,458.5	115.4	45.6

The total cash outflow for the lease liabilities and asset backed financial liabilities recorded on the balance sheet amounted to £553.3m and £13.8m respectively (2024: £506.9m and £19.3m).

The right of use assets related to the lease liabilities is presented in note 13.

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23 Financial instruments

Non‑derivative financial assets

	2025	2024
	£m	£m
Total non‑derivatives
Total non‑current assets	104.2	99.6
Total assets	104.2	99.6

Certain pension partnership structures were implemented during 2022. 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 the year, FirstGroup Energy Limited purchased a £1.0m fixed rate

unsecured convertible loan note in KleanDrive Limited. Management have concluded that this represents a financial asset under IAS 32.

Derivative financial instruments

	2025	2024
	£m	£m
Total derivatives
Total non‑current assets	0.3	0.4
Total current assets	0.2	2.0
Total assets from continuing operations	0.5	2.4
Total current liabilities	3.0	3.4
Total non‑current liabilities	1.0	1.3
Total liabilities from continuing operations	4.0	4.7
Derivatives designated and effective as hedging instruments carried at fair value
Non‑current assets
Fuel derivatives (cash flow hedge)	0.3	0.4
Current assets
Fuel derivatives (cash flow hedge)	0.2	2.0
Current liabilities
Fuel derivatives (cash flow hedge)	2.1	2.7
Currency forwards (cash flow hedge)	0.9	0.7
	3.0	3.4
Non‑current liabilities
Currency forwards (cash flow hedge)	0.3	0.2
Interest rate swaps (NextGen)	0.3	0.5
Fuel derivatives (cash flow hedge)	0.4	0.6
	1.0	1.3

The Group enters into derivative transactions under International Swaps and Derivatives Association Master Agreements that allow for the related amounts to be set‑off in certain circumstances. The amounts set out

as Fuel derivatives and Currency forwards in the table above represent the derivative financial assets and liabilities of the Group that may be subject to the above arrangements and are presented on a gross basis.

Derivative liabilities of £nil (2024: £nil) were subject to netting arrangements. Total cash flow hedges are a liability of £3.5m (2024: £2.3m asset).

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23 Financial instruments

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The following losses/(profits) were transferred from equity into inventory as basis adjustments during the year:

	2025	2024
	£m	£m
Operating losses/(profits)	3.3	(4.0)

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:

	2025
	Fair value				Carrying
					value
	Level 1	Level 2	Level 3	Total	Total
	£m	£m	£m	£m	£m
Financial assets and derivatives
Trade and other receivables 1	–	564.0	–	564.0	564.0
Derivative financial instruments	–	0.5	–	0.5	0.5
Financial liabilities and derivatives
Borrowings 2	–	214.9	–	214.9	201.9
Trade and other payables 3	–	1,044.8	–	1,044.8	1,044.8
Derivative financial instruments	–	4.0	–	4.0	4.0

Trade receivables, amounts recoverable under contracts and accrued income (note 16).

Includes asset backed financial liabilities as set out in note 22. Excludes lease liabilities.

Excludes deferred capital grants (note 18).

The estimated fair value of cash and cash equivalents, financial assets and bank overdrafts are a reasonable approximation to the carrying value of these items.

	2024
	Fair value				Carrying
					value
	Level 1	Level 2	Level 3	Total	Total
	£m	£m	£m	£m	£m
Financial assets and derivatives
Trade and other receivables 1	–	668.0	–	668.0	668.0
Derivative financial instruments	–	2.4	–	2.4	2.4
Financial liabilities and derivatives
Borrowings 2	–	162.5	–	162.5	158.4
Trade and other payables 3	–	1,096.4	–	1,096.4	1,096.4
Derivative financial instruments	–	4.7	–	4.7	4.7

Trade receivables, amounts recoverable under contracts and accrued income (note 16).

Includes asset backed financial liabilities as set out in note 22. Excludes lease liabilities.

Excludes deferred capital grants (note 18).

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.

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The estimated fair value of cash and cash equivalents and bank overdrafts are a reasonable approximation to the carrying value of these items.

	Fair values	Fair values
	at 29 March	at 30 March
	2025	2024	Fair value
Financial assets/(liabilities)	£m	£m	hierarchy	Valuation technique(s) and key inputs
Derivative contracts
1) Fuel derivatives	(2.0)	(0.9)	Level 2	Discounted cash flow; future cash flows are estimated based on forward fuel prices
				and contract rates and then discounted at a rate that reflects the credit risk of the
				various counterparties.
2) Currency forwards	(1.2)	(0.9)	Level 2	Discounted cash flow; future cash flows are estimated based on forward foreign exchange
				rates and contract rates and then discounted at a rate that reflects the credit risk of the
				various counterparties.
3) Interest rate swaps	(0.3)	(0.5)	Level 2	Future cash flows are estimated based on interest rates and then discounted at a rate that
				reflects the credit risk of the various counterparties.

The following table illustrates the carrying value of all financial assets and liabilities held by the Group on a continuing basis.

	2025
	Assets and
	liabilities at	At fair value		Derivatives
	amortised	through profit	At fair value	used for
	costs	and loss	through OCI	hedging	Total
Classification of financial instruments	£m	£m	£m	£m	£m
Financial assets and derivatives
Cash and cash equivalents	487.1	–	–	–	487.1
Trade receivables, amounts recoverable under contracts and accrued income	564.0	–	–	–	564.0
Non‑derivative financial instruments	104.2	–	–	–	104.2
Derivative financial instruments	–	–	–	0.5	0.5
	1,155.3	–	–	0.5	1,155.8
Financial liabilities and derivatives
Interest bearing loans and borrowings 1	1,461.9	–	–	–	1,461.9
Trade and other payables	1,044.8	–	–	–	1,044.8
Derivative financial instruments	–	–	–	4.0	4.0
	2,506.7	–	–	4.0	2,510.7

Includes lease liabilities and asset backed financial liabilities as set out in note 22.

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	2024
	Assets and
	liabilities at	At fair value
	amortised	through profit	At fair value
	costs	and loss	through OCI	Total
Classification of financial instruments	£m	£m	£m	£m
Financial assets and derivatives
Cash and cash equivalents	496.5	–	–	496.5
Trade receivables, amounts recoverable under contracts and accrued income	668.0	–	–	668.0
Non‑derivative financial instruments	99.6	–	–	99.6
Derivative financial instruments	–	–	2.4	2.4
	1,264.1	–	2.4	1,266.5
Financial liabilities and derivatives
Interest bearing loans and borrowings	1,621.0	–	–	1,621.0
Trade and other payables	1,096.4	–	–	1,096.4
Derivative financial instruments	–	–	4.7	4.7
	2,717.4	–	4.7	2,722.1

			Foreign
	Commodity	Electricity	exchange
As at 29 March 2025	price risk	price risk	price risk
Nominal amount of hedging	0.74m bbls	70,104 MWh	$69.3m
< 1 year	0.46m bbls	43,800 MWh	$44.4m
1 – 2 years	0.28m bbls	26,304 MWh	$24.9m
2 – 5 years	–	–	–
> 5 years	–	–	–
Average hedged rate	$92.85/bbl	£81.7/MWh	1.267
Maturity	Apr25‑Mar27	Apr25‑Mar27	Apr25‑Mar27
Carrying amount of hedging instruments
Assets – Derivatives (£m)	0.5	–	–
Liabilities – Derivatives (£m)	(2.2)	(0.3)	(1.2)
(Liabilities – Borrowings (£m)	–	–	–
Carrying amount of hedged item
Liabilities – Borrowings (£m)	N/A	N/A	N/A
Accumulated amount of fair value hedging adjustments included in carrying amount of hedged item
Liabilities – Borrowings (£m)	N/A	N/A	N/A
Changes in fair value of hedged item used for calculating hedge effectiveness	4.3	(1.2)	1.1
Changes in fair value of hedging instrument used in calculating hedge effectiveness	(4.3)	1.2	(1.1)
Changes in fair value of hedging instrument accumulated in cash flow hedge reserve	(2.6)	2.0	(0.2)

No gains and losses on derivatives designated for hedge accounting have been charged through the consolidated income statement in either the current or prior year.

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Financial risk management

The Group is exposed to financial risks including liquidity risk, credit risk and certain market‑based risks

principally being the effects of changes in foreign exchange rates, interest rates and fuel prices. The Group

manages these risks within the context of a set of formal policies established by the Board. Certain risk

management responsibilities are formally delegated by the Board, principally to a sub‑committee of the

Board and to the Chief Financial Officer and to the Treasury Committee. The Treasury Committee

comprises the Chief Financial Officer and certain senior finance employees and is responsible for

approving hedging transactions permitted under Board‑approved policies, monitoring compliance

against policy and recommending changes to existing policies.

Liquidity risk

Liquidity risk is the risk that the Group may encounter difficulty in meeting obligations associated with

financial liabilities. The objective of the Group’s liquidity risk management is to ensure sufficient committed

liquidity resources exist. The Group has a diversified debt structure largely represented by medium‑term

unsecured syndicated committed bank facilities, medium‑ to long‑term unsecured bond debt and finance

leases. It is a policy requirement that debt obligations must be addressed well in advance of their due dates.

The Group’s Treasury policy requires a minimum of £250m of committed headroom at the year end

and half year for the budget year, and £200m for year two of the three‑year plan. At year end, the total

amount of these facilities stood at £682.4m (2024: £532.4m), and committed headroom was £513.3m

(2024: £484.7m), in addition to free cash balances of £115.3m (2024: £220.5m). The next material

contractual expiry of revolver bank facilities is in January 2030.

The average duration of net debt (excluding ring‑fenced cash) at 29 March 2025 was 4.1 years

(2024: 2.4 years).

The following tables detail, on a continuing basis, the Group’s expected maturity of payables for its

borrowings, derivative financial instruments and trade and other payables. The amounts shown in these

tables are prepared on an undiscounted cash flow basis and include future interest payments in the years

in which they fall due for payment.

	2025
	< 1 year	1‑2 years	2‑5 years	> 5 years	Total
	£m	£m	£m	£m	£m
Borrowings 1	524.2	497.0	435.2	138.9	1,595.3
Fuel derivatives	2.1	0.4	–	–	2.5
FX forwards	0.9	0.3	–	–	1.2
Interest rate derivatives	–	0.3	–	–	0.3
Trade and other payables	1,044.8	–	–	–	1,044.8
	1,572.0	498.0	435.2	138.9	2,644.1

	2024
	< 1 year	1‑2 years	2‑5 years	> 5 years	Total
	£m	£m	£m	£m	£m
Borrowings 1	677.4	423.5	596.7	79.7	1,777.3
Fuel derivatives	2.7	0.6	–	–	3.3
FX forwards	0.7	0.2	–	–	0.9
Interest rate derivatives	–	0.5	–	–	0.5
Trade and other payables	1,096.4	–	–	–	1,096.4
	1,777.2	424.8	596.7	79.7	2,878.4

Includes lease liabilities and asset backed financial liabilities as set out in note 22.

No derivative financial instruments had collateral requirements or were due on demand in any of the years. Derivative financial instruments are net settled.

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Currency risk

Currency risk is the risk of financial loss to foreign currency net assets, earnings and cash flows reported

in pounds sterling due to movements in exchange rates.

‘Certain’ and ‘highly probable’ foreign currency transaction exposures 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 is also exposed to currency risk relating to its UK fuel costs which are denominated in US

dollars. This is hedged through entering a series of average rate forward contracts on a similar profile to

our fuel hedging programme. Forward currency risk is designated in the cash flow hedges, however

valuation movements arising from changes in currency‑basis spreads are excluded from the relationships

as costs of hedging. At the balance sheet date the value to be recorded in a separate component of equity

was immaterial, and as such no separate reserve has been shown within the primary financial statements.

IFRS 7 requires the Group to show the impact on profit after tax and hedging reserve on financial

instruments from a movement in exchange rates. The following analysis details the Group’s sensitivity

to a 10% strengthening in pounds sterling against the US dollar. A 10% weakening in pounds sterling

against the US dollar would have an equal but opposite effect to that shown below. The analysis has been

prepared based on the change taking place at the beginning of the financial year and being held constant

throughout the reporting period. A positive number indicates an increase in earnings or equity where

pounds sterling strengthens against the US dollar.

	2025	2024
	£m	£m
Impact on profit after tax	0.4	0.4
Impact on hedging reserve	0.2	(0.1)

Interest rate risk

The Group has variable rate debt and cash and therefore net income is exposed to the effects of changes

to interest rates. The Group Treasury policy objective is to maintain fixed interest rates at a minimum of

50% of on‑balance sheet net debt over the medium term, so that volatility is substantially reduced

year‑on‑year to EPS. The policy objective is primarily achieved through fixed rate debt. The policy on

interest rate risk within operating leases is to hedge 100% by agreeing fixed rentals with the lessors.

The main floating rate benchmarks on variable rate debt are US dollar SONIA and sterling SONIA.

At 29 March 2025, 87% (2024: 100%) of gross debt (pre‑IFRS 16 and overdraft) was fixed. This fixed rate

protection had an average duration of 4.0 years (2024: 2.3 years).

Interest rate risk within operating leases is hedged 100% by agreeing fixed rentals with the lessors prior to

inception of the lease contracts.

The following sensitivity analysis details the Group’s sensitivity to a 100 basis points (1%) increase in

interest rates throughout the reporting period with all other variables held constant.

	2025	2024
	£m	£m
Impact on profit after tax	1.2	4.8

Diesel fuel price risk

The Group purchases its fuel on a floating price basis and is therefore exposed to changes in diesel prices,

primarily in relation to First Bus operations. The Group’s policy objective is to maintain a significant degree

of fixed price protection in the short term with lower levels of protection in the medium term, so that the

businesses affected are protected from any sudden and significant increases and have time to prepare

for potentially higher costs, whilst retaining some access for potentially lower costs over the medium term.

To achieve this the Group operates a progressive hedging policy. The policy hedge target levels differ by

division but are monitored monthly and appropriate actions taken to maintain satisfactory hedge levels.

Diesel derivatives are used to hedge UK exposure. Risk component hedging has been adopted under IFRS 9,

meaning that the hedged price risk component of the purchased diesel matches that of the underlying

derivative commodity. The hedged risk component is considered to be separately identifiable and reliably

measurable. Variances in pricing of the derivative commodities and the purchased fuel are primarily driven

by further refinement of the fuel or the associated transportation costs which were excluded from the hedge

relationship. Currently First Bus diesel exposure is hedged 90% to March 2026 and 60% to March 2027.

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Notes to the consolidated financial statements

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23 Financial instruments

continued

The Group has entered into swaps for periods from April 2025 to March 2027 with the majority of these

swaps relating to the 52 weeks ending 31 March 2026. The swaps give rise to monthly cash flow exchanges

with counterparties to offset the underlying settlement of floating price costs, except where they have a

deferred start date. Gains or losses on fuel derivatives are recycled from equity into inventory on qualifying

hedges to achieve fixed rate fuel costs within operating results.

The following analysis details the Group’s sensitivity on profit after tax and equity if the price of diesel fuel

had been $10 per barrel higher during the 53 weeks ending 30 March 2024 and at the year end:

	2025	2024
	£m	£m
Impact on profit after tax	(0.4)	(0.5)
Impact on hedging reserve	4.3	2.7

Electricity price risk

The Group purchases electricity on a floating price basis and is therefore exposed to changes in electricity

prices, primarily in relation to First Bus and Group operations. The Group’s policy objective is to maintain a

significant degree of fixed price protection in the short term, so that the businesses affected have time to

prepare for prices after the current hedge period expires. To achieve this the Group uses cash flow hedge

financial instruments to achieve significant fixed price certainty.

The Group has entered into swaps for periods from April 2025 to March 2027, with the majority of these

swaps relating to the 52 weeks ending 31 March 2026. The swaps give rise to monthly cash flow exchanges

with counterparties to offset the underlying settlement of floating price costs, except where they have a

deferred start date. Gains or losses on electricity derivatives will be recycled from equity to the income

statement on qualifying hedges to achieve fixed rate electricity costs within operating results.

The following analysis details the Group’s sensitivity on profit after tax and equity if the price of electricity

had been £50 per MWh higher during the 52 weeks ending 29 March 2025 and at the year end:

	2025	2024
	£m	£m
Impact on profit after tax	(0.4)	(0.2)
Impact on hedging reserve	2.6	2.6

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24 Deferred tax

The major deferred tax (assets)/liabilities recognised by the Group and movements thereon during the current and prior reporting periods are as follows:

			Other
	Accelerated	Retirement	temporary
	tax depreciation	benefit schemes	differences	Tax losses	Total
	£m	£m	£m	£m	£m
At 25 March 2023	24.7	8.6	(41.4)	(38.9)	(47.0)
Charge/(credit) to income statement	7.0	(33.4)	14.2	(1.1)	(13.3)
Charge/(credit) to other comprehensive income and equity	–	20.2	(0.2)	–	20.0
Acquisitions and disposals of subsidiaries	0.7	–	–	–	0.7
At 30 March 2024	32.4	(4.6)	(27.4)	(40.0)	(39.6)
Charge/(credit) to income statement	(0.1)	1.9	16.6	9.1	27.5
Charge/(credit) to other comprehensive income and equity	–	7.5	(0.3)	–	7.2
Acquisitions and disposals of subsidiaries	11.1	–	(4.0)	(49.4)	(42.3)
At 29 March 2025	43.4	4.8	(15.1)	(80.3)	(47.2)

With respect to the total net deferred tax asset of £47.2m, UK net deferred tax assets of £46.3m have been recognised as the Group forecasts sufficient taxable profits in future periods and a deferred tax asset of

£0.9m relating to the US is recognised because it is probable that book gains will arise on the remaining US property portfolio.

No deferred tax has been recognised on tax losses of £413.9m (2024: tax losses of £457.9m) as there are insufficient future profits forecast in North America and some UK entities may cease to trade before their tax

losses can be utilised.

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25 Provisions

	Onerous	Insurance	Legal and
	contracts	claims	other	Total
	£m	£m	£m	£m
At 30 March 2024	–	100.2	85.7	185.9
Charged/(credited) to the income statement	–	14.7	(1.4)	13.3
Utilised in the year	(1.5)	(34.9)	(4.5)	(40.9)
Business acquisitions	38.0	16.0	0.2	54.2
Notional interest	–	(0.2)	–	(0.2)
Foreign exchange movements	–	(1.5)	(0.6)	(2.1)
At 29 March 2025	36.5	94.3	79.4	210.2
Current liabilities	20.8	32.6	42.8	96.2
Non‑current liabilities	15.7	61.7	36.6	114.0
At 29 March 2025	36.5	94.3	79.4	210.2
Current liabilities	–	35.7	38.9	74.6
Non‑current liabilities	–	64.5	46.8	111.3
At 30 March 2024	–	100.2	85.7	185.9

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 (2024: £1.1m) can extend for more than 25 years. The utilisation of £34.9m (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 £34.7m (2024: £55.7m) relates to legacy Greyhound claims, includes £31.0m (2024: £50.8m) which is recoverable from insurance companies and a receivable is included within

other receivables in note 16.

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. Also included 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.

The onerous contract provision of £38.0m was recognised on acquisition of London bus operator RATP Dev Transit London Limited and its subsidiaries. The provision recognises that a number of contracts between the

acquired business and TfL are loss making and therefore the Group has provided for the expected shortfall in these contracts, where the unavoidable costs of fulfilling these contracts outweigh the expected benefits.

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26 Called up share capital

	Number
	of shares
	million	£m
Allotted, called up and fully paid (ordinary shares of 5p each)
Balance as at 31 March 2024	750.7	37.5
Balance as at 29 March 2025 (ordinary shares of 5p each)	750.7	37.5

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 for a

total consideration of £115.8m including transaction costs.

On 14 November 2024, the Company announced a share buyback programme to purchase up to £50m or ordinary shares. This buyback programme completed on 21 March 2025 having repurchased 30,498,221

shares for a total consideration of £50.4m including transaction costs.

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27 Reserves

The share premium account represents the premium on shares issued since 1999 and arose principally on the rights issue on the Ryder acquisition in 1999 and the share placings in 2007 and 2008. The reserve is

non‑distributable. The hedging reserve records the movement on designated hedging items. The own shares reserve represents the cost of shares in FirstGroup plc purchased in the market and either held as treasury

shares or held in trust to satisfy the exercise of share options.

Hedging reserve

The movements in the hedging reserve were as follows:

	2025	2024
	£m	£m
Balance at 30 March 2024/25 March 2023	(1.8)	(0.7)
Transfer to hedging reserve through consolidated statement of comprehensive income
Diesel derivatives	(4.3)	8.1
Electricity derivatives	1.2	(3.8)
Interest rate swaps – NextGen	0.2	(0.5)
Currency forwards	(1.1)	1.3
	(4.0)	5.1
Tax on derivative hedging instrument movements through statement of comprehensive income	1.0	(0.5)
Transfer from hedging reserve to the balance sheet:
Diesel derivatives	0.9	(5.5)
Electricity derivatives	1.6	2.1
Currency forwards	0.9	(0.6)
	3.4	(4.0)
Tax on derivative hedging instrument movements to the balance sheet	(0.8)	1.0
	(2.2)	0.9
Cumulative loss on hedging instruments reclassified to the income statement	–	(2.7)
Balance at 29 March 2025/30 March 2024	(2.2)	(1.8)

Own shares

The number of own shares held by the Group at the end of the year was 185,125,956 (2024: 125,292,999) FirstGroup plc ordinary shares of 5p each. Of these, 19,401,442 (2024: 14,379,907) were held by the FirstGroup

plc Employee Benefit Trust, nil (2024: 32,520) by the FirstGroup plc Qualifying Employee Share Ownership Trust and 157,229 (2024: 157,229) were held as treasury shares, with a further 165,567,285 (2024: 110,723,343

held as treasury shares as part of the share buyback programmes. Both trusts and treasury shares have waived the rights to dividend income from the FirstGroup plc ordinary shares. The market value of the shares at

29 March 2025 was £303.6m (2024: £226.0m).

	Capital
	redemption	Capital	Total other
	reserve	reserve	reserves
	£m	£m	£m
Balance at 29 March 2025/30 March 2024	19.7	2.7	22.4

The capital redemption reserve represents the cumulative par value of all shares bought back and cancelled, less the associated transaction costs and stamp duty. The capital reserve arose on acquisitions made in

2000. Neither reserve is distributable.

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28 Translation reserve

	2025	2024
	£m	£m
At 30 March 2024/25 March 2023	(22.9)	(16.3)
Movement for the financial year	1.0	(6.6)
At 29 March 2025/30 March 2024	(21.9)	(22.9)

The translation reserve records exchange differences arising from the translation of the balance sheets of foreign currency denominated subsidiaries offset by movements on loans used to hedge the net investment in

those foreign subsidiaries.

29 Acquisition of businesses and subsidiary undertakings

				Matthews Coach	Open access –	Open access –	Total
	RATP London	Andersons Travel	Lakeside Group	Hire	Stirling	Carmarthen	£m
Provisional fair value of net assets acquired
Intangible assets	3.9	–	–	–	–	–	3.9
Property, plant and equipment	169.9	10.0	8.1	4.7	–	–	192.7
Deferred tax	44.3	(0.9)	(1.1)	–	–	–	42.3
Inventories	2.0	0.1	0.2	0.2	–	–	2.5
Trade and other receivables	12.0	5.1	1.7	0.6	–	–	19.4
Cash and cash equivalents	0.4	0.6	2.0	1.1	–	–	4.1
Trade and other payables	(24.7)	(4.9)	(0.6)	(0.7)	–	–	(30.9)
Taxation	(3.9)	(0.3)	0.1	(0.5)	–	–	(4.6)
Provisions	(54.2)	–	–	–	–	–	(54.2)
Lease liabilities	(69.9)	(2.9)	–	–	–	–	(72.8)
Asset backed financial liabilities	(43.3)	(3.6)	(2.1)	–	–	–	(49.0)
Net identifiable assets acquired	36.5	3.2	8.3	5.4	–	–	53.4
Goodwill	10.8	3.9	7.5	6.5	1.5	7.0	37.2
Net assets acquired	47.3	7.1	15.8	11.9	1.5	7.0	90.6
Satisfied by:
Cash consideration	47.3	7.1	15.8	11.9	1.5	7.0	90.6
Less: cash and cash equivalents acquired	(0.4)	(0.6)	(2.0)	(1.1)	–	–	(4.1)
Net cash outflow in respect of acquisitions	46.9	6.5	13.8	10.8	1.5	7.0	86.5

Acquisitions in 52 weeks to 29 March 2025

On 21 October 2024, 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’s 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 2024, 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.

On 4 February 2025, the Group announced its acquisition of Matthews Coach Hire Limited, a coach and bus operator in Ireland with a fleet of more than 40 vehicles. The acquisition will allow the Group to expand its

presence in non‑airport commuter and B2B markets in Ireland.

On 28 February 2025, the Group acquired the acquisition of London bus operator RATP Dev Transit London Limited and its subsidiaries (‘First Bus London’). The acquisition facilitated the Group’s entry into the London

bus market and supports the Group’s strategy of growing and diversifying its revenue base.

On 19 August 2024, the Group acquired Grand Union Trains WCML Holdings Limited and its subsidiary companies, which owns the open access track access rights for the London Euston – Stirling route. On 4 December

2024, the Group acquired Grand Union Trains GWML Holdings Limited and its subsidiary companies, which owns the open access track access right for the London Paddington – Carmarthen route.

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29 Acquisition of businesses and subsidiary undertakings

continued

The businesses acquired during the year contributed £34.6m to Group revenue and £2.2m profit to Group operating profit from the date of acquisition.

If the acquisitions had been completed on the first day of the financial year, revenue from the acquisitions for the year would have been £315.7m and operating losses from the acquisitions would have been £(17.7)m.

The Group is currently undertaking the purchase price allocation exercise for First Bus London, and this has identified a number of adjustments to reflect the fair value of the assets and liabilities acquired. IFRS 3 Business

Combinations allows the Group 12 months from the date of acquisition to finalise this exercise, and the standard acknowledges that it will be necessary to estimate certain acquisition adjustments and fair values. Owing to

the proximity of the acquisition to the reporting date, the acquisition adjustments and closing fair values are therefore disclosed in the financial statements as provisional. These will be finalised within the timeframe

permitted by IFRS 3.

Acquisitions in 53 weeks to 30 March 2024

On 23 February 2024, the Group completed the acquisition of York Pullman Bus Company Ltd for total consideration of £15.5m, which operates five coach services brands providing home‑to‑school and college contracted

services, private hire operations including rail replacement services, and a small number of local bus routes on behalf of several local authorities. Net assets acquired were £4.2m, with goodwill arising of £11.3m.

30 Net cash from operating activities

	2025	2024
	£m	£m
Operating profit from:
Continuing operations	222.6	46.5
Discontinued operations	4.9	(5.3)
Total operations	227.5	41.2
Adjustments for:
Depreciation charges	620.2	589.7
Capital grant amortisation	(65.3)	(48.7)
Software amortisation charges	2.7	3.4
Impairment	–	3.8
Share‑based payments	10.5	15.6
Profit on disposal of property, plant and equipment	(0.2)	(5.7)
Operating cash flows before working capital and pensions	795.4	599.3
(Increase)/decrease in inventories	(2.4)	0.1
Decrease/(increase) in receivables	109.4	(3.1)
Decrease in payables due within one year	(31.3)	(103.1)
(Increase)/decrease in financial assets	(1.0)	23.7
Decrease in provisions due within one year	(13.9)	(12.4)
Decrease in provisions due over one year	(14.0)	(15.5)
Settlement of foreign exchange hedge	–	(1.1)
Local Government Pension Scheme refund	–	23.1
Defined benefit pension payments (greater)/lower than income statement charge	(14.0)	115.6
Cash generated by operations	828.2	626.6
Tax paid	(6.0)	(2.2)
Interest paid¹	(68.0)	(81.1)
Net cash from operating activities 2	754.2	543.3

Interest paid includes £49.6m relating to lease liabilities (2024: £62.1m).

Net cash from operating activities is stated after an outflow of £3.2m (2024: inflow of £5.1m) in relation to financial derivative settlement.

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31 Analysis of changes in net debt

	At		Foreign		At
	30 March		exchange		29 March
	2024	Cash flow	movements	Other 3	2025
	£m	£m	£m	£m	£m
Components of financing activities:
Bank loans	–	(70.0)	–	3.3	(66.7)
Bonds	(96.2)	102.8	–	(6.6)	–
Lease liabilities 1	(1,458.5)	553.3	–	(298.4)	(1,203.6)
Asset backed financial liabilities 2	(45.6)	(22.9)	–	(46.8)	(115.3)
Share of NextGen battery debt	(13.2)	(6.8)	–	0.1	(19.9)
Total components of financing activities	(1,613.5)	556.4	–	(348.4)	(1,405.5)
Cash	246.9	(75.7)	0.2	–	171.4
Bank overdrafts	(27.8)	(28.1)	–	(0.5)	(56.4)
Ring‑fenced cash	249.6	66.1	–	–	315.7
Cash and cash equivalents	468.7	(37.7)	0.2	(0.5)	430.7
Net debt (including held for sale – discontinued operations)	(1,144.8)	518.7	0.2	(348.9)	(974.8)

Lease liabilities ‘other’ of £298.4m comprises £125.6m from lease term reassessments and £0.4m termination of leases. In addition there is £50.8m inception of new leases, being £24.7m of rolling stock leases, £10.3m of passenger carrying vehicle leases and £15.8m of

property and other leases, and interest charges of £49.6m. A further £69.9m of lease liabilities were recognised as a result of the First Bus London acquisition and £2.9m as a result of other acquisitions.

Asset backed financial liabilities ‘other’ of £46.8m comprises £43.3m passenger carrying vehicle asset backed financial liabilities on acquisition of First Bus London, and interest charges of £3.5m.

The ‘other’ column for debt items consists of the net inception/acquisition 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 consolidated cash flow statement).

	At		Foreign		At
	25 March		exchange		30 March
	2023	Cash flow	movements	Other	2024
	£m	£m	£m	£m	£m
Components of financing activities:
Bonds	(184.2)	102.9	–	(14.9)	(96.2)
Lease liabilities 1	(1,748.6)	569.0	–	(278.9)	(1,458.5)
Asset backed financial liabilities	(44.2)	20.7	–	(22.1)	(45.6)
Share of NextGen battery debt	–	(13.1)	–	(0.1)	(13.2)
Other debt	(0.6)	0.6	–	–	–
Total components of financing activities	(1,977.6)	680.1	–	(316.0)	(1,613.5)
Cash	421.8	(178.3)	3.4	–	246.9
Bank overdrafts	(82.9)	56.0	–	(0.9)	(27.8)
Ring‑fenced cash	369.6	(120.0)	–	–	249.6
Cash and cash equivalents	708.5	(242.3)	3.4	(0.9)	468.7
Net debt (including held for sale – discontinued operations)	(1,269.1)	437.8	3.4	(316.9)	(1,144.8)

Lease liabilities ‘other’ in the prior year included £216.8m net inception of new leases. This comprised £222.5m inception of new leases, being £191.7m of rolling stock leases, £9.2m of passenger carrying vehicle leases and £21.6m of property and other leases, offset by £5.7m

termination of leases.

statement). Interest charges have been reclassified from the ‘cash flow’ column to the ‘other’ column in this table compared to the 2024 Annual Report.

Accrued interest of £nil (2024: £3.5m) is excluded from the values above and derivative valuations are presented as the clean values.

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32 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 £47.2m (2024: £59.8m) and letters of credit for £123.3m (2024: £164.3m).

The performance bonds primarily relate to First Rail franchise operations of £47.1m and residual North

American obligations of £0.1m (2024: £3.2m). 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 operating arrangements,

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 joint and several basis to the FirstGroup Pension

Scheme Trustee.

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 non‑compliance.

First MTR South Western Trains Limited (FSWT), a subsidiary of the Company and the former 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 (SSWT) (the former operator of the South Western network) is 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 10 June 2025, 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 March 2022, 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.

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33 Operating commitments

	2025	2024
	£m	£m
Minimum payments made under contractual terms recognised in the income statement for the year:
Plant and machinery	5.6	5.5
Track and station access	481.3	473.1
Other assets	18.9	18.0
	505.8	496.6

At the balance sheet dates, the Group had outstanding commitments for future payments under non‑cancellable operating contracts, which fall due as follows:

	2025	2024
	£m	£m
Within one year	355.6	484.1
In the second to fifth years inclusive	175.3	747.8
After five years	198.1	1.1
	729.0	1,233.0

Included in the above commitments are contracts held by the First Rail businesses with Network Rail for access to the railway infrastructure, track, stations and depots of £481.0m (2024: £1,206.9m).

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Notes to the consolidated financial statements

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34 Share‑based payments

Equity‑settled share option plans

The Group recognised total expenses of £10.5m (2024: £15.6m) related to equity‑settled share‑based

payment transactions.

All Employee Plans

(a) Save as you earn (SAYE)

The Group operates an HMRC‑approved savings‑related share option scheme. The scheme is based on

eligible employees being granted options and their agreement to opening a sharesave account with a

nominated savings carrier and to save weekly or monthly over a three‑year period. Sharesave accounts

are held with Computershare. The right to exercise the option is at the employee’s discretion in the six

months following the end of the three‑year period. The plan rules set out the treatment of those who leave

employment before the end of the savings contract. The scheme was offered in FY 2024 and FY 2025.

During the current year, 2,980 employees accepted the invitation to join the scheme and just less than 10m

options were granted at a price of 123 pence per share. Further information is provided in the table below.

	SAYE 2024	SAYE 2023
	Options	Options
	Number	Number
Outstanding at the beginning of the year	–	14,439,530
Granted during the year	9,905,123	–
Exercised during the year	(755)	(42,503)
Lapsed during the year	(577,411)	(1,032,398)
Outstanding at the end of the year	9,326,957	13,364,629
Exercisable at the end of the year	3,351	15,958
Weighted average exercise price (pence)	123	111
Weighted average share price at date of exercise (pence)	161.7	154.8

(b) Buy as you earn (BAYE)

BAYE enables eligible employees to purchase shares from their gross income. Until August 2023, the

Company provided two matching shares for every three shares bought by employees, subject to a

maximum Company contribution of shares to the value of £20 per month. If the shares are held in trust

for five years or more, no income tax and national insurance will be payable. The matching shares will

be forfeited if the corresponding partnership shares are removed from trust within three years of award.

Since August 2023 no matching shares have been offered with the Company preferring to allocate the cost

to support a larger number of options under the SAYE plan.

In March 2025 there were 2,655 (March 2024: 2,681) participants who purchased share during the month

through the BAYE scheme. During the year, scheme participants have purchased 1,252,133 shares.

Discretionary plans

Prior to FY 2022 the discretionary awards were structured as nil cost options. Since that date the awards

have been granted as conditional shares, there is no economic difference for the Company or participants

following this change.

Financial statements

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34 Share‑based payments

continued

DBS awards vest over a three‑year period following the financial year that they relate to and are typically settled by equity.

									DBS 2022	DBS 2023	DBS 2024
	DBS 2014	DBS 2015	DBS 2016	DBS 2017	DBS 2018	DBS 2019	DBS 2020	DBS 2021	Conditional	Conditional	Conditional
	Options	Options	Options	Options	Options	Options	Options	Options	shares	shares	shares
	Number	Number	Number	Number	Number	Number	Number	Number	Number	Number	Number
Outstanding at the beginning of the year	66,171	52,621	37,538	12,333	14,779	68,548	148,801	639,710	1,696,455	831,260	–
Granted during the year	–	–	–	–	–	–	–	–	–	–	795,978
Forfeited during the year	–	–	–	–	–	–	–	–	–	–	–
Exercised/released during the year	(50,722)	(16,075)	(10,742)	(5,795)	(525)	(39,257)	(111,770)	(507,765)	(317,527)	–	–
Lapsed during the year	(15,449)	–	–	–	–	–	–	(2,677)	(18,402)	–	–
Outstanding at the end of the year	nil	36,546	26,796	6,538	14,254	29,291	37,031	129,268	1,360,526	831,260	795,978
Exercisable at the end of the year	nil	36,546	26,796	6,538	14,254	29,291	37,031	129,268	–	–	–
Weighted average share price at date of exercise
(pence)	172.7	171.8	168.1	173.4	163.9	166.8	161.9	155.3	156.6	N/A	N/A

(d) Long‑Term Incentive Plan (LTIP)

The LTIP awards granted in 2021, 2022, 2023 and 2024 have relative TSR, EPS and sustainability targets. Where the threshold measures are exceeded, the awards are settled by equity.

	LTIP 2021	LTIP 2022	LTIP 2023	LTIP 2024
	Options	Options	Options	Options
	Number	Number	Number	Number
Outstanding at the beginning of the year	2,588,698	7,440,071	7,355,892	–
Granted during the year	–	–	–	6,851,347
Forfeited during the year	–	–	–	(139,483)
Lapsed during the year	–	(216,751)	(265,454)	–
Exercised during the year	(2,557,457)	–	–	–
Outstanding at the end of the year	31,241	7,223,320	7,090,438	6,711,864
Exercisable at the end of the year	31,241	–	–	–
Weighted average share price at date of exercise (pence)	155.1	N/A	N/A	N/A

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34 Share‑based payments

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(e) Executive Share Plan (ESP)

ESP awards vest over a three‑year period following the financial year that they relate to and are typically settled by equity.

								ESP 2022	ESP 2023	ESP 2024
	ESP 2015	ESP 2016	ESP 2017	ESP 2018	ESP 2019	ESP 2020	ESP 2021	Conditional	Conditional	Conditional
	Options	Options	Options	Options	Options	Options	Options	shares	shares	shares
	Number	Number	Number	Number	Number	Number	Number	Number	Number	Number
Outstanding at the beginning of the year	41,391	44,889	57,140	152,540	425,621	283,956	1,126,197	199,358	11,959	–
Granted during the year	–	–	–	–	–	–	–	–	–	467,304
Forfeited during the year	–	–	–	–	–	–	–	–	–	–
Lapsed during the year	–	–	–	(4,387)	(4,130)	–	(33,031)	–	–	–
Exercised/released during the year	(3,224)	(3,445)	(39,832)	(84,496)	(170,610)	(269,238)	(742,334)	(183,357)	(3,987)	–
Outstanding at the end of the year	38,167	41,444	17,308	63,657	250,881	14,718	350,832	16,001	7,972	467,304
Exercisable at the end of the year	38,167	41,444	17,308	63,657	250,881	14,718	350,832	16,001	–	–
Weighted average share price at date of exercise/release
(pence)	175.4	175.4	171.2	168.8	166.6	167.6	161.8	154.5	152.9	N/A

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34 Share‑based payments

continued

The fair values of the awards granted during the last two years were measured using a Black‑Scholes

model except for the TSR element of the LTIPs which were measured using a Monte Carlo model.

The inputs into the models were as follows:

	2025	2024
	pence	pence
Weighted average share price at grant date (pence)
– DBS	164.8	135.8
– LTIP	164.5	136.2
– ESP	164.4	138.8
Weighted average exercise price at grant date (pence)
– DBS	–	–
– LTIP	–	–
– ESP	–	–
Expected volatility (%)
– DBS	N/A	N/A
– LTIP	59	59
– ESP	N/A	N/A
Expected life (years)
– DBS	3.0	3.0
– SAYE schemes	N/A	N/A
– LTIP	3.0	3.0
– ESP	3.0	3.0
Rate of interest (%)
– DBS	N/A	N/A
– LTIP	–	–
– ESP	–	–
Expected dividend yield (%)
– DBS	3.3%	–
– LTIP	3.3%	–
– ESP	3.3%	–

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the

previous five years. The expected life used in the model has been adjusted based on management’s best

estimate, for the effects of non‑transferability, exercise restrictions and behavioural considerations.

Allowances have been made for the SAYE schemes for the fact that, amongst a group of recipients some

are expected to leave before an entitlement vests. The accounting charge is then adjusted over the vesting

period to take account of actual forfeitures, so although the total charge is unaffected by the pre‑vesting

forfeiture assumption, the timing of the recognition of the expense will be sensitive to it. Fair values for the

SAYE include a 10% per annum pre‑vesting leaver assumption whereas the Executive, LTIP and deferred

share plans exclude any allowance for pre‑vesting forfeitures.

	2025	2024
	pence	pence
Weighted average fair value of options at grant date
– DBS	154.4	135.2
– LTIP	116.3	100.5
– ESP	154.3	128.2

Financial statements

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35 Retirement benefit schemes

The Group supports defined contribution (DC) and defined benefit (DB) schemes for the benefit

of employees across the following business areas:

First Bus

DB schemes: The First UK Bus Pension Scheme and The FirstGroup Pension Scheme. The First UK Bus

Pension Scheme is currently being wound up.

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.

Employees in Group corporate functions participate in the First Bus pension arrangements.

First Rail

DB schemes: Railways Pension Scheme (RPS) Shared Cost Sections. As at the balance sheet date, the

Group sponsored four sections of the RPS in respect of TOCs operating under NRCs. Following the

expiry of the SWR contract after the balance sheet date, the number of TOCs sections sponsored by the

Group reduced to two. 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. Additionally, the Group sponsors a section for its open access Hull Trains

business, which closed to new entrants in March 2024.

DC schemes: RPS Industry‑Wide Defined Contribution (IWDC) Section. Hull Trains employees who are not

eligible for the DB section, and Tram Operations employees, are enrolled into the IWDC Section.

North America

The Group is winding up legacy schemes from operations which have now been sold. During the year, the

remaining liabilities in the US were bought out in July 2024, and winding up of the legacy Greyhound US

pension plan was completed in December 2024. In Canada, the liabilities of the Greyhound Canada

Retirement Income Plan have been secured with a group annuity contract. As the winding up of the plan

progresses, this will convert to a buyout.

Each of these groups of arrangements have therefore been shown separately.

Overall, the duration of the Company’s obligations is approximately 16 years although the durations of the

individual schemes tend to vary.

The pension schemes in the UK are operated independently of the Group by the relevant pension

scheme’s trustee. All pension scheme assets are held separately from FirstGroup’s assets. The managers

or trustees (as appropriate) of the pension schemes are responsible for the investment policy, although the

sponsor is consulted.

The market value of the assets as at 29 March 2025 for all non‑contract rail operation DB schemes totalled

£1,135m (2024: £1,413m). The present value of scheme liabilities for all non‑contract rail operation defined

benefit schemes totalled £1,112m (2024: £1,438m).

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 DB 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. Legal analysis of the Group’s DB schemes did not locate any evidence to suggest that

a confirmation by the scheme actuary for relevant benefit amendments was required but not obtained.

Furthermore, it is understood that legislation is being developed that allow the appropriate retrospective

confirmations, thereby reducing or removing any potential impact.

(a) First Bus and Group (including open access rail operators)

DC plans (shown on a continuing basis)

Payments to DC plans are charged as an expense as they fall due. There is no further obligation to pay

contributions into a DC plan once the contributions specified in the plan rules have been paid. The total

expense recognised in the consolidated income statement of £36.0m (2024: £31.6m) represents

contributions payable to these plans by the Group at rates specified in the rules of the plans.

The Group operates DC plans for all Group and First Bus employees, and First Rail employees who are not

eligible to join a DB arrangement. They receive a company match to their contributions, which varies by

salary and/or service.

DB plans (shown on a continuing basis)

The Group has full responsibility for the retirement benefits for former and current employees of Group,

First Bus and Hull Trains who are members of the schemes described in the following paragraphs, bearing

all the risks and responsibilities of sponsorship of these schemes. These comprise three funded DB plans

across its First Bus and Group operations (including Hull Trains which, unlike the majority of First Rail

operations, is operated under open access), covering approximately 22,200 former and current employees.

All of these schemes are closed to new entrants.

Triennial valuations assess the cost of future service (where relevant) and the funding position. The

employer and trustees are required to agree on assumptions for the valuations and to agree the

contributions that result from these. Deficit recovery contributions may be required in addition to future

service contributions. In agreeing contribution rates, reference must be made to the affordability of

contributions by the employer.

At their last valuations, the DB schemes had funding levels between 74% and 94% (2024: 74% and 94%).

Surplus after benefits have been paid/secured, can be repaid to the employer, in line with the rules of

the schemes.

The First UK Bus Pension Scheme

During the year, the majority of the assets and liabilities of The First UK Bus Pension Scheme were

transferred to a newly created Bus Section of the FirstGroup Pension Scheme. Winding up of The First UK

Bus Pension Scheme started in September 2024 with a number of small benefits having now been settled

with payment of winding‑up lump sums. Members’ winding‑up benefits have been paid out over the

course of the year in two tranches, with a total £21.3m of winding‑up lump sums paid, extinguishing

obligations valued at £24.1m. The resulting gain of £2.8m has been recognised in income for curtailment

gains. After the lump sums exercise is completed, and remaining assets and liabilities will be transferred to

The FirstGroup Pension Scheme, The First UK Bus Pension Scheme will be wound up.

The FirstGroup Pension Scheme

The FirstGroup Pension Scheme is a legacy DB scheme that is closed to benefit accrual. It now comprises

two sections – a Group Section (members already of the FirstGroup Pension Scheme prior to merging with

The First UK Bus Pension Scheme) and a Bus Section (members transferring from The First UK Bus

Pension Scheme).

The rules governing both these schemes grant the employer influence over the allocation of any residual

surplus once the beneficiaries’ rights have been secured. Accordingly, the net surplus/deficit is recognised

in full for these schemes.

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35 Retirement benefit schemes

continued

Local Government Pension Schemes

The Group no longer participates in the LGPS after terminating in the prior year. An adjusting income statement expense for settlement charges and related costs of £146.9m was recognised in the prior year, with gains

of £5.0m recognised in income for curtailment gains and £161.0m recognised in Other comprehensive income in relation to the restricted accounting surplus in FY 2024. The termination of participation removed

£543.3m and £153.9m of obligations and £679.8m and £159.5m of assets from the Group’s balance sheet for the Greater Manchester Pension Fund and North East Scotland Pension Fund respectively during the prior

year. From a cash perspective, there were no payments required in relation to the exit from the Greater Manchester Pension Fund, while a payment of £23.1m was made from the North East Scotland Pension Fund to

the Group.

The Hull Trains Shared Cost Section of the Railways Pension Scheme

Hull Trains participates in its own Section of the Railways Pension Scheme. This scheme closed to new entrants in March 2024, but remains open to the accrual of salary‑related benefits employees who became

members before March 2024. Costs relating to accrual and to any deficit are shared with members. Any deficit is now fully borne by the sponsor – the impact of this currently has a negligible impact on the accounting

balance sheet.

The table below is set out to show the movements in the fair value of schemes’ assets (Assets) along with the movements in the present value of Defined Benefit Obligations (DBO) (Liabilities) for the DB schemes

described above:

	2025		2024
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
At beginning of period	1,147.8	1,161.8	2,166.9	1,972.5
Income statement
Operating
– Current service cost	–	5.9	–	5.8
– Past service gain including curtailments	–	–	–	(5.0)
– Settlement in relation to winding‑up lump sums	(21.3)	(24.1)	–	–
– Settlement in relation to LGPS participation termination	–	–	(839.3)	(697.2)
Total operating	(21.3)	(18.2)	(839.3)	(696.4)
Interest income/cost	54.8	53.8	81.2	74.8
Total income statement 1	33.5	35.6	(758.1)	(621.6)
Amounts paid to/(from) scheme
Employer contributions	8.6	–	6.0	–
Employee contributions	0.4	0.4	0.7	0.7
Benefits paid	(70.6)	(70.6)	(100.2)	(100.2)
Total	(61.6)	(70.2)	(93.5)	(99.5)
Expected closing position	1,119.7	1,127.2	1,315.3	1,251.4
Change in financial assumptions	–	(108.9)	–	(87.4)
Change in demographic assumptions	–	(2.5)	–	(14.3)
Employee share of changes	–	–	–	0.2
Return on assets in excess of discount rate	(127.2)	–	(167.5)	–
Experience	–	(45.7)	–	11.9
Total	(127.2)	(157.1)	(167.5)	(89.6)
At end of period	992.5	970.1	1,147.8	1,161.8

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35 Retirement benefit schemes

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	2025		2024
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
Surplus/(deficit) before adjustment		22.4		(14.0)
Impact of shared cost		–		–
Adjustment for irrecoverable surplus		–		–
Surplus/(deficit) in schemes		22.4		(14.0)
The amount is presented in the consolidated balance sheet as follows:
Non‑current assets		27.0		6.0
Non‑current liabilities		(4.6)		(20.0)
		22.4		(14.0)

In the prior year there was a financing charge of £4.3m relating to the interest on the asset ceiling as shown in the table below.

Adjustment for First Bus irrecoverable surplus

Movements in the adjustment for the First Bus irrecoverable surplus in the prior year were as follows:

	2025	2024
	£m	£m
At beginning of period	–	(156.7)
Interest on irrecoverable surplus	–	(4.3)
Gain on settlement of LGPS arrangements	–	161.0
Actuarial gain on irrecoverable surplus	–	–
At end of period	–	–

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35 Retirement benefit schemes

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Asset Allocation

	Quoted	Unquoted	Total
At March 2025	£m	£m	£m
Equity	17.0	159.3	176.3
Other return seeking assets	–	20.1	20.1
Real estate	–	1.6	1.6
Fixed income/liability driven	553.9	219.9	773.8
Other income generating	–	0.8	0.8
Cash and cash equivalents	19.9	–	19.9
	590.8	401.7	992.5
	Quoted	Unquoted	Total
At March 2024	£m	£m	£m
Equity	16.1	163.6	179.7
Other return seeking assets	–	27.2	27.2
Real estate	–	3.5	3.5
Fixed income/liability driven	680.0	243.7	923.7
Other income generating	–	1.0	1.0
Cash and cash equivalents	12.7	–	12.7
	708.8	439.0	1,147.8

(b) North America

Greyhound pension arrangements

The Group has retained certain responsibilities for the provision of retirement benefits for some legacy schemes.

The Group no longer operates a pension plan in the US (2024: one), while in Canada, there is a legacy plan (2024: one) with a DB and a DC section that is currently being wound up, and a small unfunded supplementary

executive retirement plan (SERP) with a single beneficiary.

On 18 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 net

contribution of $5.3m, gross liabilities of $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 £5.1m in the

Group’s income statement as an adjusting item.

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35 Retirement benefit schemes

continued

The table below is set out to show the movements in the fair value of schemes’ assets (Assets) along with the movements in the present value of DBO (Liabilities) for the North American DB schemes:

	2025		2024
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
At beginning of period (including held for sale)	264.8	276.1	366.8	369.5
Income statement
Operating
– Current service cost	–	1.8	–	3.4
– Past service gain including curtailments and settlements	(106.7)	(113.2)	(57.7)	(58.9)
Total operating	(106.7)	(111.4)	(57.7)	(55.5)
Interest income/cost	8.4	8.6	15.1	15.2
Total income statement	(98.3)	(102.8)	(42.6)	(40.3)
Amounts paid to/(from) scheme
Employer contributions	4.1	–	0.6	–
Employee contributions	–	–	–	–
Benefits paid	(23.4)	(23.4)	(43.2)	(43.2)
Total	(19.3)	(23.4)	(42.6)	(43.2)
Expected closing position	147.2	149.9	281.6	286.0
Change in financial assumptions	–	4.8	–	(5.1)
Change in demographic assumptions	–	2.0	–	4.7
Return on assets in excess of discount rate	9.8	–	(7.5)	–
Experience	–	0.3	–	–
Total	9.8	7.1	(7.5)	(0.4)
Currency gain/loss	(14.4)	(14.7)	(9.3)	(9.5)
At end of period	142.6	142.3	264.8	276.1

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35 Retirement benefit schemes

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	2025		2024
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
Surplus/(deficit)
Calculated as at 30 March		0.3		(11.3)
Opening irrecoverable surplus		–		(6.8)
Change in irrecoverable surplus		–		6.8
Presented in the consolidated balance sheet as Non‑current assets/(liabilities)		0.3		(11.3)

Asset Allocation

	Quoted	Unquoted	Total
At March 2025	£m	£m	£m
Annuities	–	135.7	135.7
Cash and cash equivalents	6.9	–	6.9
	6.9	135.7	142.6
	Quoted	Unquoted	Total
At March 2024	£m	£m	£m
Fixed income/liability driven	109.4	–	109.4
Annuities	–	148.2	148.2
Cash and cash equivalents	7.2	–	7.2
	116.6	148.2	264.8

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35 Retirement benefit schemes

continued

The Railways Pension Scheme (RPS)

The Group is responsible for collecting and paying contributions for a number of sections of the 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 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.

As at the balance sheet date, the Group sponsored four sections of the RPS, relating to its contracting

obligations for its TOCs. Following the expiry of the SWR contract after the balance sheet date, the number

of TOC sections sponsored by the Group reduced to two. In line with Government policy to take TOCs

into public ownership, sponsorship of these remaining sections is expected to transfer to new ownership

in due course.

For the TOC sections, under the contractual arrangements with the DfT, the employer’s responsibility is

to pay the contributions following triennial funding 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 no compensating 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.

Movements in the TOC contract adjustment in a period arise from and are accounted for as follows:

Any service cost for the period for which the contribution schedule requires no contributions from the

entity are reflected as an adjustment to the service cost in the income statement, which is considered to

be in line with paragraphs 92‑94 of IAS 19 (Revised).

Under circumstances where contributions are renegotiated, such as following a statutory valuation,

any adjustment necessary to reflect an obligation to fund past service cost will be recognised in the

income statement.

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35 Retirement benefit schemes

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The disclosed information has been set out to illustrate the effect of this on the costs borne by FirstGroup. In particular, 40% of the costs, gains or losses and any deficit are attributed to the members. In addition, the

total surplus or deficit is adjusted by way of a ‘contract adjustment’ which includes an assessment of the changes that will arise from contracted future contributions and which is the portion of the deficit or surplus

projected to exist at the end of the contract which the Group will not be required to fund or benefit from.

			Adjustment
			for employee
			share of RPS	Contract
	Assets	Liabilities	deficits (40%)	adjustment	Net
	£m	£m	£m	£m	£m
At 1 April 2024	3,722.4	(3,588.7)	(53.4)	(80.3)	–
Income statement
Operating
– Service cost	–	(135.2)	54.1	34.4	(46.7)
– Admin cost	–	(6.5)	2.6	–	(3.9)
Total operating	–	(141.7)	56.7	34.4	(50.6)
Financing	180.6	(169.6)	(4.4)	(6.6)	–
Total income statement	180.6	(311.3)	52.3	27.8	(50.6)
Amounts paid to/(from) scheme
Employer contributions	50.6	–	(20.2)	20.2	50.6
Employee contributions	33.4	–	(13.4)	(20.0)	–
Benefits paid	(157.1)	157.1	–	–	–
Total	(73.1)	157.1	(33.6)	0.2	50.6
Expected closing position	3,829.9	(3,742.9)	(34.7)	(52.3)	–
Change in financial assumptions	–	604.0	(241.6)	(362.4)	–
Change in demographic assumptions	–	9.7	(3.9)	(5.8)	–
Return on assets in excess of discount rate	(171.9)	–	68.7	103.2	–
Experience	–	58.8	(23.5)	(35.3)	–
Total	(171.9)	672.5	(200.3)	(300.3)	–
At 31 March 2025	3,658.0	(3,070.4)	(235.0)	(352.6)	–

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Notes to the consolidated financial statements

continued

35 Retirement benefit schemes

continued

			Adjustment
			for employee
			share of RPS	Contract
	Assets	Liabilities	deficits (40%)	adjustment	Net
	£m	£m	£m	£m	£m
At 1 April 2023	3,684.3	(3,814.5)	52.1	78.1	–
Impact from non‑renewal of TPE contract	(239.2)	267.7	(11.4)	(17.1)	–
Revised opening position, excluding TPE	3,445.1	(3,546.8)	40.7	61.0	–
Income statement
Operating
– Service cost	–	(128.7)	51.5	24.9	(52.3)
– Admin cost	–	(5.8)	2.3	–	(3.5)
Total operating	–	(134.5)	53.8	24.9	(55.8)
Financing	166.1	(165.4)	(0.3)	(0.4)	–
Total income statement	166.1	(299.9)	53.5	24.5	(55.8)
Amounts paid to/(from) scheme
Employer contributions	55.8	–	(22.3)	22.3	55.8
Employee contributions	36.7	–	(14.7)	(22.0)	–
Benefits paid	(141.7)	141.7	–	–	–
Total	(49.2)	141.7	(37.0)	0.3	55.8
Expected closing position	3,562.0	(3,705.0)	57.1	85.8	–
Change in financial assumptions	–	30.7	(12.3)	(18.4)	–
Change in demographic assumptions		74.6	(29.8)	(44.8)	–
Return on assets in excess of discount rate	160.4	–	(64.1)	(96.3)	–
Experience	–	11.0	(4.4)	(6.6)	–
Total	160.4	116.3	(110.6)	(166.1)	–
At 31 March 2024	3,722.4	(3,588.7)	(53.4)	(80.3)	–

During the year £6.5m (2024: £5.8m) of gross administrative expenses were incurred, included in benefits paid above.

Finance costs above include interest income of £108.4m (2024: £99.7m) and employee share of interest on assets of £72.2m (2024: £66.4m).

Income statement charges on liabilities above of £311.3m (2024: £299.9m) represent:

	2025	2024
	£m	£m
Current service costs	85.0	80.7
Interest costs	101.8	99.2
Employee share of change in DBO (not attributable to contract adjustment)	124.5	120.0
	311.3	299.9

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Notes to the consolidated financial statements

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35 Retirement benefit schemes

continued

Asset Allocation

	Quoted	Unquoted	Total
At 29 March 2025/31 March 2025	£m	£m	£m
Equity	–	1,630.1	1,630.1
Other return seeking assets	–	1,027.2	1,027.2
Real estate	–	335.0	335.0
Fixed income/liability driven	–	654.1	654.1
Cash and cash equivalents	11.6	–	11.6
	11.6	3,646.4	3,658.0
	Quoted	Unquoted	Total
At 30 March 2024/31 March 2024	£m	£m	£m
Equity	–	2,106.4	2,106.4
Other return seeking assets	–	1,166.0	1,166.0
Real estate	–	440.1	440.1
Cash and cash equivalents	9.9	–	9.9
	9.9	3,712.5	3,722.4

The Rail contracts’ assets are invested in pooled funds created specifically for the Rail schemes. As such, these assets have been categorised as unquoted.

(d) Valuation assumptions

The valuation assumptions used for accounting purposes have been made uniform to Group standards, as appropriate, when each scheme is actuarially valued.

	First Bus	First Rail	North America	First Bus	First Rail	North America
	2025	2025	2025	2024	2024	2024
At 29 March 2025/30 March 2024	%	%	%	%	%	%
Key assumptions used:
Discount rate	5.78 – 5.83	5.87	4.50	4.86 – 4.88	4.89	4.85 – 5.16
Expected rate of salary increases	N/A	2.83 – 3.12	N/A	N/A	3.70	N/A
Inflation – CPI	2.61 – 2.62	2.60	2.00	2.61 – 2.62	2.60	2.00
Future pension increases	2.37 2	2.60	N/A	2.58 2	2.60	N/A
Post‑retirement mortality (life expectancy in years) 1
Current pensioners at 65:	19.3	20.1	21.7	19.3	20.1	19.8 – 21.6
Future pensioners at 65 aged 45 now:	19.7	21.5	22.7	19.7	21.5	21.4 – 22.6

Life expectancies reflect the largest underlying plans in each region.

Weighted average for principal scheme.

The Group reviews its longevity assumptions for each scheme following completion of funding valuations. The assumptions adopted reflect recent scheme experience and views on future longevity which may include

industry‑specific adjustment where appropriate. The Group obtains specialist actuarial advice before agreeing longevity assumptions.

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Notes to the consolidated financial statements

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35 Retirement benefit schemes

continued

(e) Sensitivity of retirement benefit obligations to changes in assumptions

The method used to derive the sensitivities is the same as that used to calculate the main disclosures. The exception is longevity where we have instead applied a general rule that one year’s extra life expectancy adds

c.3% to the DBO (with resultant impacts on rail and irrecoverable surplus adjustments). This is consistent with the method applied to deriving last year’s sensitivities.

A 1.0% movement in the discount rate would impact the balance sheet position by approximately £11m. A 1.0% movement in the inflation rate would impact the balance sheet position by approximately £9m.

A one‑year movement in life expectancy would impact the balance sheet position by approximately £29m.

Management considers that the figures provide a suitable indication of the potential impact of reasonably possible changes in the financial assumptions and one‑year change in the mortality assumption. No allowance

has been made for any consequent change in the value of assets held.

(f) Consolidated statement of comprehensive income

Amounts presented in the consolidated statement of comprehensive income comprise:

	2025	2024
	£m	£m
Actuarial gain on DBO	822.9	206.5
Actuarial (loss) on assets	(289.6)	(14.6)
Actuarial (loss) on contract adjustments	(500.4)	(276.7)
Gain on settlement of LGPS arrangements	–	161.0
Adjustment for irrecoverable surplus	–	7.1
Actuarial gains/(losses) on defined benefit schemes	32.9	83.3

(g) Cash contributions

The estimated amounts of employer contributions expected to be paid to the DB schemes during the 52 weeks ending 28 March 2026 is £41.3m based on current contributions schedules in force (29 March

2025: £63.4m).

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Notes to the consolidated financial statements

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35 Retirement benefit schemes

continued

(h) Risks associated with DB plans

Other than for the First Rail TOCs, the number of employees in defined benefit plans is reducing rapidly, as these plans are closed to new entrants, and plans are being terminated. This will serve to limit the risks

associated with DB pension provision by the Group.

Despite remaining open to new entrants and future accrual, the risks posed by the RPS are limited, as under the contractual arrangements with DfT, the First Rail TOCs are not responsible for any residual deficit at the

end of a contract. Furthermore, under these contractual arrangements with the DfT, the First Rail TOCs are indemnified against any short‑term cash flow risks arising from future triennial valuations.

The key risks relating to the other DB pension arrangements and the steps taken by the Group to mitigate them are as follows:

Risk	Description	Mitigation
Asset volatility	The liabilities are calculated using a discount rate set with reference to corporate	Asset liability modelling has been undertaken to ensure that any risks taken are expected
	bond yields; if assets underperform this yield, this will create a deficit. The assets	to be rewarded and, in relation to the Company’s largest pension exposures, further work
	held in the DB arrangements are intended to meet the long‑term funding objectives	is being undertaken to ensure that the investment strategy remains the most appropriate.
	of those arrangements, and therefore results in some risk in the short term and has
	the potential for material adverse movements relative to the liabilities as valued for
	accounting purposes.
Inflation risk	A significant proportion of the UK benefit obligations are linked to inflation and	Investment strategy reviews have led to increased inflation hedging, mainly through
	higher inflation will lead to higher liabilities.	swaps or holding Index Linked Gilts in the UK schemes.
Uncertainty over level	Contributions to DB schemes can be unpredictable and volatile as a result of changes	The Group engages with the trustees to consider how contribution requirements can be
of future contributions	in the funding level revealed at each valuation.	made more stable. The level of volatility and the Group’s ability to control contribution
		levels varies between arrangements.
Life expectancy	The majority of the scheme’s obligations are to provide benefits for the life of the	Linking retirement age to State Pension Age (as in The FirstGroup Pension Scheme) has
	member, so increases in life expectancy will result in an increase in the liabilities.	mitigated this risk to some extent.
Legislative risk	Future legislative changes are uncertain. In the past these have led to increases in	The Group receives professional advice on the impact of legislative changes.
	obligations, through introducing pension increases, vesting of deferred pensions,
	equalisation of certain benefits for men and women or reduced investment return
	through the ability to reclaim Advance Corporation Tax.

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Annual Report and Accounts 2025

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Notes to the consolidated financial statements

continued

36 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Remuneration of key management personnel

The remuneration of the Directors, which comprise the plc Board who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party

Disclosures. Further information about the remuneration of individual Directors is provided in the Annual report on remuneration on pages 96 to 108.

	2025	2024
	£m	£m
Basic salaries 1	1.8	1.8
Fees	0.6	0.7
Post‑employment benefits	0.1	0.1
Share‑based payment	3.6	2.4
	6.1	5.0

Basic salaries include cash emoluments in lieu of retirement benefits, bonuses and car allowances.

37 Events after the reporting period

The Group’s South Western Railway NRC expired on 25 May 2025 and operations transferred to public control under the DfT operator, in line with the Government’s policy and as announced in December 2024.

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Annual Report and Accounts 2025

204

Notes to the consolidated financial statements

continued

38 Information about related undertakings

In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries and equity accounted

investments as at 29 March 2025 is disclosed below. Unless otherwise stated, the Group’s shareholding

represents ordinary shares held indirectly by FirstGroup plc, the entities are unlisted, and have one type of

ordinary share capital, the year end is 29 March. The Group’s interest in the voting share capital is 100%

unless otherwise stated. No subsidiary undertakings have been excluded from the consolidation:

Subsidiaries – wholly owned and incorporated in the United Kingdom

Anderson Tours Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Tours Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Travel Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Travel Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Airport Buses Limited,

3,5

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

Airport Coaches Limited,

3,5

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

Airporter Limited,

3,7

21 Arthur Street, Belfast, BT1 4GA

A.T. Brown (Coaches) Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Butler Woodhouse Limited,

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

CCB Holdings Limited,

3,4,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

CentreWest Limited,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

CentreWest London Buses Limited,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Chester City Transport Limited,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Crosville Limited,

Bus Depot, Wallshaw Street, Oldham, OL1 3TR

East Coast Trains Limited,

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

ECOC (Holdings) Limited,

1,5

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

Ensign Bus Company Limited,

3,7

The Rifle Range, Juliette Close, Purfleet Industrial Park, Aveley,

South Ockendon, Essex, RM15 4YF

Evolutionary Rail Limited,

3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FB Canada Holdings Limited,

3,4

395 King Street, Aberdeen, AB24 5RP

FG Canada Investments Limited,

3,4

395 King Street, Aberdeen, AB24 5RP

FG Properties Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FGI Canada Holdings Limited,

3,4

395 King Street, Aberdeen, AB24 5RP

FK Cross London Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Aberdeen Limited,

3,7

395 King Street, Aberdeen, AB24 5RP

First Beeline Buses Limited,

3,7

Hoeford, Gosport Road, Fareham, Hampshire, PO16 0ST

First Bus Central Services Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus London Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Pension GP Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Retirement Savings Plan Trustee Limited,

3,4

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

First Capital Connect Limited,

3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Capital East Limited,

3,5

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

First City Line Ltd,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Customer Contact Limited,

8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Cymru Buses Limited,

3,7

Heol Gwyrosydd, Penlan, Swansea, SA5 7BN

First Eastern Counties Buses Limited,

3,7

Davey House, 7b Castle Meadow, Norwich, Norfolk, NR1 3DE

First Essex Buses Limited,

3,7

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

First Glasgow (No.1) Limited,

100 Cathcart Road, Glasgow, G42 7BH

First Glasgow (No.2) Limited,

3,7

100 Cathcart Road, Glasgow, G42 7BH

First Hampshire & Dorset Limited,

3,7

Hoeford, Gosport Road, Fareham, Hampshire, PO16 0ST

First International (Holdings) Limited),

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First International No.1 Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First London Cableway Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Manchester Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Midland Red Buses Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First North West Limited,

3,4

Wallshaw Street, Oldham, OL1 3TR

First Northern Ireland Limited,

3,7

21 Arthur Street, Belfast, BT1 4GA

First Potteries Limited,

3,7

Abbey Lane, Leicester, England, LE4 0DA

First Provincial Buses Limited,

4,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Holdings Limited,

1,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail London Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Open Access Holdings Limited,

1,3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Procurement Limited,

1,3,8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Stirling Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Stirling Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Wales and Western Limited,

3,7

Heol Gwyrosydd, Penlan, Swansea SA5 7BN

First Rail Wales and Western Holdings Limited,

3,4

Heol Gwyrosydd, Penlan, Swansea SA5 7BN

First ScotRail Limited,

3,9

395 King Street, Aberdeen, AB24 5RP

First South West Limited,

3,7

Union Street, Camborne, Cornwall, TR14 8HF

First South Yorkshire Limited,

3,7

Olive Grove, Sheffield, South Yorkshire, S2 3GA

First Student UK Limited,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First TransPennine Express Limited,

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Travel Solutions Limited,

Unit 5 Petre Court, Petre Road Clayton Business Park,

Clayton Le Moors, Accrington, BB5 5HY

First West of England Limited,

Enterprise House, Easton Road, Bristol, BS5 0DZ

First West Yorkshire Limited,

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

First York Limited,

3,7

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

FirstBus (North) Limited,

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstBus Group Limited,

3,4,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstBus Holdings Limited,

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstBus Investments Limited,

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup American Investments,

3,4

395 King Street, Aberdeen, AB24 5RP

FirstGroup Canadian Finance Limited,

1,3,6

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Energy Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Holdings Limited,

1,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Pension GP Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup US Finance Limited,

1,3,6

395 King Street, Aberdeen, AB24 5RP

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Notes to the consolidated financial statements

continued

FirstGroup US Holdings,

3,4

395 King Street, Aberdeen, AB24 5RP

Grenville Motors Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

GRT Bus Group Limited,

1,3,4

395 King Street, Aberdeen, AB24 5RP

Hall and Davies Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Hampshire Books Limited,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Hull Trains Company Limited,

7,9

The Point, 8th Floor, 37 North Wharf Road, London, England, W2 1AF

JR Davies & Son Holdings Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Lakeside Coaches Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Lakeside Property Portfolio Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Leicester CityBus Limited,

3,7

Abbey Lane, Leicester, England, LE4 0DA

London Mini Coaches Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

London Mini Coaches Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

London Sovereign Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road,

London W4 1SY

London Transit Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road,

London W4 1SY

London United Busways Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road,

London W4 1SY

Lynton Bus and Coach Limited,

3,5

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

Lynton Company Services Limited,

3,5

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

Mainline Partnership Limited,

1,3,4,5

Olive Grove, Sheffield, South Yorkshire, S2 3GA

Mistral Data Limited,

8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Project Coral Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Rider Holdings Limited,

3,4

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

Scott’s Hospitality Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Southampton CityBus Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Southampton City Transport Company Limited,

4,5

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

Specialist Passenger Solutions Ltd,

3,7

J24 Hinkley Point C, Park and Ride, Huntworth Business Park,

Bridgwater, TA6 6TS

The FirstGroup Pension Scheme Trustee Limited,

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

The First UK Bus Pension Scheme Trustee Limited,

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

Totaljourney Limited,

1,3,5,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Tram Operations Limited,

3,7,9

Tramlink Depot, Coomber Way, Croydon, CR0 4TQ

Transportation Claims Limited,

Aquis House, 49‑51 Blagrave Street, Reading, RG1 1PL

Truronian Limited,

3,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Western National Holdings Limited,

4,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

York Pullman Bus Company Limited,

3,7

2 Clifton Moor Business Village, York, North Yorkshire, YO30 4XG

YPBC Limited,

3,4

2 Clifton Moor Business Village, York, North Yorkshire, YO30 4XG

Subsidiaries – wholly owned and incorporated in the United States of America

FirstGroup Management,

Inc

. 112 S French Street Suite 105, Wilmington, Delaware 19801

FirstGroup Services,

Inc

. 112 S French Street Suite 105, Wilmington, Delaware 19801

Laidlaw Transportation Holdings,

Inc

. 112 S French Street Suite 105, Wilmington, Delaware 19801

Transit Management of Dutchess County,

Inc

. 112 S French Street Suite 105, Wilmington,

Delaware 19801

Transportation Realty Income Partners LP (50%),

600 Vine Street Suite 1400, Cincinnati, Ohio 45202

Subsidiaries – wholly owned and incorporated in Ireland

Aeroporto Limited,

25‑28 North Wall Quay, Dublin

First Bus Ireland Limited,

25–28 North Wall Quay, Dublin

Matthews Coach Hire Limited,

Callenberg, Inniskeen, Co. Monaghan, Monaghan

Subsidiaries – wholly owned and incorporated in Panama

First Transit de Panama, Inc.

Morgan & Morgan, Costa del Este, MMG Tower, 23rd Floor, Panama City

Subsidiaries – wholly owned and incorporated in Canada

GCT Holdings Ltd,

Blake, Cassels & Graydon LLP, 3500, 855 – 2 Street SW, Calgary, Alberta, T2P 4J8

GCT Investment Limited Partnership,

Blake, Cassels & Graydon LLP, 3500, 855 – 2 Street SW, Calgary,

Alberta, T2P 4J8

Greyhound Canada Transportation ULC,

Blake, Cassels & Graydon LLP, 595 Burrard Street,

P.O. Box 49314, Suite 2600, Three Bentall Centre, Vancouver, British Columbia V7X 1L3

First Rail Canada Inc.,

Blake, Cassels & Graydon LLP, 199 Bay Street, Suite 4000, Toronto,

Ontario M5L 1A9

38 Information about related undertakings

continued

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Annual Report and Accounts 2025

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Notes to the consolidated financial statements

continued

Subsidiaries – not wholly owned but incorporated in the United Kingdom

First/Keolis Holdings Limited (55%),

1,3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First/Keolis TransPennine Holdings Limited (55%),

3,4,9

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

First/Keolis TransPennine Limited (55%),

3,9

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

First MTR South Western Trains Limited (70%),

7,9

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

First Trenitalia West Coast Rail Limited (70%),

7,9

8th Floor, The Point, 37 North Wharf Road,

London, W2 1AF

NextGen AssetCo Limited (50%),

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

NextGen MidCo Limited (50%),

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Directly owned by FirstGroup plc.

All shares held in subsidiary undertakings are ordinary shares.

For the year ending 29 March 2025 these subsidiaries are exempt from audit of individual accounts under S479A of the

UK Companies Act 2006.

Primary business is a holding company.

Primary business is a dormant company.

Primary business is an intragroup financing company.

Primary business is the provision of transportation services.

Primary business is an administrative or support services company.

Rail companies with 31 March year end.

Certain pension partnership structures (FirstBus Pension Limited Partnership and FirstGroup Pension Limited Partnership)

were implemented during the 52 weeks ending 26 March 2022. 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.

The first accounting period end for these SPVs was 31 March 2023. The SPVs are consolidated into FirstGroup plc’s consolidated

accounts, and therefore under Partnership (Accounts) Regulations 2008, Regulation 7, the SPVs are exempt from the requirement to

prepare individual entity annual accounts.

38 Information about related undertakings

continued

Group financial summary

Unaudited

	2025	2024	2023	2022	2021
Consolidated income statement (includes discontinued operations)	£m	£m	£m	£m	£m
Group revenue	5,066.3	4,715.1	4,759.0	5,588.0	6,844.8
Adjusted revenue	1,370.0	1,279.6	1,122.5	955.4	840.4
Operating profit before amortisation charges and other adjustments	222.2	202.4	154.4	226.8	220.4
Amortisation charges	–	–	–	(0.4)	(4.1)
Other adjustments	5.3	(161.2)	30.8	579.7	69.5
Operating profit	227.5	41.2	185.2	806.1	285.8
Finance costs	(65.7)	(82.4)	(69.3)	(153.5)	(172.0)
Investment income	7.8	16.8	12.8	1.5	2.0
Profit/(loss) before tax	169.6	(24.4)	128.7	654.1	115.8
Tax	(31.3)	15.0	(33.4)	(12.1)	(24.7)
Profit/(loss) for the year	138.3	(9.4)	95.3	642.0	91.1
EBITDA	779.8	746.8	755.8	862.1	1,178.9
Per share measures	pence	pence	pence	pence	pence
Adjusted continuing EPS	19.4	16.7	11.6	1.6	(2.8)
Basic EPS	21.3	(2.4)	11.8	60.2	6.5
Dividend per share	6.5	5.5	3.8	1.1	–
Consolidated balance sheet	£m		£m	£m	£m
Non‑current assets	2,373.9	2,425.4	2,651.9	2,267.2	2,641.2
Net current liabilities	(562.8)	(621.7)	(253.9)	(546.8)	(876.8)
Non‑current liabilities	(984.6)	(1,051.3)	(1,530.9)	(753.1)	(2,817.7)
Held for sale – continuing operations	–	–	8.3	–	–
Held for sale – discontinued operations	–	0.6	0.6	38.5	2,342.9
Non‑current provisions	(114.0)	(111.3)	(125.2)	(120.7)	(135.5)
Net assets	712.5	641.7	750.8	885.1	1,154.1
Share data
Number of shares in issue	millions	millions	millions	millions	millions
At year end	750.7	750.7	750.6	750.2	1,221.8
Average (excluding treasury shares and shares in trusts)	597.7	662.9	739.5	1,057.5	1,203.6
Share price	pence	pence	pence	pence	pence
At year end	164	180	101	107	92
High	183	188	140	107	95
Low	133	102	94	73	31

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Introduction

Financial statements

Group financial summary

continued

Unaudited

	2025	2024	2023	2022	2021
Market capitalisation	£m	£m	£m	£m	£m
At year end	959	1,154	803	1,124	610
	2025	2024	2023	2022	2022
Continuing operations	£m	£m	£m	£m	£m
Revenue	5,066.3	4,715.1	4,755.0	4,591.1	4,318.8
Adjusted revenue	1,370.0	1,279.6	1,122.5	955.4	840.4
Adjusted operating profit	222.8	204.3	161.0	106.7	112.2
Operating profit	222.6	46.5	153.9	122.8	171.0
EBITDA	780.4	748.6	762.4	731.2	782.8
	2025	2024	2023	2022	2021
First Bus	£m	£m	£m	£m	£m
Revenue	1,081.5	1,012.2	902.5	789.9	698.9
Adjusted operating profit	96.0	83.6	58.4	45.2	36.6
Operating profit/(loss)	96.0	(63.3)	51.4	45.2	30.8
EBITDA	160.1	148.1	120.9	104.4	100.8
First Rail
Revenue	4,013.1	3,738.4	3,893.2	3,801.2	3,619.9
Adjusted revenue	288.8	267.8	220.4	165.5	141.5
Adjusted operating profit	148.8	143.3	124.8	87.8	108.1
Operating profit	148.8	143.3	124.8	91.8	203.8
EBITDA	639.7	620.5	661.0	649.9	711.1

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Introduction

Financial statements

Financial statements

Introduction

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209

Company balance sheet

As at 29 March 2025/30 March 2024

		2025	2024
	Notes	£m	£m
Non‑current assets
Trade and other receivables	3	425.4	513.4
Investments	5	759.3	738.2
		1,184.7	1,251.6
Current assets
Cash and cash equivalents		64.0	118.9
Trade and other receivables	3	1.8	3.3
		65.8	122.2
Total assets		1,250.5	1,373.8
Current liabilities
Trade and other payables	7	244.4	357.8
Derivative financial instruments	4	0.9	0.7
		245.3	358.5
Net current liabilities		(179.5)	(236.3)
Non‑current liabilities
Trade and other payables	7	65.7	–
Derivative financial instruments	4	0.3	0.2
		66.0	0.2
Total liabilities		311.3	358.7
Net assets		939.2	1,015.1
Equity
Share capital	8	37.5	37.5
Share premium		693.3	693.3
Other reserves		115.8	115.9
Own shares	9	(31.1)	(20.4)
Retained earnings		123.7	188.8
Total equity		939.2	1,015.1

The Company reported a profit for the 52 weeks ending 29 March 2025 of £14.4m (2024: profit of £37.6m).

Ryan Mangold

10 June 2025

Company number SC157176

Company statement of changes in equity

For the 52 weeks ended 29 March 2025/53 weeks ended 30 March 2024

Capital

	Share	Share	Own	Hedging	Merger	Capital	Redemption	Retained	Total
	capital	premium	shares	reserve	reserve	reserve	reserve	earnings	equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 26 March 2023	37.5	693.2	(15.4)	(10.2)	13.9	93.8	19.7	295.8	1,128.3
Profit for the year	–	–	–	–	–	–	–	37.6	37.6
Other comprehensive loss for the year	–	–	–	(1.3)	–	–	–	–	(1.3)
Total comprehensive gain/(loss) for the year	–	–	–	(1.3)	–	–	–	37.6	36.3
Transactions with owners in their capacity as owners
Shares issued	–	0.1	–	–	–	–	–	–	0.1
Shares bought back but not yet cancelled	–	–	–	–	–	–	–	(74.7)	(74.7)
Liability for shares not yet bought back	–	–	–	–	–	–	–	(41.1)	(41.1)
Movement in EBT and treasury shares	–	–	(5.0)	–	–	–	–	(11.5)	(16.5)
Share‑based payments	–	–	–	–	–	–	–	12.2	12.2
Dividends paid	–	–	–	–	–	–	–	(29.5)	(29.5)
Balance at 30 March 2024	37.5	693.3	(20.4)	(11.5)	13.9	93.8	19.7	188.8	1,015.1
Balance at 31 March 2024	37.5	693.3	(20.4)	(11.5)	13.9	93.8	19.7	188.8	1,015.1
Profit for the year	–	–	–	–	–	–	–	14.4	14.4
Other comprehensive loss for the year	–	–	–	(0.1)	–	–	–	–	(0.1)
Total comprehensive gain/(loss) for the year	–	–	–	(0.1)	–	–	–	14.4	14.3
Transactions with owners in their capacity as owners
Shares bought back but not yet cancelled	–	–	–	–	–	–	–	(50.4)	(50.4)
Movement in EBT and treasury shares	–	–	(10.7)	–	–	–	–	(5.4)	(16.1)
Share‑based payments	–	–	–	–	–	–	–	10.5	10.5
Dividends paid	–	–	–	–	–	–	–	(34.2)	(34.2)
Balance at 29 March 2025	37.5	693.3	(31.1)	(11.6)	13.9	93.8	19.7	123.7	939.2

Merger reserves relating to disposal of investments for qualifying consideration, and those relating to the extent related investments are impaired are considered realised and transferred to retained earnings.

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Introduction

Financial statements

1 Material accounting policies

Basis of accounting

The separate financial statements of the Company are presented as required by the Companies Act 2006.

The financial statements have been prepared on a historical cost basis, except for the revaluation of

certain financial instruments and on a going concern basis as described in the Going concern statement

within the Strategic report on page 70.

The Company meets the definition of a qualifying entity under Financial Reporting Standard (FRS 101)

‘Reduced Disclosure Framework’ issued by the Financial Reporting Council. Accordingly, these financial

statements have been prepared in accordance with FRS 101.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available

under that standard in relation to share‑based payments, financial instruments, capital management,

presentation of a cash flow statement, certain related party transactions and the requirement to present

a statement of financial position as at the beginning of the preceding period when an entity applies an

accounting policy retrospectively or makes a retrospective restatement of its financial statements.

The financial statements for the current period include the results and financial position of the Company

for the 52 weeks ending 29 March 2025. The financial statements for the prior period include the results

and financial position of the Company for the 53 weeks ending 30 March 2024.

Where relevant, equivalent disclosures have been given in the consolidated financial statements.

The principal accounting policies adopted are the same as those set out in note 2 to the consolidated

financial statements except as noted below.

Investments

Investments in subsidiaries and associates are shown at cost less provision for impairment.

For investments in subsidiaries acquired for consideration in the form of shares, including the issue of

shares qualifying for merger relief, cost is measured by reference to the fair value only of the shares issued.

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

Dividends receivable from the Company’s subsidiaries are recognised only when they are approved

by shareholders.

Key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles

requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities

at the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period. 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. Revisions to accounting estimates are recognised in the period in which the estimate is

revised if the revision affects only that period, or in the period of revision and future periods if the revision

affects both current and future periods.

Investment in subsidiaries

Estimation is required in relation to the recoverability of the investments and is sensitive to changes in cash

flow forecasts supporting the recoverable amount. There is a significant risk that material adjustment to

the carrying amounts of the investments and receivables could be required within the next financial year,

including the reversal of prior year impairments. The carrying value of investments at 29 March 2025 is

£759.3m (2024: £738.2m).

2 Profit for the year

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own

income statement for the year. The Company reported a profit for the financial year ended 29 March 2025

of £14.4m (2024: profit of £37.6m).

Fees payable to the Company’s auditors for the audit of the Company’s annual financial statements are

disclosed in note 6 of the Group accounts. The Company had no employees in the current or preceding

financial year.

3 Trade and other receivables

2025

£m

2024

£m

Amounts due within one year

Prepayments

1.8

3.3

1.8

3.3

Amounts due after more than one year

Amounts due from subsidiary undertakings

397.4

475.5

Loss allowance

(0.7)

(0.9)

Net amounts due from subsidiary undertakings

396.7

474.6

Deferred tax asset (note 6)

28.7

38.8

425.4

513.4

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Introduction

Financial statements

Notes to the Company financial statements

4 Derivative financial instruments

2025

£m

2024

£m

Total derivatives

Total creditors – amounts falling due within one year

0.9

0.7

Total creditors – amounts falling due after more than one year

0.3

0.2

Total creditors

1.2

0.9

Derivatives classified as held for trading

Current liabilities

Currency forwards (cash flow hedge)

0.9

0.7

Non‑current liabilities

Currency forwards (cash flow hedge)

0.3

0.2

Total liabilities

1.2

0.9

Full details of the Group’s financial risk management objectives and procedures can be found in note 23 of

the Group accounts. As the holding company for the Group, the Company faces similar risks over foreign

currency and interest rate movements.

5 Investments in subsidiary undertakings

Unlisted

subsidiary

undertakings

£m

Cost

At 30 March 2024

1,188.4

Additions

31.1

At 29 March 2025

1,219.5

Provision for impairment

At 30 March 2024

450.2

Impairment

16.3

Reversal of impairment

(6.3)

At 29 March 2025

460.2

Carrying amount

At 29 March 2025

759.3

At 30 March 2024

738.2

The carrying value of the investment in subsidiary undertakings is reviewed for impairment triggers on

an annual basis. The recoverable amount is the higher of fair value less cost of disposal or the net present

value of future cash flows which are estimated based on the continued use of the asset in the business.

The investments of £759.3m principally relate to an investment in the Group’s former North American

divisions and holding companies of £78.9m, FirstGroup Holdings Limited of £21.1m, and the First Bus

business of £659.3m.

The First Bus value in use requires the determination of appropriate assumptions (which are sources of

estimation uncertainty) in relation to the cash flow forecasts, the long‑term growth rate to be applied and

the discount rate used to discount the estimated cash flows to present value.

The reversal of impairment during the year during the year relates to the investment in FirstGroup Holdings

Limited, for which the recoverable amount is £31.7m based on the net asset value, and therefore the

impact of prior year impairments has been reversed by £6.3m.

The additions in the year include IFRS 2 share‑based charges, which have subsequently been fully

written down.

The investments in First Bus would break even using a discount rate of 12.4% or a reduction of terminal

margin to 8.8%.

A full list of subsidiaries and investments can be found in note 38 to the Group accounts.

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Introduction

Financial statements

Notes to the Company financial statements

continued

6 Deferred tax

The deferred tax asset recognised by the Company and the movements thereon are as follows:

£m

At 30 March 2024

(38.8)

Charge to income statement

10.1

At 29 March 2025

(28.7)

The following is the analysis of the deferred tax balances for financial reporting purposes:

2025

£m

2024

£m

Losses

(28.4)

(38.6)

Other timing difference

(0.3)

(0.2)

Deferred tax asset due after more than one year

(28.7)

(38.8)

7 Creditors

2025

£m

2024

£m

Amounts falling due within one year

Bank overdraft

56.4

27.8

£200m sterling bond – 6.875% 2024

–

99.7

Amounts due to subsidiary undertakings

185.8

174.0

Accruals and deferred income

2.2

56.3

244.4

357.8

Amounts falling due after more than one year

Syndicated loan facilities

65.7

–

65.7

–

Borrowing facilities

The maturity profile of the Company’s undrawn committed borrowing facilities is as follows:

2025

£m

2024

£m

Facilities maturing:

Revolving credit facility – due in more than two years

295.0

300.0

Green HP finance facility – due in more than two years

92.4

129.8

Details of the Company’s borrowing facilities are given in note 21 to the Group accounts.

8 Called up share capital

Number of

shares million

£m

Allotted, called up and fully paid (ordinary shares of 5p each)

Balance at 29 March 2025 and 30 March 2024

750.7

37.5

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 for a total consideration of £115.8m including transaction costs.

On 14 November 2024, the Company announced a share buyback programme to purchase up to £50m of

ordinary shares. This buyback programme completed on 21 March 2025 having repurchased 30,498,221

shares for a total consideration of £50.4m including transaction costs.

The number of ordinary shares of 5p in issue, excluding treasury shares held in trust for employees, at the

end of the period was 565.6m (2025: 625.4m). At the end of the period 185.1m shares (2024: 125.3m shares)

were being held as treasury shares and own shares held in trust for employees.

9 Own shares

Own shares

£m

At 30 March 2024

(20.4)

Movement in EBT, QUEST and treasury shares during the year

(10.7)

At 29 March 2025

(31.1)

The number of own shares held by the Group at the end of the year was 185,125,956 (2024: 125,292,999)

FirstGroup plc ordinary shares of 5p each. Of these, 19,401,442 (2024: 14,379,907) were held by the

FirstGroup plc Employee Benefit Trust, nil (2024: 32,520) by the FirstGroup plc Qualifying Employee Share

Ownership Trust and 157,229 (2024: 157,229) were held as treasury shares, with a further 165,567,285

(2024: 110,723,343) held as treasury shares as part of the share buyback programmes. Both trusts and

treasury shares have waived the rights to dividend income from the FirstGroup plc ordinary shares.

The market value of the shares at 29 March 2025 was £303.6m (2024: £226.0m).

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Financial statements

Notes to the Company financial statements

continued

10 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 £47.2m (2024: £59.8m) and letters of credit for £123.3m (2024: £164.3m). The performance bonds

primarily relate to First Rail franchise operations of £47.1m and residual North American obligations of

£0.1m. 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 operating arrangements,

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 joint and several basis to the FirstGroup Pension

Scheme Trustee.

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 non‑compliance.

First MTR South Western Trains Limited (FSWT), a subsidiary of the Company and the former operator of

the South Western railway contract, is a defendant to collective proceedings before the UK Competition