TIDMFGP
RNS Number : 3894U
FirstGroup plc
23 November 2023
FIRSTGROUP PLC
HALF-YEARLY REPORT FOR THE 27 WEEKS TO 30 SEPTEMBER 2023
Growth in profit driven by strong performance in both First Bus
and First Rail:
-- Group adjusted operating profit increased to GBP100.6m (H1 2023:
GBP66.1m)
-- Increased Adjusted EPS of 8.1p for continuing operations (H1
2023: 4.6p)
-- Increase in declared Interim dividend to 1.5p per share (H1
2023: 0.9p per share)
-- c.GBP67m returned to shareholders during H1 2024 via the Group's
share buyback programme
-- Adjusted net cash at period end of GBP77.1m
Strategy focused on operational delivery, driving modal shift,
targeted investment in adjacent growth opportunities to diversify
the Group's portfolio and playing a leading role in environmental
and societal sustainability:
-- First Bus delivered further margin expansion in H1 2024 to 7.1%
from 4.8% in H1 2023 (FY 2023: 6.5%)
-- On track to have more than 600 electric buses, over 600 charger
heads, and four fully electric depots in England by March 2024
-- Nine-year National Rail Contract awarded to West Coast Partnership
following improvement in services
-- Landmark GBP100m strategic decarbonisation joint venture with
Hitachi
-- Group's science-based emissions reduction target approved by
Science Based Targets initiative
-- c.GBP75.5m remains of the total GBP190m being returned to shareholders
via buyback programmes
H1 2023
H1 2024
(GBPm) (GBPm)
------- ------ --------- ------- ------ ---------
Cont. Disc. Total Cont. Disc. Total
------------------------------------
Revenue 2,207.0 - 2,207.0 2,212.4 2.7 2,215.1
Adjusted(1) operating profit/(loss) 100.6 (2.2) 98.4 66.1 (8.4) 57.7
Adjusted operating profit
margin 4.6% 4.5% 3.0% 2.6%
Adjusted profit/(loss) before
tax 73.5 (2.2) 71.3 41.0 (8.1) 32.9
Adjusted EPS (2) 8.1p (0.3)p 7.8p 4.6p (1.0)p 3.6p
Dividend per share 1.5p 0.9p
Adjusted net cash(3) 77.1 7.3
H1 2024 H1 2023
(GBPm) (GBPm)
------- ------ --------- ------- ------ ---------
Statutory Cont. Disc. Total Cont. Disc. Total
------------------------------------ ------- ------ --------- ------- ------ ---------
Revenue 2,207.0 - 2,207.0 2,212.4 2.7 2,215.1
Operating (loss)/profit (41.4) 0.1 (41.3) 62.1 (28.6) 33.5
(Loss)/profit before tax (68.5) 0.1 (68.4) 37.0 (28.3) 8.7
EPS(2) (7.9)p (0.1)p
Net debt (1,144.6) (1,475.0)
- Bonds, bank and other debt
net of (cash) 384.4 346.3
- IFRS 16 lease liabilities (1,529.0) (1,821.3)
------------------------------------ ------- ------ --------- ------- ------ ---------
'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.
H1 2024 statutory operating loss of GBP(41.4)m includes charges
of GBP142.3m relating to the Group's termination of its
participation in two Local Government Pension Schemes.
Key developments
First Bus:
-- 1.1m passenger journeys a day (H1 2023: 1.0m) and 84m
service
miles operated in H1 2024 (H1 2023: 87m)
-- Passenger volumes (excluding the extra week in H1 2024)
increased
8% vs. H1 2023
-- Total revenue increased to GBP504.9m (H1 2023:
GBP427.7m),
despite a c.GBP19m reduction in government funding as
the industry
moves to a more commercial model
-- Operating margin increased to 7.1% (H1 2023: 4.8%)
despite
ongoing inflationary pressures and lower funding, due
to stronger
passenger volumes, improved driver availability and
data-led
operational and commercial efficiencies
-- Adjacent Services revenue increased to GBP116.2m from
GBP65.0m
in H1 2023 driven by First Travel Solutions, new
contract wins
and contribution of Airporter and Ensignbus acquired in
FY
2023
-- Further progress in electrification of fleet and
infrastructure:
- 166 electric buses delivered in H1 2024 and over 100
charger
heads installed
- third-party B2B charging pilots underway at Caledonia,
Scotstoun,
Aberdeen and Leicester depots
- installation of solar panels at 25 depots now completed
First Rail:
-- 123.4m passenger journeys in H1 2024 (H1 2023: 114.6m) of which
TOCs: 122.1m and open access 1.3m
-- Open access operations performance ahead of expectations, underpinned
by strong leisure volumes during the summer months; Lumo has
now carried over 2 million passengers since launch in October
2021
-- Management-fee based contracts financial performance was ahead
of expectations due to higher than accrued final fee awards
for FY 2023; focus remains on operational delivery for passengers
across all our services
-- Nine-year National Rail Contract awarded to West Coast Partnership
(incorporating Avanti West Coast) with a minimum core three-year
term to 18 October 2026, with a further six years until 17 October
2032, subject to ongoing DfT approval
Corporate:
-- GBP10m investment committed to landmark GBP100m strategic decarbonisation
joint venture with Hitachi focusing on increasing bus battery
efficiency, to deliver material capital savings through extended
battery life and increased residual value
-- Initial First Transit earnout proceeds of GBP48.9m received
in H1; receipt of the balance anticipated in H2 2024
-- GBP75m on-market share buyback programme completed and subsequent
GBP115m programme launched in August 2023
-- GBP12.2m of the Group's 2024 6.875% bonds opportunistically
repurchased (GBP172.0m remain outstanding)
-- Total gross pension liability of c.GBP1bn will be removed from
the Group's balance sheet by H2 2024 following:
- termination of participation in two First Bus Local Government
Pension Schemes on 31 October resulting in an anticipated
GBP2-3m annualised cost saving (c.GBP1m in FY 2024) and an
estimated net cash inflow of GBP15m after costs
- Greyhound Canada pension scheme bought in and c.$75m (c.GBP62m)
of Greyhound USA pension liabilities bought out and settled
in H1 2024; remaining Greyhound USA pension remains well hedged
FY 2024 outlook
-- Despite the ongoing challenging economic and industrial relations
environment, current trading and the Group's outlook for FY
2024 is in line with our expectations as set out in the Trading
Update published on 11 October 2023
-- First Bus: while clearly sensitive to broader consumer spending
and inflation trends, we expect to make some further progress
against our expectations in H2 2024, including the impact of
the Hitachi JV driven by:
- management actions taken to transform the business delivering
further productivity improvements and enhanced revenues
- lower operating costs as a result of smart efficiency initiatives
and the division's newer fleet
- supportive government policies driving increased demand
-- First Rail: the Division's financial performance in H2 2024
is anticipated to be in line with our expectations
-- Adjusted net cash position expected to be in the range of GBP40-50m
at the end of FY 2024, assuming completion of the GBP115m buyback
programme and before deployment of potential growth capital
-- We will continue to evaluate our pipeline of value-accretive
inorganic growth opportunities
Commenting, Chief Executive Officer Graham Sutherland said:
"I am pleased to report another set of very strong results for
the first half of our 2024 financial year. First Bus is delivering
sustainable revenue growth as we continue to transform the business
and our First Rail division also performed well. This is testament
to the capabilities and continued hard work of all our teams across
the Group.
"We are a resilient and profitable business which is
well-positioned to create long-term, value-accretive growth.
Leveraging our leading positions in bus and rail, supported by our
strong balance sheet enables us to continue to play a critical role
in supporting governments' economic, societal and environmental
goals."
Contacts at FirstGroup: Contacts at Brunswick Group:
Marianna Bowes, Head of Investor Andrew Porter / Simone Selzer
Relations Tel: +44 (0) 20 7404 5959
Stuart Butchers, Head of Corporate
Communications
corporate.comms@firstgroup.co.uk
Tel: +44 (0) 20 7725 3354
Contacts at Liberum Capital Limited: Contacts at RBC Capital Markets:
Nicholas How / John Fishley James Agnew / Jack Wood
Tel: +44 (0) 20 3100 2000 Tel: +44 (0) 20 7653 4000
A webcast for investors and analysts will be held at 10:30am
today - attendance is by invitation. Please email
corporate.comms@firstgroup.co.uk in advance of the webcast to
receive joining details. To access the presentation to be discussed
on the webcast, together with a pdf copy of this announcement, go
to www.firstgroupplc.com/investors . A playback facility will also
be available there in due course.
Notes
(1) 'Adjusted earnings' are shown before net adjusting items and
excludes IFRS 16 impacts in First Rail management fee operations.
For definitions of alternative performance measures and other key
terms, see the definitions section on pages 18-19.
(2 ') Adjusted EPS' and EPS based on weighted average number of
shares in the period of 697.7m (H1 2023: 739.8m) reflecting the
current year and prior year share buybacks.
(3 ') Adjusted net cash' is bonds, bank and other debt net of
free cash (i.e.excludes IFRS 16 lease liabilities and ring-fenced
cash).
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93.
Classification as per DTR 6 Annex 1R: 1.1.
About FirstGroup
FirstGroup plc (LSE: FGP.L) is a leading private sector provider
of public transport services. With GBP4.8 billion in revenue and
around 30,000 employees, we transported more than 1.8m passengers a
day in 2022/23. We create solutions that reduce complexity, making
travel smoother and life easier. Our businesses are at the heart of
our communities and the essential services we provide are critical
to delivering wider economic, social and environmental goals. Each
of our divisions is a leader in its field: First Bus is the second
largest regional bus operator in the UK, serving two-thirds of the
country's 15 largest conurbations with a fleet of more than 4,500
buses, and carrying more than a million passengers a day. First
Rail is the UK's largest rail operator, with many years of
experience running long-distance, commuter, regional and sleeper
rail services. We operate a fleet of more than 3,500 locomotives
and rail carriages through three management fee-based train
operating companies (Avanti West Coast, GWR, SWR) and two open
access routes (Hull Trains and Lumo). We are formally committed to
operating a zero-emission First Bus fleet by 2035, and First Rail
will help support the UK Government's goal to remove all
diesel-only trains from service by 2040. In February 2023
FirstGroup was named as one of the world's cleanest 200 public
companies for the fourth consecutive year by sustainable business
media group Corporate Knights in partnership with US not-for-profit
organisation, As You Sow. We provide easy and convenient mobility,
improving quality of life by connecting people and communities.
Visit our website at www.firstgroupplc.com and follow us
@firstgroupplc on X.
CEO review
Introduction
We have delivered another very strong set of results for the
first half of our 2024 financial year, despite continued economic
challenges. As a result of good performance in both of our
divisions, we have significantly increased our Adjusted Earnings
per share, which is our underlying earnings from First Bus and
First Rail excluding adjusting items and IFRS 16 impacts in the
First Rail management fee-based operations, to 8.1p in H1 2024,
from 4.6p in H1 2023.
We have also maintained our strong balance sheet, ending the
period with adjusted net cash of GBP77.1m having invested in the
electrification of our bus fleet and infrastructure and returned
c.GBP67m to shareholders via our buyback programmes, of which we
have c.GBP75.5m remaining. In line with our disciplined capital
policy the Board has recommended an interim dividend of 1.5p per
share (H1 2023: 0.9p per share). This will result in a dividend
payment of c.GBP10m, to be paid on 3 January 2024 to shareholders
on the register at 1 December 2023. The amount reflects the current
policy of c.3x cover against the Group adjusted earnings, to be
paid one-third interim and two-thirds final.
Operational summary - First Bus
In First Bus we have seen further sustainable profit growth as
we benefit from the management actions to transform the business,
as well as the use of our enhanced data to improve operational and
cost performance. We have also been assisted by a c.6% increase in
the number of drivers during the period, compared to the driver
shortages experienced in H1 2023, which has contributed to an
improvement in operated vs. scheduled mileage during H1 2024.
We have continued to grow our Adjacent Services business, thanks
to a number of contract extensions as well as the inclusion for the
full period of Airporter and Ensignbus that we acquired in FY 2023.
We also successfully launched a new Aircoach Leicester-Birmingham
airport 24-hour express service in September and are seeing demand
build steadily. The adjacent bus services market in the UK is
considerable, and we are actively reviewing a number of
opportunities to grow the business and win further contracts
leveraging our national footprint and successful track record in
managing large contracts effectively.
Government policy towards the bus sector remains highly
supportive and has contributed to the growth in passenger volumes
we have seen over the last few months. We welcomed the recent
announcements regarding the extension of the GBP2 fare cap in
England to the end of December 2024 and the award of additional Bus
Service Improvement Plan funding for bus services in the North of
England and the Midlands.
A leader in decarbonisation
We continue to make significant progress in our decarbonisation
programme and are on track to have almost 15% of our bus fleet zero
emissions and four fully electric depots in England by March 2024,
adding to the progress already made in Scotland. This is a great
achievement and is rapidly establishing the Group as a leader in
public transport decarbonisation.
Whilst we do not yet have full visibility of the impact of
running a fully electric depot, we are confident that the
electrification of our bus fleet and depots will positively
transform our business. Electrification will allow us to
standardise our fleet to drive efficiency and lower engineering
costs. We will also be able to simplify our operations and reduce
the size of our fleet whilst delivering the same mileage.
Furthermore, by making use of smart charging software we will
optimise our energy use, increase battery efficiency and
potentially extend battery life.
The landmark strategic joint venture with Hitachi that we have
recently announced will help us to continue the electrification of
our fleet and depots with increased efficiency and greater
visibility of our financial commitment, and unlike other possible
arrangements, we will retain much of the residual value in the
batteries as they are replaced and taken off our buses. Looking
ahead, we are also excited about the possibilities for future value
creation with Hitachi ZeroCarbon as they deliver market-leading
decarbonisation solutions to transport operators worldwide,
leveraging our joint experience and allowing the Group to
capitalise on its market-leading electrification position.
Growth and partnerships
On a recent site visit for analysts and institutional investors
to our new electric Leicester bus depot we highlighted Leicester
City Council's successful Enhanced Partnership Scheme. The scheme
launched in May 2022 and is delivering an optimised, co-ordinated,
multi-operator network with integrated timetables, ensuring
frequent and reliable services, supported by c.GBP100m of private
and public funding. Patronage on our buses in Leicester was up by
just over 20% during H1 2024 and punctuality and frequency have
also increased significantly, demonstrating the positive impact of
the enhanced partnership model on the communities we serve.
We were also pleased to have been awarded two contracts in
Rochdale in July this year as part of the second tranche of
Transport for Greater Manchester's ('TfGM') franchise programme
and, more recently, franchise contracts to operate services for six
schools as part of our Rochdale franchise operation.
A number of cities outside London where we operate have
expressed an interest in franchising in recent months, as well as
some where we don't currently have operations. Our mission is for
more people to use the bus, to deliver great value, to shape
networks to suit where and when people want to travel and to serve
local communities and grow local economies in a sustainable way. We
are committed to working with local authorities and national
governments to achieve this, whether through enhanced partnerships
or franchising contracts, both of which we believe offer
considerable opportunities for our business and our
stakeholders.
Operational summary - First Rail
In September, we were very pleased to have been awarded a new
nine-year National Rail Contract ('NRC') for the West Coast
Partnership ('WCP'). This includes the operation of Avanti West
Coast ('Avanti') and acting as the shadow operator for the HS2
programme through West Coast Partnership Development ('WCPD'),
which involves the development, mobilisation and the eventual
operation of high-speed services under Phase 1 of the HS2
programme. The WCP team have worked extremely hard to deliver
improvements for Avanti passengers, including an increase in the
number of services in the timetable and improved levels of
reliability for customers. The new NRC will allow the team to make
full use of its expertise to deliver further improvements including
programmes to refurbish the existing fleet and to introduce new,
more environmentally friendly trains, which will encourage more
passengers to return to the network and help deliver the UK's
decarbonisation agenda.
Our two open access rail operations have again outperformed
expectations thanks to high levels of leisure travel demand over
the summer months. Both operations saw an increase in seat capacity
utilisation during H1 2024. Hull Trains reported a c.33% increase
in passenger journeys during the period, which included increased
business travel, following a targeted marketing campaign. The
business has increased capacity to match demand, including running
a ten-car operation at peak demand times. Lumo has now carried more
than two million passengers and a recent independent study
concluded that a London to Edinburgh trip on Lumo results in 95%
fewer carbon emissions than flying. Lumo's financial performance is
largely driven by yield and the Lumo team has continued to
effectively manage this throughout H1 2024 to drive revenue, which
increased by over 40%, to GBP26.1m. Lumo has also recently become
the first UK long-distance operator to offer a flexible ticket,
Lumo Flex, that allows customers to change or refund a ticket
without a fee.
The success of our open access operations has demonstrated that,
as the largest rail operator in the UK, we have the experience and
entrepreneurial spirit to resolve challenges and innovate in the
rail sector for the future and encourage passengers back to train
travel.
A key part of our strategy is to make use of our capabilities to
drive modal shift and build a diverse and resilient portfolio. We
are actively pursuing opportunities to expand our open access
operations, through efficiency improvements, adding capacity to
existing services and identifying opportunities in new routes and
markets. We are also looking to scale up our additional services
businesses to further grow and diversify our revenue streams.
We continue to market our additional services products,
including Mistral Data, evo-rail and First Customer Contact to
other operators both in the UK and internationally. Mistral has
also sold a first product to a major international train
manufacturer in the period, and we continue to explore further
growth opportunities.
The UK rail industry continues to experience challenges as the
sector adapts to the different travel patterns and customer choices
that have evolved across society since the pandemic, while
navigating industrial action which has caused significant
disruption for rail passengers and businesses. Across the sector,
passenger numbers and revenues remain well below 2019 levels and as
a consequence, the industry has been engaged in discussions with
Government about changes that can adapt the sector to the differing
needs of customers, balanced against these significant financial
challenges faced by the national rail networks. This is reflected
in new draft rail reform legislation. The industry will continue to
explore ways to improve customer experience while delivering value
for Government and for all stakeholders, and we continue to
advocate for a spectrum of future contract models including
public/private partnerships and expanding open access, and for the
Government to take steps in the short term to incentivise operators
without requiring primary legislation.
Corporate activity
Key corporate activity during the period has included our GBP10m
investment committed to our landmark strategic joint venture with
Hitachi as mentioned above. We have also received initial First
Transit earnout proceeds of GBP48.9m and expect to receive the
balance in H2 2024 of approximately GBP21m. In addition, we will
have materially reduced our pension exposure by H2 2024 by removing
or fully insuring c.GBP1bn of gross pension liabilities without
requiring any cash from the Group, following the termination of our
participation in two First Bus Local Government Pension Schemes on
31 October 2023, and buying in our Greyhound Canada pension scheme
and buying out and settling c.$75m (c.GBP62m) of our Greyhound USA
pension liabilities during H1 2024. We have also made good progress
with merging our Bus and Group pension schemes to driver further
efficiencies. Furthermore, we opportunistically repurchased
GBP12.2m of the Group's 2024 6.875% bonds of which GBP172.0m
remains outstanding.
Building on our strong sustainability credentials
We have continued to progress our sustainability targets and
gain further recognition for our strong sustainability foundations
during H1 2024. Our near-term science-based emission reduction
target aligned with a 1.5C ambition has now been validated and
approved by the Science Based Targets Initiative. Our target
includes a 63% reduction in our Scope 1 and 2 emissions by FY 2035
from a FY 2020 base year. We were also extremely pleased to have
been ranked as the top performing bus and rail operator in the
FTSE4Good Index during the period.
FY 2024 outlook
Current trading and the Group's outlook for FY 2024 is in line
with our expectations as set out in the Post-Close Trading Update
published on 11 October 2023. Positive free cash generation (after
c.GBP115m of net cash capital expenditure in First Bus, as well as
capital returns to shareholders) is expected to result in an
adjusted net cash position in the range of GBP40-50m at the end of
FY 2024, including the anticipated capex saving resulting from the
Hitachi JV and assuming the completion of the share buyback and
before investing in potential inorganic growth opportunities.
Although clearly sensitive to broader consumer spending and
inflation trends, we expect to make some further progress against
our expectations for First Bus in H2 2024 as we continue to benefit
from the actions we have taken to transform the business. We are
confident of achieving our medium-term 10% operating margin target
for First Bus.
In First Rail, we expect the Division's financial performance to
be broadly in line with our expectations in H2 2024.
Graham Sutherland
Chief Executive Officer
23 November 2023
Business Review
First Bus
GBPm
H1 2024 H1 2023 Change
-------------------------- ------- -------
Revenue 504.9 427.7 77.2
Revenue per mile (GBP) 6.01 4.92 +1.09
Adjusted operating profit 36.0 20.7 15.3
Adjusted operating margin 7.1% 4.8% 230bps
EBITDA 68.8 51.0 17.8
Passenger volumes (m) 210 188 +12%
Operational mileage (m) 84 87 (3%)
Net operating assets 512.4 468.0 44.4
Capital expenditure 88.7 46.1 42.6
First Bus revenue increased by 18% to GBP504.9m (H1 2023:
GBP427.7m) mainly reflecting increased passenger volumes, a
positive pricing impact, improved performance and lower lost
mileage offsetting a c.GBP19m reduction in funding. Passenger
revenue increased to GBP377.1m (H1 2023: GBP322.3m), with revenue
per mile up by just over 20%. Revenue from Adjacent Services
increased to GBP116.2m in H1 2024 (H1 2023: GBP65.0m) reflecting a
number of contract extensions and the contribution of Airporter and
Ensignbus which were acquired by the Group in FY 2023.
Adjusted operating profit increased by GBP15.3m to GBP36.0m (H1
2023: GBP20.7m) with a profit margin of 7.1% (H1 2023: 4.8%)
despite ongoing inflationary pressures, due to stronger passenger
volumes, improved driver availability (compared to the shortfall in
H1 2023) and data-led operational and commercial efficiencies. The
division's financial results for H1 2024 include an extra week
which adds c.GBP1.4m of adjusted operating profit.
Passenger volumes increased by 8% compared with the prior
period, with total mileage down 7%, both excluding the extra week.
Volumes in H1 2024 benefited from improvements in service
reliability and continued to be supported by the free travel for
under-22s scheme in Scotland and the GBP2 fare cap in England.
These schemes have encouraged more people, including concessionary
travellers to use the bus.
Government policy towards the bus sector remains extremely
supportive and has contributed to the growth in passenger volumes
we have seen over the last few months. In October 2023 the DfT
announced a further GBP700m of funding for Bus Service Improvement
Plans in the North and a GBP150m investment in the Midlands. The
GBP2 fare cap has also been extended until 31 December 2024.
Operational delivery
The team has continued to work hard to drive operational and
cost efficiencies during H1 2024 as we continue the transformation
of the business. The division is recruiting more drivers and making
use of its industry-leading data to deliver better quality mileage
by aligning services to demand, implement smarter fares and drive
operational improvements and cost efficiencies.
We have added more drivers into service during H1 2024 (a net
increase of just over 600 drivers) which has contributed to an
improvement in operated vs. scheduled mileage to 98% (H1 2023: 96%;
H2 2023: 97%). We continue to focus on our workforce and have
successfully implemented a number of initiatives to not only
recruit more drivers but to also retain the existing workforce. As
well as the provision of healthcare services for all employees
which includes access to GP appointments, we have scheduled driver
catch-ups and a programme of health and wellbeing workshops.
Inflationary pressures have remained during the period. Costs
increased due to inflation by c.7%, principally in wages (+c.8% on
average) but were more than offset by pricing changes of GBP31m and
network and operational efficiencies of GBP18m. We have fuel and
electricity hedging programmes in place to mitigate cost inflation
and volatility and these programmes continue to evolve as we
transition the First Bus fleet to zero emissions.
Digital innovation
First Bus is a leader in digital transformation in the bus
industry and we continue to make use of our enhanced data and
digital capabilities to implement smarter pricing strategies,
optimise service delivery and drive cost and capital efficiency. We
have made further improvements to our service delivery and
generated more operational efficiencies during H1 2024 using our
data and software tools.
Prospective is an AI platform that enables automated, data-led
timetables, allowing us to accurately predict journey times and
plan reliable timetables based on granular data. During H1 2024 we
rolled out the platform across all of our local business units and
our focus during the period has been on prioritising routes where
improvements will have the biggest impact on our customers. Where
we have made use of the platform, customers are benefitting from an
immediate increase in punctuality, with the added benefit of
reduced lost mileage with fewer journeys needing to be adjusted,
thereby improving reliability too.
We are also using software from Optibus to optimise our bus
schedules and driver rosters. Alongside our on-bus technology, data
feeds into our operational systems, our customer apps and real time
screens, informs our drivers and provides tracking information that
allows us to analyse and improve performance. In addition, with
Optibus, we have developed a module that allows us to optimise our
schedules when we have a mixed fleet of diesel and electric
vehicles, reducing diesel mileage more than our expectations.
Adjacent Services
We continue to identify and capitalise on opportunities to make
use of our capabilities and assets to grow our Adjacent Services
business. In H1 2024 we delivered further growth in revenue to
GBP116.2m (H1 2023: GBP65.0m) driven by increased services at First
Travel Solutions, a number of contract extensions, including within
our workplace shuttle services for a number of high-profile brands,
and the contribution of Airporter and Ensignbus which were acquired
in FY 2023.
We have also successfully launched a new Aircoach
Leicester-Birmingham airport 24-hour express service in September
and are seeing demand build steadily. The adjacent bus services
market in the UK is considerable, and we are actively reviewing a
number of opportunities to grow the business and win further
contracts leveraging our national footprint and successful track
record in managing large customers effectively.
Franchising and partnerships
In July 2023, First Bus was awarded two contracts in Rochdale as
part of the second tranche of Transport for Greater Manchester's
franchise programme and, more recently, franchise contracts to
operate services for six schools as part of our Rochdale franchise
operation.
On a recent site visit for analysts and institutional investors
to our new electric Leicester bus depot we highlighted Leicester
City Council's successful Enhanced Partnership Scheme that since
its launch in May 2022 is delivering an optimised, co-ordinated,
multi-operator network with integrated timetables, ensuring
frequent and reliable services, supported by c.GBP100m of private
and public funding. Patronage on our buses in Leicester was up by
just over 20% during H1 2024 and punctuality and frequency have
also increased significantly, demonstrating the positive impact of
the enhanced partnership model on the communities we serve.
A number of cities outside London where we operate have
expressed an interest in franchising in recent months, as well as
some where we don't currently have operations. Our mission is for
more people to use the bus, to deliver great value, to shape
networks to where people want to go and to serve local communities
and grow local economies in a sustainable way. We are committed to
working with local authorities and national governments to achieve
this, whether through enhanced partnerships or franchising
contracts, both of which we believe offer considerable
opportunities for both our business and our stakeholders.
Decarbonisation
As a major UK regional bus operator, we have a key role to play
in the decarbonisation of public transport in the UK and we are
rapidly establishing ourselves as a leader in decarbonisation as we
progress towards our commitment of a 100% zero emission bus fleet
by 2035.
The electrification of bus fleets and infrastructure requires
close co-operation between operators and local authorities, and
funding from both parties.
We welcomed the announcements earlier this year regarding the
second round of the Zero Emission Bus Regional Areas ('ZEBRA2')
programme in England that includes up to GBP129m of funding, and
Phase 2 of ScotZEB with up to GBP58m of funding to support the
introduction of zero emission buses and related infrastructure. We
have now submitted applications for the second phase of the
Scottish Government's ScotZeb funding programme and will shortly
submit bids for the ZEBRA2 scheme in England and will provide an
update on these applications in due course.
In H1 2024 we took delivery of 166 electric buses, installed
more than 100 charger heads and are on track to have over 600 zero
emission vehicles by March 2024, as well as four fully electric
depots, in York, Leicester, Norwich and Portsmouth, adding to the
significant progress we have already made in Scotland. As part of
our bus depot infrastructure decarbonisation and cost cutting
initiatives, we are also installing solar panels at our depots,
with the installations now completed at 25 depots to power the
depot buildings and lower their grid energy consumption.
The electrification of our bus fleet and depots will positively
transform our business, allowing us to standardise our fleet to
drive efficiency and lower engineering costs, simplify our
operations, reduce the size of our fleet whilst delivering the same
mileage and by making use of smart charging software we will
optimise our energy use, increase battery efficiency and
potentially extend battery life. Looking further ahead,
electrification will unlock new adjacent revenue streams. These
include third party charging at our depots while our buses are out
in service (successful pilot schemes are already underway at our
Caledonia, Scotstoun, Aberdeen and Leicester depots with DPD and
other public service providers), opportunities on battery residual
value and efficient recycling post commercial use, on-site battery
storage and the ability to monetise our experience and expertise as
a leader in decarbonisation.
The landmark strategic partnership with Hitachi into which both
the Group and Hitachi will commit investment of GBP10m will assist
the Group to continue the electrification of our fleet and depots
with increased efficiency, potentially extend battery life and
value and give greater visibility of our financial commitment. In
addition, unlike other possible arrangements, we will retain much
of the residual value in the batteries as they are replaced and
taken off our buses.
As detailed in the Group's announcement on 17 November, the
partnership will result in a c.GBP20m saving in the Group's FY 2024
capital expenditure and future savings of c.GBP40m out to FY 2027.
We also anticipate a c.GBP3m per annum contribution to the Group's
earnings by FY 2026, before any potential operational benefits.
In addition, through our option to participate in a small
non-controlling interest in Hitachi ZeroCarbon, we will have the
opportunity to create future value leveraging our experience in
significant fleet electrification as Hitachi ZeroCarbon delivers
market-leading decarbonisation solutions to transport operators
worldwide, applying our joint experience.
Looking ahead
Whilst the division remains sensitive to consumer spending and
inflation trends, we expect to make some further progress against
our expectations in H2 2024, including the impact of the Hitachi
JV, as we continue to benefit from the management actions we have
taken to transform the business.
Looking further ahead, we will continue to grow our Adjacent
Services business, evaluate further franchising and enhanced
partnership opportunities, and the decarbonisation of our fleet and
infrastructure will further transform the business and unlock new
revenue streams.
First Rail
GBPm GBPm GBPm, change
H1 2024 H1 2023
Revenue from management fee-based operations 1,662.1 1,743.3 (81.2)
Revenue from open access and additional
services 105.1 85.5 +19.6
Intra-divisional eliminations (45.3) (44.1) (1.2)
First Rail Revenue 1,721.9 1,784.7 (62.8)
Attributable net income from management
fee-based operations(1) 23.2 19.1 +4.1
Gross up for tax, non-controlling interests
and IFRS 16 31.7 24.3 +7.4
Adjusted operating profit from open access and additional services 22.1 12.0 +10.1
------------------------------------------------------------------- ------- ------- ------------
First Rail adjusted operating profit 77.0 55.4 +21.6
------------------------------------------------------------------- ------- ------- ------------
Passenger journeys (m) - management fee-based operations(2) 122.1 113.4 +8.7
Passenger journeys (m) - open access operations 1.3 1.1 +0.2
Passenger journeys (m) - Total 123.4 114.5 +8.9
1 Represents the Group's share of the management fee income
available for dividend distribution from the GWR, SWR, TPE and WCP
(incorporating Avanti West Coast) contracts with DfT on a pre-IFRS
16 basis net of tax and non-controlling interests as described in
more detail on pages 13-14. See also note 3 to the financial
statements for a reconciliation to the segmental disclosures.
2 Totals exclude TPE: H1 2024: 3.3m passenger journeys (H1 2023: 9.3m).
The First Rail division reported total revenue of GBP1,721.9m in
H1 2024 (H1 2023: GBP1,784.7m). The division's open access
operations contributed GBP46.3m in revenue for the period (H1 2023:
GBP32.7m). Additional services including Mistral Data, evo-rail and
First Customer Contact delivered gross revenue of GBP59.6m (H1
2023: GBP52.8m) before intra-divisional eliminations in the period
and adjusted operating profit of GBP6.4m (H1 2023: GBP5.3m).
During H1 2024 the final variable fee payments due for the
management fee-based operations for the FY 2023 fiscal year were
agreed with the DfT at a rate ahead of the amounts accrued in the
Group's FY 2023 financial statements. As a result, the management
fee-based operations reported an increase in adjusted operating
profit for the period, to GBP54.9m (H1 2023: GBP43.4m). The
division reported a statutory operating profit of GBP77.0m (H1
2023: GBP55.4m).
From FY 2024, performance fee metrics have been updated to place
a greater weighting on quantified, rather than qualitative measures
that do not rely on a subjective assessment of an operator's
performance and are now assessed on a bi-annual basis by the DfT.
The Group does not anticipate a material impact on net income as a
result of these changes.
Rail attributable net income from management fee-based
operations - being the Group's share of the management fee income
available for distribution from the GWR, SWR, TPE (operated by the
Group until 28 May 2023) and WCP contracts with the DfT - was
GBP23.2m (H1 2023: GBP19.1m). The Group receives an annual
inter-company remittance from the TOCs reflecting the post-tax net
management and performance fees from the prior year. These become
payable up to the Group in the second half of the financial year
following completion of the management fee-based operations'
audited accounts.
The division's two open access operations Lumo and Hull Trains
have continued to experience strong demand in H1 2024. As a result
of high passenger booking volumes and positive yield management,
including inflationary increases in fares, both operations
performed ahead of expectations in H1 2024, delivering an adjusted
operating profit of GBP15.7m (H1 2023: GBP6.7m).
Both Lumo and Hull Trains have seen an increase in seat capacity
utilisation during H1 2024, with Lumo's utilisation improving
further, to 78% from 74% and Hull's up to 69% from 57%. Hull Trains
have also reported an increase in passenger journeys by a third
during the period, which has included an increase in business
travellers using the service, following a targeted marketing
campaign. The business has increased capacity to match demand,
including running a ten-car operation at peak demand times. Lumo
have now carried more than two million passengers and a recent
independent study has found that a London to Edinburgh trip on Lumo
results in 95% fewer carbon emissions than flying. The financial
performance of Lumo is largely driven by yield and the team have
continued to effectively manage yield throughout H1 2024 to drive
revenue, which increased by just over 40%, to GBP26.1m. Lumo has
also recently launched Lumo Flex, a flexible discounted ticket that
allows customers to change or refund a ticket without a fee.
To address energy cost inflation, our train operating companies
and open access operations are members of industry buying groups in
order to mitigate the long-term impact of electricity costs. For
our open access operations, electricity costs represent a material
proportion of their total costs, and these have increased by c.130%
in H1 2024. Costs are expected to decrease from these peak levels
with recent reductions in energy prices.
National Rail Contracts
Our three management fee-based operations are all now operating
under NRCs, under which the DfT retains substantially all revenue
and cost risk (including for fuel, energy and wage increases).
There is a fixed management fee and the opportunity to earn an
additional variable fee. The punctuality and other operational
targets required to achieve the maximum level of variable fee under
the contracts are designed to incentivise service delivery for
customers.
In September 2023, following a notable improvement in
performance, we were awarded an NRC for the West Coast Partnership
which is a partnership between FirstGroup (70%) and Trenitalia UK
Ltd (30%). WCP comprises Avanti West Coast ('Avanti) and West Coast
Partnership Development ('WCPD'), the shadow operator for the HS2
programme, which involves the development, mobilisation and
eventual operation of high-speed services under Phase 1 of the HS2
programme. The new NRC commenced on 15 October and is for nine
years, with a minimum three-year core term to 18 October 2026,
following which a further six years until 17 October 2032. WCP will
earn a fixed management fee of GBP5.1m per annum to deliver the
contract with the opportunity to earn a variable fee of up to
GBP15.8m per annum based on a number of criteria. Punctuality and
other targets required to achieve the maximum variable fee are
designed to incentivise the highest level of performance. Fees are
also linked to delivery within WCPD's programme.
Innovation and adjacent rail opportunities
During the year we continued to develop, market and deploy our
additional rail customer, industry and technology tools and
services. These services were initially developed to strengthen our
offering to passengers on our large passenger rail operations, but
they are being marketed to, and now also used by, third party
operators.
Our evo-rail track-to-train superfast rail 5G technology uses
trackside antennae to provide a connectivity solution that delivers
over 1Gb per second to trains to enable high speed on-board Wi-Fi
which we expect will improve the passenger experience and help to
encourage modal shift towards rail. The evo-rail technology is
generating interest throughout Europe and the USA, with the first
commercial installation on the SWR mainline, the first section of
which has produced excellent results.
Mistral Data, our analytics business, was launched in 2021 and
now has 14 software systems in operation built on native cloud
technology, allowing them to be quickly deployed whilst also
ensuring security and scalability. In H1 2024 the team has focused
on the provision of accurate, timely and targeted information
between passengers and employees. They have successfully released
various customer service products including an email service that
alerts customers when a train is cancelled on the day, with the
capability to add more service impacting messages over the coming
months and a personalised messaging service for front-line staff
that sends operational messages including the location of
passengers who may require assistance whilst the train is moving,
and any other relevant information. During the period, Mistral has
also sold a first product to a major train manufacturer.
In H1 2024 our First Customer Contact passenger service centre
continued to support customers, processing delay repay claims and
passenger assistance bookings, with quick turnaround times. The
shared passenger service centre operates at a lower cost than our
previous outsourcing arrangements and provides a single service for
customer queries across several rail operations.
Our First Rail Consulting team has experience built up over
three decades. During H1 2024, the team continued to support the
WCPD on HS2 and other key projects in other train operating
companies. First Rail Consulting was also recently one of a small
number of consultants appointed by the DfT to its GBP600m STARThree
framework to advise on the delivery of key rail, road and aviation
projects.
Customer experience
Our train companies continue to work collaboratively with
industry partners and stakeholders to enhance our service offering.
GWR undertook a trial with real-time journey planner Whoosh, and
SWR partnered with wellbeing app Go Jauntly which offers walking
maps starting at various stations on the network. Avanti's
innovative low-cost Superfare for flexible travel, offering fares
fixed by destination and now starting from GBP9 for a one-way
ticket between London and Birmingham, has seen more than 10,000
tickets sold with two-thirds of users saying they would otherwise
not have taken the train. In a separate initiative Avanti,
following a successful trial on the Liverpool route, is partnering
with the rail upgrade business Seatfrog, offering customers a
chance to bid for the company's industry-first Standard Premium as
well as first class upgrades at a low price.
In the period GWR opened three new stations at key transport
interchanges across their network, working in partnership with
local authorities in Reading, Exeter and Bristol. The operator also
delivered accessibility improvements during the period including a
GBP1m package at Chippenham station. Working with local partners,
GWR offered a tourist-focused all-inclusive ticket including
heritage railway and ferry travel in South Devon, and the Devon
& Cornwall Railcard became the first regional railcard in the
UK to go digital this summer.
SWR have invested more than GBP1.5m into community initiatives
across its network and formed awareness-raising partnerships with
Guide Dogs and homeless charity Missing People and it has installed
defibrillators at more than 150 staffed stations. The railway on
the Isle of Wight has also now fully reopened following a GBP26m
investment.
Fleet upgrades
First Rail has an important contribution to make in meeting the
challenges of climate change, and we are working with our partners
to reduce carbon emissions through a number of initiatives
including the introduction of electric trains to replace diesel
where possible.
Avanti has taken delivery of the first of its new train fleet
following an investment of GBP350m in ten electric-only trains and
13 bi-mode trains that can run under both electric and diesel
power. These will replace Avanti's diesel-only Voyager trains,
leading to a 61% reduction in carbon emissions as well as providing
a quieter and roomier service, more reliable Wi-Fi, wireless
charging and a real-time customer information system. The first
trains are undergoing mainline testing ahead of their introduction
into customer service. The programme to refurbish Avanti's electric
Pendolino fleet through a GBP117m investment programme has
continued and is delivering a step change in onboard customer
experience. SWR has taken delivery of 400 Alstom Class 701 trains
ahead of a phased introduction of the trains into operation in
2024.
Rail policy
The UK rail industry continues to experience challenges as the
sector adapts to the different travel patterns and customer choices
that have evolved across society since the pandemic, while
navigating industrial action which has caused significant
disruption for rail passengers and businesses. Across the sector,
passenger numbers and revenues remain well below 2019 levels and as
a consequence, the industry has been engaged in discussions with
Government about changes that can adapt the sector to the changing
needs of customers, balanced against these significant financial
challenges. The industry will continue to explore ways to improve
customer experience while delivering value for taxpayers and all
stakeholders, and we continue to advocate for a spectrum of future
contract models including public/private partnerships and fully
independent open access, and for the Government to take steps in
the short term to incentivise operators without requiring primary
legislation. We welcome the Government's new draft rail reform
bill, announced in the recent King's Speech, which will frame
consultation on future reforms to aid rail recovery and, in the
Government's own words, "develop the right commercial conditions to
empower the private sector to reinvigorate the industry." We are
engaging directly and through industry channels with the Labour
Party, which is still developing its rail policy in detail, and we
note the Labour leader's commitment at the recent party conference
to pursue public-private partnerships.
During the period, a number of trade unions continued to stage
industrial action at train operating companies across the UK;
notwithstanding the fact that under the management fee-based
contracts operators bear no revenue risk and limited cost risk,
prolonged industrial action presents enormous challenges for the
reputation and recovery of the industry and, most importantly, for
our passengers who rely on these services to go about their daily
lives. We continue to work closely with our industry partners to do
all that we can to minimise the effects of disruption for our
passengers. We welcome the RMT's decision to agree a way forward
with the Rail Delivery Group and put the offer from operators to
its membership, which includes a backdated 2022 pay rise for staff
and job security guarantees. We urge those members to accept this
deal which would terminate the national dispute mandate, creating a
pause and respite from industrial action over the Christmas period
and into Spring next year, while allowing for important
negotiations on proposed reforms to take place at local train
operating company level, through the established collective
bargaining structures.
As the largest rail operator in the UK, First Rail will play a
significant role in the industry as it evolves, and the success of
our open access operations has demonstrated that we have the
experience and entrepreneurial spirit to introduce new services,
resolve challenges and innovate for the future, encouraging
passengers back to rail whilst also growing our business.
Looking ahead
Financial performance is expected to be broadly in line with our
expectations in H2 2024, including bid costs, despite the ongoing
industrial relations challenges.
In the medium to longer term, we anticipate further growth as we
actively pursue opportunities to expand our open access operations
through efficiency improvements, adding capacity to existing
services and identifying opportunities in new routes and markets.
We are also looking to scale up our additional services businesses
to further grow and diversify our revenue streams.
Financial review
Revenue
Revenue from continuing operations decreased slightly to
GBP2,207.0m (H1 2023: GBP2,212.4m). First Bus revenue increased by
18% to GBP504.9m, principally reflecting strong passenger volumes,
service improvements and positive pricing impact, partly offset by
lower receipts from government funding. First Rail saw increased
revenue across its open access and additional services businesses,
although this was more than offset by lower revenue in its
management-fee based operations where we take no substantial
revenue risk.
Operating performance
Adjusted operating performance by division is as follows:
27 weeks to 30 September 26 weeks to 24 September 52 weeks to 25 March
2023 2022 2023
Adjusted Adjusted
Adjusted Adjusted Adjusted Adjusted
operating operating operating operating operating operating
Revenue profit(1) margin(1) Revenue profit(1) margin(1) Revenue profit(1) margin(1)
GBPm GBPm % GBPm GBPm % GBPm GBPm %
---------------- -------- ---------- ---------- ------- ---------- ---------- ------- ----------- -----------
First Bus 504.9 36.0 7.1 427.7 20.7 4.8 902.5 58.4 6.5
First Rail 1,721.9 77.0 4.5 1,784.7 55.4 3.1 3,893.2 124.8 3.2
Group items(2) (19.8) (12.4) n/a - (10.0) n/a (40.7) (22.2) n/a
---------------- -------- ---------- ---------- ------- ---------- ---------- ------- ----------- -----------
Continuing
operations 2,207.0 100.6 4.6 2,212.4 66.1 3.0 4,755.0 161.0 3.4
Discontinued
operations(3) - (2.2) n/a 2.7 (8.4) n/a 4.0 (6.6) n/a
Total 2,207.0 98.4 4.5 2,215.1 57.7 2.6 4,759.0 154.4 3.2
Statutory operating performance by division is as follows:
27 weeks to 30 26 weeks to 24 September 52 weeks to 25 March
September 2022 2023
2023
Operating Operating Operating Operating Operating Operating
Revenue profit(1) margin(1) Revenue profit(1) margin(1) Revenue profit(1) margin(1)
GBPm GBPm % GBPm GBPm % GBPm GBPm %
-------------- --------- ---------- ---------- ------- --------- ---------- ------- ---------- ----------
First Bus 504.9 (106.3) (21.1) 427.7 16.4 3.8 902.5 51.4 5.7
First Rail 1,721.9 77.0 4.5 1,784.7 55.4 3.1 3,893.2 124.8 3.2
Group items(2) (19.8) (12.1) n/a - (9.7) n/a (40.7) (22.3) n/a
-------------- --------- ---------- ---------- ------- --------- ---------- ------- ---------- ----------
Continuing
operations 2,207.0 (41.4) (1.9) 2,212.4 62.1 2.8 4,755.0 153.9 3.2
Discontinued
operations(3) - 0.1 n/a 2.7 (28.6) n/a 4.0 31.3 n/a
Total 2,207.0 (41.3) (1.9) 2,215.1 33.5 1.5 4,759.0 185.2 3.9
(1 ') Adjusted' figures throughout this document are before
adjusting and certain other items as set out in note 3 to the
interim financial statements.
(2) Includes elimination of intra-group trading between Bus and
Rail divisions (not material in H1 2023), and charges relating to
central management and other items.
(3) Discontinued operations relates to the Group's residual Greyhound US activities.
Adjusted operating profit from continuing operations was
GBP100.6m (H1 2023: GBP66.1m), reflecting strong demand in the
First Rail open access operations, and higher than anticipated
variable fee payments due to the division's management fee-based
contracts for FY 2023 having now been agreed with the Department
for Transport. Despite ongoing inflationary pressures, First Bus
benefited from strong passenger volumes and productivity
improvements. Central costs were GBP(12.4)m with the increase
partly due to costs incurred on strategic projects.
The Group's EBITDA adjusted for First Rail management fees
performance measure also increased year-on-year.
27 weeks 26 weeks 52 weeks
to 30 September to 24 September to 25 March
2023 2022 2023
GBPm GBPm GBPm
First Bus EBITDA(1) 61.4 42.8 105.0
Attributable net income from First
Rail management fee-based operations(2) 23.2 19.1 38.7
First Rail EBITDA from open access
and additional services(1) 22.2 12.6 32.5
Group central costs (EBITDA basis(1)
) (12.0) (9.6) (21.2)
Group EBITDA adjusted for First Rail
management fees 94.8 64.9 155.0
----------------------------------------- ---------------- ---------------- ------------
(1) Pre-IFRS 16 basis.
(2) A reconciliation to the segmental disclosures is set out in note 3.
Adjusted earnings were GBP56.5m (H1 2023: GBP34.0m), driven by
strong adjusted operating profit performance across the business,
partly offset by a higher taxation charge.
27 weeks 26 weeks 52 weeks
to 30 September to 24 September to 25 March
2023 2022 2023
GBPm GBPm GBPm
First Bus adjusted operating profit 36.0 20.7 58.4
Adjusted operating profit from rail
management fee operations excluding
IFRS 16(1) 35.8 25.8 54.0
Adjusted operating profit from rail
open access and additional service 22.1 12.0 31.5
Group central costs (operating profit
basis) (12.4) (10.0) (22.2)
Group adjusted operating profit excluding
IFRS 16 impacts from rail management
fee operations 81.5 48.5 121.7
------------------------------------------ ---------------- ---------------- ------------
Interest excluding IFRS 16 interest
from rail management fee operations(1) (0.9) (6.0) (8.7)
Taxation (20.2) (6.4) (22.1)
Non-controlling interest (3.9) (2.1) (5.3)
Group adjusted earnings(1) 56.5 34.0 85.6
------------------------------------------ ---------------- ---------------- ------------
(1) The Group has revised its definition of adjusted earnings,
to also exclude the impact of IFRS 16 depreciation and interest
charges in relation to its rail management fee-based operations
given the Group takes no cost risk on these rolling stock leases.
The prior year comparatives have also been updated for the revised
definition. There has been no other change to the calculation, or
to the Group's policy regarding adjusting items.
Reconciliation to non-GAAP measures and performance
Note 3 to the financial statements sets out the reconciliations
of operating profit and profit before tax to their adjusted
equivalents.
The principal adjusting items in H1 2024 are as follows:
First Bus pension settlement charge and related items
In September 2023, First Bus concluded a period of consultation
with regards to its two Local Government Pension Funds and
subsequently terminated its participation in these funds on 31
October 2023, with affected employees enrolled into the First Bus
Retirement Savings Plan. Adjusting charges of GBP142.3m were
recognised in the period for the settlement charge and related
termination costs. A gain of GBP160.4m was recognised in Other
comprehensive income in relation to the restricted accounting
surplus.
Adjusting items - discontinued operations
Following the announcement on 26 October 2022 of EQT
Infrastructure's agreement to sell First Transit to Transdev North
America, Inc, the Group continues to estimate its earnout
consideration to be $88.5m (GBP72.5m). An initial payment of $62.8m
(GBP48.9m) was received during the first half of the year, leaving
contingent consideration receivable on the Group's balance sheet of
$25.7m (GBP21.0m). An adjusting credit of GBP2.3m arose as a result
of the hedging of the cash receipt and the retranslation of the US
dollar asset into pounds sterling.
Group statutory operating profit
Statutory operating loss (continuing basis) was GBP(41.4)m (H1
2023: profit of GBP62.1m), reflecting the charges from adjusting
items.
Finance costs and investment income
Net finance costs were GBP27.1m (H1 2023: GBP24.8m) with the
increase principally due to interest charges on lease liabilities,
a result of the new management fee TOC Rail leases entered into
during the prior year, offset by higher interest earned on cash
balances.
Profit before tax
Statutory loss before tax (continuing basis) was GBP(68.5)m (H1
2023: profit GBP37.0m). Adjusted profit before tax (continuing
basis) as set out in note 3 to the financial statements was
GBP73.5m (H1 2023: GBP41.0m). Adjusting items (continuing basis)
were a charge of GBP142.0m, reflecting the First Bus pension
settlement charge and related costs. (H1 2023: charge of GBP4.0m
principally reflecting the loss on disposal of the First Scotland
East business).
Tax
The tax charge on adjusted profit before tax on continuing
operations was GBP18.4m (H1 2023: GBP6.1m), representing an
effective tax rate of 25.0% (H1 2023: 14.9%). The rate has
increased because the corporation tax rate has increased to 25% and
the super-deduction for capital expenditure has been withdrawn.
There was a tax credit of GBP35.6m (H1 2023: charge of GBP2.0m)
relating to adjusting items and there were no other adjustments to
deferred tax (H1 2023: credit of GBP0.8m). The total tax credit,
including tax on discontinued operations, was GBP(17.2)m (H1 2023:
charge of GBP7.3m). The actual tax paid during the period was
GBP1.5m (H1 2023: GBP0.4m).
The ongoing Group's effective tax rate is expected to be broadly
in line with UK corporation tax levels (currently 25%).
EPS
Adjusted continuing EPS was 8.1p (H1 2023: 4.6p). Basic EPS was
(7.9)p (H1 2023: (0.1)p).
Shares in issue
As at 30 September 2023 there were 662.5m shares in issue (H1
2023: 738.5m), excluding treasury shares and own shares held in
trust for employees of 88.2m (H1 2023: 11.9m). Since December 2022,
79.3m shares have been repurchased under the Group's share buyback
programmes. The weighted average number of shares in issue for the
purpose of basic EPS calculations (excluding treasury shares and
own shares held in trust for employees) in the period was 697.7m
(H1 2023: 739.8m).
Capital allocation framework
The Group's capital allocation framework can be summarised as
follows:
Investment
* First Bus: GBP115m net cash capex for FY 2024, mostly
on electrification; GBP10m investment in strategic
partnership with Hitachi to purchase up to 1,000
electric bus batteries; estimated capex saving of
c.GBP20m in FY 2024
* First Rail: continues to be cash capital-light, with
any capital expenditure required by the management
fee-based operations fully funded under the new
contracts
----------------- ------------------------------------------------------------
Growth
* Actively reviewing adjacent organic and inorganic
opportunities where this creates value for
shareholders and exceeds the Group's pre-tax WACC
(c.10%)
----------------- ------------------------------------------------------------
Returns
for shareholders * Progressive dividend policy currently 3x cover of
Group adjusted earnings; paid c.1/3 interim and 2/3
final dividend
* Interim dividend of 1.5p per share declared
----------------- ------------------------------------------------------------
Balance
sheet * Less than 2.0x Adjusted Net Debt: rail management
fee-adjusted EBITDA target in the medium term
----------------- ------------------------------------------------------------
Dividend
The Board has declared an interim dividend of 1.5p per share
(c.GBP10m in aggregate), to be paid on 3 January 2024 to
shareholders on the register at 1 December 2023.
Adjusted cash flow
The Group's adjusted cash outflow of GBP(108.0)m (H1 2023:
outflow of GBP(112.1)m) in the period reflects strong underlying
cash generated by operations offset by capital outflows relating to
investment in First Bus, the impact of the share buyback
programmes, lease payments and movement in First Rail ring-fenced
cash (GBP61.0m outflow since FY 2023). The adjusted cash flow is
set out below:
27 weeks 26 weeks 52 weeks
to 30 September to 24 September to 25 March
2023 2022 2023
GBPm GBPm GBPm
EBITDA 342.3 339.5 755.8
Other non-cash income statement charges (134.3) 1.3 10.9
Working capital (74.9) (162.8) (101.3)
Movement in other provisions (18.8) (8.2) (33.0)
Decrease in financial assets 26.0 - -
Settlement of foreign exchange hedge (1.1) (1.8) (1.2)
Pension payments lower than income statement
charge 113.1 11.1 13.6
---------------------------------------------- ---------------- ---------------- ------------
Cash generated by operations 252.3 179.1 644.8
Capital expenditure and acquisitions (115.6) (61.5) (208.5)
Proceeds from disposal of property, plant
and equipment 17.2 23.0 147.8
Proceeds from capital grant funding 55.3 70.6 144.2
Proceeds from contingent consideration 48.9 - -
Net proceeds from disposal of businesses - 2.0 2.0
Interest and tax (31.4) (33.2) (64.6)
Shares purchased for Employee Benefit
Trust (6.1) (10.7) (15.3)
Share repurchases from buyback programmes,
including costs (66.6) - (31.6)
Dividends paid, including to non-controlling
interests (19.7) (8.2) (20.8)
Settlement of foreign exchange hedge 4.2 - (12.5)
Lease payments now in debt/other (246.5) (273.2) (557.5)
---------------------------------------------- ---------------- ---------------- ------------
Adjusted cash flow (108.0) (112.1) 28.0
Foreign exchange movements 0.8 8.6 (4.0)
Net inception of leases (14.8) (1,029.0) (1,231.8)
Lease payments in debt 246.5 276.5 557.5
Other non-cash movements - - 0.2
Movement in net debt in the period 124.5 (856.0) (650.1)
Capital expenditure
Non-First Rail cash capital expenditure was GBP95.2m, which
related to First Bus and Group items (H1 2023: GBP46.8m, all in
First Bus). First Rail cash capital expenditure was GBP20.4m (H1
2023: GBP14.7m) and is typically matched by receipts from the DfT
under current contractual arrangements or other funding.
During the period leases in the non-First Rail divisions were
entered into with capital values in First Bus of GBP5.5m and Group
items of GBP1.3m (H1 2023: Group items GBP0.2m). First Rail entered
into leases with a capital value of GBP9.0m (H1 2023: GBP1,015.9m).
No asset-backed financial liabilities were entered into during the
period (H1 2023: GBP19.3m, all in First Bus).
Non-First Rail gross capital investment (fixed asset and
software additions, plus the capital value of new leases) was
GBP88.8m and comprised First Bus GBP88.6m and Group items GBP0.1m
(H1 2023: GBP65.6m, comprising First Bus GBP65.4m, Group items
GBP0.2m). First Rail gross capital investment was GBP35.2m (H1
2023: GBP1,032.2m). The balance between cash capital expenditure
and gross capital investment represents new leases, creditor
movements and the recognition of additional right of use assets in
the period.
Funding
As at the period end, the Group had GBP581.9m of undrawn
committed headroom and free cash (FY 2023: GBP638.9m), being
GBP300.0m (FY 2023: GBP300.0m) of committed headroom and GBP281.9m
(FY 2023: GBP338.9m) of net free cash after offsetting overdraft
positions.
Net cash/(debt)
As at 30 September 2023 the Group's adjusted net cash, which
excludes IFRS 16 lease liabilities and ring-fenced cash, was
GBP77.1m (FY 2023: adjusted net cash of GBP109.9m). Reported net
debt was GBP(1,144.6)m (FY 2023: GBP(1,269.1)m) after IFRS 16 and
including ring-fenced cash of GBP307.3m (FY 2023: GBP369.6m), as
follows:
Analysis of net debt 30 September 2023 24 September 25 March
GBPm 2022 2023
GBPm GBPm
Sterling bond (2024) 172.0 199.9 184.2
Bank loans and overdrafts 96.4 39.9 82.9
Lease liabilities 1,529.0 1,821.3 1,748.6
Asset backed financial liabilities 32.1 49.9 44.2
Loan notes 0.6 0.6 0.6
---------------------------------------------------------------- ----------------- ------------ --------
Gross debt excluding accrued interest 1,830.1 2,111.6 2,060.5
Cash (378.2) (297.6) (421.8)
First Rail ring-fenced cash and deposits (303.2) (315.3) (364.2)
Other ring-fenced cash and deposits (4.1) (23.7) (5.4)
---------------------------------------------------------------- ----------------- ------------ --------
Net debt excluding accrued interest 1,144.6 1,475.0 1,269.1
---------------------------------------------------------------- ----------------- ------------ --------
IFRS 16 lease liabilities - rail 1,492.2 1,780.9 1,711.2
IFRS 16 lease liabilities - non-rail 36.8 40.4 37.4
---------------------------------------------------------------- ----------------- ------------ --------
IFRS 16 lease liabilities - total 1,529.0 1,821.3 1,748.6
---------------------------------------------------------------- ----------------- ------------ --------
Net cash excluding accrued interest (pre-IFRS 16) (384.4) (346.3) (479.5)
---------------------------------------------------------------- ----------------- ------------ --------
Adjusted net cash (pre-IFRS 16 and excluding ring-fenced cash) (77.1) (7.3) (109.9)
Under the terms of the First Rail contractual agreements with
the DfT, cash can only be distributed by the TOCs either up to the
lower amount of their retained profits or the amount determined by
prescribed liquidity ratios. The ring-fenced cash represents that
which is not available for distribution or the amount required to
satisfy the liquidity ratios at the balance sheet date.
Interest rate risk
Exposure to floating interest rates is managed to ensure that at
least 50% (but at no time more than 100%) of the Group's pre-IFRS
16 gross debt is fixed rate for the medium term.
Fuel and electricity price risk
We use a progressive forward hedging programme to manage
commodity risk. As at November 2023, 81% of our 'at risk' UK crude
requirements for H2 2024 (41.2m litres, which is all in First Bus)
was hedged at an average rate of 46p per litre, 62% of our
requirements for the year to the end of March 2025 at 51p per
litre, and 17% of our requirements for the year to the end of March
2026 at 51p per litre. We also have an electricity hedge programme
in place, with 89% of our consumption (based on current consumption
forecasts) hedged for H2 2024 at GBP165/MWh, 67% for FY 2025 at
GBP144/MWh and 21% for FY 2026 at GBP111/MWh.
Foreign currency risk
'Certain' and 'highly probable' foreign currency transaction
exposures (including fuel purchases for the UK divisions) may be
hedged at the time the exposure arises for up to two years at
specified levels, or longer if there is a very high degree of
certainty. The Group does not hedge the translation of earnings
into the Group reporting currency but accepts that reported Group
earnings will fluctuate as exchange rates against pounds Sterling
fluctuate for the currencies in which the Group does business,
although this exposure is materially reduced following the sales of
the North American divisions. During the year, the net cash
generated in each currency may be converted by Group Treasury into
pounds Sterling by way of spot transactions in order to keep the
currency composition of net debt broadly constant.
Foreign exchange
The most significant exchange rates to pounds Sterling for the
Group are as follows:
27 weeks to 30 26 weeks to 24 September 52 weeks to 25 March
September 2023 2022 2023
------------------ -------------------------- ----------------------
Closing Effective Closing Effective Closing Effective
rate rate rate rate rate rate
---------------- ------- --------- ----------- ------------- --------- -----------
US Dollar 1.22 1.26 1.09 1.12 1.22 1.11
Canadian Dollar 1.66 1.70 1.48 1.60 1.68 1.76
---------------- ------- --------- ----------- ------------- --------- -----------
Pensions
We have updated our pension assumptions for the defined benefit
schemes in the UK and North America. The net pension surplus of
GBP27.9m at the beginning of the reporting period moved to a net
surplus of GBP5.6m as at the balance sheet date on 30 September
2023, with the movement principally due to a reduction in asset
values which more than offset the impact of increased discount
rates on scheme liabilities, as well as the impact of the pension
actions detailed below and in note 18. The main factors that
influence the balance sheet position for pensions and the principal
sensitivities to their movement at 30 September 2023 are set out
below:
Movement Impact
--------------- -------- --------------------------
Discount rate -0.1% Decrease surplus by GBP14m
Inflation +0.1% Decrease surplus by GBP11m
Life expectancy +1 year Decrease surplus by GBP37m
--------------- -------- --------------------------
On 29 September 2023, and following a period of employee
consultation, the Group gave notice of its intention to terminate
the participation of the relevant First Bus subsidiaries in certain
Local Government Pension Schemes (LGPS) on 31 October 2023, and
this was executed at that date. An expense of GBP142.3m was
recognised in H1 2024 as an adjusting income statement item for the
settlement charges and other related costs, and a gain of GBP160.4m
was recognised in Other comprehensive income in relation to the
restricted accounting surplus.
During the period, the Limited Partnership created following the
sale of the North American divisions returned GBP23.7m to The Bus
Pension Scheme, linked to the GBP500m capital return in December
2021. The amounts held by the Limited Partnership generated
interest income of GBP3.3m during the period which increased the
value of the related financial asset on the Group's balance
sheet.
The basis on which the Scheme is valued for funding purposes
(Technical Provisions) following the next triennial valuation will
determine the final distribution of funds from the escrow during
2025, and within that the liabilities are valued by reference to
gilt yields. On an agreed low dependency funding basis, First Bus
and First Group scheme shortfalls are in aggregate c.GBP46m lower
than at the start of the year (c.GBP146m at 25 March 2023), with
c.GBP97m remaining in escrow.
Balance sheet
Net assets have decreased by GBP117.1m since 25 March 2023.
As at As at As at
30 September 24 September 25 March 2023
2023 2022 GBPm
Balance sheets - net assets/(liabilities) GBPm GBPm
------------------------------------------ ------------- ------------- --------------
First Bus 512.4 468.0 511.9
First Rail 1,240.0 1,501.0 1,368.3
Greyhound (retained) (24.8) (21.6) (21.8)
Divisional net assets 1,727.6 1,947.4 1,858.4
Group items 57.3 221.7 162.1
Borrowings and cash (1,145.0) (1,475.2) (1,275.6)
Taxation (6.9) 18.4 5.3
Held for sale assets 0.7 46.0 0.6
------------------------------------------- ------------- ------------- --------------
Total 633.7 758.3 750.8
------------------------------------------- ------------- ------------- --------------
Legacy North American assets and liabilities on balance
sheet
As part of the disposal of First Transit to EQT Infrastructure,
FirstGroup was entitled to an 'earnout' consideration of up to
$290m (c.GBP220m). On 26 October 2022, EQT Infrastructure announced
its agreement to sell First Transit to Transdev North America, Inc,
and as a result the Group estimates its earnout consideration will
be around $88.5m (GBP72.3m). During the first half of the year, an
initial payment of $62.8m (GBP48.9m) was received in relation to
the earnout consideration, with a residual asset of $25.7m
(GBP21.0m) held on the balance sheet at 30 September 2023.
Post-balance sheet events
-- On 19 September, the Group announced it had agreed a new
National Rail Contract (NRC) with the Department for Transport
(DfT) for the West Coast Partnership. The new NRC commenced on 15
October 2023 with a duration of nine years, including a core
minimum three-year term to 18 October 2026.
-- On 19 October, the Group completed the buy-out of the 6%
non-controlling interest in Leicester CityBus Limited for
consideration of GBP3.1m.
-- On 31 October, the Group terminated the participation of the
relevant First Bus subsidiaries in certain Local Government Pension
Schemes (LGPS). Details of the accounting impact are provided
above, and in note 18 of the financial statements.
-- On 17 November, the Group announced it had agreed a strategic
partnership with Hitachi as part of the Group's bus fleet and
infrastructure decarbonisation programme. The Group and Hitachi
have each committed a cash investment of GBP10m into the strategic
partnership.
Going concern
The Board carried out a review of the Group's financial
projections for the 18 months to 31 March 2025 and having regard to
the risks and uncertainties to which the Group is exposed, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the condensed consolidated financial
statements in the half-yearly report have been prepared on the
going concern basis.
Definitions
Unless otherwise stated, all financial figures for the 27 weeks
to 30 September 2023 (the 'first half', the 'period' or 'H1 2024')
include the results and financial position of the First Rail
business for the period ended 16 September 2023 and the results of
all other businesses for the 27 weeks ended 30 September 2023. The
figures for the 26 weeks to 24 September 2022 (the 'prior period'
or 'H1 2023') include the results and financial position of the
First Rail business for the period ended 17 September 2022 and the
results of all other businesses for the 26 weeks ended 24 September
2022. Figures for the 52 weeks to 25 March 2023 ('FY 2023') include
the results and financial position of the First Rail business for
the year ended 31 March 2023 and the results of all other
businesses for the 52 weeks ended 25 March 2023.
'Cont.' or the 'Continuing operations' refer to First Bus, First
Rail, Group items and Greyhound Canada.
'Disc.' or the 'Discontinued operations' refer to First Student,
First Transit and Greyhound US.
References to 'adjusted operating profit', 'adjusted profit
before tax', and 'adjusted EPS' throughout this document are before
the adjusting items as set out in note 3 to the financial
statements, and in the case of 'adjusted EPS', excluding the impact
of IFRS 16 for the Group's management fee-based Rail
operations.
'EBITDA' is adjusted operating profit less capital grant
amortisation plus depreciation.
The Group's 'EBITDA adjusted for First Rail management fees' is
First Bus and First Rail EBITDA from open access and additional
services on a pre-IFRS 16 basis, plus First Rail attributable net
income from management fee-based operations, minus central
costs.
'Adjusted earnings' is the Group's statutory profit for the
period attributable to equity holders of the parent, excluding
adjusting items as detailed in note 3, and also excluding the
impact of IFRS 16 for the Group's management fee-based Rail
operations.
'Net debt/(cash)' is the value of Group external borrowings,
excluding accrued interest, less cash balances.
'Adjusted net debt/(cash)' excludes ring-fenced cash and IFRS 16
lease liabilities from net debt/(cash).
Forward-looking statements
Certain statements included or incorporated by reference within
this document may constitute 'forward-looking statements' with
respect to the business, strategy and plans of the Group and our
current goals, assumptions and expectations relating to our future
financial condition, performance and results. By their nature,
forward-looking statements involve known and unknown risks,
assumptions, uncertainties and other factors that cause actual
results, performance or achievements of the Group to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. No
statement in this document should be construed as a profit forecast
for any period. Shareholders are cautioned not to place undue
reliance on the forward-looking statements.
Except as required by the UK Listing Rules and applicable law,
the Group does not undertake any obligation to update or change any
forward-looking statements to reflect events occurring after the
date of this document.
Principal risks and uncertainties
The Board has conducted a thorough assessment of the principal
risks and uncertainties facing the Group for the remainder of the
financial year, including those that would threaten the successful
and timely delivery of its strategic priorities, future performance
solvency and liquidity.
There are a number of risks and uncertainties facing the Group
in the remaining six months of the financial year in addition to
those mentioned in the Business and Financial Reviews. The
underlying principal risks and uncertainties in our operating
businesses remain as set out in detail on pages 67 to 75 of the
Annual Report and Accounts 2023, with several of these risks being
more elevated currently given the wider political and economic
backdrop (impacting cost inflation, driver availability, industrial
action, policy uncertainty and passenger demand levels),
namely:
-- Economic conditions including economic fluctuations
-- Geopolitical
-- Climate change
-- Contracted businesses
-- Growth within the sector
-- Financial resources
-- Safety
-- Pension scheme funding
-- Regulatory compliance
-- Data security and consumer privacy, including cyber
security
-- Human resources
Risks that are of particular focus in the final six months of
the year include changes in the UK economy, particularly the effect
of rising inflation on the Group and associated industrial relation
challenges across the First Rail business, noting some progress has
been made in the period. A change of UK Government transport policy
could also lead to the renationalisation of our First Rail
operations as the expiry dates of our various agreements with the
DfT are reached. Finally, workforce availability, linked to both
labour market shortages and staff retention, is a key risk that
could impact operational capacity across both our bus and rail
operations.
For a full summary of the Principal Risks and Uncertainties
facing the Group, please refer to the Annual Report and Accounts
2023 at
https://www.firstgroupplc.com/investors/annual-report-2023.aspx
.
Graham Sutherland Ryan Mangold
Chief Executive Officer Chief Financial Officer
23 November 2023 23 November 2023
Condensed consolidated income statement
Notes Unaudited Unaudited
27 weeks to 26 weeks to
30 September 2023 24 September 2022
GBPm GBPm
Revenue 2, 4 2,207.0 2,212.4
--------------------------------------------------------------------- ----- ------------------ ------------------
Operating costs before LGPS pension settlement and related charges (2,106.1) (2,150.3)
LGPS pension settlement and related charges (142.3) -
--------------------------------------------------------------------- ----- ------------------ ------------------
Total operating costs (2,248.4) (2,150.3)
Operating (loss)/profit (41.4) 62.1
Investment income 5 11.0 1.8
Finance costs 5 (38.1) (26.9)
--------------------------------------------------------------------- ----- ------------------ ------------------
(Loss)/profit before tax (68.5) 37.0
Tax 6 17.2 (5.1)
--------------------------------------------------------------------- ----- ------------------ ------------------
(Loss)/profit from continuing operations (51.3) 31.9
--------------------------------------------------------------------- ----- ------------------ ------------------
Profit/(loss) from discontinued operations 4 0.1 (30.5)
--------------------------------------------------------------------- ----- ------------------ ------------------
(Loss)/profit for the period (51.2) 1.4
--------------------------------------------------------------------- ----- ------------------ ------------------
Attributable to:
Equity holders of the parent (55.1) (0.6)
Non-controlling interests 3.9 2.0
--------------------------------------------------------------------- ----- ------------------ ------------------
(51.2) 1.4
--------------------------------------------------------------------- ----- ------------------ ------------------
Earnings per share
Earnings per share for (loss)/profit from continuing operations
attributable to the ordinary
equity holders of the company
Basic (7.9)p 4.0p
Diluted (7.9)p 3.9p
Earnings per share for loss attributable to the ordinary equity
holders of the company
Basic 7 (7.9)p (0.1)p
Diluted 7 (7.9)p (0.1)p
--------------------------------------------------------------------- ----- ------------------ ------------------
Adjusted results (from continuing operations)(1)
Adjusted operating profit 3 100.6 66.1
Adjusted profit before tax 73.5 41.0
Adjusted EPS 7 8.1p 4.6p
Adjusted diluted EPS 7.8p 4.5p
--------------------------------------------------------------------- ----- ------------------ ------------------
(1) Adjusted for certain items as set out in note 3 and note
7.
The accompanying notes form an integral part of this
consolidated income statement.
Condensed consolidated statement of comprehensive income
Unaudited Unaudited
27 weeks 26 weeks
to to
30 September 24 September
2023 2022
GBPm GBPm
(Loss)/profit for the period (51.2) 1.4
Items that will not be reclassified subsequently
to profit or loss
Actuarial losses on defined benefit pension
schemes (70.7) (117.0)
Gain on termination of LGPS participation
from restricted accounting surplus 160.4 -
Deferred tax on actuarial (gains)/losses
on defined benefit pension schemes (22.3) 30.8
67.4 (86.2)
Items that may be reclassified subsequently
to profit or loss
Hedging instrument movements 11.2 (22.8)
Deferred tax on hedging instrument movements (2.2) (4.1)
Cumulative profit on hedging instruments
reclassified to the income statement (2.9) -
Exchange differences on translation of foreign
operations - continuing operations (0.6) (4.8)
Exchange differences on translation of foreign
operations - discontinued operations (1.9) 21.2
3.6 (10.5)
Other comprehensive income/(loss) for the
period 71.0 (96.7)
Total comprehensive income/(loss) for the
period 19.8 (95.3)
-------------------------------------------------- ------------- -------------
Attributable to:
Equity holders of the parent 15.9 (97.3)
Non-controlling interests 3.9 2.0
-------------------------------------------------- ------------- -------------
19.8 (95.3)
------------------------------------------------- ------------- -------------
Total comprehensive income/(loss) for the
period attributable to owners of FirstGroup
plc arises from:
Continuing operations 24.5 (52.1)
Discontinued operations (4.7) (43.2)
-------------------------------------------------- ------------- -------------
19.8 (95.3)
------------------------------------------------- ------------- -------------
The accompanying notes form an integral part of this
consolidated statement of comprehensive income.
Condensed consolidated balance sheet
Note Unaudited Audited
30 September 25 March
2023 2023
GBPm GBPm
Non-current assets
Goodwill 8 99.6 99.6
Other intangible assets 9.4 10.8
Property, plant and equipment 9 2,171.1 2,329.7
Deferred tax assets 40.5 47.0
Retirement benefit assets 18 28.3 44.6
Derivative financial instruments 13 2.2 0.1
Financial asset 13 97.2 117.6
Investments 2.6 2.5
------------------------------------------------------- ---- ------------- ---------
2,450.9 2,651.9
------------------------------------------------------- ---- ------------- ---------
Current assets
Inventories 25.4 26.0
Contingent consideration receivable 10 21.0 72.3
Trade and other receivables 10 981.8 848.3
Current tax assets 0.9 -
Cash and cash equivalents 17 685.5 791.4
Derivative financial instruments 13 6.8 7.4
------------------------------------------------------- ---- ------------- ---------
1,721.4 1,745.4
------------------------------------------------------- ---- ------------- ---------
Assets held for sale 0.7 8.9
------------------------------------------------------- ---- ------------- ---------
Total assets 4,173.0 4,406.2
------------------------------------------------------- ---- ------------- ---------
Current liabilities
Trade and other payables 1,442.2 1,314.4
Tax liabilities - Current tax
liabilities 0.1 0.3
- Other tax and social security 48.2 41.4
Borrowings 11 702.4 554.7
Derivative financial instruments 13 2.4 2.6
Provisions 14 75.8 85.9
------------------------------------------------------- ---- ------------- ---------
Current liabilities 2,271.1 1,999.3
------------------------------------------------------- ---- ------------- ---------
Net current liabilities (549.7) (253.9)
------------------------------------------------------- ---- ------------- ---------
Non-current liabilities
Borrowings 11 1,128.1 1,512.3
Retirement benefit liabilities 18 22.7 16.7
Derivative financial instruments 13 0.6 1.9
Provisions 14 116.8 125.2
------------------------------------------------------- ---- ------------- ---------
1,268.2 1,656.1
------------------------------------------------------- ---- ------------- ---------
Total liabilities 3,539.3 3,655.4
------------------------------------------------------- ---- ------------- ---------
Net assets 633.7 750.8
------------------------------------------------------- ---- ------------- ---------
Equity
Share capital 15 37.5 37.5
Share premium 693.3 693.2
Hedging reserve 3.9 (0.7)
Other reserves 22.4 22.4
Own shares (11.4) (15.4)
Translation reserve (18.8) (16.3)
Retained earnings (107.7) 19.5
------------------------------------------------------- ---- ------------- ---------
Equity attributable to equity
holders of the parent 619.2 740.2
Non-controlling interests 14.5 10.6
------------------------------------------------------- ---- ------------- ---------
Total equity 633.7 750.8
The accompanying notes form an integral part of this
consolidated balance sheet.
COndensed consolidated statement of changes in equity
Share Share Hedging Other Own Translation Retained Total Non-controlling Total
capital premium reserve reserves shares reserve earnings GBPm interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 25
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 - - - - - - (55.1) (55.1) 3.9 (51.2)
Other
comprehensive
income/(loss)
for the
period - - 6.1 - - (2.5) 67.4 71.0 - 71.0
------- ------- -------- -------- ------- ----------- -------- ------ --------------- -------
Total
comprehensive
income/(loss)
for the
period - - 6.1 - - (2.5) 12.3 15.9 3.9 19.8
Derivative
hedging
instrument
movements
transferred
to balance
sheet (net
of tax) - - (1.5) - - - - (1.5) - (1.5)
Transactions
with owners
in their
capacity as
owners
Shares issued - 0.1 - - - - - 0.1 - 0.1
Movement in
EBT and
treasury
shares - - - - 4.0 - (10.0) (6.0) - (6.0)
Share-based
payments - - - - - - 6.6 6.6 - 6.6
Deferred tax
on
share-based
payments - - - - - - (0.6) (0.6) - (0.6)
Shares bought
back but
not yet
cancelled - - - - - - (22.7) (22.7) - (22.7)
Liability for
shares
not yet
bought back - - - - - - (93.1) (93.1) - (93.1)
Dividends paid - - - - - - (19.7) (19.7) - (19.7)
Balance at 30
September
2023
(unaudited) 37.5 693.3 3.9 22.4 (11.4) (18.8) (107.7) 619.2 14.5 633.7
-------------- ------- ------- -------- -------- ------- ----------- -------- ------ --------------- -------
Balance at 26
March 2022 37.5 692.8 19.3 22.4 (9.0) (24.0) 137.6 876.6 8.5 885.1
(Loss)/profit
for the
period - - - - - - (0.6) (0.6) 2.0 1.4
Other
comprehensive
(loss)/income
for the
period - - (26.9) - - 16.4 (86.2) (96.7) - (96.7)
------- ------- -------- -------- ------- ----------- -------- ------ --------------- -------
Total
comprehensive
(loss)/income
for the
period - - (26.9) - - 16.4 (86.8) (97.3) 2.0 (95.3)
Hedging
instrument
movements
transferred
to balance
sheet (net of
tax) - - (14.5) - - - - (14.5) - (14.5)
Transactions
with owners
in their
capacity as
owners
Shares issued - 0.2 - - - - - 0.2 - 0.2
Movement in
EBT and
treasury
shares - - - - (4.3) - (6.3) (10.6) - (10.6)
Share-based
payments - - - - - - 1.6 1.6 - 1.6
Dividends paid - - - - - - (8.2) (8.2) - (8.2)
Balance at 24
September
2022
(unaudited) 37.5 693.0 (22.1) 22.4 (13.3) (7.6) 37.9 747.8 10.5 758.3
The accompanying notes form an integral part of this
consolidated statement of changes in equity.
Condensed consolidated cash flow statement
Note Unaudited Unaudited
27 weeks 26 weeks
to 30 September to 24 September
2023 2022 (restated)
GBPm GBPm
Cash generated by operations 252.3 179.1
Tax paid (1.5) (0.4)
Interest paid (39.4) (35.0)
------------------------------------------------- ---- ---------------- ----------------
Net cash from operating activities 16 211.4 143.7
Investing activities
Interest received 9.5 2.2
Proceeds from disposal of property, plant
and equipment 17.2 23.0
Purchases of property, plant and equipment (113.9) (60.7)
Purchases of software (1.7) (0.8)
Proceeds from capital grant funding 55.3 70.6
Proceeds from contingent consideration 48.9 -
Net proceeds from disposal of subsidiaries
(net of cash disposed) - 2.0
Settlement of foreign exchange hedge 4.2 (16.3)
Net cash from investing activities 19.5 20.0
------------------------------------------------- ---- ---------------- ----------------
Financing activities
Shares purchased by Employee Benefit Trust (6.1) (10.7)
Treasury shares purchased via share buyback
schemes and directly associated costs (66.6) -
Shares issued - 0.3
External dividends paid (19.7) (8.2)
Repayment of bond issues (12.2) -
(Repayment of)/proceeds from asset backed
financial liabilities (12.1) 14.4
Repayment of lease liabilities (234.4) (271.6)
Net cash flow used in financing activities (351.1) (275.8)
------------------------------------------------- ---- ---------------- ----------------
Net decrease in cash and cash equivalents
before foreign exchange movements (120.2) (112.1)
Cash and cash equivalents at beginning of period 708.5 700.2
Foreign exchange movements 0.8 8.6
------------------------------------------------- ---- ---------------- ----------------
Cash and cash equivalents at the end of the
period 589.1 596.7
Cash flow from discontinued operations
Net cash (outflow)/inflow from operating activities (3.7) 10.4
Net cash inflow from investing activities 53.1 2.4
Net cashflow from financing activities - -
---------------------------------------------------- ----- ----
Net cashflow from discontinued operations 49.4 12.8
As disclosed in the Group's 2023 Annual Report, during 2023
management reassessed the classification of cash flows in relation
to capital grants received from the Department for Transport and
Transport for Scotland, which had previously been reported within
net cash from operating activities. As these grants typically
relate to the funding of capital investment by the Group,
management concluded that these cash flows represented investing
activities, rather than operating activities, and accordingly have
restated the cash flow for an inflow of GBP70.6m for the 26 weeks
to 24 September 2022.
Cash and cash equivalents are included within current assets on
the consolidated balance sheet. Cash and cash equivalents includes
ring-fenced cash of GBP307.3m in H1 2024 (full year 2023:
GBP369.6m). The most significant ring-fenced cash balances are held
by the Group's First Rail subsidiaries. All non-distributable cash
in franchised Rail subsidiaries is considered ring-fenced under the
terms of the National Rail Contracts.
Reconciliation to cash flow statement Note Unaudited Audited
30 September 25 March
2023 2023
GBPm GBPm
Cash and cash equivalents - Balance Sheet 17 685.5 791.4
Bank overdraft 17 (96.4) (82.9)
Balances per consolidated cash flow statement 589.1 708.5
Note to the condensed consolidated cash flow statement -
reconciliation of net cash to movement in net debt
Note Unaudited Unaudited
27 weeks 26 weeks
to 30 September to 24 September
2023 2022
GBPm GBPm
Net decrease in cash and cash equivalents
in period (120.2) (112.1)
Decrease in debt excluding leases 12.2 -
Adjusted cash flow (108.0) (112.1)
Repayment of lease liabilities and asset backed
financial liabilities 246.5 276.5
Inception of leases (14.8) (1,029.0)
Foreign exchange movements 0.8 8.6
Other non-cash movements - -
------------------------------------------------ ---- ---------------- ----------------
Movement in net debt in period 124.5 (856.0)
Net debt at beginning of period (1,269.1) (619.0)
------------------------------------------------ ---- ---------------- ----------------
Net debt at end of period 17 (1,144.6) (1,475.0)
Management considers that adjusted cash flow is an appropriate
measure for assessing the Group cash flow as it is the measure that
is used to assess both Group and divisional cash performance
against budgets and forecasts. Adjusted cash flow is stated prior
to cash flows in relation to debt excluding leases.
The accompanying notes form an integral part of this
consolidated cash flow statement.
Notes to the CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1 Basis of preparation
The half yearly results for the 27 weeks to 30 September 2023
include the results and financial position of the First Rail
division for the period ended 16 September 2023 and the results and
financial position for the other divisions for the 27 weeks ended
30 September 2023. The comparative figures for the 26 weeks to 24
September 2022 include the results of the First Rail division for
the period ended 17 September 2022 and the results of the other
divisions for the 26 weeks ended 24 September 2022. The comparative
figures for the 52 weeks ended 25 March 2023 include the financial
position of the First Rail division at 31 March 2023 and the
financial position of the other divisions at 25 March 2023.
These half yearly results do not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year ended 25 March 2023 were approved
by the board of directors on 8 June 2023 and delivered to the
Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498 of
the Companies Act 2006.
These condensed consolidated interim financial statements for
the half year reporting period for the 27 weeks to 30 September
2023 have been prepared in accordance with the UK-adopted
International Accounting Standard 34 Interim Financial Reporting
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim condensed consolidated interim financial statements
do not include all of the notes of the type normally included in an
annual financial report. Accordingly, this report is to be read in
conjunction with the annual report for the year ended 25 March
2023, and any public announcements made by FirstGroup plc during
the interim reporting period.
The accounting policies applied are consistent with those
described in the Group's latest annual audited financial
statements, except for income tax which at the interim is based on
applying expected full year effective tax rates to the interim
results. There has been no material change as a result of applying
these amendments. We have also included certain non-GAAP measures
in order to reflect management's reported view of financial
performance excluding certain other items.
These results are unaudited but have been reviewed by the
auditor. The comparative figures for the 26 weeks to 24 September
2022 are unaudited and are derived from the condensed consolidated
interim financial statements for that period, which was also
reviewed by the auditor.
Going concern - basis of preparation
The Directors have carried out a review of the Group's financial
projections for the 18 months to 31 March 2025, with due regard for
the risks and uncertainties to which the Group is exposed, the
uncertain economic climate and the impact that this could have on
trading performance. The review also considered the Group's net
current liabilities position at 30 September 2023, and the bond
which matures in September 2024. Based on this review, the
Directors believe that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the half yearly results have been prepared on
the going concern basis in preparing this report.
Evaluation of going concern
The Board evaluated whether it was appropriate to prepare the
half yearly results in this report on a going concern basis and in
doing so considered whether any material uncertainties exist that
cast doubt on the Group's and the Company's ability to continue as
a going concern over the going concern period.
1 Basis of preparation (continued)
Consistent with prior years, the Board's going concern
assessment is based on a review of future trading projections,
including whether banking covenants are likely to be met and
whether there is sufficient committed facility headroom to
accommodate future cash flows for the going concern period.
Divisional management teams prepared detailed, bottom-up
projections for their businesses reflecting the impact of the
post-pandemic operating environment, including assumptions on
passenger volume recovery and government support arrangements as
well as inflationary cost and other macroeconomic pressures.
Projections also captured the impact of actions required to address
the Group's climate--related targets and ambitions.
Base case scenario
These projections were the subject of a series of executive
management reviews and were used to update the base case scenario
that was used for the purposes of the going concern assessment at
the 2023 year end. The base case assumes a continuing recovery in
passenger volumes and yields in FY24 and FY25. The base case
assumes the three TOC rail contracts run to their expiry date,
should there be a change in government. The macro projections in
the updated base case assume that the UK operates in a recovering,
post-pandemic 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.
Severe, plausible downside scenario
In addition, a severe but plausible downside case was also
modelled which assumes a more protracted post-pandemic recovery
profile. In First Bus the severe but plausible downside case
assumes slower recovery of passenger revenues in the second half of
FY24 and through FY25 and further inflationary cost pressures. In
First Rail, the downside case assumes reduced TOC performance fee
awards and lower revenues in Hull Trains and Lumo Open Access. The
downside case also assumed a delay in realising proceeds from the
Greyhound property portfolio until after the going concern period,
lower proceeds from the First Transit earnout, and potential
downsides should the Group be impacted by significant climate or
cyber security events.
Mitigating actions
If the future operating environment of the Group were to be more
challenging than assumed in the base case or downside case
scenarios, the Group would reduce and defer planned growth capital
expenditure and further reduce costs in line with a lower volume
operating environment, to the extent that the essential services we
operate in Bus are not required to be run for the governments and
communities we support.
Going concern statement
Based on the scenario modelling undertaken, and the potential
mitigating actions referred to above, the Board is satisfied that
the Group's liquidity and covenant headroom over the going concern
period is sufficient for the business needs.
Operating and financial review
The operating and financial review considers the impact of
seasonality on the Group and also the principal risks and
uncertainties facing it in the remaining six months of the
financial year.
Summary of significant events in the Group
Significant events in relation to the change in the financial
position and performance of the Group:
On 26 October 2022, EQT Infrastructure announced its agreement
to sell First Transit to Transdev North America, Inc. As part of
the First Transit disposal to EQT Infrastructure, FirstGroup is
entitled to an earnout consideration. The Group currently estimates
the total earnout consideration to be around $88.5m (GBP72.5m), in
line with the 2023 year-end assessment. During the first half of
the year, an initial payment of $62.8m (GBP49.0m) was received in
relation to the earnout consideration, with a residual asset of
$25.7m (GBP21.0m) held on the balance sheet at 30 September 2023.
An adjusting credit of GBP2.3m arose as a result of the hedging of
the cash receipt and the retranslation of the US dollar asset into
pounds sterling.
In September, First Rail agreed a new National Rail Contract
(NRC) with the Department for Transport (DfT) for the West Coast
Partnership (WCP), comprising Avanti West Coast and the West Coast
Partnership Development. The contract is for nine years and has a
minimum three-year term to 18 October 2026, and thereafter a
further six years until 17 October 2032, subject to ongoing DfT
approval. On 11 May 2023, the Department for Transport confirmed
that it would not exercise its option to extend FirstGroup's
TransPennine Express NRC, which then duly expired on 28 May
2023.
In First Rail, the final variable fee payments for the
division's management fee-based contracts for the FY 2023 financial
year were agreed with the DfT at a rate ahead of the amounts
accrued in the FY 2023 financial statements, contributing a further
c.GBP12m to adjusted and statutory operating profit in H1 2024.
First Rail's open access operations Lumo and Hull Trains
continued to be profitable in the period, driven primarily by
passenger revenue growth from increased leisure travel during the
summer period.
In the First Bus division, first half performance has been
underpinned by strong passenger volumes and productivity
improvements resulting from management actions taken to transform
the business, although these have been partly offset by ongoing
inflationary pressures.
The Group has a GBP300m sustainability-linked Revolving Credit
Facility ('RCF') with a group of its relationship banks. This
committed RCF remains undrawn and matures in August 2026.
The Company's GBP75m share buyback programme completed on 3
August 2023 having repurchased 63,868,786 shares for a total
consideration of GBP75.5m including transaction costs. On 8 June
2023, the Company announced a new share buyback programme to
purchase up to GBP115m of ordinary shares. At 30 September 2023,
the Company had repurchased 15,438,871 shares for a total
consideration of GBP23.5m including transaction costs.
In September 2023, First Bus concluded a period of consultation
with regards to its two Local Government Pension Funds and
subsequently terminated its participation in these funds on 31
October 2023, with affected employees enrolled into the First Bus
Retirement Savings Plan. Adjusting charges of GBP142.3m relating to
the settlement charge and other costs relating to the termination
were recognised during the period. A gain of GBP160.4m was
recognised in Other comprehensive income in relation to the
restricted accounting surplus.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of these half yearly results requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results might
differ from these estimates.
In preparing these half yearly results, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
for the year ended 25 March 2023.
This half yearly report has been prepared in respect of the
Group as a whole and accordingly matters identified as being
significant or material are so identified in the context of
FirstGroup plc and its subsidiary undertakings taken as a
whole.
These condensed consolidated interim financial statements were
approved by the Board on 23 November 2023.
2 Revenue
Passenger revenue in First Bus was GBP377.1m (H1 2023:
GBP322.3m) with the increase mainly reflecting increased passenger
volumes, service improvements and positive pricing impact, partly
offset by funding reductions. First Rail passenger revenue was
GBP1,405.6m (H1 2023: GBP1,290.9m).
The principal direct fiscal support recognised during the period
comprised GBP24.5m (H1 2023: GBP43.7m) of funding and concessions
in First Bus. These are recognised within revenue in accordance
with IFRS 15 (as per our policy on revenue recognition in the 2023
Annual Accounts), 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 BRG scheme, which provided funding
from September 2021 to June 2023, has been replaced by a new
scheme, BSOG+ from July 2023, under which funding is provided
through enhanced BSOG rates per litre and an additional payment per
km operated for eligible miles. In addition to this the DfT
implemented a GBP2 cap on all single fares across the country in
January 2023 and are currently reimbursing operators for any
revenue foregone as a result of the reduced ticket prices. The
scheme has recently been extended and will now run until at least
December 2024. In Scotland, the NSG+ scheme which ran throughout
FY23 has now ended with the only remaining funding being provided
by the NSG scheme which essentially replaces BSOG. In Wales the BES
scheme which funded operators to a pre-agreed margin in order to
allow them to maintain the network ended in July 2023 and has been
replaced by the Bus Transition Fund (BTF) which operates in an
almost identical manner.
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
year and prior year periods, our First Rail franchises were
operated under the terms of these arrangements.
- EMA in respect of GWR up to 26 June 2022, whereupon GWR
transitioned to a new, three-year NRC with an option for the DfT to
extend by a further three years to June 2028
- ERMA in respect of WCP / Avanti up to 16 October 2022,
whereupon the existing arrangement was extended by a further six
months by the DfT to March 2023. That arrangement was again
extended to 15 October 2023, and in September, a new NRC was
awarded for a nine-year period, with a minimum core three-year term
to 18 October 2026
- NRC for SWR throughout both periods
- On 11 May 2023 the DfT confirmed that it would not exercise
its option to extend FirstGroup's TPE NRC, and the contract expired
on 28 May 2023. On that date the DfT appointed its Operator of Last
Resort to take over delivery of passenger services on the TPE
network
Under the arrangements, our franchised TOCs are paid a fixed
management fee to continue to operate the rail network at a service
level agreed with the government. Performance based fees are earned
through a combination of scorecards and quantified target
methodologies benchmarked off this agreed service level. Net DfT
funding including the management and performance fee is recognised
as revenue in Rail franchise subsidy receipts, in line with the
revenue recognition policy for franchise subsidy receipts from the
DfT.
Disaggregated revenue by operating segment is set out in note
4.
3 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. The Group's
adjusted performance is used to explain year-on-year changes when
the effect of certain items are 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 GBP5.0m would not normally
be considered as adjusting items unless part of a larger strategic
project, but items which distort year-on-year comparisons that
exceed this amount could potentially be classified as an adjusting
item and are assessed on a case by case basis. Such potential
adjusting other items include: restructuring and reorganisation
costs; property gains or losses; aged legal and self-insurance
claims; movements on insurance discount rates; onerous contract
provisions; and pension settlement gains or losses. In addition,
management assesses divisional performance before other intangible
asset amortisation charges (excluding software amortisation), as
these are typically a result of Group decisions and therefore the
divisions have little or no control over these charges. Management
considers that this overall basis more appropriately reflects
operating performance and provides a better understanding of the
key performance indicators of the business.
3 Reconciliation to non-GAAP measures and performance (continued)
Reconciliation of operating (loss)/profit 27 weeks 26 weeks to
to adjusted operating profit on a to 24 September
continuing basis 30 September 2022
2023 GBPm
GBPm
Operating (loss)/profit on a continuing
basis (41.4) 62.1
Adjustments for:
LGPS pension settlement and related
charges 142.3 -
Loss on sale of Scotland East - 3.7
Strategic items - 1.9
Greyhound Canada (0.3) (1.6)
Total adjusting operating profit items
on a continuing basis 142.0 4.0
------------------------------------------- ------------- -------------
Adjusted operating profit on a continuing
basis 100.6 66.1
Reconciliation of operating profit/(loss) 27 weeks 26 weeks to
to adjusted operating loss on a discontinued to 24 September
basis 30 September 2022
2023 GBPm
GBPm
Operating profit/(loss) from discontinued
operations 0.1 (28.6)
Adjustments for:
Transit earnout (credit)/charge (2.3) 27.9
Gain on sale of Greyhound properties - (7.7)
Total adjusting operating profit items
from discontinued operations (2.3) 20.2
----------------------------------------------- ------------- -------------
Adjusted operating loss from discontinued
operations (2.2) (8.4)
Reconciliation of (loss)/profit before 27 weeks 26 weeks to
tax to adjusted earnings to 24 September
30 September 2022
2023 GBPm
GBPm
(Loss)/profit before tax (including
discontinued operations) (1) (68.4) 8.7
------------------------------------------ ------------- -------------
Adjusting operating profit items -
continuing operations 142.0 4.0
Adjusting operating profit items -
discontinued operations (2.3) 20.2
Adjusting operating profit items -
total operations 139.7 24.2
Rail management fee-based operations
- IFRS 16 adjustment 7.1 1.5
Adjusted profit before tax including
discontinued operations 78.4 34.4
------------------------------------------ ------------- -------------
Tax charge on adjusted profit before
tax (20.2) (6.4)
Non-controlling interests (2) (3.9) (2.1)
------------------------------------------ ------------- -------------
Adjusted earnings including discontinued
operations 54.3 25.9
1 See note 4.
2 Statutory non-controlling interests principally reflects
Avanti West Coast and South Western Trains.
Adjusting items
The principal adjusting items in relation to the operating
profit adjustments - continuing operations were as follows:
First Bus pension settlement charge and related items
In September 2023, First Bus concluded a period of consultation
with regards to its two Local Government Pension Funds and
subsequently terminated its participation in these funds on 31
October 2023, with affected employees enrolled into the First Bus
Retirement Savings Plan. Adjusting charges of GBP142.3m relating to
the settlement charge and other costs relating to the termination
were recognised during the period. A gain of GBP160.4m was
recognised in Other comprehensive income in relation to the
restricted accounting surplus.
The principal adjusting items in relation to the operating
profit adjustments - discontinued operations were as follows:
Transit earnout charge
Following the announcement on 26 October 2022 of EQT
Infrastructure's agreement to sell First Transit to Transdev North
America, Inc, the Group continues to estimate its total earnout
consideration to be $88.5m (GBP72.5m). An initial payment of $62.8m
(GBP49.0m) was received during the first half of the year, leaving
contingent consideration receivable on the Group's balance sheet of
$25.7m (GBP21.0m). An adjusting credit of GBP2.3m arose as a result
of the hedging of the cash receipt and the retranslation of the US
dollar asset into pounds sterling.
3 Reconciliation to non-GAAP measures and performance (continued)
Group adjusted attributable EBITDA and operating profit
First Bus EBITDA comprises:
27 weeks 26 weeks
to to
30 September 24 September
2023 2022
GBPm GBPm
Pre-IFRS 16 EBITDA 61.4 42.8
IFRS 16 adjustments (1) 7.4 8.2
----------------------------------------- ------------- -------------
First Bus adjusted EBITDA per segmental
results (note 4) 68.8 51.0
----------------------------------------- ------------- -------------
First Rail EBITDA comprises:
Non-management fees based TOCs 22.2 12.6
Group's share of management fee income available for dividends 23.2 19.1
Non-controlling interest 3.9 2.0
Tax at 25% (H1 2023: 19%) 8.7 4.9
IFRS 16 adjustments (1) 228.8 267.0
---------------------------------------------------------------- ----- -----
First Rail adjusted EBITDA per segmental
results table (note 4) 286.8 305.6
---------------------------------------------------------------- ----- -----
Group items EBITDA comprises:
Pre-IFRS 16 EBITDA (12.0) (9.6)
IFRS 16 adjustments (1) 0.9 0.9
------------------------------------------- ------ -----
Group items adjusted EBITDA per segmental
results table (note 4) (11.1) (8.7)
------------------------------------------- ------ -----
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.
4 Business segments information
For management purposes, the Group is organised into three
operating divisions - First Bus, First Rail and Greyhound. The sale
of First Student and First Transit was completed on 21 July 2021,
and the sale of Greyhound US and Mexico completed on 21 October
2021. The properties related to the retained Greyhound US business
were classified as Held for Sale and were therefore treated as
discontinued. Greyhound Canada was retained and is categorised as a
Continuing Operation, although trading operations have ceased. The
divisions are managed separately in line with the differing
services that they provide and the geographical markets which they
operate in. There is a clear distinction between each division and
no judgement is required to identify each reportable segment.
The segment results for the 27 weeks to 30 September 2023 are as
follows:
Discontinued
Continuing Operations Operations
--------------------------- -------
First First Group Group
Bus Rail Greyhound Items(1) Total Greyhound Items(1) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Passenger revenue 377.1 1,405.6 - - 1,782.7 - - 1,782.7
Contract revenue 94.2 - - (19.8) 74.4 - - 74.4
Rail franchise subsidy
receipts - 204.9 - - 204.9 - - 204.9
Other 33.6 111.4 - - 145.0 - - 145.0
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Revenue 504.9 1,721.9 - (19.8) 2,207.0 - - 2,207.0
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Adjusted EBITDA(2) 68.8 286.8 - (11.1) 344.5 (1.1) (1.1) 342.3
Depreciation (36.6) (229.2) - (1.0) (266.8) - - (266.8)
Software amortisation (0.7) (1.1) - (0.3) (2.1) - - (2.1)
Capital grant amortisation 4.5 20.5 - - 25.0 - - 25.0
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Segment results 36.0 77.0 - (12.4) 100.6 (1.1) (1.1) 98.4
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Other adjustments
(note 3) (142.3) - 0.3 - (142.0) - 2.3 (139.7)
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Operating (loss)/profit (106.3) 77.0 0.3 (12.4) (41.4) (1.1) 1.2 (41.3)
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
Investment income 1.2 1.3 - 8.5 11.0 - - 11.0
Finance costs (1.3) (28.2) - (8.6) (38.1) - - (38.1)
--------------------------- ------- ------- --------- --------- ------- --------- --------- -------
(Loss)/profit before
tax (106.4) 50.1 0.3 (12.5) (68.5) (1.1) 1.2 (68.4)
Tax 17.2
-------
Loss after tax (51.2)
-------
1 Group items comprise the elimination of intra-group trading
between Bus and Rail divisions (not material in H1 2023) and
charges relating to central management and other items.
2 Adjusted EBITDA is adjusted operating profit less capital
grant amortisation plus depreciation plus software
amortisation.
Balance sheet at 30 September 2023 Total assets Total liabilities Net assets/(liabilities)
GBPm GBPm GBPm
Greyhound retained 66.6 (91.4) (24.8)
First Bus 810.8 (298.4) 512.4
First Rail 2,380.1 (1,140.1) 1,240.0
----------------------------------- ------------ ----------------- ------------------------
3,257.5 (1,529.9) 1,727.6
Group items 187.9 (130.6) 57.3
Borrowings and cash 685.5 (1,830.5) (1,145.0)
Taxation 41.4 (48.3) (6.9)
----------------------------------- ------------ ----------------- ------------------------
Total 4,172.3 (3,539.3) 633.0
----------------------------------- ------------ ----------------- ------------------------
Greyhound (held for sale) 0.7 - 0.7
Grand total 4,173.0 (3,539.3) 633.7
The segment results for the 26 weeks to 24 September 2022 were
as follows:
Discontinued
Continuing Operations Operations
--------------------------- -------
First First Group Group
Bus Rail Greyhound Items(1) Total Greyhound Items(1) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Passenger revenue 322.3 1,290.9 - - 1,613.2 - - 1,613.2
Contract revenue 54.8 - - - 54.8 - - 54.8
Rail franchise subsidy
receipts - 361.2 - - 361.2 - - 361.2
Other 50.6 132.6 - - 183.2 2.7 - 185.9
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Revenue 427.7 1,784.7 - - 2,212.4 2.7 - 2,215.1
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Adjusted EBITDA(2) 51.0 305.6 - (8.7) 347.9 (8.4) - 339.5
Depreciation (33.2) (310.4) - (1.0) (344.6) - - (344.6)
Software amortisation (0.8) (3.2) - (0.3) (4.3) - - (4.3)
Capital grant amortisation 3.7 63.4 - - 67.1 - - 67.1
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Segment results 20.7 55.4 - (10.0) 66.1 (8.4) - 57.7
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Other adjustments
(note 3) (4.3) - 1.6 (1.3) (4.0) 7.7 (27.9) (24.2)
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Operating profit/(loss) 16.4 55.4 1.6 (11.3) 62.1 (0.7) (27.9) 33.5
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Investment income - 1.3 - 0.5 1.8 0.4 - 2.2
Finance costs (1.1) (19.5) - (6.3) (26.9) (0.1) - (27.0)
--------------------------- ------ ------- --------- --------- ------- --------- --------- -------
Profit/(loss) before
tax 15.3 37.2 1.6 (17.1) 37.0 (0.4) (27.9) 8.7
Tax (7.3)
-------
Profit after tax 1.4
-------
1 Group items comprise central management and other items.
2 Adjusted EBITDA is adjusted operating profit less capital
grant amortisation plus depreciation plus software
amortisation.
4 Business segments information (continued)
Balance sheet at 25 March 2023 Total assets Total liabilities Net assets/(liabilities)
GBPm GBPm GBPm
Greyhound retained 79.8 (101.6) (21.8)
First Bus 775.5 (263.6) 511.9
First Rail 2,460.4 (1,092.1) 1,368.3
------------------------------- ------------ ----------------- ------------------------
3,315.7 (1,457.3) 1,858.4
Group items 251.5 (89.4) 162.1
Borrowings and cash 791.4 (2,067.0) (1,275.6)
Taxation 47.0 (41.7) 5.3
------------------------------- ------------ ----------------- ------------------------
Total 4,405.6 (3,655.4) 750.2
------------------------------- ------------ ----------------- ------------------------
Greyhound (held for sale) 0.6 - 0.6
Grand total 4,406.2 (3,655.4) 750.8
Segment assets and liabilities are determined by identifying the
assets and liabilities that relate to the business of each segment
but excluding intercompany balances, borrowings and cash and
taxation.
5 Investment income and finance costs
27 weeks 26 weeks
to to
30 September 24 September
2023 2022
GBPm GBPm
Investment income
Bank interest receivable (9.5) (2.2)
Interest on pensions (1.5) -
------------------------------------------------------------- ------------- -------------
Total investment income (including discontinued operations) (11.0) (2.2)
------------------------------------------------------------- ------------- -------------
Finance costs
Bonds 6.5 6.9
Bank interest and facility fees 3.2 1.6
Finance charges payable in respect
of lease liabilities 27.8 20.0
Finance charges payable in respect
of asset backed financial liabilities 0.6 0.7
Interest on long term provisions - 0.5
Interest on pensions - (2.8)
Interest - other - 0.1
------------------------------------------------------------- ------------- -------------
Total finance costs (including discontinued
operations) 38.1 27.0
------------------------------------------------------------- ------------- -------------
Total finance costs 38.1 27.0
Investment income (11.0) (2.8)
------------------------------------------------------------- ------------- -------------
Net finance costs (including discontinued
operations) 27.1 24.8
------------------------------------------------------------- ------------- -------------
Investment income relating to discontinued operations was GBPnil
(H1 2023: GBP(0.4)m) and finance costs relating to discontinued
operations were GBPnil (H1 2023: GBP0.1m).
6 Tax on profit on ordinary activities
27 weeks 26 weeks
to to
30 September 24 September
2023 2022
GBPm GBPm
Current tax charge 0.7 0.5
Deferred tax (credit)/charge (17.9) 6.8
--------------------------------------- ------------- -------------
Total tax (credit)/ charge (including
discontinued operations) (17.2) 7.3
Tax (credit)/charge attributable to:
(Loss)/profit from continuing operations (17.2) 5.1
------------------------------------------ ------ ---
Profit from discontinued operations - 2.2
------------------------------------------ ------ ---
The tax effect of the adjustments disclosed in note 3 was a
credit of GBP35.6m in H1 2024 (H1 2023: charge of GBP2.0m). In
addition, there were no adjustments to brought forward tax balances
(H1 2023: net credit of GBP0.8m).
7 Earnings per share (EPS)
Basic EPS is calculated by dividing the loss attributable to
equity shareholders of GBP(55.1)m in H1 2024 (H1 2023: GBP(0.6)m)
by the weighted average number of ordinary shares in issue of
697.7m (H1 2023: 739.8m). 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.
30 September 24 September
2023 2022
number number
m m
Weighted average number of shares
used in basic calculation 697.7 739.8
Executive share options 26.0 24.5
----------------------------------- ------------ ------------
Weighted average number of shares
used in the diluted calculation 723.7 764.3
The adjusted EPS is intended to highlight the recurring results
of the Group before certain other adjustments as set out in note 3,
and before IFRS 16 charges relating to the Group's management
fee-based Rail operations. A reconciliation is set out below:
27 weeks to 26 weeks to
30 September 24 September 2022
2023
GBPm EPS (p) GBPm EPS (p)
-------------------------------------- --- --------- ------- -------- ----------
Basic loss / EPS (55.1) (7.9) (0.6) (0.1)
Management fee-based Rail
operations - IFRS 16 adjustments 5.3 0.8 1.1 0.1
Other adjustments (note 3) 139.7 20.0 24.2 3.3
Tax effect of Other adjustments (35.6) (5.1) 2.0 0.3
Other adjustments to deferred
tax assets - - (0.8) (0.1)
--------------------------------------- --------- ------- -------- ----------
Adjusted profit and EPS attributable
to the ordinary equity holders
of the company 54.3 7.8 25.9 3.5
--------------------------------------- --------- ------- -------- ----------
Adjusted loss from discontinued
operations (2.2) (0.3) (8.1) (1.1)
Adjusted profit and EPS from
continuing operations 56.5 8.1 34.0 4.6
27 weeks to 26 weeks to
30 September 24 September
2023 2022
pence pence
Diluted EPS (7.9) (0.1)
Adjusted diluted EPS 7.5 3.4
1 Adjusted diluted EPS for the prior period reflects the amended
definition of adjusted earnings, where it excludes certain
adjustments as set out in note 3, and before IFRS 16 charges
relating to the Group's management fee-based Rail operations.
8 Goodwill and impairment of assets
GBPm
Cost and carrying amount
At 30 September 2023 and at 26 March 2023 99.6
------------------------------------------ ----
Disclosures including goodwill by cash generating unit (CGU),
details of impairment testing and sensitivities thereon are set out
on pages 180 to 181 of the 2023 Annual Report.
At 30 September 2023, impairment testing was revisited for each
of the First Bus, Hull Trains, and Lumo CGUs. For each of these, it
was concluded that there had been no indicators of impairment since
March 2023, therefore no adjustment was required to the carrying
value of the CGUs at 30 September 2023.
9 Property, plant and equipment
Owned assets
Land and Passenger Other plant Total
buildings carrying and equipment GBPm
GBPm vehicle fleet GBPm
GBPm
Cost
At 26 March 2023 213.1 753.5 711.6 1,678.2
Additions 1.5 75.4 29.5 106.4
Transfers to right of use assets - (2.7) - (2.7)
Disposals (0.5) (39.5) (57.9) (97.9)
Foreign exchange movements - (0.1) - (0.1)
At 30 September 2023 214.1 786.6 683.2 1,683.9
--------------------------------- ---------- -------------- -------------- -------
Accumulated depreciation and
impairment
At 26 March 2023 60.5 432.9 546.1 1,039.5
Charge for period 2.0 26.5 21.7 50.2
Disposals (0.2) (33.1) (56.6) (89.9)
Impairment - - 0.5 0.5
Foreign exchange movements - (0.1) - (0.1)
At 30 September 2023 62.3 426.2 511.7 1,000.2
--------------------------------- ---------- -------------- -------------- -------
Carrying amount
At 30 September 2023 151.8 360.4 171.5 683.7
--------------------------------- ---------- -------------- -------------- -------
At 25 March 2023 152.6 320.6 165.5 638.7
9 Property, plant and equipment (continued)
Right of use assets
Rolling stock Land and Passenger Other plant Total
GBPm buildings carrying and equipment GBPm
GBPm vehicle fleet GBPm
GBPm
Cost
At 26 March 2023 3,781.7 71.4 51.7 8.5 3,913.3
Additions and modifications 8.2 2.3 3.8 1.5 15.8
Transfers from owned
assets - - 2.7 - 2.7
Disposals (221.6) (7.4) (0.5) (0.1) (229.6)
At 30 September 2023 3,568.3 66.3 57.7 9.9 3,702.2
---------------------------- ------------- ---------- -------------- -------------- -------
Accumulated depreciation
and impairment
At 26 March 2023 2,144.7 30.9 40.3 6.4 2,222.3
Charge for period 206.5 4.3 5.3 0.7 216.8
Lease impairment 1.6 - - - 1.6
Disposals (220.6) (4.9) (0.3) (0.1) (225.9)
At 30 September 2023 2,132.2 30.3 45.3 7.0 2,214.8
---------------------------- ------------- ---------- -------------- -------------- -------
Carrying amount
At 30 September 2023 1,436.1 36.0 12.4 2.9 1,487.4
---------------------------- ------------- ---------- -------------- -------------- -------
At 25 March 2023 1,637.0 40.5 11.4 2.1 1,691.0
The discounted lease liability relating to the right of use
assets included above is shown in note 12.
As at 30 September 2023 the Group had entered into contractual
capital commitments amounting to GBP252.0m principally representing
purchase of PCVs and TOC commitments.
Owned assets and Rolling stock Land and Passenger Other plant Total
right of use assets GBPm buildings carrying and equipment GBPm
GBPm vehicle fleet GBPm
GBPm
Carrying amount
At 30 September 2023 1,436.1 187.8 372.8 174.4 2,171.1
--------------------- ------------- ---------- -------------- -------------- -------
At 25 March 2023 1,637.0 193.1 332.0 167.6 2,329.7
The maturity analysis of lease liabilities is presented in note
12.
Amounts recognised in income statement 27 weeks 26 weeks
to to
30 September 24 September
2023 2022
GBPm GBPm
---------------------------------------- ------------- -------------
Depreciation expense on right of use
assets 216.8 257.9
Interest expense on lease liabilities 27.8 20.0
Impairment charge 1.6 -
Expense relating to short-term leases 0.8 -
Expense relating to leases of low value
assets 0.1 1.5
247.1 279.4
---------------------------------------- ------------- -------------
10 Trade and other receivables
30 September 25 March
2023 2023
GBPm GBPm
Amounts due within one year (from discontinued
operations)
Contingent consideration receivable 21.0 72.3
------------------------------------------------ ------------ --------
Amounts due within one year (from continuing 30 September 25 March
operations) 2023 2023
GBPm GBPm
Trade receivables 329.4 386.1
Loss allowance (37.3) (49.0)
---------------------------------------------- ------------ --------
Trade receivables net 292.1 337.1
Other receivables 188.0 210.3
Amounts recoverable on contracts 47.2 22.5
Prepayments 47.9 90.8
Accrued income 406.6 187.6
---------------------------------------------- ------------ --------
981.8 848.3
11 Borrowings
30 September 25 March 2023
2023 GBPm
GBPm
On demand or within one year
Leases (note 12) (1) 424.7 447.4
Asset backed financial liabilities
(note 12) (2) 8.3 17.3
Bank overdraft 96.4 82.9
Loan note 0.6 0.6
Bond 6.875% (repayable 2024) (3) 172.4 6.5
------------------------------------ ------------ -------------
Total current liabilities 702.4 554.7
Within one to two years
Leases (note 12) (1) 351.6 381.6
Asset backed financial liabilities
(note 12) (2) 6.0 5.9
Bond 6.875% (repayable 2024) - 184.2
357.6 571.7
----------------------------------- ------------ -------------
Within two to five years
Leases (note 12) (1) 719.7 825.9
Asset backed financial liabilities
(note 12) (2) 10.0 12.1
729.7 838.0
----------------------------------- ------------ -------------
More than five years
Leases (note 12) (1) 33.0 93.7
Asset backed financial liabilities
(note 12) (2) 7.8 8.9
40.8 102.6
----------------------------------- ------------ -------------
Total non-current liabilities 1,128.1 1,512.3
1 The right of use assets relating to lease liabilities are
shown in note 9. The maturity analysis of lease liabilities is
presented in note 12.
2 The maturity analysis of asset backed financial liabilities is presented in note 12.
3 Includes GBP0.4m of accrued interest (FY 2023: GBP6.5m of accrued interest).
12 Lease liabilities and asset backed financial liabilities
The Group had the following lease liabilities at the balance
sheet dates:
Lease liabilities 30 September 25 March 2023
2023 GBPm
GBPm
Due in less than one year 472.9 503.1
Due in more than one year but not
more than two years 386.0 421.5
Due in more than two years but not
more than five years 759.5 878.8
Due in more than five years 43.3 105.0
------------------------------------ ------------ -------------
1,661.7 1,908.4
Less future financing charges (132.7) (159.8)
------------------------------------ ------------ -------------
1,529.0 1,748.6
----------------------------------- ------------ -------------
Comprising:
Lease liabilities - Rail 1,492.2 1,711.2
Lease liabilities - non-Rail 36.8 37.4
The Group had the following asset backed financial liabilities
at the balance sheet dates:
Asset backed financial liabilities 30 September 25 March 2023
2023 GBPm
GBPm
Due in less than one year 8.6 17.9
Due in more than one year but not
more than two years 6.4 6.3
Due in more than two years but not
more than five years 11.4 13.7
Due in more than five years 9.6 10.9
------------------------------------ ------------ -------------
36.0 48.8
Less future financing charges (3.9) (4.6)
------------------------------------ ------------ -------------
32.1 44.2
----------------------------------- ------------ -------------
Comprising:
Asset backed financial liabilities
- non-Rail 32.1 44.2
Asset backed financial liabilities - -
- Rail
13 Financial instruments
Non-derivative financial instruments
30 September 25 March 2023
2023 GBPm
GBPm
Total non-derivatives
Total non-current assets 97.2 117.6
Total assets 97.2 117.6
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.
Derivative financial instruments
30 September 25 March 2023
2023 GBPm
GBPm
Derivatives designated and effective
as hedging instruments carried at
fair value
Non-current assets
Fuel derivatives (cash flow hedge) 2.0 -
Currency forwards (cash flow hedge) 0.2 0.1
2.2 0.1
------------------------------------- ------------ -------------
Current assets
Fuel derivatives (cash flow hedge) 6.0 3.3
Currency forwards (cash flow hedge) 0.8 4.1
6.8 7.4
------------------------------------- ------------ -------------
Current liabilities
Fuel derivatives (cash flow hedge) 1.5 2.6
Currency forwards (cash flow hedge) 0.9 -
2.4 2.6
------------------------------------- ------------ -------------
Non-current liabilities
Currency forwards (cash flow hedge) - 0.1
Fuel derivatives (cash flow hedge) 0.6 1.8
0.6 1.9
------------------------------------- ------------ -------------
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:
30 September 2023
Fair value
---------------------------------- --------
Carrying
value
Level 1 Level 2 Level 3 Total Total
GBPm GBPm GBPm GBPm GBPm
---------------------------- ------- ------- ------- ------- --------
Financial assets
and derivatives
Trade and other receivables - 783.2 - 783.2 783.2
Contingent consideration
receivable - 21.0 - 21.0 21.0
Derivative financial
instruments - 9.0 - 9.0 9.0
Financial liabilities
and derivatives
Borrowings (1) 0.6 1,733.1 - 1,733.7 1,734.1
Trade and other payables - 1,295.9 - 1,295.9 1,295.9
Derivative financial
instruments - 3.0 - 3.0 3.0
25 March 2023
Fair value
---------------------------------- --------
Carrying
value
Level 1 Level 2 Level 3 Total Total
GBPm GBPm GBPm GBPm GBPm
---------------------------- ------- ------- ------- ------- --------
Financial assets
and derivatives
Trade and other receivables - 596.2 - 596.2 596.2
Contingent consideration
receivable - 72.3 - 72.3 72.3
Derivative financial
instruments - 7.5 - 7.5 7.5
Financial liabilities
and derivatives
Borrowings(1) 0.6 1,984.1 - 1,984.7 1,984.1
Trade and other payables - 1,198.3 - 1,198.3 1,198.3
Derivative financial
instruments - 4.5 - 4.5 4.5
(1) Includes lease liabilities as set out in note 12.
13 Financial instruments (continued)
The estimated fair value of cash and cash equivalents, short
term trade and other receivables and short term trade and other
payables is a reasonable approximation to the carrying value of
these items.
Level 1: Quoted prices in active markets for identical assets
and liabilities.
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the asset or liability either directly or
indirectly.
Level 3: Inputs for the asset or liability that are not based on
observable market data.
There were no transfers between Level 1 and Level 2 during the
current or prior year.
14 Provisions
Insurance Legal and Total
claims other GBPm
GBPm GBPm
At 26 March 2023 129.9 81.2 211.1
Charged to the income statement 6.6 7.0 13.6
Utilised in the period (21.6) (7.4) (29.0)
Transferred from accruals - 1.7 1.7
Disposed - (5.2) (5.2)
Foreign exchange movements 0.3 0.1 0.4
-------------------------------- --------- --------- ------
At 30 September 2023 115.2 77.4 192.6
-------------------------------- --------- --------- ------
Current liabilities 40.2 35.6 75.8
Non-current liabilities 75.0 41.8 116.8
-------------------------------- --------- --------- ------
At 30 September 2023 115.2 77.4 192.6
-------------------------------- --------- --------- ------
Current liabilities 45.5 40.4 85.9
Non-current liabilities 84.4 40.8 125.2
-------------------------------- --------- --------- ------
At 25 March 2023 129.9 81.2 211.1
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 GBP1.3m in H1 2024 (full year 2023:
GBP1.3m) can extend for more than 25 years. The utilisation of
GBP21.6m in H1 2024 (full year 2023: GBP37.1m) represents payments
made largely against the current liability of the preceding year as
well as the settlement of certain large aged claims.
The insurance claims provisions contain GBP59.7m in H1 2024 (
full year 2023: GBP73.3m ) which is recoverable from insurance
companies and is included within other receivables in note 10.
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 and other
provisions in respect of contractual and other obligations under
rail contracts and restructuring costs. The dilapidation provisions
are expected to be settled at the end of the respective
contracts.
15 Called up share capital
30 September 25 March 2023
2023 GBPm
GBPm
Allotted, called up and fully paid
750.7m ordinary shares of 5p each
(25 March 2023: 750.6m) 37.5 37.5
The Company has one class of ordinary shares which carries no
right to fixed income.
On 16 December 2022, the Company announced a share buyback
programme to purchase up to GBP75m of ordinary shares. This
programme completed on 3 August 2023 having repurchased 63,868,786
shares for a total consideration of GBP75.5m including transaction
costs.
On 8 June 2023, the Company announced a share buyback programme
to purchase up to GBP115m of ordinary shares. At 30 September 2023,
the Company had repurchased 15,438,871 shares for a total
consideration of GBP23.5m including transaction costs.
As at 30 September 2023, GBP75.5m has been deducted from
retained earnings in respect of shares and directly associated
transaction costs relating to the GBP75m share buyback programme. A
further GBP115.8m has been deducted from retained earnings in
respect of the shares already purchased, directly associated
transaction costs and the remaining commitment to purchase up to
GBP115m of ordinary shares relating to the second share buyback
programme.
The directors have declared an interim dividend of 1.5p per
ordinary share in respect of the period ended 30 September 2023,
totalling approximately GBP10m.
16 Net cash from operating activities
27 weeks 26 weeks to 24 September 2022
to 30 September
2023
(restated)
GBPm GBPm
Operating (loss)/profit from:
Continuing Operations (41.4) 62.1
Discontinued Operations 0.1 (28.6)
----------------------------------------------------- ---------------- -----------------------------
Total Operations (41.3) 33.5
Adjustments for:
Depreciation charges 266.8 344.6
Capital grant amortisation (25.1) (67.1)
Software amortisation charges 2.1 4.3
Loss on disposal of subsidiaries - 3.7
Impairment charges 2.1 -
Share-based payments 6.6 1.6
Profit on disposal of property, plant and equipment (0.9) (8.0)
----------------------------------------------------- ---------------- -----------------------------
Operating cash flows before working capital
and pensions 210.3 312.6
Decrease/(increase) in inventories 0.6 (2.6)
Increase in receivables (131.7) (95.8)
Increase/(decrease) in payables due within one
year 56.2 (64.1)
Decrease in contingent consideration receivable - 27.9
Decrease in financial assets 23.7 -
Decrease in provisions due within one year (9.3) (14.2)
(Decrease)/increase in provisions due over one
year (9.5) 6.0
Settlement of foreign exchange hedge (1.1) (1.8)
Aberdeen Local Government Pension Scheme refund - 11.8
Defined benefit pension payments lower than/(greater
than) income statement charge 113.1 (0.7)
----------------------------------------------------- ---------------- -----------------------------
Cash generated by operations 252.3 179.1
Tax paid (1.5) (0.4)
Interest paid (1) (39.4) (35.0)
Net cash from operating activities 211.4 143.7
1 Interest paid includes GBP27.8m relating to lease liabilities (H1 2023: GBP20.0m).
As disclosed in the Group's 2023 Annual Report, during 2023
management reassessed the classification of cash flows in relation
to capital grants received from the Department for Transport and
Transport for Scotland, which had previously been reported within
net cash from operating activities. As these grants typically
relate to the funding of capital investment by the Group,
management concluded that these cash flows represented investing
activities, rather than operating activities, and accordingly have
restated the cash flow for an inflow of GBP70.6m for the 26 weeks
to 24 September 2022.
17 Analysis of changes in net debt - adjusted cash flow
At Cash Foreign Other At 30
26 March flow Exchange GBPm September
2023 GBPm GBPm 2023
GBPm GBPm
Components of financing activities:
Bonds (184.2) 12.2 - - (172.0)
Lease liabilities(1) (1,748.6) 234.4 - (14.8) (1,529.0)
Asset backed financial liabilities (44.2) 12.1 - - (32.1)
Other debt (0.6) - - - (0.6)
------------------------------------ --------- ------- --------- ------ ----------
Total components of financing
activities (1,977.6) 258.7 - (14.8) (1,733.7)
Cash 421.8 (42.8) (0.8) - 378.2
Bank overdrafts (82.9) (13.3) - (0.2) (96.4)
Ring-fenced cash 369.6 (62.3) - - 307.3
------------------------------------ --------- ------- --------- ------ ----------
Cash and cash equivalents 708.5 (118.4) (0.8) (0.2) 589.1
Net debt (1,269.1) 140.3 (0.8) (15.0) (1,144.6)
1 Lease liabilities 'Other' includes GBP14.8m net inception of new leases.
18 Retirement benefit schemes
The Group supports defined contribution (DC) and defined benefit
(DB) schemes for the benefit of employees across the following
business areas:
- UK Bus and Group - including The First UK Bus Pension Scheme,
The FirstGroup Pension Scheme and two Local Government Pension
Schemes
- North America - legacy schemes from operations which have now been sold
- Rail - sponsoring four sections of the Railways Pension Scheme
(RPS) relating to the Group's obligations for its TOCs, with an
additional section for its Open Access Hull Trains business. Since
the obligations to the TOC arrangements are considered to be
limited to contributions during the period of the contract, these
are fundamentally different to the obligations to the other pension
arrangements.
Each of these groups of arrangements have therefore been shown
separately. The scheme details are described on pages 211 to 219 of
the Annual Report and Accounts for the 52 weeks ended 25 March
2023.
(a) UK Bus and Group (including Hull Trains)
A consultation on terminating participation in the two Local
Government Pension Schemes (LGPS) was undertaken during the period.
On 29 September 2023, the Group gave notice of its intention to
terminate the participation of the relevant First Bus subsidiaries
in these schemes on 31 October 2023. An adjusting income statement
expense for settlement charges and related costs of GBP142.3m has
been recognised, with a gain of GBP160.4m recognised in Other
comprehensive income in relation to the restricted accounting
surplus.
The termination of participation will remove GBP556.0m and
GBP157.1m of obligations and GBP691.6m and GBP162.9m of assets
(based on conditions at 30 September 2023) from the Group's balance
sheet for the Greater Manchester and Aberdeen schemes respectively
during FY 2024.
From a cash perspective, it is expected that there are no
payments required in relation to the exit from the Greater
Manchester LGPS fund, while a payment of GBP21.9m is expected to be
made from the Aberdeen LGPS fund to the Group.
The closure to accrual and previously held irrecoverable surplus
amounts are recognised within the settlement charge disclosed
below. Final values will be recognised at the FY 2024 year end to
reflect the values of assets and obligations at 31 October
2023.
The table below is set out to show amounts charged/(credited) to
the condensed consolidated income statement along with the amounts
included in the condensed consolidated balance sheet arising from
the fair value of schemes' assets (Assets) and the present value of
defined benefit obligations (DBO) (Liabilities) for the UK Bus,
Group and Hull Trains DB schemes:
Income statement 27 weeks 26 weeks to
to 24 September
30 September 2022
2023
GBPm GBPm
------------------------------------------- ------------- -------------
Operating
- Current service and administration
cost 2.2 4.1
- Past service gain including curtailments (5.1) -
- Settlement charge in relation to
LGPS participation termination 141.4 -
Total operating 138.5 4.1
-------------------------------------------- ------------- -------------
Interest income (1.4) (3.0)
-------------------------------------------- ------------- -------------
Total income statement 137.1 1.1
-------------------------------------------- ------------- -------------
18 Retirement benefit schemes (continued)
Balance sheet 30 September 25 March
2023 2023
GBPm GBPm
------------------------------------------------------ ------------ ---------
Fair value of scheme assets 1,110.6 2,166.9
Present value of defined benefit obligations (1,092.5) (1,972.5)
------------------------------------------------------ ------------ ---------
Surplus before adjustment 18.1 194.4
Impact of shared cost (0.5) (0.3)
Adjustment for irrecoverable surplus(1) - (156.7)
------------------------------------------------------ ------------ ---------
Surplus in schemes 17.6 37.4
------------------------------------------------------ ------------ ---------
The amount is presented in the condensed consolidated
balance sheet as follows:
Non-current assets 28.3 44.6
Non-current liabilities (10.7) (7.2)
------------------------------------------------------ ------------ ---------
17.6 37.4
------------------------------------------------------ ------------ ---------
1 The irrecoverable surplus in the prior year represented the
amount of the surplus that the Group could not recover through
reducing future Company contributions to LGPS.
The balances in the table above at 30 September 2023 exclude the
fair value of scheme assets and present value of defined benefit
obligations relating to the LGPS arrangements, following
termination of participation in these schemes. If the LGPS
arrangements were to be included in the table, the fair value of
scheme assets would be GBP1,965.0m, and the present value of
defined benefit obligations would be GBP(1,947.0)m.
(b) North America
Greyhound pension arrangements
The Group has retained certain responsibilities for the
provision of retirement benefits for some legacy schemes.
The Group operates a single legacy DB arrangement in the US,
while in Canada, there is a single legacy plan with a DB and DC
section and a small unfunded supplementary executive retirement
plan (SERP).
On 6 July 2023, the Greyhound Employees Retirement Income Plan
('the Canadian Scheme') was fully bought-in with an insurer (i.e. a
bulk annuity policy was purchased in respect of all members of the
Canadian Scheme). There are two items in the financial statements
as a result of the annuitisation of the Canadian Greyhound Plan -
the transaction itself and the requirement to distribute surplus to
members. The buy-in transaction resulted in an investment gain of
C$14.3m, reflected in the OCI; the surplus distribution has been
valued at C$15.8m and has been reflected in the OCI as a change in
assumption. The obligations remain on the Group's balance
sheet.
In the US, the Group conducted both a lump sum exercise and
partial buy-out for the plan. Under the lump sum exercise, certain
members of the plan were offered the opportunity to convert their
pension into a lump sum, resulting in an income statement charge of
US$0.1m. The partial buy-out was completed on 24 August and removed
US$71.3m of obligations and US$71.7m of assets from the Group's
balance sheet, resulting in an income statement charge of US$0.4m.
Both of these transactions for the Greyhound ATU plan resulted in
costs of US$0.5m (GBP0.4m in the table below) being recognised.
The table below is set out to show amounts charged/(credited) to
the condensed consolidated income statement along with the amounts
included in the condensed consolidated balance sheet arising from
the fair value of schemes' assets (Assets) and the present value of
DBO (Liabilities) for the North American DB schemes:
Income statement 27 weeks 26 weeks to
to 24 September
30 September 2022
2023
GBPm GBPm
------------------------------------------------------ ------------- -------------
Operating
- Current service and administration cost 1.3 0.9
- Past service charge including curtailments
and settlements 0.4 -
Total operating 1.7 0.9
------------------------------------------------------ ------------- -------------
Interest (income)/cost (0.1) 0.2
------------------------------------------------------ ------------- -------------
Total income statement 1.6 1.1
------------------------------------------------------ ------------- -------------
Balance sheet 30 September 25 March
2023 2023
GBPm GBPm
------------------------------------------------------ ------------- -------------
Fair value of schemes' assets 273.0 366.8
Present value of defined benefit obligations (285.0) (369.5)
------------------------------------------------------ ------------- -------------
Deficit before adjustment (12.0) (2.7)
Opening irrecoverable surplus - (14.6)
Change in irrecoverable surplus - 7.0
Currency loss on irrecoverable surplus - 0.8
------------------------------------------------------ ------------- -------------
Deficit in schemes (12.0) (9.5)
------------------------------------------------------ ------------- -------------
The amount is presented in the condensed consolidated
balance sheet as follows:
Non-current assets - -
Non-current liabilities (12.0) (9.5)
------------------------------------------------------ ------------- -------------
(12.0) (9.5)
------------------------------------------------------ ------------- -------------
18 Retirement benefit schemes (continued)
First Transit management contracts
The Group retained ten First Transit Management Contracts
following the sale of First Transit in 2021. As at the balance
sheet date, the Group had ceased to sponsor any Transit Management
pension arrangements following the expiry of the last remaining
contracts.
Details of the assets and liabilities of these schemes are as
follows:
30 September 25 March
2023 2023
GBPm GBPm
-------------------------------------------------
Assets - 14.0
Liabilities - (21.8)
------------------------------------------------- ------------- --------
Deficits in schemes - (7.8)
Amounts recoverable from contracting authorities - 7.8
------------------------------------------------- ------------- --------
Net deficits in schemes - -
------------------------------------------------- ------------- --------
(c) Rail contracts
The Railways Pension Scheme (RPS)
The Group is responsible for collecting and paying contributions
for a number of sections of the Railways Pension Scheme (RPS) as
part of its obligations under the contracts which it holds for its
TOCs. These responsibilities continue for the periods of the TOCs
and are passed to future contract holders when those TOCs
terminate. Management of the RPS is not the responsibility of the
Group, nor is it liable to benefit from any future surplus or fund
any deficit of those funds.
The Group currently sponsors four sections of the RPS, relating
to its contracting obligations for its TOCs. The RPS is managed by
the Railways Pension Trustee Company Limited, and is subject to
regulation from the Pensions Regulator and relevant UK legislation.
The RPS is a shared cost arrangement. All costs, and any deficit or
surplus, are shared 60% by the employer and 40% by the members. For
the TOC sections, under the contractual arrangements with the DfT,
the employer's responsibility is to pay the contributions following
triennial funding valuations while it operates the contracted
services. These contributions are subject to change on
consideration of future statutory valuations. At the end of the
franchise, 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 2013) 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 franchise and committed
contributions. The TOC adjustment on the balance sheet date
reflects the extent to which the Group is not currently committed
to fund the deficit.
The table below is set out to show amounts charged/(credited) to
the condensed consolidated income statement along with the amounts
included in the condensed consolidated balance sheet arising from
the fair value of schemes' assets (Assets) and the present value of
defined benefit obligations (DBO) (Liabilities) for the TOC defined
benefit schemes:
Income statement 27 weeks 26 weeks to
to 24 September
30 September 2022
2023
GBPm GBPm
----------------------------------------------- ------------- -------------
Operating
- Current service cost 39.3 69.6
- Administrative cost 1.7 0.7
- Impact of franchise adjustment on operating
cost (13.8) (43.7)
Total operating 27.2 26.6
----------------------------------------------- ------------- -------------
Interest cost 0.6 9.0
Impact of franchise adjustment on net interest
income (0.6) (9.0)
----------------------------------------------- ------------- -------------
Total income statement 27.2 26.6
----------------------------------------------- ------------- -------------
18 Retirement benefit schemes (continued)
Balance sheet 30 September 25 March
2023 2023
GBPm GBPm
----------------------------------------------- ------------- -------------
Fair value of schemes' assets 3,454.8 3,684.3
Present value of defined benefit obligations (3,317.7) (3,814.5)
----------------------------------------------- ------------- -------------
Surplus/(deficit) before adjustment 137.1 (130.2)
Franchise adjustment (60%) (82.3) 78.1
Adjustment for employee share of RPS deficits
(40%) (54.8) 52.1
----------------------------------------------- ------------- -------------
Surplus in schemes - -
----------------------------------------------- ------------- -------------
(d) Valuation assumptions
The valuation assumption used for accounting purposes have been
made uniform to Group standards, as appropriate, when each scheme
is actuarially valued.
The key assumptions were as follows:
30 September 2023 25 March 2023
First First North First First North
Bus Rail America Bus Rail America
% % % % % %
----------------------------------------------------- ----- ----- ----------- ----------- ----- -----------
Key assumptions used:
5.67 4.67 - 4.66 -
Discount rate 5.50 5.35 - 5.82 4.69 4.80 4.92
Expected rate of salary increases 3.70 3.20 n/a 3.51 3.22 n/a
Inflation - CPI 2.70 2.70 2.00 2.51 - 2.56 2.72 2.00
Future pension increases 2.70 2.70 n/a 2.53 2.72 n/a
Post-retirement mortality (life expectancy in years)
Current pensioners at 65: 19.3 20.7 19.7 - 21.6 19.4 20.7 19.7 - 21.6
Future pensioners at 65 aged 45 now: 19.7 22.2 21.3 - 22.6 19.8 22.2 21.3 - 22.6
19 Contingent liabilities
To support subsidiary undertakings in their normal course of
business, the FirstGroup plc and certain subsidiaries have
indemnified certain banks and insurance companies who have issued
performance bonds for GBP59.9m (25 March 2023: GBP55.0m) and
letters of credit for GBP170.4m (25 March 2023: GBP169.9m). The
performance bonds primarily relate to First Rail franchise
operations of GBP56.7m and residual North American obligations of
GBP3.3m. 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 GBP103.4m to First
Rail Train Operating Companies of which GBP78.5m remains undrawn.
Letters of credit remain in place to provide collateral for legacy
Greyhound insurance and pension obligations.
The Group is party to certain unsecured guarantees granted to
banks for overdraft and cash management facilities provided to
itself and subsidiary undertakings. The Company has given certain
unsecured guarantees for the liabilities of its subsidiary
undertakings arising under certain HP contracts, finance leases,
operating leases and certain pension scheme arrangements. It also
provides unsecured cross guarantees to certain subsidiary
undertakings as required by VAT legislation. First Bus subsidiaries
have provided unsecured guarantees on a joint and several basis to
the Trustees of The First Bus Pension Scheme. Two of the Company's
North American subsidiaries participated in multi-employer pension
plans in which their contributions were pooled with the
contributions of other contributing employers. The funding of those
plans is reliant on the ongoing involvement of third parties.
In its normal course of business the Group has ongoing
contractual negotiations with Government and other organisations.
The Group is party to legal proceedings and claims which arise in
the normal course of business, including but not limited to
employment and safety claims. The Group takes legal advice as to
the likelihood of success of claims and counterclaims. No provision
is made where due to inherent uncertainties, no accurate
quantification of any cost, or timing of such cost, which may arise
from any of the legal proceedings can be determined.
The Group's operations are required to comply with a wide range
of regulations, including environmental and emissions regulations.
Failure to comply with a particular regulation could result in a
fine or penalty being imposed on that business, as well as
potential ancillary claims rooted in non--compliance.
19 Contingent liabilities (continued)
First MTR South Western Trains Limited ('FSWT'), a subsidiary of
the Company and the operator of the South Western railway contract,
is a defendant to collective proceedings before the UK Competition
Appeal Tribunal (the 'CAT') in respect of alleged breaches of UK
competition law. Stagecoach South Western Trains Limited ('SSWT')
(the former operator of the South Western network) is also a
defendant to these proceedings. 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 class representative ('CR') alleges that FSWT, SSWT,
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 two of which have been set for June 2024 and June 2025,
respectively, with no date currently set for the final trial. 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.
20 Related party transactions
There are no related party transactions or changes since the
Group's 2023 Annual Report which could have a material effect on
the Group's financial position or performance of the Group in the
27 weeks to 30 September 2023.
21 Events after the reporting period
- On 19 September, the Group announced it had agreed a new
National Rail Contract (NRC) with the Department for Transport
(DfT) for the West Coast Partnership. The new NRC commenced on 15
October 2023 with a duration of nine years, including a core
minimum three-year term to 18 October 2026.
- In September, First Bus concluded a period of consultation
with regards to its two Local Government Pension Funds and
subsequently terminated its participation in these funds on 31
October, with affected employees enrolled into the First Bus
Retirement Savings Plan. Adjusting charges of GBP142.3m were
recognised in the period for the settlement charge and related
termination costs. A gain of GBP160.4m was recognised in Other
comprehensive income in relation to the restricted accounting
surplus.
- On 19 October, the Group completed the buy-out of the 6%
non-controlling interest in Leicester CityBus Limited for
consideration of GBP3.1m.
- On 17 November, the Group announced it had agreed a strategic
partnership with Hitachi as part of the Group's bus fleet and
infrastructure decarbonisation programme. The Group and Hitachi
have each committed a cash investment of GBP10m into the strategic
partnership.
Responsibility statement
The directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and
that the interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely:
-- an indication of important events that have occurred during
the first 27 weeks and their impact on the half yearly results, and
a description of the principal risks and uncertainties for the
remaining 26 weeks of the financial year; and
-- material related-party transactions in the first 27 weeks and
any material changes in the related-party transactions described in
the last annual report.
The Directors of FirstGroup plc are listed on the Group's
website at www.firstgroupplc.com.
Graham Sutherland Ryan Mangold
Chief Executive Officer Chief Financial Officer
23 November 2023 23 November 2023
Independent review report to FirstGroup plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed FirstGroup plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
Half-Yearly Report of FirstGroup plc for the 27 week period ended
30 September 2023 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the Condensed Consolidated Balance Sheet as at 30 September 2023;
-- the Condensed Consolidated Income Statement for the period then ended;
-- the Condensed Consolidated Statement of Comprehensive Income for the period then ended;
-- the Condensed Consolidated Cash Flow Statement for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half-Yearly
Report of FirstGroup plc have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Half-Yearly
Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the group to cease
to continue as a going concern .
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Half-Yearly Report, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the
Half-Yearly Report in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Half-Yearly Report, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Half-Yearly Report based on our review.
Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Watford
23 November 2023
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BTBLTMTBTBAJ
(END) Dow Jones Newswires
November 23, 2023 02:00 ET (07:00 GMT)
Grafico Azioni Firstgroup (LSE:FGP)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Firstgroup (LSE:FGP)
Storico
Da Mag 2023 a Mag 2024
