TIDMFGP 
 
FIRSTGROUP PLC 
           HALF-YEARLY REPORT FOR THE 26 WEEKS TO 24 SEPTEMBER 2022 
 
  * Resilient financial performance delivered despite the challenging 
    political, economic and industrial relations environment FirstGroup is 
    experiencing, in commin with many UK businesses 
  * Group's adjusted attributable profit was in line with management 
    expectations in the period, and expectations for the current financial year 
    are broadly unchanged despite a shift in mix 
  * Financial performance in First Rail was led by strong growth in open access 
    operations; working hard to deliver passenger service level objectives 
    across the four management fee-based contracts 
  * Continuing to strengthen First Bus for when current funding arrangements 
    end, while managing industry-wide driver shortages and cost inflation in 
    the near term 
  * Progress made monetising contingent values from exiting North America, with 
    £122m sale of legacy Greyhound properties anticipated to complete in 
    December and First Transit earnout recently triggered at c.£74m 
  * Strategy focused on continuous improvement in operational delivery, 
    targeted investment in adjacent growth opportunities and playing a leading 
    role in the decarbonisation of public transport 
 
                                                     H1 2023                       H1 2022 
                                                        (£m)                          (£m) 
 
                                     Cont.   Disc.     Total      Cont.    Disc.     Total 
 
Revenue                            2,212.4     2.7   2,215.1    2,139.1    970.6   3,109.7 
 
Adjusted1 operating profit/(loss)     66.1   (8.4)      57.7       51.8    121.3     173.1 
 
Adjusted1 operating profit margin     3.0%              2.6%       2.4%    12.5%      5.6% 
 
Adjusted1 profit/(loss) before tax    41.0   (8.1)      32.9      (6.3)    110.0     103.7 
 
Adjusted1 EPS2                        4.4p  (1.0)p      3.4p     (0.4)p     7.0p      6.6p 
 
Group adjusted attributable                             30.8                          13.3 
profit3 
 
Dividend per share                                      0.9p                             - 
 
Adjusted net cash/(debt)4                                7.3                         603.9 
 
                                                     H1 2023                       H1 2022 
                                                        (£m)                          (£m) 
 
Statutory                            Cont.   Disc.     Total      Cont.    Disc.     Total 
 
Revenue                            2,212.4     2.7   2,215.1    2,139.1    970.6   3,109.7 
 
Operating profit/(loss)               62.1  (28.6)      33.5       52.2    592.3     644.5 
 
Profit/(loss) before tax              37.0  (28.3)       8.7     (64.5)    581.0     516.5 
 
EPS2                                                  (0.1)p                         42.4p 
 
Net cash/(debt)                                    (1,475.0)                       (234.2) 
 
- Bonds, bank and other debt net                       346.3                       1,188.8 
of (cash) 
 
 - IFRS 16 lease liabilities                       (1,821.3)                     (1,423.0) 
 
 
'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 2023 financial summary (continuing operations vs H1 2022 unless otherwise 
stated) 
 
  * Group adjusted operating profit increased to £66.1m (H1 2022: £51.8m), 
    principally reflecting: 
      + increased open access earnings with aggregate rail management fee-based 
        income broadly in line 
      + lower First Bus adjusted operating profit, reflecting the slower 
        transition from pandemic recovery funding towards a commercial model 
        and cost impacts of inflation 
      + lower central costs 
  * Group adjusted attributable profit3 increased to £30.8m (H1 2022: pro forma 
    £13.3m) 
  * Statutory operating profit of £62.1m (H1 FY23: £52.2m) includes net 
    adjusting item charges of £4.0m 
  * Adjusted net cash4 of £7.3m (March 2022: adjusted net debt of £(3.9)m), 
    with £557.7m of undrawn committed liquidity 
  * Interim dividend declared of 0.9p, in line with announced policy 
 
Key developments 
 
First Bus: 
 
  * Commercial volumes increased by 32%, with concession volumes recovering 
    more slowly 
  * Revenue beginning to benefit from recent pricing actions, partly offset by 
    reductions in funding level 
  * As the industry moves towards a more commercial model, network realignments 
    commencing to better align to demand, First Scotland East location disposed 
    of and regional management structure reorganised 
  * However, the recent extension of recovery funding arrangements in England, 
    ongoing driver shortages and the cost inflationary backdrop limit the pace 
    of near-term progress 
 
First Rail: 
 
  * Open access operations ahead of plan, underpinned by strong leisure volumes 
    for Lumo and Hull Trains 
  * Focused on operational delivery for passengers across all our services in a 
    challenging industrial relations environment 
  * West Coast Partnership (WCP) contract recently extended, enabling the 
    Avanti West Coast team to execute their plans to restore services to the 
    levels that passengers rightly expect 
 
Corporate: 
 
  * Sale of almost all remaining legacy Greyhound properties for $141m (£122m) 
    to Twenty Lake Holdings expected to complete in December 2022; as a result, 
    the Group's exit from residual Greyhound will be substantially complete at 
    an aggregate net value in excess of $160m since start of the financial year 
  * FirstGroup estimates First Transit earnout consideration of c.$85m (£74m at 
    hedged rates) to be received during FY 2024, following recently announced 
    sale of the Transit business by EQT Infrastructure 
  * Potential for additional distributions as the contingent values from 
    exiting North America are realised 
 
FY 2023 outlook 
 
  * Although the political, economic and industrial relations backdrop and pace 
    of travel volume recovery are challenges, management's expectations for FY 
    2023 are broadly unchanged despite a shift in mix 
  * First Bus: although clearly sensitive to the broader consumer spending and 
    inflation trends, we expect sequential progress in H2 2023, with the 
    realignments of routes/timetables in October and pricing actions partially 
    offset by a higher cost base for increased mileage as a result of the 
    extension of recovery funding in England, currently in place until March 
    2023 
  * First Rail: we expect higher profit from our open access operations with 
    the four management fee-based operations to deliver aggregate financial 
    performance broadly in line with management expectations 
  * On track to realise the further c.£5m in annual central cost savings 
    previously guided 
  * Adjusted net cash4 position expected to be in the range of £100-110m at the 
    end of FY 2023 after receipt of Greyhound property proceeds in December and 
    before any deployment of this capital 
 
Commenting, Chief Executive Officer Graham Sutherland said: 
 
"We have delivered a resilient financial performance in the period despite 
significant headwinds - demonstrating our strengths in the UK bus and rail 
markets and the increasing capability and potential we are building into our 
businesses as public transport continues to navigate the aftershocks of 
pandemic travel restrictions. 
 
"With a strong balance sheet and an important role supporting the 
sustainability and economic growth agendas in our core UK public transport 
markets, we see clear opportunities to create further value and deliver 
progressive returns to shareholders in the coming years." 
 
Contacts at FirstGroup:                  Contacts at Brunswick PR: 
Investor relations: Faisal Tabbah /      Andrew Porter / Simone Selzer 
Marianna Bowes                           Tel: +44 (0) 20 7404 5959 
Media: Stuart Butchers 
corporate.comms@firstgroup.co.uk 
Tel: +44 (0) 20 7725 3354 
 
A webcast for investors and analysts will be held at 9:00am 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' figures throughout this document are before adjusting items 
as set out in note 3 to the financial statements. 
 
2     Weighted average number of shares reduced from 1,203.4m to 739.8m between 
H1 2023 and H1 2022, reflecting the tender offer completed in December 2021; as 
a result EPS figures are not directly comparable between the two periods. 
 
3     For definitions of alternative performance measures and other key terms, 
see the definitions section from page 17. 
 
4     'Adjusted net cash/(debt) excludes ring-fenced cash and IFRS 16 lease 
liabilities from net debt as shown in the table on page 14. 
 
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 
6 Annex 1R: 1.2. 
 
FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public 
transport services. With £4.6 billion in revenue and more than 30,000 
employees, our UK divisions transported nearly 1.5m passengers a day in the 
last financial year. First Bus is the second largest regional bus operator in 
the UK, serving two-thirds of the UK's 15 largest conurbations with a fleet of 
c.4,900 buses. 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 c.3,800 rail vehicles through four management fee-based 
train operating companies (Avanti West Coast, GWR, SWR, TPE) and two open 
access routes (Hull Trains and Lumo). 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. We are formally 
committed to operating a zero-emission First Bus fleet by 2035 and to cease 
purchasing further diesel buses after 2022; and First Rail will help support 
the UK Government's goal to remove all diesel-only trains from service by 2040. 
In 2022 FirstGroup was named as one of the world's cleanest 200 public 
companies for the third consecutive year by sustainable business media group 
Corporate Knights in partnership with US not-for-profit organisation, As You 
Sow. Visit our website at www.firstgroupplc.com and follow us @firstgroupplc on 
Twitter. 
 
CEO review 
 
Introduction and strategic summary 
 
Since joining FirstGroup as Chief Executive Officer in May 2022, I have focused 
on understanding the strategic opportunities and risks of our public transport 
operations across the UK. I believe that the Group has demonstrated that it is 
financially resilient in the face of the political, economic and industrial 
relations headwinds currently being experienced. It is clear there are several 
challenges to overcome, uncertainties to resolve and improvements to be made in 
the consistency of our service delivery, and these will be a key focus in the 
coming months and years. However, as the regional bus market returns to a more 
commercial model and our realignment of First Bus to reflect changing passenger 
trends is completed, we believe there is scope for significant earnings growth 
and margin enhancement over time. Meanwhile we are confident that our 
experience and market position in rail stands us in good stead as this industry 
continues its evolution. 
 
As a leader in both bus and rail in the UK, FirstGroup already has a robust 
platform to build on and there are a number of organic and inorganic 
opportunities to invest for growth where we have a comparative advantage. For 
example, our capabilities and experience in First Bus can be deployed more 
proactively into bus franchising, business to business (B2B) contracted 
services (including employee shuttle), as well as new revenue opportunities 
allied to the electrification of our fleets and depots. There are significant 
challenges at present in parts of our rail operations, particularly in Avanti 
West Coast and TransPennine Express (TPE), where our teams are completely 
focused on delivering their plans to tackle the issues that are causing 
disruption for passengers. In rail we also have notable successes such as our 
Lumo open access service, which in its first year of operation has already 
served a million passengers, many of whom would otherwise have flown between 
London and Edinburgh at a far greater environmental cost. As the largest 
private sector rail operator in the UK we have the experience and 
entrepreneurial spirit to resolve challenges, fix problems and innovate for the 
future, encouraging passengers back to the railway while growing our business. 
 
Our existing bus and rail businesses are cash generative and we have a strong 
financial position with scope to increase gearing prudently over time. I 
believe the core Group is therefore very well-placed to capture adjacent growth 
opportunities in the UK and elsewhere while also offering a sustainable, 
progressive dividend as part of a balanced capital allocation policy going 
forward, with the potential for additional distributions to shareholders as the 
contingent values from exiting North America are realised. 
 
We will continue to invest to meet our commitment of transitioning our regional 
bus operations to a 100% zero emission fleet by 2035 as part of our objective 
to be a sustainability leader in public transport. We continue to work 
successfully with local authorities to secure government funding assistance for 
zero emission vehicles and associated infrastructure. Based on our recent 
committed orders, including the largest Electric Vehicle (EV) bus order outside 
of London to-date, almost 13% of our entire fleet will be electrified by March 
2024. We are also accelerating our investment in energy efficiency and some 
self-generation of power, and exploring additional revenue streams relating to 
the electrification of our networks. In addition, in further recognition of our 
sustainability progress, I am pleased to report that we were ranked third in 
the World Benchmarking Alliance's recently published Transport Benchmark. The 
Benchmark uses publicly available information to assess ninety of the world's 
largest transportation companies on their progress towards decarbonisation and 
their contributions to a just transition and social transformation. 
 
Protecting our passengers and employees 
 
Our first priority has always been, and remains, the health and safety of our 
passengers, employees and the communities in which we operate. We maintain 
robust safety management systems and technology solutions throughout the Group, 
with a clear focus on ensuring compliance with policies, processes, and 
procedures, as well as operating our safety behavioural change programme, which 
aims to make safety a personal core value for every employee. Since the start 
of the coronavirus pandemic we have followed all appropriate public health 
authority guidance and maintained our commitment to best practice in areas such 
as enhanced cleaning and decontamination of vehicles, depots and stations. We 
take great pride in the way all our colleagues and teams continue to provide 
direct assistance and support to those most in need, right at the heart of our 
communities. 
 
Operational summary - First Bus 
 
Whilst our commercial passenger volumes have increased in the period, 
concessionary volumes continue to recover more slowly and we have been severely 
affected by cost inflation. Nevertheless, we have made progress in the period 
with several of the key drivers that will support improvement in bus margins 
once the sector transitions to a more commercial model, including yield and 
pricing actions, network realignment and the sale of First Scotland East. 
However, the extension of the Bus Recovery Grant funding in England into H2 
2023, the tapering of concession funding, inflation and continued industry-wide 
driver shortages are limiting the scope for significant margin progress in the 
near term. Despite this, we have a range of opportunities ahead to right-size 
and optimise our route networks, our operating portfolio and our engineering 
practices using new tools and enhanced data. In our B2B business we have been 
awarded a five-year extension to our contract to transport employees at Hinkley 
Point in our Somerset Passenger Services business, and we recently announced 
that our Aircoach business has completed the acquisition of the Northern 
Ireland-based transport firm Airporter. Overall, we continue to target revenue 
growth and a 10% margin in regional bus over time. 
 
Operational summary - First Rail 
 
The industrial action that has taken place across the rail sector during H1 
2023 has caused significant disruption for our passengers, although the 
financial impact on our business overall is relatively limited under the terms 
of our four management fee-based contracts. We are committed to working closely 
with government and our partners across the industry to deliver a successful 
railway that serves the needs of our customers and communities. Our open access 
operations Lumo and Hull Trains were profitable in the period, a significant 
swing from losses incurred in the prior financial year, which reflected the 
start-up of Lumo and periodic pandemic-related closures of Hull Trains. 
Following the award of an up to six-year National Rail Contract to Great 
Western Railway (GWR) in June 2022, in October 2022 we agreed with the 
Department for Transport (DfT) an extension of the current contractual 
arrangements for the West Coast Partnership (WCP) to March 2023. The extension 
allows our team at Avanti West Coast to sustain their focus on delivering their 
robust plan to increase the availability of trained drivers and restore 
services to the levels that passengers rightly expect. Discussions are ongoing 
with DfT regarding the longer-term National Rail Contract for WCP. 
 
Resilient performance with Group adjusted attributable profit in line with 
management expectations 
 
Revenue from continuing operations increased to £2,212.4m (H1 2022: £2,139.1m), 
with increased passenger revenue in First Bus partly offset by lower grant 
funding receipts, while First Rail revenue increased across both open access 
and management-fee based operations. 
 
Adjusted operating profit from continuing operations was £66.1m (H1 2022: £ 
51.8m), with First Rail higher, principally reflecting the transition from loss 
to profit of our open access operations, while First Bus was lower than the 
prior period, primarily reflecting the net impact of inflation and changes in 
the pandemic recovery funding model as the sector transitions to a more fully 
commercial model. The additional leases recognised under IFRS 16 for the new 
GWR contract are now expected to increase adjusted profit by approximately £22m 
in FY 2023 rather than by £30m as guided on signing, as the leases were signed 
later and at different lease terms. Central costs of £(10.0)m were lower than 
the prior period, reflecting the actions taken to resize the organisation 
following the North American disposals. Adjusted EPS was 4.4p (H1 2022: 
adjusted loss (0.4)p from continuing operations). 
 
Statutory operating profit (continuing basis) of £62.1m (H1 2022: £52.2m) 
includes £4.0m of net costs from adjusting items (H1 2022: £0.4m credit), and 
statutory EPS was (0.1)p (H1 2022: 42.4p). 
 
The Group reports on two alternative profit performance measures, which focus 
on the contractually agreed net fees available to be distributed up to the 
parent company from the management fee-based operations (as described in more 
detail on page 12) rather than their earnings, which management believes is 
helpful to aid understanding of the Group's underlying performance. The first 
of these, Group adjusted attributable profit, increased in the period to £30.8m 
(H1 2022: pro forma £13.3m). Meanwhile the Group's EBITDA adjusted for First 
Rail management fees was £118.8m on a rolling last twelve month basis (FY 2022: 
£98.5m). As previously noted, these metrics define our leverage and dividend 
policies as set out on page 14. 
 
Underlying cash flow in period in line with expectations 
 
The Group's adjusted cash outflow of £(112.1)m (H1 2022: inflow of £1,704.7m, 
including inflows of £2.3bn relating to the disposal of the North American 
operations) in the period reflects strong underlying cash generated by 
operations offset by outflows relating to investment in First Bus, lease 
payments and movement in First Rail ring-fenced cash (£125.1m outflow since FY 
2022). 
 
At the period end, the Group had adjusted net cash of £7.3m (FY 2022: adjusted 
net debt of £(3.9)m). The Group's accounts continue to consolidate the Train 
Operating Companies (TOCs) which manage the four management-fee based 
operations, including their substantial ring-fenced cash balances and right of 
use liabilities under IFRS 16, which primarily relate to the leased rolling 
stock used to operate these contracts. Both ring-fenced cash and the IFRS 16 
liabilities are excluded from the Group's adjusted net cash/(debt) measure. 
 
IFRS 16 lease liabilities increased to £1,821.3m (FY 2022: £1,083.2m) mainly as 
a result of new and updated lease arrangements across the First Rail 
management-fee based operations, while ring-fenced cash was £339.0m (FY 2022: £ 
468.1m). Taken together, the reported net debt including IFRS 16 lease 
liabilities and ring-fenced cash increased to £(1,475.0)m (FY 2022: £(619.0)m). 
 
Corporate activity 
 
In September the Group announced the sale of all but two of its remaining 
Greyhound US properties to an affiliate of Twenty Lake Holdings LLC, for net 
proceeds of c.$141m cash (£122m). The portfolio sale is subject to customary 
closing conditions, with completion expected to occur and the proceeds received 
in December 2022. In addition, the Group also completed the sale of a site in 
Denver for $9m in August 2022. In aggregate, profits on sale of c.$90m (net of 
property tax, selling and other costs) are expected to be booked over the 
course of the financial year. Following these property sales, FirstGroup's 
residual legacy Greyhound assets comprise deferred consideration, residual real 
estate in Canada and two sites in the US (both under contract subject to due 
diligence), and funding awards from the Coronavirus Aid, Relief, and Economic 
Security (CARES) Act and American Rescue Plan (ARP) schemes relating to the 
period Greyhound was under the Group's ownership, altogether valued at c.$55m. 
Legacy Greyhound liabilities (comprising residual insurance and pension 
liabilities which FirstGroup expects to de-risk in due course) and other 
provisions total c.$35m. 
 
In accordance with the terms of the disposal of First Transit by FirstGroup plc 
to EQT Infrastructure V (EQT Infrastructure) in July 2021, the Group was 
notified in October 2022 that affiliates of EQT Infrastructure had signed an 
agreement to sell First Transit to Transdev North America, Inc. The sale is 
subject to customary conditions, including regulatory and antitrust clearance 
processes in the US and Canada. As part of the First Transit disposal to EQT 
Infrastructure, FirstGroup is entitled to an earnout consideration, which is 
calculated as a percentage of the realised equity value on the sale by EQT and 
contemplating the cash flows generated by First Transit since March 2021 to 
completion (subject to certain permitted leakage provisions). We currently 
estimate the earnout consideration will be around £74m based on the information 
received on the sale by EQT and accordingly, we have recorded a non-cash loss 
of £27.9m relative to the previous carrying value of the earnout. The final 
earnout consideration amount will be determined in the period following 
completion of the sale, with receipt expected in FY 2024. 
 
Following a period of significant gilt yield rises since the start of 2022, 
gilt yield movements in the period immediately following the period end were 
exceptional. The Bus Pension Scheme was able to maintain its high level of 
hedge protection against interest rate and inflation risks throughout this 
volatile period. As a precautionary measure, after the period end the Group 
agreed to make £95m from the Limited Partnership created following the sale of 
the North American divisions (the escrow) available to the Scheme to assist 
with liquidity management. This amount has been loaned from the escrow to the 
Scheme on a short term basis, whilst its investment strategy and assets are 
repositioned as necessary. Following the rise in gilt yields, the funding 
shortfall (the basis which will determine the final distribution of funds from 
the escrow following the next triennial valuation) is currently materially 
lower than it was at the beginning of the period. 
 
On 26 May 2022 the Group announced it had received a series of unsolicited, 
conditional proposals from I Squared Capital Advisors (UK) LLP (I Squared) in 
relation to a possible offer to acquire the entire issued, and to be issued, 
share capital of the Company. The unsolicited offers received from I Squared 
resulted in a final proposal on 15 August 2022 of 135 pence per FirstGroup 
share (comprising 133.9 pence plus the 1.1 pence final dividend being paid on 
19 August 2022) together with further contingent value from the First Transit 
earnout. The Board, having carefully evaluated this proposal together with its 
advisers, concluded that the cash component significantly undervalued 
FirstGroup's continuing operations and its future prospects, and the contingent 
value did not provide shareholders with sufficient certainty. On 16 August 2022 
I Squared announced that it did not intend to make a firm offer for FirstGroup 
and was therefore bound by the restrictions contained within Rule 2.8 of the 
City Code on Takeovers and Mergers. 
 
Interim dividend 
 
The Board is declaring an interim dividend of 0.9p per share (c.£6.7m in 
aggregate), to be paid on 23 December 2022 to shareholders on the register at 
18 November 2022. The amount reflects the current policy of c.3x cover against 
the Group adjusted attributable profit, to be paid one third interim and two 
thirds final. 
 
Looking ahead 
 
Although the political, economic and industrial relations backdrop and pace of 
travel volume recovery are challenges, our expectations for FY 2023 are broadly 
unchanged, despite a shift in mix between our bus and rail divisions. While 
First Bus is clearly sensitive to broader consumer spending and inflation 
trends, we do expect sequential progress in H2 2023, with the realignments of 
routes and timetables in October and our pricing actions partially offset by a 
higher cost base for increased mileage as a result of the extension of recovery 
funding in England, which is currently in place until March 2023. In First 
Rail, we expect the four management fee-based operations to deliver aggregate 
financial performance broadly in line with management expectations, with higher 
profit from our open access operations over FY 2023. We are on track to realise 
the further c.£5m in annual central cost savings previously guided to this 
financial year, ahead of our original target. We expect our adjusted net cash 
position to be in the range of £100-110m at the end of FY 2023 after receipt of 
the Greyhound property proceeds in December and before any deployment of this 
capital. 
 
In the medium term we expect further value creation through both earnings 
growth, as First Bus continues the transition to a more commercial model, and 
from targeted deployment of growth capital. 
 
Graham Sutherland 
 
Chief Executive Officer 
 
9 November 2022 
 
Business review 
 
First Bus 
 
                                                                £m      £m, change 
 
26 weeks to 24 September                         H1 2023   H1 2022 
 
Revenue                                            427.7     392.5           +35.2 
 
Adjusted operating profit                           20.7      26.8           (6.1) 
 
Adjusted operating margin                           4.8%      6.8%        (200)bps 
 
EBITDA                                              51.0      55.5           (4.5) 
 
Net operating assets                               468.0     509.4          (41.4) 
 
Capital expenditure                                 46.1       9.9           +36.2 
 
First Bus reported revenue of £427.7m (H1 2022: £392.5m), principally 
reflecting improving passenger volumes partially offset by lower government 
funding support (including the tapering of concession reimbursement to current 
volume levels) than in H1 2022. Overall passenger volumes increased by 29% 
compared with the prior period, underpinned by commercial volumes, whilst the 
pace of recovery in concessionary and peak-time commuter travel remains slower. 
During H1 2023 commercial passenger volumes were at 78% and concessions at 68% 
of 2019 equivalent levels. First Bus is currently operating c.80% on average of 
the service mileage compared with the equivalent period in 2019 following the 
network changes we implemented in October 2022. 
 
For a substantial portion of FY 2022 First Bus and other regional bus operators 
effectively provided their assets and expertise to operate a government-funded 
bus system on a broadly cash break-even basis to ensure continuity of service 
during the pandemic. Under these arrangements, called the Covid Bus Service 
Support Grant-Restart (CBSSG-R) programme in England, operators were paid the 
costs of operation, less revenue received from customers and other public 
sector monies. Recoverable costs included all reasonable operational costs, 
including depreciation and allocated debt finance, together with any pension 
deficit funding. In Wales and Scotland bus operators received government 
pandemic support funding which is in place to July 2023 and Autumn 2022 
respectively. The CBSSG-R programme in England formally came to an end on 1 
September 2021, and since that time delivery of local bus services across 
England has been reinforced by the DfT's £226.5m Bus Recovery Grant (BRG) 
package, which was allocated to regional bus operators based on mileage and 
volumes. In March 2022 the DfT announced a further £150m in transitional 
funding for regional bus and light rail operators, and this scheme was 
subsequently extended with a further £130m announced in August 2022, to support 
bus operators in England to March 2023. In FY 2022 the Scottish Government 
committed to funding free bus travel for all under-22s from 31 January 2022 and 
we have subsequently seen a significant increase in the volume of under-22s 
travelling on our services in Scotland. In September 2022 the DfT announced £ 
60m of funding in order to cap adult regional bus fares in England at £2 
between January and March 2023. The division reported adjusted operating profit 
of £20.7m (H1 2022: £26.8m) in the period, reflecting the changes in the 
funding regime noted above and cost inflation. Statutory operating profit was £ 
16.4m (H1 2022: £26.8m). 
 
Optimising our business 
 
We are continuing to enhance our business and its prospects for when the 
current transitional period ends. Our cost reduction and operational efficiency 
programmes have delivered annualised savings of c.£20m since 2019 and we have 
several initiatives in place to deliver further savings. In H1 2023, higher 
than anticipated inflation impacted a number of our key input costs, including 
pay, fuel and utility costs. We have continued the roll out of a number of 
initiatives to ensure that we continue to offer an attractive and competitive 
employee proposition, as industry-wide driver shortages remain elevated. The 
vast majority of our local wage agreements (a number of which are multi-year) 
have been concluded in FY 2022 and H1 2023, with a small number set to be 
concluded shortly. Fuel costs were mitigated by our fuel hedge programme. We 
have also implemented energy efficiency measures such as aligning electricity 
usage with building occupancy, awareness campaigns to encourage behavioural 
change and we are accelerating our investment in the self-generation of power. 
This has included the installation of new energy efficient lighting, bus washes 
and energy management systems, and we are commencing the installation of solar 
panels at a number of our depots. 
 
We have continued to develop our pricing and yield management strategy, 
resulting in a shift towards shorter term products such as lower entry single 
and return fares, and updated weekly and monthly discounts being implemented 
across our operations. Having been prohibited from doing so under the earlier 
CBSSG pandemic funding, we increased fares in October 2021, and have since made 
further interventions within the CPI cap permitted under more recent funding 
schemes. The increases we have implemented have been designed to better match 
our new ticketing products to evolving travel trends, whilst at the same time 
recognising the potential impact of the cost of living crisis on discretionary 
passenger journeys by retaining low single fares. 
 
As part of our initiatives to address underperforming locations, we completed 
the sale of our First Scotland East operations to McGill's Group in September 
2022. We have also completed a reorganisation of our regional management 
structure in the period. 
 
Digital innovation 
 
Our real-time passenger volume data capture, GPS functionality and ticketing 
systems are allowing us to make commercial decisions more efficiently, optimise 
our networks and timetables and roll out innovative functionality to our 
customers. We are also able to structure our pricing models more effectively 
and introduce new ticketing options for customers that are more closely aligned 
with their preferences and able to attract new customers. In addition, we are 
partnering with specialist software companies to roll out enhanced timetabling, 
vehicle and employee rostering capabilities across the network, improving 
efficiency and reducing cost. Ticket transactions using digital payment methods 
now account for around 70% of our ticket transactions, and during H1 2023 we 
continued the roll out of 'tap on tap off' capped payment technology, which is 
now installed on more than half of our fleet. We are also participating in the 
development of a multi operator contactless payment ticketing system in a 
partnership between the bus industry and Transport for West Midlands. The 
scheme will allow passengers to access the best value travel for a day or week 
across multiple operators. 
 
Fleet decarbonisation 
 
We continue to work successfully with local authorities to secure government 
funding assistance for zero emission vehicles and associated infrastructure 
under the Zero Emission Buses Regional Area (ZEBRA) funding in England, and 
Transport Scotland's Scottish Zero Emission Bus (ScotZEB) funding scheme. In 
August 2022 First Bus placed the UK's largest ever EV bus order outside of 
London with UK manufacturer Wrightbus. The £81m order totalling 193 buses will 
see new zero emission buses being rolled out from March 2023. We anticipate 
that we will have 591 EVs, almost 13% of our entire fleet, by March 2024. In 
addition to growing our EV fleet we are also identifying opportunities to 
generate adjacent revenue streams created by the transition of our fleet and 
depot infrastructure to electricity. 
 
B2B and other contracted revenue 
 
In H1 2023 we have continued to develop and grow our activities in the B2B bus 
services market and have further contracts in the pipeline. Having acquired the 
50% of Somerset Passenger Solutions (SPS) that we did not own in FY 2022, in H1 
2023 we agreed a five year extension to our contract to provide passenger 
transport for the construction workers employed at the EDF Hinkley Point C 
nuclear power station. During the period we have also been active with regard 
to bus franchising opportunities. In the period First West of England took over 
the running of the m1 metrobus service, a bus rapid transit contract serving 
more than 50,000 passengers a week, from Bristol Community Transport after its 
parent HCT Group announced that it would cease operation of the route. 
Subsequent to the period end we announced in October 2022 that our Aircoach 
operation had completed the acquisition of Northern Ireland-based Airporter. 
This has expanded Aircoach's footprint in Ireland, increasing its daily routes 
to seven, with an enhanced all-island route connecting the north west to 
Belfast International Airport, Dublin Airport and Dublin city centre. 
 
First Bus outlook 
 
Although clearly sensitive to broader consumer spending and inflation trends, 
we expect sequential progress in H2 2023, with the realignments of routes and 
timetables in October and pricing actions partially offset by a higher cost 
base for increased mileage as a result of the extension of the transitional Bus 
Recovery Grant funding, currently in place until March 2023. 
 
Looking further ahead, we are focused on rightsizing our regional bus business 
around the actual passenger activity we are seeing as the sector moves to a 
more commercial model. We have the tools in place to continue to adapt our 
operations, deliver further efficiencies and manage the inflationary 
environment, as recovery funding tapers off. We will accelerate the 
decarbonisation of our fleet and have identified a number of potential 
opportunities to deploy growth capital, including to create additional revenue 
streams from the electrification of our fleets and depots, develop our B2B 
business, and pursue attractive, potentially scalable opportunities in bus 
franchising. 
 
First Rail 
 
                                                                    £m         £m, 
                                                                            change 
Six months to 17 September                           H1 2023   H1 2022 
 
Revenue from management fee-based operations         1,743.3   1,729.8       +13.5 
 
Revenue from open access and additional services        85.5      45.7       +39.8 
 
Inter-divisional eliminations                         (44.1)    (28.9)      (15.2) 
 
First Rail revenue                                   1,784.7   1,746.6       +38.1 
 
Attributable net income from management fee-based       19.1      17.5        +1.6 
operations1 
 
Gross up for tax, minorities and IFRS 16                24.3      29.3       (5.0) 
 
Adjusted operating profit/(loss) from open access       12.0     (7.6)       +19.6 
and additional services 
 
First Rail adjusted operating profit                    55.4      39.2       +16.2 
 
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 minority 
interests as described in more detail on page 12. See also note 3 to the 
financial statements for a reconciliation to the segmental disclosures. 
 
Total revenue increased in H1 2023 to £1,784.7m (H1 2022: £1,746.6m), with 
passenger volumes increasing in the period. Open access contributed £32.7m in 
revenue in the period (H1 2022: £6.6m) and adjusted operating profit of £6.7m 
(H1 2022: adjusted loss £(10.4)m), reflecting the successful launch of Lumo and 
the restoration of regular Hull Trains services following periods of closure 
due to the pandemic in the prior period. Additional services such as Mistral 
Data and rail contact centres delivered gross revenue of £52.8m (H1 2022: £ 
39.1m) before interdivisional eliminations in the period and adjusted operating 
profit of £5.3m (H1 2022: £2.8m). 
 
In H1 2023 the four management fee-based operations have recorded performance 
fees at management's best estimate in aggregate for the period. 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 and WCP (incorporating Avanti West Coast) contracts with the DfT 
- was £19.1m (H1 2022: £17.5m). The Group receives an annual dividend 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 TOC audited accounts. 
 
First Rail adjusted operating profit increased to £55.4m (H1 2022: £39.2m), 
which principally reflects the increase in open access contribution, as well as 
higher IFRS 16 lease depreciation following the award of the new GWR contract 
in June 2022, which is now expected to increase adjusted profit by 
approximately £22m in FY 2023 rather than £30m as guided on signing, as the 
leases were signed later and at different lease rates. The division reported a 
statutory operating profit of £55.4m (H1 2022: £43.2m). 
 
Transition to National Rail Contracts 
 
In May 2021 SWR and TPE transitioned to the Government's new National Rail 
Contracts (NRCs) which run to May 2023 with potential extensions to May 2025. 
In March 2022 the DfT issued a Prior Information Notice which provides for a 
NRC for TPE starting in Spring 2023, with a minimum core term of four years 
with up to a further four years at the DfT's discretion. GWR was awarded an NRC 
in June 2022 with a core three-year term to 21 June 2025, with an option for 
the DfT to extend it by up to three further years to June 2028. Under the NRCs, 
the DfT retains substantially all revenue and cost risk (including for fuel and 
wage increases). There is a fixed management fee and the opportunity to earn an 
additional performance fee. The punctuality and other operational targets 
required to achieve the maximum level of performance fee under the contracts 
are designed to incentivise service delivery for customers. 
 
The West Coast Partnership (WCP) has been operating under an Emergency Recovery 
Measures Agreement (ERMA) which was put in place by the DfT in September 2020. 
On 7 October 2022 the Group announced that it had agreed with the DfT to extend 
the current contractual arrangements for WCP to the end of March 2023 under 
broadly the same terms and conditions. The WCP contract comprises operation of 
Avanti West Coast and acting as shadow operator to the HS2 programme. The 
agreement will allow the team at Avanti West Coast to sustain their focus on 
delivering their robust plan to restore service levels to the levels that 
passengers expect. Discussions are ongoing with DfT regarding the longer-term 
NRC for WCP which is currently envisaged will run up to October 2032. Under 
these contractual arrangements the four TOCs continue to be fully consolidated 
in the Group accounts with the net cost of operations and capital expenditure 
funded in advance by the DfT. 
 
Innovation and adjacent rail opportunities 
 
We continue to develop, market and deploy our additional rail customer, 
industry and technology tools and services. In the period, the installation of 
our evo-rail track-to-train superfast rail-5G technology across 70 kilometres 
of the SWR main line commenced, and international trials continued. Our 
analytics business Mistral Data developed a new application in the period that 
identifies areas of potential low rail-wheel adhesion, based on real-time wheel 
slip reported data, which was installed on the SWR network. 
 
To address energy cost inflation in our open access operations, both Lumo and 
Hull Trains have joined an industry hedging group to mitigate the long-term 
impact of electricity costs which represent a significant proportion of their 
costs. 
 
Rail sector 
 
The rail sector is in the midst of a period of reform aiming to modernise 
industry practices and secure its long-term future at a time when passenger 
volumes in a number of segments remain below pre-pandemic levels. First Rail 
has on average operated a fifth of the UK passenger rail market by revenue 
since 2007, and currently has a quarter of the market. As a result, we have a 
strong track record of delivery on major projects such as fleet introductions, 
capital projects on behalf of Network Rail, customer service innovations and 
managing the impact of significant infrastructure changes, from network 
electrification through to route upgrades, and through our experience as a 
'shadow operator' on the HS2 infrastructure project. We believe this unrivalled 
knowledge and expertise stands us in good stead as the industry structure in 
the UK continues to evolve. 
 
A number of trade unions have held industrial action at train operating 
companies across the UK and at Network Rail during H1 2023. Whilst the 
financial impact of industrial action is expected to be limited under the terms 
of the management fee-based contracts, it is possible that if industrial action 
continues over a prolonged period of time, this could impact some of the 
performance metrics. We will continue to work with our industry partners to do 
all that we can to minimise the disruption for our passengers caused by 
prolonged industrial action, as well as continuing talks on securing the 
long-term future for the railways. 
 
First Rail outlook 
 
For FY 2023, we expect higher profit increases from our open access operations, 
with the four management fee-based operations to deliver aggregate financial 
performance broadly in line with management expectations. We continue to work 
collaboratively with our industry partners and stakeholders to enhance our 
service offering and to increase connectivity with other transport modes for 
our customers. 
 
Looking further ahead, in the medium term we expect a broadly consistent level 
of contribution from First Rail's four management fee-based operations for 
their contractual durations, with further growth from open access and 
additional rail services. As the UK's largest operator we are well placed both 
to drive increased patronage and to generate resilient and consistent returns 
for shareholders as the UK passenger rail industry continues its evolution to a 
more customer-focused and sustainable railway system that works better for all 
parties. 
 
Financial review 
 
Discontinued operations 
 
In the first half of the year, the Group's residual Greyhound US activities are 
disclosed as discontinued operations. As described in more detail in the 2022 
Annual Report and Accounts, the Group completed the sale of its First Student 
and First Transit divisions to EQT Infrastructure on 21 July 2021, and the sale 
of Greyhound lines Inc. to a wholly owned subsidiary of FlixMobility GmbH on 21 
October 2021. All three are reported as discontinued operations in the prior 
periods. 
 
Revenue 
 
Revenue from continuing operations increased to £2,212.4m (H1 2022: £2,139.1m), 
principally reflecting increased passenger volumes partly offset by lower 
receipts from government grants in First Bus, and in First Rail increased 
revenue across open access, additional services and management-fee based 
operations. 
 
Operating performance 
 
Statutory operating performance by division is as follows: 
 
                     26 weeks to 24 September    26 weeks to 25 September   52 weeks to 26 March 2022 
                                         2022                        2021 
 
                  Revenue Operating Operating Revenue Operating Operating Revenue Operating Operating 
                       £m   profit1   margin1      £m   profit1   margin1      £m   profit1   margin1 
                                 £m         %                £m         %                £m         % 
 
First Bus           427.7      16.4       3.8   392.5      26.8       6.8   789.9      45.2       5.7 
 
First Rail        1,784.7      55.4       3.1 1,746.6      43.2       2.5 3,801.2      91.8       2.4 
 
Group items2            -     (9.7)       n/a       -    (17.8)       n/a       -    (14.2)       n/a 
 
Continuing        2,212.4      62.1       2.8 2,139.1      52.2       2.4 4,591.1     122.8       2.7 
operations 
 
Discontinued          2.7    (28.6)       n/a   970.6     592.3       n/a   996.9     683.3       n/a 
operations 
 
Total             2,215.1      33.5       1.5 3,109.7     644.5      20.7 5,588.0     806.1      14.4 
 
Adjusted operating performance by division is as follows: 
 
                     26 weeks to 24 September    26 weeks to 25 September   52 weeks to 26 March 2022 
                                         2022                        2021 
 
                  Revenue  Adjusted  Adjusted Revenue  Adjusted  Adjusted Revenue  Adjusted  Adjusted 
                       £m operating operating      £m operating operating      £m operating operating 
                            profit1   margin1           profit1   margin1           profit1   margin1 
                                 £m         %                £m         %                £m         % 
 
First Bus           427.7      20.7       4.8   392.5      26.8       6.8   789.9      45.2       5.7 
 
First Rail        1,784.7      55.4       3.1 1,746.6      39.2       2.2 3,801.2      87.8       2.3 
 
Group items2            -    (10.0)       n/a       -    (14.2)       n/a       -    (26.3)       n/a 
 
Continuing        2,212.4      66.1       3.0 2,139.1      51.8       2.4 4,591.1     106.7       2.3 
operations 
 
Discontinued          2.7     (8.4)       n/a   970.6     121.3       n/a   996.9     120.1       n/a 
operations 
 
Total             2,215.1      57.7       2.6 3,109.7     173.1       5.6 5,588.0     226.8       4.1 
 
1        'Adjusted' figures throughout this document are before adjusting and 
certain other items as set out in note 3 to the financial statements. 
 
2     Central management, other items and retained Greyhound results. 
 
Adjusted operating profit from continuing operations was £66.1m (H1 2022: £ 
51.8m), reflecting the transition from loss to profit of our open access rail 
operations, while First Bus was lower than the prior period, primarily 
reflecting net cost inflation and the changes in the pandemic recovery funding 
regime in September 2021. The additional leases recognised under IFRS 16 for 
the new GWR contract are now expected to increase adjusted profit by 
approximately £22m in FY 2023 rather than by £30m as guided on signing, as the 
leases were signed later and at different lease terms. Central costs of £(10.0) 
m were lower than the prior period, reflecting the actions taken to resize the 
organisation following the North American disposals. 
 
The Group's adjusted attributable profit alternative performance measure is 
calculated as follows and increased significantly in the period: 
 
                                                  26 weeks to   26 weeks  52 weeks 
                                                           24      to 25     to 26 
                                                    September  September     March 
                                                         2022       2021      2022 
                                                           £m         £m        £m 
 
First Bus adjusted operating profit                      20.7       26.8      45.2 
 
Attributable net income from First Rail                  19.1       17.5      45.5 
management fee-based operations1 - Group's share 
of the management fee income available for 
dividend distribution from GWR, SWR, TPE and WCP 
contracts 
 
First Rail adjusted operating profit/(loss) from         12.0      (7.6)     (9.7) 
open access and additional services 
 
Group central costs (operating profit basis)           (10.0)     (13.9)    (26.3) 
 
Subtotal                                                 41.8       22.8      54.7 
 
Cash interest2                                          (8.3)     (10.3)    (20.7) 
 
Tax3                                                    (2.7)        0.8       2.2 
 
Group adjusted attributable profit                       30.8       13.3      36.2 
 
1     A reconciliation to the segmental disclosures is set out in note 3. 
 
2     Pro forma interest charge excluding notional interest, lease interest on 
IFRS 16 Right of Use assets and interest on discontinued operations. 
 
3     Pro forma taxation at 19%. 
 
A reconciliation of the Group's adjusted attributable profit measure to 
adjusted earnings after tax is shown below: 
 
                                  H1 2023                        Movements   H1 2023 
                                    Group                                   Adjusted 
                                 adjusted                                   earnings 
                             attributable                                  after tax 
                                   profit                                         £m 
                                       £m 
                                            Adjusted   Gross up     Actual 
                                          First Rail    tax and   interest 
                                            earnings   minority    and tax 
                                          to IFRS 16  interests         £m 
                                               basis         £m 
                                                  £m 
 
First Bus adjusted operating         20.7          -          -          -       20.7 
profit 
 
Attributable net income from         19.1       17.4        6.9          -       43.4 
First Rail management 
fee-based operations1 
 
First Rail adjusted                  12.0          -          -          -       12.0 
operating profit from open 
access and additional 
services 
 
Group central costs                (10.0)          -          -          -     (10.0) 
(operating profit basis) 
 
Subtotal                             41.8       17.4        6.9          -       66.1 
 
Cash interest2                      (8.3)     (20.0)          -        3.2     (25.1) 
 
Tax3                                (2.7)          -      (4.9)        1.5      (6.1) 
 
Minority interest                       -          -      (2.0)          -      (2.0) 
 
Total                                30.8      (2.6)          -        4.7       32.9 
 
1     A reconciliation to the segmental disclosures is set out in note 3. 
 
2     Pro forma interest charge excluding notional interest, lease interest on 
IFRS 16 Right of Use assets and interest on discontinued operations, H1 FY22 
pro forma due to material deleveraging following the sale of North American 
businesses. 
 
3     Pro forma taxation at 19%. 
 
The Group's EBITDA adjusted for First Rail management fees performance measure 
also increased year-on-year. On a last twelve month basis, the Group's EBITDA 
adjusted for First Rail management fees was £118.8m. It is calculated as 
follows: 
 
                                               26 weeks to 26 weeks to 52 weeks to 
                                                        24          25    26 March 
                                                 September   September        2022 
                                                      2022        2021          £m 
                                                        £m          £m 
 
First Bus EBITDA1                                     42.8        47.6        87.6 
 
Attributable net income from First Rail               19.1        17.5        45.5 
management fee-based operations2 - Group's 
share of the management fee income available 
for dividend distribution from GWR, SWR, TPE 
and WCP contracts 
 
First Rail EBITDA from open access and                12.6       (7.4)       (9.7) 
additional services1 
 
Group central costs (EBITDA basis1)                  (9.6)      (13.0)      (24.8) 
 
Group EBITDA adjusted for First Rail                  64.9        44.7        98.6 
management fees 
 
1     Pre-IFRS 16 basis. 
 
2     A reconciliation to the segmental disclosures is set out in note 3. 
 
Reconciliation to non-GAAP measures and performance 
 
Note 3 to the financial statements sets out the reconciliations of operating 
profit/(loss) and loss before tax to their adjusted equivalents. 
 
The principal adjusting items in H1 2023 are as follows: 
 
First Bus restructuring 
 
As part of the restructuring of the First Bus division to transition to a more 
commercial model, the Group completed the sale of its First Scotland East 
business in September 2022, realising a loss on disposal of £(3.7)m. In line 
with this transition plan, the Group also incurred costs of £(0.6)m relating to 
the reorganisation of its First Bus regional management structure. 
 
Other restructuring costs 
 
Restructuring costs of £(1.3)m were incurred in relation to the Group's central 
functions as part of its ongoing cost efficiency initiatives. 
 
Greyhound Canada 
 
A provision relating to the continued winding down of Greyhound Canada 
operations was released in the period. 
 
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 now estimates 
its earnout consideration to be around £74m based on the information received 
on the sale by EQT. This gives rise to a non-cash adjusting charge of £27.9m 
(before currency hedging entered into after the period end) relative to the 
carrying value of the earnout of £106.1m as at 26 March 2022. A gain of £7.7m 
arose upon disposal of Greyhound US property during the first half of the year. 
 
Group statutory operating profit 
 
Statutory operating profit (continuing basis) was £62.1m (H1 2022: £52.2m), 
reflecting the £(4.0)m charge from net adjusting items, compared with the £0.4m 
credit in net adjusting items in H1 2022. 
 
Finance costs and investment income 
 
Net finance costs were £24.8m (H1 2022: £128.0m) with the decrease principally 
due to lower finance costs following the repayment of debt after receipt of the 
First Student and First Transit disposal proceeds, and the impact in the prior 
year of debt early settlement make-whole costs of £50.0m and charges of £8.6m 
for the write-off of unamortised fees. 
 
Profit before tax 
 
Statutory profit before tax (continuing basis) was £37.0m (H1 2022: loss of £ 
(64.5)m). Adjusted profit before tax (continuing basis) as set out in note 4 to 
the financial statements was £41.0m (H1 2022: adjusted loss of £(6.3)m). 
Adjusting items were an overall charge of £4.0m, principally reflecting the 
loss on disposal of the First Scotland East business (H1 2022: charge of £58.2m 
mainly reflecting the adjusting finance costs). 
 
Tax 
 
The tax charge on statutory profit before tax (continuing basis) was £5.1m (H1 
2022: tax credit of £26.4m) representing an effective tax rate of 13.8% (H1 
2022: not meaningful). The tax charge on adjusted profit before tax including 
discontinued operations for the period was £6.1m (H1 2022: £21.6m), 
representing an effective tax rate of 18.5% (H1 2022: 20.8%). The lower rate in 
the current period reflects the absence of profits in the US which had a higher 
effective tax rate. There was a tax charge of £2.0m (H1 2022: credit of £24.3m) 
relating to adjusting items and a tax credit of £0.8m (H1 2022: charge of £ 
5.9m) from adjustments to deferred tax. The total tax charge, including tax on 
discontinued operations, was £7.3m (H1 2022: £3.2m). The actual tax paid during 
the period was £0.4m (H1 2022: £12.2m). 
 
The ongoing Group's effective tax rate is expected to be broadly in line with 
UK corporation tax levels (currently 19% and increasing to 25% from 1 April 
2023). 
 
EPS 
 
Total adjusted diluted EPS was 3.2p (H1 2022: 6.6p). Basic EPS was (0.1)p (H1 
2022: 42.4p). 
 
Shares in issue 
 
As at 24 September 2022 there were 738.5m shares in issue (H1 2022: 1,215.3m), 
excluding treasury shares and own shares held in trust for employees of 11.9m 
(H1 2022: 7.6m). In December 2021, 476.2m shares were acquired pursuant to a 
tender offer and cancelled. 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 739.8m (H1 2022: 1,203.4m). 
 
Capital allocation framework 
 
The Group's capital allocation framework can be summarised as follows: 
 
Sustainable    * First Bus: c.£90m per annum in net cash capital expenditure, 
investment       principally transition of bus fleet to 100% zero emissions by 
                 2035, expected to be covered by operational cash generation 
               * First Rail: continues to be cash capital-light, with any capital 
                 expenditure required by the four management fee-based operations 
                 fully funded under the contracts 
 
Growth         * Actively reviewing organic and inorganic opportunities to deploy 
                 capital in the UK and elsewhere 
 
Returns for    * Dividends: progressive annual dividends, 3x covered by Group 
shareholders     adjusted attributable profit 
               * Interim dividend of 0.9p per share declared (expected to be c.1/3 
                 interim, 2/3 final typically) 
               * Potential for additional distributions as the contingent values 
                 from exiting North America are realised 
 
Balance        * Maintain leverage of less than 2.0x Adjusted Net Debt: rail 
sheet            management fee-adjusted EBITDA 
 
Dividend 
 
The Board has declared an interim dividend of 0.9p per share (c.£6.7m in 
aggregate), to be paid on 23 December 2022 to shareholders on the register at 
18 November 2022. 
 
Adjusted cash flow 
 
The Group's adjusted cash outflow of £(112.1)m (H1 2022: inflow of £1,704.7m, 
including inflows of £2.3bn relating to the disposal of the North American 
operations) in the period reflects strong underlying cash generated by 
operations offset by outflows relating to investment in First Bus, lease 
payments and movement in First Rail ring-fenced cash (£125.1m outflow since FY 
2022. The adjusted cash flow is set out below: 
 
                                                    26 weeks   26 weeks   52 weeks 
                                                       to 24      to 25      to 26 
                                                   September  September March 2022 
                                                        2022       2021         £m 
                                                          £m         £m 
 
EBITDA                                                 339.5      478.9      862.1 
 
Other non-cash income statement charges                  1.3        1.2        3.8 
 
Working capital                                       (92.2)      (7.6)     (11.6) 
 
Movement in other provisions                           (8.2)     (20.4)     (27.4) 
 
Increase in financial assets/contingent                    -          -    (223.1) 
consideration receivable 
 
Settlement of foreign exchange hedge                   (1.8)          -          - 
 
Pension payments in excess of income statement          11.1    (338.6)    (340.4) 
charge/LGPS refund 
 
Cash generated by operations                           249.7      113.5      263.4 
 
Capital expenditure and acquisitions                  (61.5)    (142.2)    (262.9) 
 
Proceeds from disposal of property, plant and           23.0        3.4       23.1 
equipment 
 
Net proceeds from disposal of businesses                 2.0    2,293.4    2,320.0 
 
Interest and tax                                      (33.2)    (167.9)    (196.6) 
 
Share buy back resulting from tender offer                 -          -    (506.0) 
 
External dividends paid                                (8.2)          -          - 
 
Lease payments now in debt/other                     (283.9)    (395.5)    (632.1) 
 
Adjusted cash flow                                   (112.1)    1,704.7    1,008.9 
 
Foreign exchange movements                               8.6      (7.9)      (3.8) 
 
Net (inception)/termination of leases              (1,029.0)      172.4      184.1 
 
Lease payments in debt                                 276.5      378.4      609.8 
 
Other non-cash movements                                   -      144.0      207.8 
 
Movement in net debt in the period                   (856.0)    2,391.6    2,006.8 
 
Capital expenditure 
 
Non-First Rail cash capital expenditure was £46.8m, all of which related to 
First Bus (H1 2022: £114.5m, comprising First Bus £8.7m, Group items £0.4m, 
First Student £72.6m, First Transit £21.8m and Greyhound £11.0m). First Rail 
cash capital expenditure was £14.7m (H1 2022: £25.1m) and is typically matched 
by receipts from the DfT under current contractual arrangements or other 
funding. 
 
In addition, during the period leases in the non-First Rail divisions were 
entered into with capital values in First Bus of £19.3m and Group items £0.2m 
(H1 2022: First Bus £1.9m, Group items £0.7m, First Student £8.4m, First 
Transit £1.3m and Greyhound £2.1m). During the period First Rail entered into 
leases with a capital value of £1,015.9m (H1 2022: £26.1m). 
 
Non-First Rail gross capital investment (fixed asset and software additions, 
plus the capital value of new leases) was £65.6m and comprised First Bus £65.4m 
and Group items £0.2m (H1 2022: £178.2m, comprising First Bus £11.9m, Group 
items £0.9m, First Student £94.7m, First Transit £13.5m, Greyhound £12.3m). 
First Rail gross capital investment was £1,032.2m (H1 2022: £44.9m). 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 £557.7m of undrawn committed headroom and 
free cash (FY 2022: £532.1m), being £300.0m (FY 2022: £300.0m) of committed 
headroom and £257.7m (FY 2022: £232.1m) of net free cash after offsetting 
overdraft positions. 
 
Net cash/(debt) 
 
As at 24 September 2022 the Group's adjusted net cash, which excludes the 
capitalisation of Right of Use Assets under IFRS 16 and ring-fenced cash, was £ 
7.3m (FY 2022: adjusted net debt of £(3.9)m). Reported net debt was £1,475.0m 
(FY 2022: £619.0m) after IFRS 16 and including ring-fenced cash of £339.0m (FY 
2022: £468.1m), as follows: 
 
Analysis of net debt                                       24        25  26 March 
                                                    September September      2022 
                                                         2022      2021        £m 
                                                           £m        £m 
 
Sterling bond (2024)                                    199.9     199.9     199.9 
 
Bank loans and overdrafts                                39.9      31.4      87.5 
 
Lease liabilities                                     1,821.3   1,366.4   1,083.2 
 
Asset backed financial liabilities                       49.9      56.6      35.5 
 
Loan notes                                                0.6       0.6       0.6 
 
Gross debt excluding accrued interest                 2,111.6   1,654.9   1,406.7 
 
Cash                                                  (297.6)   (892.4)   (319.6) 
 
First Rail ring-fenced cash and deposits              (315.3)   (518.3)   (440.4) 
 
Other ring-fenced cash and deposits                    (23.7)    (10.0)    (27.7) 
 
Net debt excluding accrued interest                   1,475.0     234.2     619.0 
 
IFRS 16 lease liabilities - rail                      1,780.9   1,255.7   1,031.2 
 
IFRS 16 lease liabilities - non-rail                     40.4     110.7      52.0 
 
IFRS 16 lease liabilities - total                     1,821.3   1,366.4   1,083.2 
 
Net (cash)/debt excluding accrued interest            (346.3) (1,132.2)   (464.2) 
(pre-IFRS 16) 
 
Adjusted net (cash)/debt (pre-IFRS 16 and               (7.3)   (603.9)       3.9 
excluding ring-fenced cash) 
 
Under the terms of the First Rail contractual agreements with the DfT, cash can 
only be distributed by the TOCs either up to the lower amount of their retained 
profits or the amount determined by prescribed liquidity ratios. The 
ring-fenced cash represents that which is not available for distribution or the 
amount required to satisfy the liquidity ratios at the balance sheet date. 
 
Interest rate risk 
 
Exposure to floating interest rates is managed to ensure that at least 50% (but 
at no time more than 100%) of the Group's pre-IFRS 16 gross debt is fixed rate 
for the medium term. 
 
Fuel price risk 
 
We use a progressive forward hedging programme to manage commodity risk. As at 
9 November 2022, 97% of our 'at risk' UK crude requirements for H2 2023 (44m 
litres, which is all in First Bus) were hedged at an average rate of 40p per 
litre, 63% of our requirements for the year to the end of March 2024 at 46p per 
litre, and 10% of our requirements for the year to the end of March 2025 at 59p 
per litre. 
 
Foreign currency risk 
 
'Certain' and 'highly probable' foreign currency transaction exposures 
(including fuel purchases for the UK divisions) may be hedged into the Group 
reporting currency (pounds Sterling) 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. In accordance with this policy, the legacy Greyhound property sale 
and First Transit earnout proceeds have been substantially hedged into pounds 
Sterling during the period, at a rate of $1.1543. 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: 
 
                          26 weeks to 24        26 weeks to 25  52 weeks to 26 March 
                          September 2022        September 2021                  2022 
 
                      Closing  Effective    Closing  Effective    Closing  Effective 
                         rate       rate       rate       rate       rate       rate 
 
US Dollar                1.09       1.12       1.37       1.39       1.32       1.40 
 
Canadian Dollar          1.48       1.60       1.73       1.72       1.64       1.73 
 
Pensions 
 
We have updated our pension assumptions for the defined benefit schemes in the 
UK and North America. The net pension surplus (comprising continued and 
discontinued operations) of £186.7m at the beginning of the reporting period 
moved to a net surplus of £60.2m as at the balance sheet date on 24 September 
2022, with the movement principally due to a deterioration in pension asset 
performance partially offset by the impact of higher discount rates in the 
period. The main factors that influence the balance sheet position for pensions 
and the principal sensitivities to their movement at 24 September 2022 are set 
out below: 
 
                                             Movement                      Impact 
 
Discount rate                                   +0.1%    Increase surplus by £21m 
 
Inflation                                       +0.1%    Decrease surplus by £17m 
 
Life expectancy                               +1 year    Decrease surplus by £61m 
 
Following a period of significant gilt yield rises since the start of 2022, 
gilt yield movements in the period immediately following the balance sheet date 
were exceptional. The Bus Pension Scheme was able to maintain its high level of 
hedged protection against interest rate and inflation risks throughout this 
volatile period. As a precautionary measure, after the period end the Group 
agreed to make £95m from the Limited Partnership created following the sale of 
the North American divisions (the escrow) available to the Scheme to assist 
with liquidity management. This amount has been loaned from the escrow to the 
Scheme on a short term basis, whilst its investment strategy and assets are 
repositioned as necessary. 
 
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. As at the reporting date, 
the Scheme liabilities were estimated to be around 12% higher on a funding 
basis than on the accounting basis shown on the balance sheet. Following the 
rise in gilt yields, the funding shortfall is currently materially lower than 
it was at the beginning of the period, although slightly higher than at the 
reporting date, with volatility in gilt yields remaining elevated. 
 
Balance sheet 
 
Net assets have decreased by £126.8m since 26 March 2022. The principal reason 
is the reduction in the net pension surplus. The GWR leases under the new NRC 
arrangement underpin the increase in First Rail's net assets, with the related 
liability reflected in reported net debt. 
 
Balance sheets - net assets/                  As at          As at          As at 
(liabilities)                          24 September   25 September  26 March 2022 
                                               2022           2021             £m 
                                                 £m             £m 
 
First Bus                                     468.0          509.4          626.4 
 
First Rail                                  1,501.0          777.7          597.3 
 
Greyhound (retained)                         (21.6)         (49.0)          (4.8) 
 
Divisional net assets                       1,947.4        1,238.1        1,218.9 
 
Group items                                   221.7           53.2          245.8 
 
Borrowings and cash                       (1,475.2)        (170.5)        (619.0) 
 
Taxation                                       18.4            5.2            0.9 
 
Held for sale assets                           46.0           73.6           38.5 
 
Total                                         758.3        1,199.6          885.1 
 
Legacy North American assets and liabilities on balance sheet 
 
As part of the disposal of First Transit to EQT Infrastructure, FirstGroup is 
entitled to an 'earnout' consideration of up to $290m (c.£220m). The earnout is 
for a period of three years from 21 July 2021 and is calculated as a percentage 
of the realised equity value on disposal of the First Transit business by EQT 
Infrastructure or an arm's length valuation as at the third anniversary of the 
sale (21 July 2024) if not disposed by that point. Following the announcement 
on 26 October 2022 of EQT Infrastructure's agreement to sell First Transit to 
Transdev North America, Inc, the Group now estimates its earnout consideration 
will be around £74m. Following the property sales announced in the period, 
total Greyhound assets and liabilities are carried at a value of £24.4m. 
 
Post-balance sheet events 
 
  * 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 earnout consideration to 
    be around £78m. The Group considered this to be an adjusting event and 
    therefore it was reflected in the fair value of the contingent 
    consideration receivable for the earnout at 24 September 2022. In the first 
    half of the year this gives rise to a non-cash, adjusting charge of £27.9m 
    relative to the carrying value of the earnout of £106m at 26 March 2022. 
  * In light of the liquidity problems encountered by several UK Defined 
    Benefit pension schemes which have resulted from recent rapid and 
    significant movements in government bond yields, FirstGroup provided a 
    short-term loan of £95m to the Bus Pension Scheme so that it could continue 
    to maintain its current level of risk management during the uncertain times 
    as the Bank of England support in the market is withdrawn, and to allow its 
    asset portfolio to be rebalanced in an orderly manner. The Company utilised 
    the funds held in escrow following the sale of the North American business 
    to support the Scheme funding strategy as the source of funds for the loan. 
  * In October 2022 an extension of the current contractual arrangements for 
    WCP was agreed with DfT to March 2023. Discussions are ongoing with DfT 
    regarding the longer-term NRC for WCP. 
  * On 28 October 2022, the Group announced that its Aircoach business had 
    agreed a deal to purchase the Northern Ireland-based transport firm 
    Airporter. 
 
Going concern 
 
The Board carried out a review of the Group's financial projections for the 18 
months to 31 March 2024 and having regard to the risks and uncertainties to 
which the Group is exposed, the Directors have a reasonable expectation that 
the Group has adequate resources to continue in operational existence for the 
foreseeable future. Accordingly, the condensed consolidated financial 
statements in the half-yearly report have been prepared on the going concern 
basis. 
 
Definitions 
 
Unless otherwise stated, all financial figures for the 26 weeks to 24 September 
2022 (the 'first half', the '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. The figures for the 26 weeks to 25 September 2021 (the 'prior 
period' or 'H1 2022') include the results and financial position of the First 
Rail business for the period ended 18 September 2021 and the results of all 
other businesses for the 26 weeks ended 25 September 2021. Figures for the 52 
weeks to 26 March 2022 ('FY 2022') include the results and financial position 
of the First Rail business for the year ended 31 March 2022 and the results of 
all other businesses for the 52 weeks ended 26 March 2022. Results for the 52 
weeks to 25 March 2023 ('FY 2023') will include the results and financial 
position for First Rail for the year ending 31 March 2023 and the results and 
financial position of all the other businesses for the 52 weeks ending 25 March 
2023. 
 
'Cont.' or the 'Continuing operations' refer to First Bus, First Rail and Group 
items. 
 
'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. 
 
'EBITDA' is adjusted operating profit less capital grant amortisation plus 
depreciation. 
 
The Group's 'EBITDA adjusted for First Rail management fees' is First Bus, 
central costs 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. 
 
'Group adjusted attributable profit' is First Bus and First Rail adjusted 
operating profit from open access and additional services, plus First Rail 
attributable net income from management fee-based operations, minus central 
costs, minus cash interest, minus tax. 
 
'Net debt' is the value of Group external borrowings excluding the fair value 
adjustment for coupon swaps designated against certain bonds, excluding accrued 
interest, less cash balances. 
 
'Adjusted net Cash/(Debt)' excludes ring-fenced cash and IFRS 16 lease 
liabilities from net debt. 
 
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 76 to 81 of the 
Annual Report and Accounts 2022, 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 
  * Climate change 
  * Geopolitical 
  * Contracted businesses 
  * Competition and emerging technologies 
  * Transactions 
  * Financial resources 
  * Pandemic 
  * Safety 
  * Data security including cyber security and GDPR 
  * Regulatory compliance 
  * 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. 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 2022 at https:// 
www.firstgroupplc.com/investors/annual-report-2022.aspx. 
 
Graham Sutherland                                                  Ryan Mangold 
 
Chief Executive Officer                                              Chief 
Financial Officer 
 
9 November 2022                                                      9 November 
2022 
 
Condensed consolidated income statement 
 
                                                    Notes       Unaudited      Unaudited 
                                                              26 weeks to    26 weeks to 
                                                             24 September   25 September 
                                                                     2022           2021 
                                                                       £m             £m 
 
Revenue                                              2, 4         2,212.4        2,139.1 
 
Operating costs                                                 (2,150.3)      (2,086.9) 
 
Operating profit                                                     62.1           52.2 
 
Investment income                                       5             1.8            0.3 
 
Finance costs                                           5          (26.9)        (117.0) 
 
Profit/(loss) before tax                                             37.0         (64.5) 
 
Tax                                                     6           (5.1)           26.4 
 
Profit/(loss) from continuing operations                             31.9         (38.1) 
 
(Loss)/profit from discontinued operations             13          (30.5)          551.4 
 
Profit for the period                                                 1.4          513.3 
 
Attributable to: 
 
Equity holders of the parent                                        (0.6)          510.7 
 
Non-controlling interests                                             2.0            2.6 
 
                                                                      1.4          513.3 
 
 
Earnings per share 
 
Earnings per share for profit/(loss) from 
continuing operations attributable to the 
ordinary equity holders of the company 
 
Basic                                                                4.0p         (3.4)p 
 
Diluted                                                              3.9p         (3.4)p 
 
Earnings per share for (loss)/profit attributable 
to the ordinary equity holders of the company 
 
Basic                                                   7          (0.1)p          42.4p 
 
Diluted                                                 7          (0.1)p          42.4p 
 
Adjusted results (from continuing operations)1 
 
Adjusted operating profit                               3            66.1           51.8 
 
Adjusted profit/(loss) before tax                                    41.0          (6.3) 
 
Adjusted EPS                                            7            4.4p         (0.4)p 
 
Adjusted diluted EPS                                                 4.3p         (0.4)p 
 
1        Adjusted for certain items as set out in note 3. 
 
The accompanying notes form an integral part of this consolidated income 
statement. 
 
Condensed consolidated statement of comprehensive income 
 
                                                              Unaudited Unaudited 
                                                               26 weeks  26 weeks 
                                                                     to        to 
                                                                     24        25 
                                                              September September 
                                                                   2022      2021 
                                                                     £m        £m 
 
Profit for the period                                               1.4     513.3 
 
Items that will not be reclassified subsequently to 
profit or loss 
 
Actuarial losses on defined benefit pension schemes             (117.0)    (30.7) 
 
Deferred tax on actuarial losses on defined benefit                30.8       2.7 
pension schemes 
 
Impact of UK tax rate change on deferred tax on                       -      10.0 
actuarial losses 
 
                                                                 (86.2)    (18.0) 
 
Items that may be reclassified subsequently to profit or 
loss 
 
Hedging instrument movements                                     (22.8)      15.5 
 
Deferred tax on hedging instrument movements                      (4.1)     (3.9) 
 
Exchange differences on translation of foreign                    (4.8)       0.6 
operations - continuing operations 
 
Exchange differences on translation of foreign                     21.2     (1.7) 
operations - discontinued operations 
 
Reclassification of foreign currency translation reserve              -   (450.6) 
on discontinued operations 
 
                                                                 (10.5)   (440.1) 
 
Other comprehensive loss for the period                          (96.7)   (458.1) 
 
Total comprehensive (loss)/income for the period                 (95.3)      55.2 
 
Attributable to: 
 
Equity holders of the parent                                     (97.3)      52.6 
 
Non-controlling interests                                           2.0       2.6 
 
                                                                 (95.3)      55.2 
 
 
Total comprehensive (loss)/income for the period 
attributable to owners of FirstGroup Plc arises from 
 
Attributable to 
 
Continuing operations                                            (52.1)    (42.9) 
 
Discontinued operations                                          (43.2)      98.1 
 
                                                                 (95.3)      55.2 
 
The accompanying notes form an integral part of this consolidated statement of 
comprehensive income. 
 
Condensed consolidated balance sheet 
 
                                     Note                   Unaudited     Audited 
                                                         24 September    26 March 
                                                                 2022        2022 
                                                                   £m          £m 
 
Non-current assets 
 
Goodwill                                8                        93.5        93.5 
 
Other intangible assets                                          10.1        12.4 
 
Property, plant and equipment           9                     2,389.7     1,692.7 
 
Contingent consideration receivable    11                           -       106.1 
 
Deferred tax assets                                              65.8        36.1 
 
Retirement benefit assets              21                        67.6       203.0 
 
Derivative financial instruments       16                         5.2         4.2 
 
Financial asset                        16                       117.0       117.0 
 
Investments                                                       2.7         2.2 
 
                                                              2,751.6     2,267.2 
 
Current assets 
 
Inventories                                                      30.7        28.9 
 
Contingent consideration receivable    11                        78.2           - 
 
Trade and other receivables            11                       804.4       682.3 
 
Current tax assets                                                  -         3.1 
 
Cash and cash equivalents              20                       636.6       787.7 
 
Derivative financial instruments       16                        21.4        26.2 
 
Assets held for sale                   10                        46.0        38.5 
 
                                                              1,617.3     1,566.7 
 
Total assets                                                  4,368.9     3,833.9 
 
Current liabilities 
 
Trade and other payables                                      1,174.8     1,245.1 
 
Tax liabilities - Current tax                                     0.9           - 
liabilities 
 
                        - Other tax                              46.5        38.3 
and social security 
 
Borrowings                             14                       502.6       677.0 
 
Derivative financial instruments       16                        21.2           - 
 
Provisions                             17                       107.9       114.6 
 
Current liabilities                                           1,853.9     2,075.0 
 
Net current liabilities                                       (236.6)     (508.3) 
 
Non-current liabilities 
 
Borrowings                             14                     1,609.2       736.8 
 
Retirement benefit liabilities         21                         7.4        16.3 
 
Derivative financial instruments       16                         0.4           - 
 
Provisions                             17                       139.7       120.7 
 
                                                              1,756.7       873.8 
 
Total liabilities                                             3,610.6     2,948.8 
 
Net assets                                                      758.3       885.1 
 
 
Equity 
 
Share capital                          18                        37.5        37.5 
 
Share premium                                                   693.0       692.8 
 
Hedging reserve                                                (22.1)        19.3 
 
Other reserves                                                   22.4        22.4 
 
Own shares                                                     (13.3)       (9.0) 
 
Translation reserve                                             (7.6)      (24.0) 
 
Retained earnings                                                37.9       137.6 
 
Equity attributable to equity                                   747.8       876.6 
holders of the parent 
 
Non-controlling interests                                        10.5         8.5 
 
Total equity                                                    758.3       885.1 
 
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      £m       interests  equity 
                                 £m      £m      £m       £m     £m          £m       £m                      £m      £m 
 
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)/income for the             -       -       -        -      -           -    (0.6)   (0.6)             2.0     1.4 
period 
 
Other comprehensive (loss)/       -       -  (26.9)        -      -        16.4   (86.2)  (96.7)               -  (96.7) 
income for the period 
 
Total comprehensive income/       -       -  (26.9)        -      -        16.4   (86.8)  (97.3)             2.0  (95.3) 
(loss) for the period 
 
Shares issued                     -     0.2       -        -      -           -        -     0.2               -     0.2 
 
Hedging instrument                -       -  (14.5)        -      -           -        -  (14.5)               -  (14.5) 
movements transferred to 
balance sheet (net of tax) 
 
Movement in EBT and               -       -       -        -  (4.3)           -    (6.3)  (10.6)               -  (10.6) 
treasury shares 
 
Share-based payments              -       -       -        -      -           -      1.6     1.6               -     1.6 
 
Dividends paid                    -       -       -        -      -           -    (8.2)   (8.2)               -   (8.2) 
 
Balance at 24 September        37.5   693.0  (22.1)     22.4 (13.3)       (7.6)     37.9   747.8            10.5   758.3 
2022 (unaudited) 
 
Balance at 28 March 2021       61.1   689.6   (3.4)      4.6  (9.0)       524.7   (89.6) 1,178.0          (23.9) 1,154.1 
 
Income for the period             -       -       -        -      -           -    510.7   510.7             2.6   513.3 
 
Other comprehensive income/       -       -    11.6        -      -     (451.7)   (18.0) (458.1)               - (458.1) 
(loss) for the period 
 
Total comprehensive income/       -       -    11.6        -      -     (451.7)    492.7    52.6             2.6    55.2 
(loss) for the period 
 
Shares issued                     -     0.9       -        -      -           -        -     0.9               -     0.9 
 
Hedging instrument                -       -   (1.4)        -      -           -        -   (1.4)               -   (1.4) 
movements transferred to 
balance sheet (net of tax) 
 
Disposal of non-controlling       -       -       -        -      -           -        -       -           (0.7)   (0.7) 
interest in First 
Transit 
 
Movement in EBT and               -       -       -        -    2.6           -   (13.4)  (10.8)               -  (10.8) 
treasury shares 
 
Share-based payments              -       -       -        -      -           -      2.3     2.3               -     2.3 
 
Balance at 25 September        61.1   690.5     6.8      4.6  (6.4)        73.0    392.0 1,221.6          (22.0) 1,199.6 
2021 (unaudited) 
 
The accompanying notes form an integral part of this consolidated statement of 
changes in equity. 
 
Condensed consolidated cash flow statement 
 
                                                     Note   Unaudited   Unaudited 
                                                          26 weeks to 26 weeks to 
                                                                   24          25 
                                                            September   September 
                                                                 2022        2021 
                                                                   £m          £m 
 
Cash generated by operations                                    249.7       113.5 
 
Tax paid                                                        (0.4)      (12.2) 
 
Interest paid                                                  (35.0)     (156.0) 
 
Net cash from/(used in) operating activities           19       214.3      (54.7) 
 
Investing activities 
 
Interest received                                                 2.2         0.3 
 
Proceeds from disposal of property and plant and                 23.0         3.4 
equipment 
 
Purchases of property, plant and equipment                     (60.7)     (135.2) 
 
Purchases of software                                           (0.8)       (4.4) 
 
Net proceeds from disposal of subsidiaries (net of                2.0     2,293.4 
cash disposed)1 
 
Settlement of foreign exchange hedge                           (16.3)           - 
 
Acquisition of business                                             -       (2.7) 
 
Net cash (used in)/from investing activities                   (50.6)     2,154.8 
 
Financing activities 
Shares purchased by Employee Benefit Trust                     (10.7)      (17.4) 
 
Shares issued                                                     0.3         0.6 
 
External dividends paid                                         (8.2)           - 
 
Dividends paid to non-controlling shareholders                      -       (0.3) 
 
Repayments of CCFF                                                  -     (298.2) 
 
Repayment of bank facilities                                        -     (581.2) 
 
Repayment of bond issues                                            -     (675.4) 
 
Repayment of senior unsecured loans                                 -     (200.1) 
 
Proceeds from/(repayment of) asset backed financial              14.4      (65.8) 
liabilities 
 
Repayments of lease liabilities                               (271.6)     (312.5) 
 
Fees for finance facilities                                         -       (1.7) 
 
Net cash flow used in financing activities                    (275.8)   (2,152.0) 
 
Net decrease in cash and cash equivalents before              (112.1)      (51.9) 
foreign exchange movements 
 
Cash and cash equivalents at beginning of period                700.2     1,443.4 
 
Foreign exchange movements                                        8.6       (3.9) 
 
Cash and cash equivalents at the end of the period              596.7     1,387.6 
 
1        H1 2023 amount of £2.0m comprises cash consideration received of £7.2m 
less cash and cash equivalent sold of £5.2m. H1 2022 amount of £2,293.4m 
comprises cash consideration received of £2,377.3m less cash and cash 
equivalent sold of £83.9m. 
 
Cash and cash equivalents are included within current assets on the 
consolidated balance sheet. Cash and cash equivalents includes ring-fenced cash 
of £339.0m in H1 2023 (full year 2022: £468.1m). 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 and ERMAs. Non Rail 
ring-fenced cash includes three elements: (1) loss escrow funds maintained by 
various third-party administrators, the purpose of which is to provide a source 
of funds for use by the administrators for payment of the self-insurance 
liability for losses and loss adjustment expenses in accordance with agreements 
between the administrators and the Business; (2) balances within former First 
Transit subsidiaries which were retained by the Group following the sale of 
First Transit, where those subsidiaries act as a disbursement agent on the 
behalf of their customers and the cash is only allowed to be used to settle 
customer liabilities; (3) funds in escrow for upfront deposit received relating 
to the sale of Greyhound property portfolio. 
 
Reconciliation to cash flow statement                Note   Unaudited     Audited 
                                                                   24    26 March 
                                                            September        2022 
                                                                 2022          £m 
                                                                   £m 
 
Cash and cash equivalents - Balance Sheet              20       636.6       787.7 
 
Bank overdraft                                         20      (39.9)      (87.5) 
 
Balances per consolidated cash flow statement                   596.7       700.2 
 
Note to the condensed consolidated cash flow statement - reconciliation of net 
cash to movement in net debt 
 
                                                     Note   Unaudited   Unaudited 
                                                          26 weeks to 26 weeks to 
                                                                   24          25 
                                                            September   September 
                                                                 2022        2021 
                                                                   £m          £m 
 
Net decrease in cash and cash equivalents in period           (112.1)      (51.9) 
 
Decrease in debt excluding leases                                   -     1,756.6 
 
Adjusted cash flow                                            (112.1)     1,704.7 
 
Payment of lease liabilities                                    276.5       378.3 
 
(Inception)/termination of leases                           (1,029.0)       172.4 
 
Fees capitalised against bank facilities and bond                   -       (1.7) 
issues 
 
Foreign exchange movements                                        8.6       (7.9) 
 
Other non-cash movements                                            -       145.8 
 
Movement in net debt in period                                (856.0)     2,391.6 
 
Net debt at beginning of period                               (619.0)   (2,625.8) 
 
Net debt at end of period                              20   (1,475.0)     (234.2) 
 
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 26 weeks to 24 September 2022 include the 
results and financial position of the First Rail division for the period ended 
17 September 2022 and the results and financial position for the other 
divisions for the 26 weeks ended 24 September 2022. The comparative figures for 
the 26 weeks to 25 September 2021 include the results of the First Rail 
division for the period ended 18 September 2021 and the results of the other 
divisions for the 26 weeks ended 25 September 2021. The comparative figures for 
the 52 weeks ended 26 March 2022 include the financial position of the First 
Rail division at 31 March 2022 and the financial position of the other 
divisions at 26 March 2022. 
 
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 
26 March 2022 were approved by the board of directors on 14 June 2022 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. The 
half yearly results have been reviewed, not audited. 
 
These condensed consolidated interim financial statements for the half year 
reporting period for the 26 weeks to 24 September 2022 has 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 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 26 March 2022, 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 other 
intangible asset amortisation charges and certain other items. 
 
These results are unaudited but have been reviewed by the auditor. The 
comparative figures for the 26 weeks to 25 September 2021 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 2024, 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. 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. 
 
Update since the FY22 results 
 
  * The contractual arrangements in First Rail have continued to develop with 
    the award of a six-year National Rail Contract to GWR in June 2022. In 
    October an extension of the current contract arrangements was agreed for 
    the West Coast Partnership to March 2023, and discussions are ongoing with 
    DfT regarding the longer-term National Rail Contract for the West Coast 
    Partnership. 
  * The Group's open access operations Lumo and Hull Trains were profitable in 
    the period, a significant swing from losses incurred in the prior financial 
    year in these operations, which reflected the start-up of Lumo and periodic 
    pandemic-related closures of Hull Trains. 
  * In the First Bus division, good progress has been made in the period with 
    several of the key drivers that the Group believes will support the 
    improvement in Bus margins once the sector transitions to a more commercial 
    model, including yield and pricing actions, network realignment and the 
    sale of First Scotland East. 
  * Commercial passenger volume levels in First Bus have increased in the 
    period although concessionary volumes continue to recover more slowly. In 
    the near term the tapering of concession funding, the extension of the Bus 
    Recovery Grant funding into H2 2023, inflation and continued driver 
    shortages will limit the scope for significant margin progress. 
  * The Group has a £300m sustainability-linked Revolving Credit Facility 
    ('RCF') with a group of its relationship banks. This committed RCF remains 
    undrawn. In June 2022, the Group exercised its option to extend the 
    maturity of the facility for a further year to August 2025. 
  * Management has demonstrated the flexibility of our businesses to generate 
    cash flows well within required debt facility and covenant levels since the 
    pandemic struck. 
 
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 pressures. 
 
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 2022 year end. The base case assumes a 
gradual recovery in passenger volumes in FY23 and FY24 as activity reaches its 
normalised post-pandemic levels, although passenger volumes remain below 
pre-pandemic levels in the going concern assessment period. The macro 
projections in the updated base case assume that the UK operates in a 
recovering, post-pandemic economy. 
 
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 FY23 and through FY24 and further inflationary 
cost pressures. In First Rail, the downside case assumes reduced TOC 
performance fee awards, lower revenues in Hull Trains and East Coast Open 
Access, and the risk of losing one National Rail Contract. The downside case 
also assumed a delay in realising proceeds from the Greyhound property 
portfolio until after the going concern period. 
 
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 earnout consideration to be around $85m (£78.2m). 
In the first half of the year this gives rise to a non-cash, adjusting charge 
of £27.9m relative to the carrying value of the earnout of £106.1m at 26 March 
2022. 
 
The contractual arrangements in First Rail have continued to develop with the 
award of a six-year National Rail Contract to GWR in June 2022. In October an 
extension of the current contract arrangements was agreed for the West Coast 
Partnership to March 2023, and discussions are ongoing with DfT regarding the 
longer-term National Rail Contract for the West Coast Partnership. 
 
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 26 March 2022, with the exception of 
the First Transit earnout where the estimated valuation is now underpinned by 
EQT Infrastructure's agreement to sell First Transit to Transdev North America, 
Inc. 
 
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 9 November 2022. 
 
2              Revenue 
 
Passenger revenue in First Bus was £322.3m (H1 2022: £266.3m) as passenger 
volumes continued their post-pandemic recovery. First Rail Passenger revenue 
was £1,290.9m (H1 2022: £699.2m). 
 
The principal direct fiscal support recognised during the period comprised £ 
247.1m (H1 2022: £920.2m) of EMA/ERMA funding in First Rail and £43.7m (H1 
2022: £127.9m) of BRG, NSG+ and BES 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 2022 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. The current 
BRG scheme in England, which has been in place since September 2021, has 
recently been extended by the DfT to run through to the end of March 2023 
providing a fixed monthly payment to operators to offset some of their 
commercial revenue losses. The Scottish NSG+ scheme provides operators with a 
fixed payment per km operated. In Wales the BES scheme which funds operators to 
a pre-agreed margin has been extended again and will now continue until March 
2023. 
 
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 full period 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 for the full period. On 16 October 2022, 
    the existing arrangement was extended by a further six months by the DfT to 
    March 2023 
  * NRCs for SWR and TPE for the full period 
 
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. 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 £5.0m would not normally be considered as adjusting items unless 
part of a larger strategic project, but items which distort year-on-year 
comparisons that exceed this amount could potentially be classified as an 
adjusting item and are assessed on a case by case basis. Such potential 
adjusting other items include: restructuring and reorganisation costs; property 
gains or losses; aged legal and self-insurance claims; movements on insurance 
discount rates; onerous contract provisions; 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 profit to                    26 weeks to  26 weeks to 
adjusted operating profit on a continuing               24 September 25 September 
basis                                                           2022         2021 
                                                                  £m           £m 
 
Operating profit on a continuing basis                          62.1         52.2 
 
Adjustments for: 
 
Loss on sale of Scotland East                                    3.7            - 
 
Strategic items                                                  1.9            - 
 
Greyhound Canada                                               (1.6)          3.6 
 
Rail termination sums net of impairment                            -        (4.0) 
reversal 
 
Total adjusting operating profit items on                        4.0        (0.4) 
a continuing basis 
 
Adjusted operating profit on a continuing                       66.1         51.8 
basis 
 
 
 
Reconciliation of operating (loss)/profit                26 weeks to  26 weeks to 
to adjusted operating (loss)/profit on a                24 September 25 September 
discontinued basis                                              2022         2021 
                                                                  £m           £m 
 
Operating (loss)/profit from discontinued                     (28.6)        592.3 
operations including gains on sale of 
First Student and First Transit 
 
Less gain on sale of First Student and                             -      (479.4) 
First Transit 
 
Operating (loss)/profit from discontinued                     (28.6)        112.9 
operations 
 
Adjustments for: 
 
Transit earnout charge                                          27.9 
 
Gain on sale of Greyhound properties                           (7.7)            - 
 
Other intangible asset amortisation                                -          0.4 
charges 
 
Other costs associated with the disposal                           -         31.5 
of First Student and First Transit 
 
Partial reversal of prior year impairments                         -       (55.4) 
of Greyhound 
 
Professional fees relating to Greyhound                            -          2.9 
 
Employment taxes relating to First Student                         -          6.6 
and First Transit 
 
North America insurance provisions                                 -         22.4 
 
Total adjusting operating profit                                20.2          8.4 
adjustments from discontinued operations 
 
Adjusted operating (loss)/profit from                          (8.4)        121.3 
discontinued operations 
 
 
 
Reconciliation of profit before tax to                   26 weeks to  26 weeks to 
adjusted profit before tax                              24 September 25 September 
                                                                2022         2021 
                                                                  £m           £m 
 
Profit before tax (including discontinued                        8.7        516.5 
operations)1 
 
Adjusting operating profit items -                               4.0        (0.4) 
continuing operations 
 
Adjusting operating profit items -                              20.2          8.4 
discontinued operations 
 
Gain on sale of First Student and First                            -      (479.4) 
Transit 
 
Adjusting operating profit items - total                        24.2      (471.4) 
operations 
 
Finance costs adjustment - continuing                              -         58.6 
operations 
 
Adjusted profit before tax including                            32.9        103.7 
discontinued operations 
 
Adjusted tax charge                                            (6.1)       (21.6) 
 
Non-controlling interests2                                     (2.0)        (2.6) 
 
Adjusted earnings including discontinued                        24.8         79.5 
operations 
 
 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 restructuring 
 
As part of the restructuring of the Bus division to transition to a more 
commercial model, the Group completed the sale of its First Scotland East 
business in September 2022, realising a loss on disposal of £(3.7)m. In line 
with this transition plan, the Group also incurred costs of £(0.6)m relating to 
the reorganisation of its Bus management structure. 
 
Other restructuring costs 
 
Restructuring costs of £(1.3)m were incurred in relation to the Group's central 
functions, as part of its ongoing cost efficiency initiatives. 
 
Greyhound Canada 
 
A provision relating to the continued winding down of Greyhound Canada 
operations was released in the period. 
 
3              Reconciliation to non-GAAP measures and performance (continued) 
 
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 now estimates 
its earnout consideration to be around $85m (£78.2m). This gives rise to a 
non-cash adjusting charge of £27.9m relative to the carrying value of the 
earnout of £106.1m at 26 March 2022. 
 
Greyhound US strategic items 
 
A gain of £7.7m arose upon disposal of Greyhound US property during the first 
half of the year. 
 
Group adjusted attributable EBITDA and operating profit 
 
First Bus EBITDA comprises: 
 
                                                        26 weeks to  26 weeks to 
                                                                 24 25 September 
                                                          September         2021 
                                                               2022           £m 
                                                                 £m 
 
Pre-IFRS16 EBITDA                                              42.8         47.6 
 
IFRS16 adjustments1                                             8.2          7.9 
 
First Bus adjusted EBITDA per segmental                        51.0         55.5 
results (note 4) 
 
First Rail EBITDA comprises: 
 
Non-management fees based TOCs                                 12.6        (7.4) 
 
Group's share of management fee income                         19.1         17.5 
available for dividends 
 
Depreciation relating to contracted TOCs                          -          2.9 
 
Pre-EMA/ERMA and other adjustments                                -          4.1 
 
Minority interest                                               2.0          2.8 
 
Tax at 19%                                                      4.9          4.7 
 
IFRS16 adjustments1                                           267.0        279.6 
 
First Rail adjusted EBITDA per segmental                      305.6        304.2 
results table (note 4) 
 
Group items EBITDA comprises: 
 
Pre-IFRS16 EBITDA                                             (9.6)       (13.0) 
 
IFRS16 adjustments1                                             0.9          0.8 
 
Group items adjusted EBITDA per segmental                     (8.7)       (12.2) 
results table (note 4) 
 
First Rail adjusted operating profit comprises: 
 
Non-management fees based TOCs                                 12.0        (7.6) 
 
Group's share of management fee income                         19.1         17.5 
available for dividends 
 
Pre-EMA/ERMA and other adjustments                                -          4.1 
 
Minority interest                                               2.0          2.8 
 
Tax at 19%                                                      4.9          4.7 
 
IFRS16 adjustments1                                            17.4         17.7 
 
First Rail adjusted operating profit per                       55.4         39.2 
segmental results table (note 4) 
 
1     IFRS16 adjustments to EBITDA principally reflect the add back of 
operating lease rental costs charged to the income statement before the 
adoption of IFRS16. IFRS16 adjustments to operating profit reflect operating 
lease rental costs less depreciation charges on Right of Use Assets. 
 
4              Business segments information 
 
For management purposes, the Group was organised into five operating divisions 
- First Bus, First Rail, First Student, First Transit and Greyhound. First 
Student and First Transit were categorised as Discontinued Operations at 27 
March 2021 and the sale of these completed on 21 July 2021. Greyhound US and 
Mexico were categorised as Discontinued Operations at 25 September 2021 and the 
sale of this completed on 21 October 2021. The properties related to the 
retained Greyhound US business have been classified as held for sale and have 
therefore been treated as discontinued. Greyhound Canada was retained and is 
categorised as a Continuing Operation however, trading operations have ceased. 
The divisions are managed separately in line with the differing services that 
they provide and the geographical markets which they operate in. There is a 
clear distinction between each division and no judgement is required to 
identify each reportable segment. 
 
The segment results for the 26 weeks to 24 September 2022 are as follows: 
 
                                    Continuing Operations              Discontinued 
                                                                         Operations 
 
                            First   First Greyhound  Group   Total Greyhound  Group   Total 
                              Bus    Rail        £m Items1      £m        £m Items1      £m 
                               £m      £m               £m                       £m 
 
Passenger revenue           322.3 1,290.9         -      - 1,613.2         -      - 1,613.2 
 
Contract revenue             54.8       -         -      -    54.8         -      -    54.8 
 
Rail franchise subsidy          -   361.2         -      -   361.2         -      -   361.2 
receipts 
 
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 EBITDA2             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 intangible asset          -       -         -      -       -         -      -       - 
amortisation charges 
 
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 24 September 2022          Total assets         Total   Net assets/ 
                                                      £m   liabilities (liabilities) 
                                                                    £m            £m 
 
Greyhound retained                                 128.4       (150.0)        (21.6) 
 
First Bus                                          720.6       (252.6)         468.0 
 
First Rail                                       2,483.8       (982.8)       1,501.0 
 
                                                 3,332.8     (1,385.4)       1,947.4 
 
Group items                                        287.7        (66.0)         221.7 
 
Borrowings and cash                                636.6     (2,111.8)     (1,475.2) 
 
Taxation                                            65.8        (47.4)          18.4 
 
Total                                                        (3,610.6)         712.3 
                                                 4,322.9 
 
Greyhound (held for sale)1                          46.0             -          46.0 
 
Grand total                                      4,368.9     (3,610.6)         758.3 
 
1     Greyhound US and Canada land and properties are classified as held for 
sale at 24 September 2022 and shown as such in the Condensed Consolidated 
Balance Sheet . 
 
The segment results for the 26 weeks to 25 September 2021 are as follows: 
 
                            Continuing Operations             Discontinued Operations 
 
                    First   First Grey-   Group Continuing   First   First  Grey-  Group   Total 
                      Bus    Rail hound  Items1 Operations Student Transit  hound Items1      £m 
                       £m      £m    £m      £m         £m      £m      £m     £m     £m 
 
Passenger revenue   266.3   699.2     -       -      965.5       -       -  132.6      - 1,098.1 
 
Contract revenue     32.9       -     -       -       32.9   450.3   203.2      -      -   686.4 
 
Charter/private         -       -     -       -          -    21.8     0.1    0.8      -    22.7 
hire 
 
Rail franchise          -   948.4     -       -      948.4       -       -      -      -   948.4 
subsidy receipts 
 
Other                93.3    99.0     -       -      192.3     7.4    96.4   58.0      -   354.1 
 
Revenue             392.5 1,746.6     -       -    2,139.1   479.5   299.7  191.4      - 3,109.7 
 
Adjusted EBITDA2     55.5   304.2 (0.2)  (12.2)      347.3    88.2    20.7   22.7      -   478.9 
 
Depreciation       (30.3) (302.5) (0.2)   (1.3)    (334.3)       -       - (10.5)      - (344.8) 
 
Software            (0.7)   (0.8)     -   (0.3)      (1.8)       -       -  (0.4)      -   (2.2) 
amortisation 
 
Capital grant         2.3    38.3     -       -       40.6       -       -    0.6      -    41.2 
amortisation 
 
Segment results      26.8    39.2 (0.4)  (13.8)       51.8    88.2    20.7   12.4      -   173.1 
 
Other intangible        -       -     -       -          -       -       -  (0.4)      -   (0.4) 
asset amortisation 
charges 
 
Other adjustments       -     4.0 (3.6)       -        0.4  (14.8)   (6.5)   44.0  448.7   471.8 
(note 3) 
 
Operating profit/    26.8    43.2 (4.0)  (13.8)       52.2    73.4    14.2   56.0  448.7   644.5 
(loss) 
 
Investment income       -     0.2     -     0.1        0.3       -       -      -      -     0.3 
 
Finance costs3      (1.3)  (20.8) (0.7)  (94.2)    (117.0)   (7.5)   (0.7)  (3.1)      - (128.3) 
 
Profit/(loss)        25.5    22.6 (4.7) (107.9)     (64.5)    65.9    13.5   52.9  448.7   516.5 
before tax 
 
Tax                                                                                        (3.2) 
 
Profit after tax                                                                           513.3 
 
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. 
 
3     Finance costs under Group items include £58.6m of adjusting items for 
total make-whole costs (bonds and facilities) and for the write off of 
unamortised bridge, bond and facility costs (see note 3). 
 
Balance sheet at 26 March 2022            Total assets         Total   Net assets/ 
                                                    £m   liabilities (liabilities) 
                                                                  £m            £m 
 
Greyhound retained                               132.2       (137.0)         (4.8) 
 
First Bus                                        806.0       (179.6)         626.4 
 
First Rail                                     1,659.9     (1,062.6)         597.3 
 
                                               2,598.1     (1,379.2)       1,218.9 
 
Group items                                      370.4       (124.6)         245.8 
 
Borrowings and cash                              787.7     (1,406.7)       (619.0) 
 
Taxation                                          39.2        (38.3)           0.9 
 
Total                                          3,795.4     (2,948.8)         846.6 
 
Greyhound (held for sale)1                        38.5             -          38.5 
 
Grand total                                    3,833.9     (2.948.8)         885.1 
 
1     Greyhound US and Canada land and properties are classified as held for 
sale at 26 March 2022 and shown as such in the Condensed Consolidated Balance 
Sheet. 
 
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 
 
                                                        26 weeks to  26 weeks to 
                                                                 24 25 September 
                                                          September         2021 
                                                               2022           £m 
                                                                 £m 
 
Investment income 
 
Bank interest receivable                                      (2.2)        (0.3) 
 
Finance costs 
 
Bonds                                                           6.9         15.4 
 
Bank interest and facility fees                                 1.6         14.9 
 
Total make-whole costs (bonds and                                 -         50.0 
facilities) 
 
Write off of unamortised bridge, bond and                         -          8.6 
facility costs 
 
Senior unsecured loan notes                                       -          3.2 
 
Finance charges payable in respect of lease                    20.0         22.9 
liabilities 
 
Finance charges payable in respect of asset                     0.7          1.7 
backed financial liabilities 
 
Interest on long term provisions                                0.5          3.4 
 
Interest on pensions                                          (2.8)          5.8 
 
Interest - other                                                0.1          2.4 
 
Total finance costs (including discontinued                    27.0        128.3 
operations) 
 
Total finance costs                                            27.0        128.3 
 
Investment income                                             (2.2)        (0.3) 
 
Net finance costs (including discontinued                      24.8        128.0 
operations) 
 
Split: 
 
Adjusted net finance costs                                     24.8         69.4 
 
Other adjustments (note 3)                                        -         58.6 
 
                                                               24.8        128.0 
 
Investment income relating to discontinued operations was £(0.4)m (H1 2022: £ 
nil) and finance costs relating to discontinued operations were £0.1m (H1 2022: 
£11.3m). 
 
6              Tax on profit on ordinary activities 
 
                                                        26 weeks to  26 weeks to 
                                                                 24 25 September 
                                                          September         2021 
                                                               2022           £m 
                                                                 £m 
 
Current tax charge                                              0.5          1.8 
 
Deferred tax charge                                             6.8          1.4 
 
Total tax charge (including discontinued                        7.3          3.2 
operations) 
 
 
 
Tax charge/(credit) attributable to: 
 
Profit/(loss) from continuing operations                        5.1       (26.4) 
 
Profit from discontinued operations                             2.2         29.6 
 
The tax effect of the adjustments disclosed in note 3 was a charge of £2.0m in 
H1 2023 (H1 2022: credit of £24.3m). In addition, there were further 
adjustments to brought forward tax balances giving rise to a net credit of £ 
0.8m (H1 2022: charge of £5.9m). 
 
7              Earnings per share (EPS) 
 
EPS is calculated by dividing the (loss)/profit attributable to equity 
shareholders of £(0.6)m in H1 2023 (H1 2022: £510.7m) by the weighted average 
number of ordinary shares in issue of 739.8m (H1 2022: 1,203.4m). 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. 
 
                                                        24 September 25 September 
                                                                2022         2021 
                                                              number       number 
                                                                   m            m 
 
Weighted average number of shares used in                      739.8      1,203.4 
basic calculation 
 
Executive share options1                                        24.5            - 
 
Weighted average number of shares used in                      764.3      1,203.4 
the diluted calculation 
 
1     For the period ended 25 September 2021 the loss from continuing 
operations made the executive share options anti-dilutive and therefore the 
options were not included in this period. 
 
7              Earnings per share (EPS) (continued) 
 
The adjusted EPS is intended to highlight the recurring results of the Group 
before amortisation charges and certain other adjustments as set out in note 3. 
A reconciliation is set out below: 
 
                                                        26 weeks to    26 weeks to 
                                                       24 September   25 September 
                                                               2022           2021 
 
                                                          £m    EPS      £m    EPS 
                                                                (p)            (p) 
 
Basic (loss)/profit / EPS                              (0.6)  (0.1)   510.7   42.4 
 
Amortisation charges (note 3)                              -      -     0.4      - 
 
Finance cost adjustments (note 3)                          -      -    58.6    4.9 
 
Other adjustments (note 3)                              24.2    3.3 (471.8) (39.2) 
 
Tax effect of above adjustments                          2.0    0.3  (24.3)  (2.0) 
 
Other adjustments to deferred tax                      (0.8)  (0.1)     5.9    0.5 
assets 
 
Adjusted profit and EPS attributable                    24.8    3.4    79.5    6.6 
to the ordinary equity holders of the 
company 
 
Adjusted (loss)/profit from                            (8.1)  (1.0)    84.4    7.0 
discontinued operations 
 
Adjusted profit/(loss) EPS from                         32.9    4.4   (4.9)  (0.4) 
continuing operations 
 
 
 
                                                        26 weeks to    26 weeks to 
                                                       24 September   25 September 
                                                               2022           2021 
                                                              pence          pence 
 
Diluted EPS                                                   (0.1)           42.4 
 
Adjusted diluted EPS                                            3.2            6.6 
 
8              Goodwill and impairment of assets 
 
                                                                              £m 
 
Cost 
 
At 27 March 2022                                                            93.5 
 
At 24 September 2022                                                        93.5 
 
Accumulated impairment losses 
At 27 March 2022                                                               - 
 
At 24 September 2022                                                           - 
 
Carrying amount 
 
At 24 September 2022                                                        93.5 
 
At 26 March 2022                                                            93.5 
 
Disclosures including goodwill by cash generating unit (CGU), details of 
impairment testing and sensitivities thereon are set out on pages 185 to 186 of 
the 2022 Annual Report. 
 
First Bus 
 
At 24 September 2022 the First Bus impairment testing was revisited and it was 
concluded that there are no indicators of impairment since March 2022. 
Therefore no adjustment to the carrying value of First Bus is required at 24 
September 2022. 
 
Hull Trains 
 
At 24 September 2022 the Hull Trains impairment testing was revisited and it 
was concluded that there are no indicators of impairment since March 2022. 
Therefore no adjustment to the carrying value of Hull Trains is required at 24 
September 2022. 
 
Lumo 
 
At 24 September 2022 the Lumo operation's impairment testing was revisited and 
it was concluded that there are no indicators of impairment since March 2022. 
Therefore no adjustment to the carrying value of Lumo is required at 24 
September 2022. 
 
9              Property, plant and equipment 
 
Owned assets 
 
                                      Land and   Passenger Other plant       Total 
                                     buildings    carrying         and          £m 
                                            £m     vehicle   equipment 
                                                     fleet          £m 
                                                        £m 
 
Cost 
 
At 27 March 2022                         203.6       799.1       662.8     1,665.5 
 
Additions                                    -        31.4        30.2        61.6 
 
Disposals                                (7.9)      (93.7)       (4.0)     (105.6) 
 
Transfers                                    -         2.3       (2.3)           - 
 
At 24 September 2022                     195.7       739.1       686.7     1,621.5 
 
Accumulated depreciation and 
impairment 
 
At 27 March 2022                          76.9       484.2       448.0     1,009.1 
 
Charge for period                          1.9        22.8        62.0        86.7 
 
Disposals                                (4.5)      (68.6)       (2.8)      (75.9) 
 
At 24 September 2022                      74.3       438.4       507.2     1,019.9 
 
Carrying amount 
 
At 24 September 2022                     121.4       300.7       179.5       601.6 
 
At 26 March 2022                         126.7       314.9       214.8       656.4 
 
9              Property, plant and equipment (continued) 
 
Right of use assets 
 
                            Rolling    Land and   Passenger Other plant       Total 
                              stock   buildings    carrying         and          £m 
                                 £m          £m     vehicle   equipment 
                                                      fleet          £m 
                                                         £m 
 
Cost 
 
At 27 March 2022            2,585.6        55.9        60.2         7.5     2,709.2 
 
Additions and               1,002.6        13.4       (0.3)         0.4     1,016.1 
modifications 
 
Disposals                     (4.0)       (0.6)       (6.5)       (0.3)      (11.4) 
 
Foreign exchange                  -         0.5           -           -         0.5 
movements 
 
At 24 September 2022        3,584.2        69.2        53.4         7.6     3,714.4 
 
Accumulated 
depreciation and 
impairment 
 
At 27 March 2022            1,609.7        22.5        35.6         5.1     1,672.9 
 
Charge for period             246.8         4.0         6.3         0.8       257.9 
 
Disposals                     (0.8)       (0.2)       (3.9)       (0.1)       (5.0) 
 
Foreign exchange                  -         0.5           -           -         0.5 
movements 
 
At 24 September 2022        1,855.7        26.8        38.0         5.8     1,926.3 
 
Carrying amount 
 
At 24 September 2022        1,728.5        42.4        15.4         1.8     1,788.1 
 
At 26 March 2022              975.9        33.4        24.6         2.4     1,036.3 
 
The discounted lease liability relating to the right of use assets included 
above is shown in note 14. 
 
£990.0m of additions relate to the extension of leases as a result of signing 
of the National Rail Contract in Great Western Railway. As at 24 September 2022 
the Group had entered into contractual capital commitments amounting to £91.6m 
principally representing buses ordered in the United Kingdom. 
 
                            Rolling    Land and   Passenger Other plant       Total 
                              stock   buildings    carrying         and          £m 
                                 £m          £m     vehicle   equipment 
                                                      fleet          £m 
                                                         £m 
 
Carrying amount 
 
At 24 September 2022        1,728.5       163.8       316.1       181.3     2,389.7 
 
At 26 March 2022              975.9       160.1       339.5       217.2     1,692.7 
 
The maturity analysis of lease liabilities is presented in note 15. 
 
Amounts recognised in income statement                    26 weeks to 26 weeks to 
                                                                   24          25 
                                                            September   September 
                                                                 2022        2021 
                                                                   £m          £m 
 
Depreciation expense on right of use assets                     257.9       275.5 
 
Interest expense on lease liabilities                            20.0        24.6 
 
Expense relating to short-term leases                               -         0.3 
 
Expense relating to leases of low value assets                    1.5         1.7 
 
                                                                279.4       302.1 
 
10           Assets held for sale 
 
                                                                   24    26 March 
                                                            September        2022 
                                                                 2022          £m 
                                                                   £m 
 
Assets held for sale                                             46.0        38.5 
 
Assets held for sale relate to properties in discontinued Greyhound US of £ 
44.8m and properties in continuing Greyhound Canada of £1.2m. 
 
11           Trade and other receivables 
 
                                                                   24    26 March 
                                                            September        2022 
                                                                 2022          £m 
                                                                   £m 
 
Amounts due within one year (from discontinued 
operations) 
 
Contingent consideration receivable                              78.2           - 
 
Amounts due after more than one year (from 
discontinued operations) 
 
Contingent consideration receivable                                 -       106.1 
 
 
 
Amounts due within one year (from continuing                       24    26 March 
operations)                                                 September        2022 
                                                                 2022          £m 
                                                                   £m 
 
Trade receivables                                               300.9       292.1 
 
Loss allowance                                                 (20.6)      (15.2) 
 
Trade receivables net                                           280.3       276.9 
 
Other receivables                                               212.9       194.7 
 
Amounts recoverable on contracts                                 53.4         3.1 
 
Prepayments                                                      71.4        69.4 
 
Accrued income                                                  186.4       138.2 
 
                                                                804.4       682.3 
 
12           Business disposals 
 
First Scotland East Limited 
 
On 19 September 2022, the Group completed the divestment of its subsidiary, 
First Scotland East Limited, to McGill's Bus Service Limited, for a total 
consideration of £11.0m. Of the total consideration, £7.2m of cash was received 
at completion, with the remaining £5.0m of cash to be received over the next 
three years. The cost of the disposal was £2.5m, including transaction fees, 
recognition of insurance indemnification and PCV warranty provisions, offset by 
a working capital adjustment of £1.3m. There are no conditions attached to the 
deferred consideration. 
 
Net assets disposed were £14.7m, including £5.2m of cash, giving rise to a loss 
before tax on disposal of £3.7m. The loss has been recognised as an adjusting 
item. First Scotland East Limited was included within the Bus segment. 
 
13           Discontinued operations 
 
First Student and First Transit 
 
The sale of First Student and First Transit was approved by a shareholder 
majority on 27 May 2021 and was reported as a discontinued operation in the 
financial statements for the 52 weeks ended 27 March 2022 for the period to the 
sale completion on 21 July 2021. Proceeds net of direct transaction costs/fees 
were £2,323.3m excluding earnout. Financial information relating to the 
discontinued operation for the period to the date of disposal (21 July 2021) 
was presented in the Group's FY22 Annual Report. 
 
As part of the disposal transaction, FirstGroup are entitled to an 'earnout' 
consideration of up to $290m (c.£220m) relating to First Transit. The earnout 
is for a period of three years from 21 July 2021 and is calculated as a 
percentage of the Realised Equity Value. 
 
On 26 October 2022, EQT Infrastructure announced its agreement to sell First 
Transit to Transdev North America, Inc. As a result of this agreement, the 
Group estimates the earnout consideration to be around $85m (£78.2m). In the 
first half of the year this gives rise to a non-cash, adjusting charge of £ 
27.9m relative to the carrying value of the earnout of £106.1m at 26 March 
2022. 
 
At 26 March 2022, the earnout was fair valued using stochastic modelling of 
discounted cash flows and assumed EQT did not dispose of the business by the 
third anniversary (21 July 2024). Fair value at 26 March 2022 was $140m (£ 
106.1m). 
 
Greyhound 
 
The disposal of Greyhound Lines, Inc to a wholly-owned subsidiary of 
FlixMobility GmbH was announced and completed on 21 October 2021. Greyhound US 
was therefore reported as a discontinued operation for the period to the sale 
completion in the financial statements for the 52 weeks to 26 March 2022. The 
properties relating to the retained Greyhound US business were classified as 
held for sale and therefore in FY23 continue to be treated as discontinued as 
it is anticipated that these properties will be disposed of in 2022 as part of 
a single plan to exit the Greyhound business. Financial information relating to 
the discontinued operation for the period to the date of disposal (21 October 
2021) was presented in the Group's FY22 Annual Report. 
 
14           Borrowings 
 
                                                        24 September     26 March 
                                                                2022         2022 
                                                                  £m           £m 
 
On demand or within 1 year 
 
Leases (note 15)1                                              445.1        573.4 
 
Asset backed financial liabilities (note                        17.4          9.0 
15)2 
 
Bank overdraft                                                  39.9         87.5 
 
Bond 6.875% (repayable 2024)3                                    0.2          7.1 
 
Total current liabilities                                      502.6        677.0 
 
Within 1 - 2 years 
 
Leases (note 15)1                                              336.0        167.8 
 
Asset backed financial liabilities (note                         8.3         15.7 
15)2 
 
Bond 6.875% (repayable 2024)                                   199.9            - 
 
Loan notes                                                       0.6          0.6 
 
                                                               544.8        184.1 
 
Within 2 - 5 years 
 
Leases (note 15)1                                              836.6        294.4 
 
Asset backed financial liabilities (note                        14.1         10.5 
15)2 
 
Bond 6.875% (repayable 2024)                                       -        199.9 
 
                                                               850.7        504.8 
 
More than 5 years 
 
Leases (note 15)1                                              203.6         47.6 
 
Asset backed financial liabilities (note                        10.1          0.3 
15)2 
 
                                                               213.7         47.9 
 
Total non-current liabilities                                1,609.2        736.8 
 
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 15. 
 
2     The maturity analysis of asset backed financial liabilities is presented 
in note 15. 
 
3     Includes accrued interest only. 
 
15           Lease liabilities and asset backed financial liabilities 
 
The Group had the following lease liabilities at the balance sheet dates: 
 
Lease liabilities                                       24 September     26 March 
                                                                2022         2022 
                                                                  £m           £m 
 
Due in less than one year                                      503.4        593.0 
 
Due in more than one year but not more                         374.0        179.4 
than two years 
 
Due in more than two years but not more                        893.8        304.4 
than five years 
 
Due in more than five years                                    217.3         59.8 
 
                                                             1,988.5      1,136.6 
 
Less future financing charges                                (167.2)       (53.4) 
 
                                                             1,821.3      1,083.2 
 
Comprising: 
 
Lease liabilities - Road                                        40.4         52.1 
 
Lease liabilities - Rail                                     1,780.9      1,031.1 
 
The Group had the following asset backed financial liabilities at the balance 
sheet dates: 
Asset backed financial liabilities                      24 September     26 March 
                                                                2022         2022 
                                                                  £m           £m 
 
Due in less than one year                                       18.0          9.3 
 
Due in more than one year but not more                           8.9         16.6 
than two years 
 
Due in more than two years but not more                         16.1         11.9 
than five years 
 
Due in more than five years                                     12.5          0.5 
 
                                                                55.5         38.3 
 
Less future financing charges                                  (5.6)        (2.8) 
 
                                                                49.9         35.5 
 
Comprising: 
 
Asset backed financial liabilities - Road                       49.9         35.5 
 
Asset backed financial liabilities - Rail                          -            - 
 
16           Financial instruments 
 
Non-derivative financial instruments 
 
                                                        24 September     26 March 
                                                                2022         2022 
                                                                  £m           £m 
 
Total non-derivatives 
 
Total non-current assets                                       117.0        117.0 
 
Total assets                                                   117.0        117.0 
 
Certain pension partnership structures were implemented during the previous 
financial year. These structures involved the creation of special purpose 
vehicles (SPVs) to hold cash to fund the Bus and Group pension schemes if 
required based on a designated funding mechanism. The amounts paid into the Bus 
and Group SPVs during the previous financial year were £95m and £22m 
respectively. Management have concluded that these amounts represent financial 
assets under IAS 32. 
 
Derivative financial instruments 
 
                                                        24 September     26 March 
                                                                2022         2022 
                                                                  £m           £m 
 
Derivatives designated and effective as 
hedging instruments carried at fair value 
 
Non-current assets 
 
Fuel derivatives (cash flow hedge)                               2.2          4.0 
 
Currency forwards (cash flow hedge)                              3.0          0.2 
 
                                                                 5.2          4.2 
 
Current assets 
 
Fuel derivatives (cash flow hedge)                              14.5         25.6 
 
Cross currency swaps (net investment                             6.9            - 
hedge) 
 
Currency forwards (cash flow hedge)                                -          0.6 
 
                                                                21.4         26.2 
 
Current liabilities 
 
Fuel derivatives (cash flow hedge)                               0.4            - 
 
Currency forwards (net investment hedge)                        20.8            - 
 
                                                                21.2            - 
 
Non-current liabilities 
 
Fuel derivatives (cash flow hedge)                               0.4            - 
 
                                                                 0.4            - 
 
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: 
 
                                                                  24 September 2022 
 
                                                             Fair value    Carrying 
                                                                              value 
                            Level 1     Level 2     Level 3       Total       Total 
                                 £m          £m          £m          £m          £m 
 
Financial assets and 
derivatives 
 
Trade and other                   -       540.7           -       540.7       540.7 
receivables 
 
Contingent                        -        78.2           -        78.2        78.2 
consideration 
receivable 
 
Derivative financial              -        26.6           -        26.6        26.6 
instruments 
 
Financial liabilities 
and derivatives 
 
Borrowings1                     0.6     2,050.1           -     2,050.7     2,111.8 
 
Trade and other                   -     1,070.3           -     1,070.3     1,070.3 
payables 
 
Derivative financial              -        21.6           -        21.6        21.6 
instruments 
 
 
 
                                                                      26 March 2022 
 
                                                             Fair value    Carrying 
                                                                              value 
                           Level 1     Level 2    Level 3         Total       Total 
                                £m          £m         £m            £m          £m 
 
Financial assets and 
derivatives 
 
Trade and other                  -       443.1          -         443.1       443.1 
receivables 
 
Contingent                       -           -      106.1         106.1       106.1 
consideration 
receivable 
 
Derivative financial             -        30.4          -          30.4        30.4 
instruments 
 
Financial liabilities 
and derivatives 
 
Borrowings1                   10.6     1,345.4          -       1,356.0     1,326.3 
 
Trade and other                  -     1,144.1          -       1,144.1     1,144.1 
payables 
 
Derivative financial             -           -          -             -           - 
instruments 
 
1     Includes lease liabilities as set out in note 14. 
 
16           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. The announcement of EQT Infrastructure's agreement to sell First Transit 
to Transdev North America, Inc, means that the Group's valuation of the earnout 
now reflects an observable market value, and the contingent consideration 
receivable has therefore been reclassified from Level 3 to Level 2 at 24 
September 2022. 
 
17           Provisions 
 
                                             Insurance Legal and  Pensions   Total 
                                                claims     other        £m      £m 
                                                    £m        £m 
 
At 27 March 2022                                 148.0      86.0       1.3   235.3 
 
Charged to the income statement                    7.6      17.2     (1.3)    23.5 
 
Utilised in the period                          (16.0)    (17.7)         -  (33.7) 
 
Notional interest                                  0.6         -         -     0.6 
 
Foreign exchange movements                        18.9       3.0         -    21.9 
 
At 24 September 2022                             159.1      88.5         -   247.6 
 
Current liabilities                               55.7      52.2         -   107.9 
 
Non-current liabilities                          103.4      36.3         -   139.7 
 
At 24 September 2022                             159.1      88.5         -   247.6 
 
Current liabilities                               51.8      62.7       0.1   114.6 
 
Non-current liabilities                           96.2      23.3       1.2   120.7 
 
At 26 March 2022                                 148.0      86.0       1.3   235.3 
 
 
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 five years although certain 
liabilities in respect of lifetime obligations of £9.5m in H1 2023 (full year 
2022: £8.9m) can extend for up to 30 years. The utilisation of £16.0m in H1 
2023 (full year 2022: £43.0m) represents payments made largely against the 
current liability of the preceding year. 
 
The insurance claims provisions contain £94.8m in H1 2023 (full year 2022: £ 
88.5m) which is recoverable from insurance companies and is included within 
other receivables in note 11. 
 
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 obligations under rail franchises and restructuring 
costs. The dilapidation provisions are expected to be settled at the end of the 
respective franchise. 
 
18           Called up share capital 
 
                                                        24 September     26 March 
                                                                2022         2022 
                                                                  £m           £m 
 
Allotted, called up and fully paid 
 
750.4m ordinary shares of 5p each (26                           37.5         37.5 
March 2022: 750.2m) 
 
The Company has one class of ordinary shares which carries no right to fixed 
income. 
 
The directors have declared an interim dividend of 0.9p per ordinary share in 
respect of the period ended 24 September 2022, totalling approximately £6.7m. 
 
19           Net cash from operating activities 
 
                                                          26 weeks to 26 weeks to 
                                                         24 September          25 
                                                                 2022   September 
                                                                   £m        2021 
                                                                               £m 
 
Operating profit/(loss) from: 
 
Continuing Operations                                            62.1        52.2 
 
Discontinued Operations (including gain on sale of             (28.6)       592.3 
First Student and First Transit) 
 
Total Operations                                                 33.5       644.5 
 
Adjustments for: 
 
Depreciation charges                                            344.6       344.9 
 
Capital grant amortisation                                     (67.1)      (41.7) 
 
Software amortisation charges                                     4.3         2.3 
 
Other intangible asset amortisation charges                         -         0.5 
 
Loss/(gain) on disposal of subsidiaries                           3.7     (479.4) 
 
Reversal of impairment charges                                      -      (55.4) 
 
Share-based payments                                              1.6         2.3 
 
Profit on disposal of property, plant and equipment             (8.0)       (0.9) 
 
Operating cash flows before working capital and                 312.6       417.1 
pensions 
 
Increase in inventories                                         (2.6)       (5.1) 
 
Increase in receivables                                        (95.8)     (112.0) 
 
Increase in payables due within one year                          6.5       150.1 
 
Decrease in contingent consideration receivable                  27.9           - 
 
(Decrease)/increase in provisions due within one year          (14.2)         1.5 
 
Increase in provisions due over one year                          6.0         0.5 
 
Settlement of foreign exchange hedge                            (1.8)           - 
 
Aberdeen Local Government Pension Scheme refund                  11.8           - 
 
Defined benefit pension payments in excess of income            (0.7)     (338.6) 
statement charge 
 
Cash generated by operations                                    249.7       113.5 
 
Tax paid                                                        (0.4)      (12.2) 
 
Interest paid1                                                 (35.0)     (156.0) 
 
Net cash from/(used in) operating activities                    214.3      (54.7) 
 
1     Interest paid includes £20.0m relating to lease liabilities (H1 2022: £ 
22.9m). 
 
20           Analysis of changes in net debt - adjusted cash flow 
 
                                         At      Cash   Foreign     Other     At 24 
                                   27 March      flow  Exchange        £m September 
                                       2022        £m        £m                2022 
                                         £m                                      £m 
 
Components of financing 
activities: 
 
Bonds                               (199.9)         -         -         -   (199.9) 
 
Lease liabilities1                (1,083.2)     271.6         - (1,009.7) (1,821.3) 
 
Asset backed financial               (35.5)       4.9         -    (19.3)    (49.9) 
liabilities2 
 
Other debt                            (0.6)         -         -         -     (0.6) 
 
Total components of financing     (1,319.2)     276.5         - (1,029.0) (2,071.7) 
activities 
 
Cash                                  319.6    (30.6)       8.6         -     297.6 
 
Bank overdrafts                      (87.5)      47.6         -         -    (39.9) 
 
Ring-fenced cash                      468.1   (129.1)         -         -     339.0 
 
Cash and cash equivalents             700.2   (112.1)       8.6         -     596.7 
 
Net debt                            (619.0)     164.4       8.6 (1,029.0) (1,475.0) 
 
 1. Lease liabilities 'Other' includes £1,009.7m net inception of new leases. 
    This comprises £1,025.4m inception of new leases, being £1,011.8m of 
    rolling stock leases, £13.4m of property leases and £0.2m of PCV leases, 
    offset by £15.7m lease disposals. Lease disposals consists of £12.7m of 
    rolling stock leases and £3.0m of property and other leases. 
 2. Asset backed financial liabilities 'Other' includes £19.3m of inception of 
    leases in First Bus. 
 
21           Retirement benefit schemes 
 
The Group supports defined contribution and defined benefit 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 
    (see note 13) 
  * Rail - sponsoring six 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 220 to 229 of the Annual Report and 
Accounts for the 52 weeks ended 26 March 2022. 
 
(a) UK Bus and Group (including Hull Trains) 
 
The table below is set out to show amounts charged/(credited) to the condensed 
consolidated income statement along with the amounts included in the condensed 
consolidated balance sheet arising from the fair value of schemes' assets 
(Assets) and the present value of defined benefit obligations (DBO) 
(Liabilities) for the UK Bus, Group and Hull Trains defined benefit schemes: 
 
Income statement                                             26 weeks   26 weeks 
                                                                   to         to 
                                                                   24         25 
                                                            September  September 
                                                                 2022       2021 
 
                                                                   £m         £m 
 
Operating 
 
- Current service and administration cost                         4.1        5.1 
 
- Past service gain including curtailments and                      -          - 
settlements 
 
Total operating                                                   4.1        5.1 
 
Interest (income)/cost                                          (3.0)        0.7 
 
Total income statement                                            1.1        5.8 
 
 
 
21           Retirement benefit schemes (continued) 
 
 
Balance sheet                                                      24   26 March 
                                                            September       2022 
                                                                 2022 
 
                                                                   £m         £m 
 
Fair value of scheme assets                                   2,068.3    2,930.1 
 
Present value of defined benefit obligations                (1,930.7)  (2,571.7) 
 
Surplus before adjustment                                       137.6      358.4 
 
Impact of shared cost                                           (0.3)        1.4 
 
Adjustment for irrecoverable surplus1                          (73.2)    (162.3) 
 
Surplus in schemes                                               64.1      197.5 
 
The amount is presented in the condensed consolidated 
balance sheet as follows: 
 
Non-current assets                                               67.6      203.0 
 
Non-current liabilities                                         (3.5)      (5.5) 
 
                                                                 64.1      197.5 
 
 1. The irrecoverable surplus represents the amount of the surplus that the 
    Group could not recover through reducing future Company contributions to 
    LGPS, see below. 
 
(b) North America 
 
Greyhound pension arrangements 
 
The Group has retained certain responsibilities for the provision of retirement 
benefits for a number of legacy schemes. 
 
The Group operates a single legacy defined benefit arrangement in the US, while 
in Canada, there are three funded legacy plans and a small unfunded 
supplementary executive retirement plan. The assets for the funded plans in 
Canada have been co-mingled in a master trust for a number of years and are 
being merged into a single plan (subject to regulatory approval) in order to 
further improve oversight and streamline investment strategy, which is expected 
to result in efficiency savings when winding up the plans. 
 
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 North American defined benefit schemes: 
 
Income statement                                             26 weeks   26 weeks 
                                                                   to         to 
                                                                   24         25 
                                                            September  September 
                                                                 2022       2021 
 
                                                                   £m         £m 
 
Operating 
 
- Current service and administration cost                         0.9        2.4 
 
- Past service gain including curtailments and                      -     (27.7) 
settlements 
 
Total operating                                                   0.9     (25.3) 
 
Interest cost                                                     0.2        1.1 
 
Total income statement                                            1.1     (24.2) 
 
Balance sheet                                                      24   26 March 
                                                            September       2022 
                                                                 2022 
 
                                                                   £m         £m 
 
Fair value of schemes' assets                                   429.9      412.4 
 
Present value of defined benefit obligations                  (424.8)    (408.7) 
 
Surplus before adjustment                                         5.1        3.7 
 
Change in irrecoverable surplus                                 (9.0)     (13.7) 
 
Currency loss on irrecoverable surplus                              -      (0.8) 
 
Deficit in schemes                                              (3.9)     (10.8) 
 
The amount is presented in the condensed consolidated 
balance sheet as follows: 
 
Non-current assets                                                  -          - 
 
Non-current liabilities                                         (3.9)     (10.8) 
 
                                                                (3.9)     (10.8) 
 
During FY22, the Group transferred responsibility for the FirstGroup America 
(US) and Supplementary Executive (Canada) schemes. As such, these schemes have 
been removed from the balance sheet position and the tables above. 
 
21           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's First Transit 
subsidiary companies sponsored a total of five single-employer pension 
arrangements. The Group is indemnified against any pension liabilities by the 
relevant transit authorities, and pension costs are reimbursed as they fall 
due. The Group will not retain any pension liability upon expiry of the 
contract or if the contracts are reassigned. 
 
Details of the assets and liabilities of these schemes are as follows: 
 
                                                                   24   26 March 
                                                            September       2022 
                                                                 2022         £m 
                                                                   £m 
 
Assets                                                          317.1      281.6 
 
Liabilities                                                   (336.6)    (322.1) 
 
Deficits in schemes                                            (19.5)     (40.5) 
 
Amounts recoverable from contracting authorities                 19.5       40.5 
 
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 six 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                                             26 weeks   26 weeks 
                                                                   to         to 
                                                                   24         25 
                                                            September  September 
                                                                 2022       2021 
 
                                                                   £m         £m 
 
Operating 
 
- Current service cost                                           69.6       69.2 
 
- Administrative cost                                             0.7          - 
 
- Impact of franchise adjustment on operating cost             (43.7)     (42.2) 
 
Total operating                                                  26.6       27.0 
 
Interest cost                                                     9.0        8.4 
 
Impact of franchise adjustment on net interest income           (9.0)      (8.4) 
 
Total income statement                                           26.6       27.0 
 
 
 
 
 
21           Retirement benefit schemes (continued) 
 
 
Balance sheet                                                      24   26 March 
                                                            September       2022 
                                                                 2022 
 
                                                                   £m         £m 
 
Fair value of schemes' assets                                 3,769.5    3,790.6 
 
Present value of defined benefit obligations                (3,770.8)  (5,066.1) 
 
Deficit before adjustment                                       (1.3)  (1,275.5) 
 
Franchise adjustment (60%)                                        0.8      765.3 
 
Adjustment for employee share of RPS deficits (40%)               0.5      510.2 
 
Surplus/(deficit) 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: 
 
                                        24 September 2022              26 March 2022 
 
                                    First   First   North      First   First   North 
                                      Bus    Rail America        Bus    Rail America 
                                        %       %       %          %       %       % 
 
Key assumptions 
used: 
 
Discount rate                        5.17    4.65  4.77 -     2.91 -    2.83  3.72 - 
                                                     5.17       2.97            4.19 
 
Expected rate of                     3.84    3.25     n/a       4.01    3.43     n/a 
salary increases 
 
Inflation - CPI                    2.75 -    2.75    2.00     2.89 -    2.93    2.00 
                                     2.84                       3.01 
 
Future pension                     2.74 -    2.75     n/a      2.681    2.93     n/a 
increases                            2.84 
 
22           Contingent liabilities 
 
To support subsidiary undertakings in their normal course of business, 
FirstGroup plc and certain subsidiaries have indemnified certain banks and 
insurance companies who have issued performance bonds for £71.3m (26 March 
2022: £69.4m) and letters of credit for £224.0m (26 March 2022: £219.7m). The 
performance bonds primarily relate to residual North American obligations of £ 
3.6m and the First Rail franchise operations of £67.7m. 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 £98.5m to 
First Rail Train Operating Companies of which £60.6m remains undrawn. Following 
the sale of Greyhound, the majority of the surety bonds were cancelled, with a 
residual amount of £3.6m remaining as noted above. 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 participate in 
multi-employer pension schemes in which their contributions are pooled with the 
contributions of other contributing employers. The funding of these schemes is 
therefore reliant on the ongoing participation by third parties. 
 
In its normal course of business the Group has ongoing contractual negotiations 
with national, regional and local 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. 
 
The inquest relating to the death of seven passengers in the Croydon tram 
incident in November 2016 concluded in July 2021. The tram was operated by Tram 
Operations Limited ('TOL'), a subsidiary of the Group, under a contract with a 
Transport for London ('TfL') subsidiary. TOL provides the drivers and 
management to operate the tram services, whereas the infrastructure and trams 
are owned and maintained by a TfL subsidiary. The Office of Rail & Road ('ORR') 
announced on 24 March 2022 that it had taken the decision to prosecute TfL, the 
driver of the tram and TOL for breaches of Health and Safety law. While TOL has 
indicated a guilty plea to the charge laid against it, the Company cannot yet 
accurately determine the quantum or timing of any financial penalties or 
related costs which may arise from these proceedings. 
 
22           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. A separate set of proceedings has been 
issued against London & South Eastern Railway Limited ('LSER') in respect of 
the operation of other rail services. The two sets of proceedings are being 
heard together. The class representative ('CR') alleges that FSWT, SSWT and 
LSER 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') was made by the CAT in January 2022 and 
following an unsuccessful appeal by FSWT, SSWT and LSER, the proceedings will 
now proceed with the next key step for FSWT, SSWT and LSER being to file their 
substantive defences. A trial date has not yet been set. 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. At present the Company 
cannot accurately determine the likelihood, quantum or timing of any damages 
and costs which may arise from these proceedings. 
 
23           Related party transactions 
 
There are no related party transactions or changes since the Group's 2022 
Annual Report which could have a material effect on the Group's financial 
position or performance of the Group in the 26 weeks to 24 September 2022. 
 
24           Post balance sheet events 
 
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 earnout consideration to be around $85m (£78.2m). 
The Group considered this to be an adjusting event and therefore it was 
reflected in the fair value of the contingent consideration receivable for the 
earnout at 24 September 2022. In the first half of the year this gives rise to 
a non-cash, adjusting charge of £27.9m relative to the carrying value of the 
earnout of £106.1m at 26 March 2022. 
 
In light of the liquidity problems encountered by several UK defined benefit 
pension schemes which have resulted from recent rapid and significant movements 
in government bond yields, FirstGroup provided a short-term loan of £95m to the 
Bus Pension Scheme so that it could continue to maintain its current level of 
risk management during the uncertain times as the Bank of England support in 
the market is withdrawn, and to allow its asset portfolio to be rebalanced in 
an orderly manner. The Company utilised the Limited Partnership that was 
created following the sale of the North American business to support the Scheme 
funding strategy as the source of funds for the loan. 
 
In October we agreed with DfT an extension of the current contractual 
arrangements for the West Coast Partnership to March 2023. Discussions are 
ongoing with DfT regarding the longer-term National Rail Contract for the West 
Coast Partnership. 
 
On 28 October 2022, the Group announced that its Aircoach business had agreed a 
deal to purchase the Northern Ireland-based transport firm Airporter. 
 
Responsibility statement 
 
The directors confirm that these condensed consolidated interim financial 
statements have been prepared in accordance with UK adopted International 
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure 
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial 
Conduct Authority and that the interim management report includes a fair review 
of the information required by DTR 4.2.7R and DTR 4.2.8R, namely: 
 
  * an indication of important events that have occurred during the first 26 
    weeks and their impact on the half yearly results, and a description of the 
    principal risks and uncertainties for the remaining 26 weeks of the 
    financial year; and 
  * material related-party transactions in the first 26 weeks and any material 
    changes in the related-party transactions described in the last annual 
    report. 
 
The Directors of FirstGroup plc are listed on the Group's website at 
www.firstgroupplc.com. 
 
Graham 
Sutherland 
Ryan Mangold 
 
Chief Executive 
Officer                                                               Chief 
Financial Officer 
 
9 November 
2022                                                                          9 
November 2022 
 
Independent review report to FirstGroup plc 
 
Report on the condensed consolidated interim financial statements 
 
Our conclusion 
 
We have reviewed FirstGroup plc's condensed consolidated interim financial 
statements (the "interim financial statements") in the Half-Yearly Report of 
FirstGroup plc for the 26 week period ended 24 September 2022 (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 24 September 2022; 
  * 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. 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 this ISRE. 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 
 
9 November 2022 
 
 
 
END 
 
 

(END) Dow Jones Newswires

November 09, 2022 02:00 ET (07:00 GMT)

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