In accordance with LR 9.6.1R, FirstGroup plc (the “Company”) has
today submitted copies of the documents listed below to the
Financial Conduct Authority’s National Storage Mechanism.
These documents will shortly be available for inspection at:
As required by DGTR 6.3.5R (3), the 2022 Annual Report, the 2022
AGM Notice and the Form of Proxy are also available on the
Company’s website at www.firstgroupplc.com.
A condensed set of the FirstGroup plc financial statements,
including information on important events that have occurred during
the year and their impact on the financial statements, were
included in the Company’s announcement of its full year results
published on 14 June 2022 (“Final
Results Announcement”). The Final Results Announcement is
available for viewing on the Company’s website at
www.firstgroupplc.com.
DGTR 6.3.5R requires that certain information relating to all
listed companies’ financial results be communicated in unedited
full text through a Regulatory Information Service. The content of
the Final Results Announcement, together with the information set
out below in the Appendix, which is extracted from the 2022 Annual
Report, constitute the material required to satisfy the
requirements of DGTR 6.3.5R. Cross-references and page numbers in
the Appendix refer to sections in the 2022 Annual Report.
This announcement is not a substitute for reading the 2022 Annual
Report.
The Directors are responsible for preparing the Annual Report
and Accounts and the
financial statements in accordance with applicable law and
regulation. Company law requires
the Directors to prepare financial statements for each financial
year. Under that law the
Directors have prepared the group financial statements in
accordance with UK-adopted international accounting standards and
the company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 ‘Reduced Disclosure Framework’, and
applicable law). Under company law, Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the group for that period.
The Directors are responsible for safeguarding the assets of the
group and company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities. The
Directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Directors consider that the Annual Report and Accounts and
accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the group’s and company’s position and performance, business model
and strategy.
Each of the Directors, whose names and functions are listed in
Board of Directors confirm that, to the best of their
knowledge:
In the case of each Director in office at the date the
directors’ report is approved:
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
To deliver our strategy, it is important that we understand and
manage the risks that face the Group. The table below outlines our
principal risks:
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| External
Risks |
|
|
|
|
| Economic
conditions |
|
|
|
|
The
Group’s success depends on adapting to economic fluctuations which
may negatively impact performance through increased costs, changing
customer needs, reduced demand and/or reduced opportunities for
growth. Globally, the economic outlook is less certain, and the
Group specifically has experienced increased fuel costs
related to the Russia-Ukraine war. All these market changes have
the potential to decrease the Group’s available financial resources
to invest capital in innovative solutions that drive demand.
Additionally, when these economic uncertainties are combined
with rising fuel prices, they may further increase costs to the
Group that they cannot pass to consumers particularly in our
First Bus divisions. |
|
In order to adapt to
market uncertainties and continue to drive demand, the Group
continues to be customer-focused and strives to provide
innovative transport solutions. Whilst the Group
has implemented hedging processes to offset temporary economic
impacts driven by inflation and supply chain events we also
continue to focus on strategic ventures to develop new
innovative service offerings (e.g., fleet and ticket initiatives)
in order to provide our customers with attractive transport
solutions and retain customer demand through unstable economic
conditions. |
|
Although it is not yet
clear the impacts of other macro-economic factors, the Group has
continued to hedge exposure to FX and fuel fluctuations to
minimize material impacts and fares are generally increased
by wider inflation levels that offsets cost pressures. This
has allowed for a certain level of visibility into pricing that can
be built into the UK bus forecasting models. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Climate change |
|
|
|
|
Businesses
globally continue to come under increasing pressure from all
stakeholders, particularly policy makers and investors, to
demonstrate strong progress on their climate-related performance.
The pandemic has further increased the public’s awareness of
global environmental challenges and the threat posed by climate
change. Inadequate attention to our climate-related risks and
opportunities, as well as emerging technologies, could negatively
impact the Group’s performance, reputation and growth.
The UK government has set a legally binding target
for net-zero greenhouse gas emissions by 2050.
All companies that operate in the UK or are owned
by UK-based companies will be substantially impacted by
decarbonisation policies introduced to meet this target. As a
result, the Group is under increased pressure and scrutiny from
both investors and government bodies to provide evidence of
our strategic plans in place to mitigate climate
change risks.
Climate change poses both physical and transition risks to our
business, from weather events impacting our assets, operations,
service delivery and customer demand, to changes in policy,
technology and market expectations impacting our capital and
operational costs, our reputation, and access to funding.
Delays in implementing our strategic plans to mitigate
climate-related risks, including transitioning our fleets to zero
emissions, could result in lost business, reduced revenue and
reduced profitability. |
|
The
Group’s strategic framework for sustainability, Mobility Beyond
Today, sets out the company’s ambition to be the partner of choice
for innovative and sustainable transport. Climate change has
been an integral part of our risk management framework
for many years and, through Mobility Beyond Today,
has become an integral part of core business strategy.
In FY 2021, FirstGroup became the first bus and rail operator in
the UK to formally commit to setting an ambitious science-based
target aligned with limiting global warming to 1.5°C and reaching
net-zero emissions by 2050 or earlier. During FY 2022, we have
developed a science-based carbon reduction target for our Scope 1
and 2 emissions, submitted this for validation to SBTi, and are
modelling 1.5°C trajectories to 2035 to inform our transition plans
and interim targets. As part of this work, we have also completed a
full inventory of our Scope 3 emissions and are developing a supply
chain engagement plan to promote carbon reductions across our value
chain.
First Bus has set a target to operate a zero emissions fleet
by 2035, starting with a commitment to stop purchasing
any new diesel buses after 2022. First Rail is supporting the
UK Government’s target to remove all diesel-only trains from
service by 2040, with electrification of our First Rail routes
already delivering a reduction in carbon emissions per
passenger kilometre. We continue to work with government
and industry partners to support further electrification of
Britain’s rail network and implement alternative technologies such
as battery power to help achieve zero emission trains.
While eliminating carbon emissions associated with our operations,
we are actively supporting a modal shift to public transport to
further reduce emissions from transport. We also continue to embed
the TCFD recommendations to assess and mitigate impacts from
climate change onto our business and build long-terms climate
resilience across our operations. Business continuity plans are in
place for all areas of our businesses in case of extreme weather or
other physical events.
More details on our climate-related performance can be found in the
non-financial KPI section (page 54), our Mobility Beyond Today
update (page 35), our 2022 TCFD report (pages 60-67) and
Environmental Performance Report (at www.firstgroupplc.com)
|
|
The Group recognises
the continued pressure and opportunity to create a more
sustainable world and maintains our commitment to invest in new
technologies and collaborate with partners to create a cleaner
future. Our TCFD implementation work, the climate-related
commitments we have made and the strategies we are developing
to meet them will ensure we are managing our climate
transition risks effectively and continue to build business
resilience for the long term. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Geopolitical |
|
|
|
|
| The political landscape
within which the Group operates is constantly changing. The Group’s
operations depend on government policy, funding regimes and
infrastructure initiatives continuing to support private
company operators in public transportation. Inability to maintain
rail contracts and/or leverage national funding and develop
government partnerships, including the ability to attract and
retain resources with the knowledge and skills necessary
to maintain/develop government partnerships, may result
in the reduction and/or elimination of rail contracts and/or an
inability to sustain and develop new bus routes resulting in
adverse financial impacts. |
|
Whilst the
Group collaborates with industry bodies to help anticipate
government policy and/or funding regime changes in order to adjust
operations, the Group is an apolitical organisation and does not
have the ability to control or substantially influence
government policy.
The Group has been able to mitigate capability gap disruptions by
defining a new operating model to support government infrastructure
initiatives and has partnered with third-party consultants to help
further drive the change portfolio and ensure the Group
has the requisite skills and capabilities to leverage
national funding. |
|
After the
UK government announced significant funding for the bus sector,
including infrastructure investments to transform bus services
across the country, both national and local governments
continue to demonstrate willingness to support service
provision whilst passenger volumes continue to recover, while
underpinning investment to strengthen bus networks for the
longer term.
Additionally, the DfT and UK Government continues to support the
delivery of rail services through lower-risk fee-based contracts,
that better align the risk and reward for running the network than
the traditional franchising model. See pages 26-29 for additional
Information on the negotiation of the outstanding National
Rail Contract agreements. |
|
Strategic Risks |
| Contracted
business |
|
|
|
|
The
Group’s contracted businesses are dependent on the ability to
secure and renew contracts on profitable terms, effectively manage
affiliates, deliver under contract terms and avoid termination.
Additionally, the ability of the Group to achieve performance
targets is dependent on our ability to exceed passenger performance
metrics laid out in rail contracts.
Failure to do so would result in reduced revenue
and profitability and/or negative impact on delivering the
Group’s strategic objectives. |
|
Contracts have been
re-negotiated and concluded at SWR and TPE under the DfT’s National
Rail Contract structure framework, and negotiations are ongoing for
the WCP contract award. The contract structure is now
concession-based with a fixed management fee plus performance
incentives resulting in a far better balance of risk and reward.
As the largest incumbent with four UK rail operations expected
to be in place until at least May 2023 for TPE and SWR (with an
option for the DfT to extend for two years), negotiations are
ongoing for an award in GWR and Avanti in line with the respective
prior information Notices issued by the DfT to up to 2028 and 2032
respectively. Furthermore, we have the extensive operational
expertise needed to meet requirements for the contract performance
incentives. Our First Rail teams who focus on DfT negotiations and
ensure that future commitments to UK rail will have an
appropriate balance of potential risks and rewards for
shareholders. |
|
The transition from
franchising to contracts has led to a better balance of risk
and reward via reduced revenue risk, minimal cost and contingent
capital risk, and will continue to provide more consistent cash
generation each year. As the largest incumbent, the Group has the
operational structure and expertise to exceed passenger
delivery against performance targets and to build on our base
business with no limited revenue risk. Additionally, future
contracts now commit to a minimum of two-years awards and
are expected to be longer allowing for better financial and
portfolio planning. Additionally, future contract awards are
expected to be longer dated in contract length as per the PIN’s
allowing for better financial portfolio planning. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
|
Competition and emerging technologies |
The
Group’s market share and competitiveness is dependent on
effectively competing in areas of pricing and service options. Our
success is also dependent on identifying and developing innovative
offerings in line with the Group’s goal to the be the partner of
choice for innovative and sustainable transport, accelerating the
transition to a zero carbon world. Our main competitors
include the private car and other transportation service providers
(e.g. ride share etc.). Zero emission and emerging technologies
such as autonomous vehicles and on-demand schemes provide
opportunities to grow and develop our market segments. The Group
may also begin to experience more competitors for
rail contracts as a result of the decreased contingent capital
requirements of the National Rail Contract structure.
Failure to effectively compete in the market and/or develop new and
innovative options could result in decreased customer retention,
decreased demand, reduced revenue, negatively impacting the
effective execution of FirstGroup’s strategy and/or other adverse
financial and reputational impacts.
|
|
To meet
our goal to be the partner of choice for innovative and sustainable
transport, we continue to focus on service quality and delivery in
order to attract passengers and other customers to our portfolio
of businesses. We are leaders in the operation and maintenance
of electric vehicles, and we continue to invest in the technology
and services to support connected and on-demand travel.
The Group also continues to have dedicated consumer experience
teams in our divisions who help implement innovative customer
convenience solutions (e.g. real-time seat capacity, contactless
and capped ticketing, smart tickets, 5G/WiFi, data driven pricing)
who focus on improving access to our services and our overall
service to customers.
Wherever possible the Group works with local and national
bodies to promote measures aimed at increasing demand for
public transport. |
|
Changes in
demand for public transportation due to increased remote
work environments has led to reduced passenger volumes. Although
the lasting impact to commuting behaviours and consumer travel
demand continues to evolve, the Group’s passenger volumes continued
to increase following the lifting of restrictions.
The Group has continued to invest in emerging technologies this
year, including autonomous and electric vehicles, and services to
support connected and on-demand travel, including mobility as
a service (MaaS).
We continue to increase the number of low and zero emission
vehicles operating in our buses and open access trains fleet, Hull
Trains and Lumo, and to focus on providing easy and convenient
mobility, encouraging the switch from private car journeys
to our services. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
|
Transactions |
The
Group’s operational success in organic growth is dependent on
effectively identifying and executing acquisitions and
transactions. Our success is also dependent on the outcomes of
favourable results of the transactions executed in the sale of
First Student and First Transit through the Transit earn out,
realising the value of the retained Greyhound real estate portfolio
and fully discharging the retained Greyhound legacy pension and
insurance liabilities. Additionally, the Group faces additional
risk of continued industry consolidation, specifically within the
bus operations.
Failure to identify and/or execute acquisitions and other
transactions in a timely manner, along with the failure to complete
transactions in accordance with agreed terms, could result in
negative impact on business operations (contracts, customers,
employee retention, etc.), negative reputational impacts, the
inability to meet financial obligations, and/or the inability to
meet financial goals/projections. |
|
The Group
actively seeks out and reviews mergers and acquisition (M&A)
opportunities that would be beneficial to our portfolio. We
continued to gather insights from our strategic advisors and
contacts within the business to evaluate potential
transactions.
Greyhound retained legacy insurance liabilities in the USA
have been re-insured in the market to reduce exposure as well as
further cash contributed to the legacy pension arrangements and
investment strategy amendments to reduce future volatility and
better match the liabilities as the respective schemes progress
towards ultimate buyout.
Greyhound retained real estate portfolio disposals continue to
progress with a number of property sales since disposal to
Flix Mobility in October 2021 for a total of £150 million. |
|
With the
sale of the North American operations complete, we continue to
focus on managing the outcomes of the transaction to ensure maximum
value to the Group. We are closely monitoring any Transit earnout
provisions to position us most favourably at time of
settlement.
Greyhound legacy insurance and pension de-risking has been
completed to significantly reduce the risk of these
exposures. |
|
Operational Risks |
| Financial
resources |
As set out
in further detail in note 25 to the financial statements on pages
207 to 209, treasury risks include liquidity risks, risks arising
from changes to foreign exchange and interest rates and fuel price
risk.
Liquidity risk includes the risk that the Company is unable to
refinance debt as it becomes due. Foreign currency and interest
rate movements may impact the profits, balance sheet and cash flows
of the Group. Ineffective hedging arrangements may not fully
mitigate losses or may increase them.
The Group is credit rated by Standard & Poor’s and Fitch. A
downgrade in the Group’s credit ratings to below current investment
grade may lead to increased financing costs and other consequences
and affect the Group’s ability to invest in its operations.
The Group’s banking arrangements contain financial and other
covenants with financial covenants tested semi-annually on 30
September and 31 March. In the event a covenant test level is
breached the Company may not be able to negotiate sufficient
headroom to allow it to continue to trade. |
|
The Group monitors our
leverage ratios and overall liquidity consistently to ensure we
remain within our target range and have adequate financial
resources on a two-to-three year period looking forward. |
|
As a result of the sale
of the North American operations and the significant deleveraging
in the period, the business is in a much stronger credit position
and has a well-capitalised balance sheet with net debt (before
IFRS 16 and ring-fenced cash). Credit is more available within the
markets and the Group has sufficient cash and an a unutilised £300m
sustainability-linked committed revolving credit facility balance
to cover repayment on our bond to provide substantial debt
facilities if required. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Pandemic |
|
|
|
|
Covid-19
has altered the way in which the Group operates and serves our
communities. Our success depends on effectively managing operations
to match modifying levels of passenger demand in line with
government support requirements and continuing to anticipate
and adapt to changes in consumer commuting and travel behaviours,
especially for our Hull Trains and Lumo businesses which do not
qualify for government support.
Failure to balance operational changes to attune to consumer
behaviours to future passenger demand levels as the UK continues to
progress out of the crisis created by the pandemic, whilst also
maintaining the necessary level of passenger volumes to qualify for
government support, may result in adverse reputational or financial
impacts. |
|
To adapt
operations to changing passenger demand and commuting
patterns, whilst also meeting government pandemic funding
requirements, the Group continues to implement new policies and
procedures across all vehicle fleets. These policies and procedures
include processes to track policy developments, modelling scenarios
for efficiency of service levels, and fare strategies.
Under National Rail Contracts the Group will not experience revenue
risk as a result of decreased demand. However, our Hull Trains and
Lumo businesses along with our bus businesses, have a greater risk
of loss caused by decreased demand. While the Group saw demand
increase during the last year, to adapt our operations to potential
changes in commuting and travel behaviour, the Group has dedicated
teams to assess and monitor workforce and route planning service
levels, reducing these where necessary. The dedicated teams use
advanced data analytics that reduce the overall time needed to
adjust schedules.
As end markets have emerged from Covid-19, the Group has begun
to reshape routes and timetables to align with demand. The
actions taken via these plans will be based on real-time
passenger flow data now available following digital
transformation initiatives. |
|
Whilst the Group has
implemented reduced service levels In Bus to c.85-90% of
pre-pandemic levels in line with the grant funding in First Bus and
variable costs, the Group remains vulnerable if passenger demand
levels remain depressed as the UK emerges from the pandemic, given
that grant funding is expected to reduce. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Safety |
|
|
|
|
| The Group is committed
to fostering and maintaining a culture of safety.
However, public transport inherently includes safety related risks,
many of which are out of our control. These risks include
terrorism, adverse weather, human error and increased
traffic/congestion on public roadways. A safety incident, or
a threat of an incident, could lead to reduced public
confidence in public transportation overall and potentially reduce
demand for our services. |
|
In order
to promote and maintain our culture of safety, all divisions have
extensive safety plans and safety training for our drivers and
employees. Access to vehicles is controlled to prevent against
malicious access. Mechanical safety controls (speed monitoring,
cameras, etc.) are implemented across our fleet
of vehicles.
Whilst the Group has implemented preventative safety measures and
procedures, we recognise that incidents are ultimately out of our
control and do at times result in legal claims. As a result, the
Group has dedicated departments, utilising third-party experts when
needed, to analyse and maintain effective insurance structures and
levels. |
|
Although the Group
continues to assess, update and implement safety procedures across
our businesses, risk mitigation in this area continues to be a
focus. |
| Pension
scheme funding |
The Group
sponsors or participates in several significant defined benefit
pension schemes. Within the schemes, the Group’s future cash
contributions and funding requirements are dependent on investment
performance, movements in discount rates, expectations
of future inflation and life expectancy
In order to maintain adequate cash funding and prevent adverse
financial impacts or reputational damage, the Group must monitor
the performance of our fund investments and movements in other
contributing factors (e.g. discount rates, life expectancy,
etc.). |
|
In order
to effectively monitor our funding requirements, all our cash
models/forecasts include significant pension deficit funding. The
Group also uses third party experts to advise on investment
strategies and liability management, monitor movements
in discount rates and inflation expectations.
We continue to replace our defined benefit schemes with defined
contribution arrangements where possible. We are also focusing on
diversifying asset classes and reallocating riskier investments to
investments that better match the characteristics of the
liabilities as funding levels improve.
Under the First Rail contracting arrangements, the Group’s
train operating companies are not responsible for any residual
deficit at the end of a franchise contract with no cost risk
during the contract so there is only short-term cash flow risk
within any particular franchise. |
|
The Group
has closed most of its defined benefit schemes in its divisions to
future accrual. This will lead to the natural reduction of the
size and volatility of the pension funding risk over time.
As part of the sale of the North American businesses and the
capital return to shareholders, £220m was contributed to the First
Bus pension scheme and £117m placed in an escrow arrangement where
this cash could be returned to the Group in certain scenarios
depending on the achievement of low dependency funding levels In
2024 and 2030 valuation for the First Bus and FirstGroup
schemes respectively.
Furthermore, significant cash contributions have been made
into the legacy Greyhound pension arrangements in USA and Canada
that have significantly de-risked these exposures. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Data
security and consumer privacy, including cyber-security |
The Group
continues to see an increase of mobile and internet sales across
all divisions. These mobile and internet channels gather large
amounts of data which require safeguards in order to protect our
customer’s data and to comply with the General Data Protection
Regulation (GDPR) and California Consumer Privacy Act (CCPA).
Whilst this data requires compliance with consumer privacy
regulations, it also makes us a target of data security attacks by
third parties. The Board has also implemented a clear policy
on ransomware attacks should these occur.
In addition to maintaining infrastructures that protect consumer
data, our operations rely on information technology systems.
Cyber-attacks, computer malware, viruses, spamming and phishing
attacks have become more prevalent and may result in a breach of
our systems. A breach of our facilities and/or networks could
disrupt our operations and impair our ability to protect consumer
data, and/or compromise our confidential business information.
A failure to prevent, mitigate or detect security breaches and/or
improper access to our business and/or customer information and/or
comply with consumer privacy regulations could result in disruption
to our operations, significant penalties and have an adverse
impact on consumer confidence in the Group. |
|
To protect our customer
data and comply with all data privacy regulations, the Group has
implemented IT infrastructure controls across the company. We also
have dedicated compliance officers in each division. The Group
administers a training programme to all employees, communicating
their role in protecting and preventing the unauthorised access to
sensitive data. Additionally, in order to comply with user
preferences, the operations are implementing a software solution
that makes it easier to record and update customer preferences.
Business continuity plans continue to evolve and are updated as the
transition to greater dependency on technology continues in order
to minimise the impact of cyber-attacks and the potential impact to
the continuity of our operations. |
|
Despite the Group’s
continued efforts to mitigate this risk, the risk of a
cyber-security attack for all companies remains and has escalated
in recent times following heightened geopolitical tensions and
increasing numbers of sophisticated threat actors. We continue
to be diligent in evaluating and implementing enhanced techniques
to protect our systems and data from threats. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Regulatory
compliance |
The
Group’s operations are subject to a wide range of legislation
and regulation. Complying with such legislation and regulations may
increase the Group’s operating costs, and non-compliance could lead
to financial penalties, investigation expenses, legal costs or
reputational damage. The Group’s corporate governance, which is
recognised by external ESG ratings as strong and well aligned with
stakeholder interests, supports our ability to respond to, and
prepare for, financial and ESG laws and regulations.
The main regulatory compliance risks specific to the Group that are
not covered in other principal risks include workplace compliance
(employee wage and hour, meal and break matters, etc.), workplace
health and safety and anti-trust/anti-bribery regulations.
|
|
To help
the Group comply with all legislation and regulations, we have
dedicated compliance professionals who ensure applicable laws by
locality are followed. We also engage with third party legal
experts when necessary to advise on policies and procedures and
other related compliance matters. We provide a hotline for
employees and third parties to report concerns.
To help mitigate non-compliance risk with anti-bribery and
anti-trust regulations we maintain robust policies and procedures
and our employees receive regular training on the policies. We also
complete periodic audits of our training programmes to ensure
consistent training and participation. |
|
Although
our legislative and regulatory environment continues to change, the
Group maintains our commitment to assess and adapt not only our
insurance structure but also our policies and procedures to prevent
non-compliance. |
| Risk description,
Group |
|
Mitigation |
|
Comment on risk
change during
the year |
| Human
resources |
Employee
costs represent the largest component of the Group’s operating
costs. These costs include expenses related to recruitment,
retention and talent development. The costs are impacted by changes
in employment markets, new regulatory requirements and
diversity and inclusion programmes. A failure to effectively
recruit and retain a diverse and talented workforce could have
adverse financial, reputational and operational impacts.
The employment market for drivers and technicians has become more
challenging since the pandemic. This has increased our recruitment
and retention costs and may impact operations as consumer travel
demand increases. Our employee turnover has also been impacted
by current wider economic circumstances, particularly rising
inflation. |
|
In order
to increase retention and decrease employee costs, the Group has
enhanced recruitment practices, including launching a national
media campaign to promote job openings and leveraging online
channels for all roles.
To help prevent overall employee turnover, we continue to focus on
improving communication with employees, defining a new people
strategy, investing in employee development and diversity and
inclusion, and providing market competitive wages and benefits.
Employee engagement survey results are reviewed to develop
actions to address low performing metrics to further help retain
our top talent. |
|
With industry-wide
driver shortages stabilised, but at a higher level than
historically, we continue to focus on our bus driver recruitment
and retention programmes, and on managing our multi-year pay deals
with local unions. This will require the Group to assess and
adapt our operations in the future. Additionally, employee and
community expectations continue to impact our recruitment,
retention, diversity and development strategies. |