FirstGroup PLC - Annual Report 2026

First Group Plc

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Better journeys

FirstGroup plc

Annual Report

and Accounts 2026

Contents

We are

FirstGroup

FirstGroup is a leading private sector provider

of public transport. We create solutions that

reduce complexity, making travel smoother

and life easier. Our businesses are at the heart

of our communities, and the essential services

we provide are critical to delivering wider

economic, social and environmental goals.

Visit our website at www.firstgroupplc.com

and follow us on LinkedIn FirstGroup plc.

Introduction

At a glance

Highlights

Strategic report

Chair’s statement

Our markets

Our market drivers

Our business model

Chief Executive Officer’s review

Our strategic pillars

Key performance indicators

Business review

Financial review

Responsible business

Climate-related financial disclosures

Our stakeholders

Section 172 statement

Risk management

Viability and going concern

Governance report

Corporate Governance report

Governance at a glance

Board

Nomination Committee report

Audit Committee report

Responsible Business Committee report

Remuneration Committee report

115

Directors’ report and additional disclosures

118

Statement of Directors’ responsibilities

Financial statements

119

Independent auditors’ report

128

Consolidated income statement

129

Consolidated statement of comprehensive income

130

Consolidated balance sheet

131

Consolidated statement of changes in equity

132

Consolidated cash flow statement

134

Notes to the consolidated financial statements

189

Group financial summary

191

Company balance sheet

192

Company statement of changes in equity

193

Notes to the Company financial statements

196

Shareholder information

198 Glossary

Find out more about FirstGroup online

Read this report online

FirstGroup

Annual Report and Accounts 2026

At a glance

FirstGroup

First Rail

First Bus

1.07m

passenger

journeys a day

c.6,000

buses and coaches

(includes 1,400 zero

emission buses)

c.18,000

employees

c.70

depots

c.365,000

passenger

journeys a day

c.320

trains (includes

205 bi-mode or

electric trains)

c.12,440

employees

221

stations

First Bus is one of the largest bus companies

in the UK, with decades of experience working

closely with local authorities and partners

across the UK and Ireland. We carry more than

one million passengers a day and serve more

than 20% of the UK population with our regional

and London bus and coach services.

Regional Bus

We provide tendered bus services for local

authorities and are a leading operator in the

majority of our local areas, including major urban

centres such as Glasgow, Bristol and Leeds.

Business and Coach

Alongside the operation of our commercial

networks, our Business and Coach division

provides a range of services including

workplace shuttles at distribution centres

and major construction sites, school hire,

private tour operators, airports and airlines,

as well as rail replacement services.

Franchising

In London, First Bus London operates c.90

Transport for London (TfL) routes in west and

central London from ten depots, serving

180 million passengers annually. First Bus also

operates services in Rochdale on behalf of

Transport for Greater Manchester (TfGM).

First Rail has more than 25 years of experience

in the rail sector and has been one of the UK’s

leading operators for a number of years.

Open access

We have two open access rail operations, Hull

Trains and Lumo, with three routes in operation

(two on the East Coast Main Line and a new Stirling

to London service on the West Coast Main Line),

with a fourth service between Carmarthen and

London Paddington service entering mobilisation.

Transport for London contracts

We have operated London Trams and the London

Cable Car for a number of years on behalf of TfL

and, in 2025, we were awarded the contract to

operate the London Overground from May 2026.

Government-contracted operations

We have two Department for Transport (DfT)

train operating companies (TOCs), Great

Western Railway (GWR) and West Coast

Partnership (WCP), which includes Avanti West

Coast, and we operated South Western Railway

(SWR) from May 2021 to 25 May 2025, when it

transferred to the DfT Operator (DfTO).

Rail Services

Our Rail Services businesses include First

Customer Contact, Mistral Data and First Rail

Consultancy which offer a variety of solutions

for the rail industry, bringing experience,

expertise and benefits to the sector.

Regional Bus passengers only.

London

York

Aberdeen

Edinburgh

Stirling

Newcastle

Morpeth

Hull

York

Leeds

Shefﬁeld

Leicester

Ipswich

Slough

Basildon

Portsmouth

Glasgow

Cork

Galway

Belfast

Bristol

Manchester

Bradford

Stoke-on-Trent

Worcester

Penzance

Dublin

Weymouth

Plymouth

Crewe

Weston-super-Mare

Swansea

Carmarthen

Cardiff

Truro

Bath

Norwich

Chelmsford

London

Birmingham

Southampton

Oxford

Who we are

FirstGroup is one of the UK’s leading private sector

operators of public transport, with two divisions,

First Bus and First Rail, operating a diverse portfolio

of transport services. We have c.30,000 employees

and carry nearly 1.5 million passengers a day.

Avanti West Coast (Avanti)

Great Western Railway (GWR)

Hull Trains

Lumo

New open access routes

First Bus operations

Where we operate

Business split

First Bus

First Rail

Adjusted revenue share (as % of Group)

Adjusted EPS contribution (pence)

84%

16%

First Bus

Open access and

contracted rail

DfT TOCs and

Rail Services

7.9p

4.0p

14.0p

Committed to our customers

Supportive of each other

Dedicated to safety

Setting the highest standards

Accountable for performance

Our strategy

Our four strategic pillars help us to drive value

and sustainable growth for all our stakeholders.

Read more on pages 97 to 99

CEO

CFO

FY 2026 Executive Annual Bonus Plan (EABP)

Weighting

Measure

Threshold

(0% payment)

Target (50%

payment)

Maximum

(100% payment)

Outcome

as % of

maximum

award

Link to

strategy

50%

Group adjusted operating profit

33.0%

Target

£155.8m

£168.4m

£185.2

Performance

20%

Group adjusted cash flow

20.0%

Target

£92.1m

£99.2m

£127.5m

Performance

20%

Operational scorecard

10.9%

Performance

10%

Personal objectives

CEO

9.0%

CFO

8.0%

Total bonus achieved (as % of maximum)

CEO

72.9%

CFO

71.9%

Weighting

Measure

Threshold

(0% payment)

Maximum

(100% payment)

Outcome

as % of

maximum

award

Link to

strategy

50%

EPS

50%

Target

12.1p

15.7p

Performance

35%

Relative TSR

35%

Target

Median

Upper quartile

Performance

7.5%

Zero emission fleet

7.5%

Target

600

850

Performance

7.5%

Emissions reduction

7.5%

Target

12%

15%

Performance

Total (as % of maximum)

100%

£173.8m

20.3p

1,154

30.9%

£140.2m

83rd percentile

90%

80%

FY 2026 single figure total

remuneration (£’000s)

Spend on pay (£m)

FY 2026 single figure total remuneration

Shareholding requirement –

progress in FY 2026

Requirement

200%

of base salary within 5 years of appointment

At 28 March 2026

CEO

277%

CFO

535%

Total employee pay

Adjusted operating profit

Distributions to shareholders

Spend on zero emission vehicles

Total Executive Director pay

54.4%

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Remuneration at a glance

In setting the remuneration for Executive Directors,

the Committee considers the Group’s overall

approach to employee reward. Given the diverse

nature of the operations of our divisions and the

employment markets in which they operate,

remuneration practices vary across the organisation

to ensure they remain relevant to each individual

market. This includes recognising that approximately

85% of colleagues are covered by collective

bargaining arrangements, which shape pay

structures and outcomes.

The Remuneration Committee and the Responsible

Business Committee discuss a number of items each

year to ensure the organisation’s approach to reward

remains consistent and fair. All members of the

Remuneration Committee also sit on the Responsible

Business Committee, so although the final two items

below are formally considered by the Responsible

Business Committee, Remuneration Committee

members participate in those discussions. Insights

from the Responsible Business Committee are then

fed into the Remuneration Committee.



A report summarising wider workforce pay

policies and practices, with updates provided

on a regular basis



The CEO pay ratio and underlying statistics



Gender and ethnicity pay gap reports, including

statistics from each UK reporting entity



The actions management is taking to improve

diversity in the workforce and close pay gaps

where they exist

The table on page 96 (Wider workforce

remuneration) summarises the approach to

pay at FirstGroup. The main difference between

the structure of our most senior employees’

remuneration and that of the wider workforce

is that senior employee remuneration is more

heavily weighted to variable pay, linked to

business performance.

The Committee recognises the importance

of transparency and seeks to ensure that the

workforce understands how Executive Director

remuneration is determined. To support this, the

Group’s communication channels are used to

signpost the information set out in the Directors’

remuneration report.

Treating our people fairly

Effective 1 April 2024, First Bus became a Real Living

Wage employer. First Bus have gone beyond the

accreditation requirements and have also included

all apprentices.

Across the Group, pay structures vary. For non-

collectively bargained employees in First Bus,

recent salary increase budgets have been

weighted towards lower earners.

Employees receive a range of benefits in addition

to base salary, including retail discounts and

supermarket savings, holiday buy and sell and

cycle to work.

We continue to offer the Save As You Earn (SAYE)

share scheme, enabling colleagues to purchase

discounted shares following a three-year savings

contract. There are c.4,250 active colleagues

participating in at least one of the three current

schemes (15.6% of eligible colleagues), contributing

an average of c.£200 per month. From the first

relaunched scheme in 2023, which matures in

September 2026, there are currently c.2,350 active

colleagues who subscribed at an option price of 111p

(the closing share price on 27 March 2026 was 168.9p).

Travel benefits include free travel for employees and

their families across their own network. Employees

are also able to purchase discounted rail and bus

travel across the Group. In FY 2026, more than 113,000

rail and 23,500 bus discounted tickets were purchased

across the Group.

All employees also have access to an Employee

Assistance Programme, which offers employees

free access to a virtual GP, online physiotherapy,

wellbeing and counselling services, legal

and financial support as well as a number

of other services.

Healthcare benefits for First Bus colleagues include

the Simplyhealth scheme, which provides cashback

on everyday healthcare costs. In FY 2026, nearly

4,000 colleagues utilised Simplyhealth, receiving

over £340,000 in cashback.

We operate a number of different monetary and

non-monetary recognition programmes and events

in which colleagues at all levels of the business

participate in. These programmes range from spot

bonuses to annual recognition events, such as the

Our Way Awards in First Bus, recognising individuals

and teams for exemplary performance throughout

the year.

Engaging with our colleagues

While the Committee does not formally consult with

the workforce on Executive Director remuneration,

it takes into account wider workforce views and

experience through a range of established

engagement mechanisms.

The Group also engaged with its workforce through

the Designated Non-Executive Director for Workforce

and Chair of the Colleague Advisory Panel, Myrtle

Dawes at events also attended by other Non-

Executive Directors. The Panel gives colleagues the

opportunity to get together with our Non-Executive

Directors, and discuss their views on what is working

well and where we can improve. It brings together

leaders, managers, supervisors and frontline

colleagues, encouraging open dialogue and

different perspectives.

Across our businesses we have ‘Your Voice’

engagement surveys that run at least annually

across First Bus, First Rail and the corporate

centre. First Bus has improved response rates

and engagement scores over the past three

years have risen to 66% (+25% in 4 years). Across

our Rail businesses, the engagement score is 71%.

A key part of our engagement strategy is enabling

local teams to take ownership of the employee

experience in ways that resonate with their unique

contexts. While the overarching strategy provides

clarity and alignment, we trust local leaders to

shape meaningful interventions on the ground.

This approach has built stronger emotional

connections, improved communication, and

driven performance from the depot floor up.

To support this, First Bus have recently launched a

new personalised colleague app ‘Blink’, which brings

simpler tools and clearer updates to help colleagues

feel more connected. It is an easily accessible central

hub, where all colleagues and leaders can share

important content and updates directly. It is also

a place where achievements are seen, shared

and celebrated across the whole company.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Remuneration in context

Strategic alignment of remuneration

The table below sets out how each of the performance metrics used in our incentive plans for FY 2026 is aligned to the Company’s strategy. See pages 13 to 14 for more information

on our strategy.

Measure

Deliver

day in, day out

Drive

modal shift

Lead in environmental and

social sustainability

Diversify

our portfolio

EABP

Group adjusted operating profit

Group adjusted cash flow

Operational performance

Personal performance

LTIP

EPS

Relative TSR

Zero emission fleet

Scope 1&2 emissions reduction

All employees

Base salary



Base salaries are reviewed annually.



When setting pay for Executive Directors and the Executive Committee, the Committee considers salary increases for the wider workforce.

Pension



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

line with market practice.

All-employee

share schemes



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

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

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

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

Benefits



We offer a range of benefits to our employees, including our Employee Assistance Programme, discounts and cashback at major retailers,

and discounted travel on our networks. See page 95 for more information.



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

Senior executives

and management

Annual bonus



Incentivises successful execution of our business strategy and operational goals.

LTIP



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

Shareholding guidelines



Executive Directors and Executive Committee members are required to hold a material percentage of their salary in Company shares

within five years of appointment, ensuring alignment with the shareholder experience.

Wider workforce remuneration

Key to our strategic pillars

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social

sustainability

Diversify

our portfolio

Remuneration in context

continued

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

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

The Annual report on remuneration sets out



Directors’ remuneration for FY 2026, on pages 97 to 102



The statement of the planned implementation of policy in FY 2027, on page 103

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

The Annual report on remuneration and Chair’s statement will be put to an advisory shareholder vote at the 2026 AGM.

Single total figure of remuneration for Executive Directors (audited)

Salaries

Taxable

benefits

Pension

Total fixed

remuneration

Annual bonus

LTIP

2,3

Other

Total

variable

remuneration

Total

remuneration

Graham Sutherland – CEO

FY 2026 £’000s

606

637

662

1,675

–

2,337

2,974

FY 2025 £’000s

589

619

726

2,349

3,076

3,695

Ryan Mangold – CFO

FY 2026 £’000s

508

599

548

1,229

–

1,777

2,376

FY 2025 £’000s

494

582

608

1,724

2,333

2,915

Half of the annual bonus earned is deferred into shares for a period of three years.

The value of the 2023 LTIP, which had a three-year performance period ending 28 March 2026, was calculated using the average share price over the last three months of FY 2026 (182.7p). In line with reporting requirements, the LTIP values include dividend equivalent amounts of

£143,301 and £105,180 for the Chief Executive Officer and Chief Financial Officer, respectively. £398,309 and £292,351 of the value for the Chief Executive Officer and Chief Financial Officer, respectively, is attributed to share price growth as the share price at award was 135.2p in 2023.

The value for FY 2025 relates to the 2022 LTIP, which had a three-year performance period ending 29 March 2025. The value of the 2022 LTIP for Graham Sutherland and Ryan Mangold reported in the 2025 report (£1.709m and £1.254m, respectively) was an estimate based on the

average share price over the last three months of FY 2025 (164.73p). The actual value of the 2022 LTIP on the 18 August 2025 vesting date was £2.349m and £1.724m for Graham Sutherland and Ryan Mangold, respectively (based on share price of 225.7p); this includes actual dividend

equivalents received of £153,669 and £112,776, respectively.

Graham Sutherland and Ryan Mangold both participate in the 2024 SAYE scheme. More detail on the scheme can be found on page 96. The value of their options under the 2024 scheme has been valued as the number of options subscribed for, multiplied by the difference between

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

More detail can be found below.

Benefits (audited)

Graham Sutherland’s benefits for the year comprised £1,285 for UK private medical insurance. Ryan Mangold’s benefits for the year comprised a £12,000 car allowance and £3,213 for UK private medical insurance.

Pension (audited)

Graham Sutherland received a pension allowance of 5% of his base salary, £30,285. Ryan Mangold received a pension allowance of 15% of his base salary, £76,230.

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

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Annual report on remuneration

FY 2026 performance and reward decisions

As a Committee, we believe it is imperative to strike the right balance between incentivising the management team, rewarding strong performance and being equitable in the broader context.

When assessing the performance of the Executive Directors, the Remuneration Committee takes a broad view of financial performance delivered, the shareholder experience and the outcome for the Company’s

stakeholders, including customers, employees and the communities in which we operate. When considering remuneration outcomes, the Committee takes into account performance against specific metrics on safety,

including workplace fatalities and injuries, and customer satisfaction, as well as environmental, social and governance matters such as significant environmental incidents, large or serial fines or sanctions from regulatory

bodies, and significant adverse legal judgements or settlements. The Committee has broad discretion to ensure incentive outcomes are appropriate.

FY 2026 Executive Directors’ annual bonus (audited)

For FY 2026, the annual bonus maximum opportunity was 150% of salary for both Executive Directors. As in previous years, the EABP aimed to incentivise improved performance against a range of financial and non-financial

metrics. The structure of the bonus was weighted so that 70% was based on financial metrics and 30% on non-financial metrics. The Committee retains overriding discretion to adjust the overall bonus outturn (including to

£nil) if a serious safety failing or deterioration is identified.

The chart below sets out the targets, performance achieved and corresponding bonus outturns on a formulaic basis against the financial and qualitative targets.

FY 2026 annual bonus outcome

Measure

Weighting

Threshold:

On target:

50%

Maximum:

100%

Outturn

Bonus achievement

Payout %

Group adjusted operating profit (pre-IFRS 16 basis)

50%

£155.8m

£168.4m

£185.2m

£173.8m

66.1%

33%

Group adjusted cash flow

20%

£92.1m

£99.2m

£127.5m

£140.2m

100%

20%

Operational scorecard:

First Bus Net Promoter Score

3.5%

10.6

11.6

12.6

17.2

100%

3.5%

First Bus employee engagement score

3.5%

63%

65%

67%

66%

75%

2.6%

First Bus overall fleet MPG

8.2

8.3

8.4

8.3

50%

1.5%

First Rail average TOC scorecard score

2.3

65%

3.3%

First Rail Train on Self Cancellations: Lumo

2.5%

>24

First Rail Train on Self Cancellations: Hull

2.5%

>24

Personal objectives

10%

N/A

see below

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

covenants. Group operating profit post-IFRS 16 is £219.4m. See note 4 for the reconciliation.

Group adjusted cash flow is assessed from continuing operations on a pre-IFRS 16 basis. It excludes London capital expenditure (-£25.9m), acquisitions (-£35.3m), interest and tax (-£22.9m), dividends to shareholders (-£38.9m), share buyback (-£50.4m), and share purchases for

Employee Benefit Trust (-£24.3m).

Personal objectives

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

achievement of the personal objectives element of the EABP for Graham Sutherland. It was noted that Graham Sutherland has had a very strong year as CEO. Some specific achievements include:



Implemented target operating model to position the Group for sustainable growth and value creation



Delivered all FY 2025 M&A integration, including First Bus London which is performing ahead of expectations



Continued to execute our UK-focused growth strategy with the acquisition of three coach companies in the year, growth in open access and award of the London Overground contract

Ryan Mangold has had another strong year. Some specific achievements include:



Maintained a strong balance sheet and disciplined capital allocation policy, critically important given uncertainty



Delivered solutions to support innovation in Bus electric supply to facilitate lower future operating costs



Continued to execute our UK-focused growth strategy with the acquisition of three coach companies in the year, growth in open access and award of the London Overground contract

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

above). The Committee determined that Graham and Ryan had delivered their personal objectives to a high standard. The Committee accordingly awarded Graham Sutherland and Ryan Mangold 9% and 8% out of

a possible 10%, respectively, for their personal objectives.

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Annual Report and Accounts 2026

Governance report

Introduction

Annual report on remuneration

continued

Taking into account the above outcomes, the formulaic EABP award for Graham Sutherland and Ryan Mangold resulted in a potential award of 72.9% and 71.9% of the maximum, respectively. The Committee considered this

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

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

The overall bonus payout for FY 2026 was therefore as follows:

Graham Sutherland

Ryan Mangold

Maximum EABP opportunity (% of salary)

150%

EABP achieved (as % of maximum)

72.9%

71.9%

EABP (% of salary)

109.4%

107.9%

Total EABP

£662,430

£548,176

EABP – Cash

£331,215

£274,088

EABP – Deferred shares

£331,215

£274,088

Long-Term Incentive Plan

The vesting of 2023 LTIP awards was subject to achieving the following performance conditions over a three-year performance period ending 28 March 2026:

Vesting of 2023 Long‑Term Incentive awards (audited)

Metrics

Weighting

Threshold:

20%

Maximum:

100%

Outturn

% of award

which vested

Adjusted EPS

50%

12.1p

15.7p

20.3p

100%

Relative TSR vs FTSE 250 (excluding Investment Trusts)

35%

Median

Upper quartile

83rd percentile

100%

Sustainability Scorecard

ZE fleet (# vehicles)

7.5%

600

850

1,154

100%

Emissions reduction: Scope 1&2 emissions (tCO

e) reduction

7.5%

12%

15%

30.9%

100%

Total

100%

Grant Thornton have verified the FY 2026 outturn and agreed the methodology applied in respect of FY 2020 baseline. Carbon Footprint Limited have reviewed our baseline calculations and have provided assurance in respect of our FY 2026 baseline.

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

Executive Director

Total number of

shares granted

Proportion of

award vesting

(% max)

Face value of

shares vesting

(£’000)

Value attributable

to share price

movement

(£’000)

Value of

dividend

equivalents due

(£’000)

Value of

resultant

award

(£’000)

Graham Sutherland

838,017

100%

£1,531

£398

£143

£1,675

Ryan Mangold

615,088

100%

£1,124

£292

£105

£1,229

The face value of the 2023 LTIP at vesting has been calculated based on the average share price over the last three months of FY 2026 (182.7p).

At vesting, £398,309 and £292,351 of the value for Graham Sutherland and Ryan Mangold, respectively, is attributed to share price growth (the share price at award was 135.2p in 2023).

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Annual Report and Accounts 2026

Governance report

Introduction

Annual report on remuneration

continued

Long‑Term Incentive awards made during the year

The Committee determined that the 2025 awards would be measured against EPS, relative TSR and an ESG Scorecard (comprising two environmental measures and two diversity and inclusion metrics), over a three-year

period. The measures of the 2025 LTIP are consistent with the 2024 LTIP award.

Awards were made in June 2025 and are subject to an additional two-year holding period as well as malus and clawback. Before an award vests, the Committee must be satisfied that the underlying performance of the

Group is satisfactory and has the ability to amend the formulaic vesting outcome if it believes this is appropriate. The Committee believes that having a performance override is an important feature of the plan, as it

mitigates the risk of unwarranted vesting outcomes.

The targets in the 2025 LTIP were set based on information known at the time. The Committee is mindful of the impact that renationalisation of the DfT TOCs may have on the 2025 LTIP targets. The Committee will consider if

any adjustments to the 2025 LTIP (either positive or negative) are necessary due to factors outside of management’s control. Full disclosure of any adjustments made will be provided in the relevant remuneration report.

Details of the performance metrics, targets and comparator group for the 2025 LTIP awards are set out below:

2025 Long‑Term Incentive Plan performance metrics (audited)

ESG Scorecard

Adjusted EPS

Relative TSR

vs FTSE 250

Additional ZE

buses

in service/on order

by 31 March 2028

Scope 1&2 emissions

(tCO

reduction

Gender diversity in

senior leadership

Ethnic diversity in

senior leadership

Weighting

50%

30%

7.5%

2.5%

Threshold (20% vesting)

17.5p

Median

590

29%

38.7%

9.6%

Maximum (100% vesting)

21.5p

Upper quartile

890

34%

40%

11%

Vesting will be on a straight-line basis between threshold and maximum.

EPS will be assessed on a pre-IFRS 16 basis, as this aligns with how performance is measured internally and is most readily understood by management teams (Group adjusted operating profit in the EABP is measured on a pre-IFRS 16 basis for the same reason). A reconciliation from

IAS 17 to post-IFRS 16 EPS will be included in the FY 2028 Directors’ remuneration report so as to provide clarity between the LTIP targets and achievement relative to the reported EPS on a statutory basis.

Relative TSR will be assessed against the FTSE 250 Index, excluding investment trusts.

4 Zero emission.

Tonnes of carbon dioxide equivalent (tCO

e).

From SBT base year 2020.

An LTIP award of 200% and 175% of salary were granted to Graham Sutherland and Ryan Mangold, respectively, on 12 June 2025.

2025 Long‑Term Incentive Plan grants (audited)

Details of Graham Sutherland’s and Ryan Mangold’s awards (granted in the form of conditional share awards) are set out below:

Executive Director

Share price

at date of grant

Face value

(% of base salary)

Number

of shares

awarded

Face value

of award

% of award

which vests

at threshold

Performance

period

Graham Sutherland

217.8p

200%

556,198

£1,211,400

20%

1.4.25 – 31.3.28

Ryan Mangold

217.8p

175%

408,333

£889,350

20%

1.4.25 – 31.3.28

The share price at grant for the LTIP awards is closing mid-market share price for the day preceding the grant date.

As is normal practice, the Committee will ensure that any vesting is appropriate in the context of underlying financial performance and the experience of our wider stakeholders. The Committee retains the ability to apply

discretion in the event that the value at vesting is considered to be an unjustified windfall gain taking into account the performance of the Group.

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Annual report on remuneration

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Performance graphs

200

100

150

31/03/16

31/03/17

31/03/18

31/03/19

31/03/20

31/03/21

31/03/22

31/03/23

31/03/24

30/03/25

29/03/26

FirstGroup plc

Total shareholder return

FTSE 250 Index

Total shareholder return

Remuneration of the Chief Executive Officer

The table below shows the total remuneration figure for the Chief Executive Officer, during each of the past ten years. The total remuneration figure includes the annual bonus and LTIP awards that vested based on

performance in those years. The annual bonus percentages show the payout for each year as a percentage of the maximum.

2017

Tim

O’Toole

2018

Tim

O’Toole

2019

Tim

O’Toole

2019

Wolfhart

Hauser

2019

Matthew

Gregory

2020

Matthew

Gregory

2021

Matthew

Gregory

2022

Matthew

Gregory

2022

David

Martin

2023

David

Martin

2023

Graham

Sutherland

2024

Graham

Sutherland

2025

Graham

Sutherland

2026

Graham

Sutherland

Total remuneration (£’000s)

1,267

1,100

175

266

422

788

840

2,246

320

134

1,191

1,398

3,694

2,974

EABP (% of maximum potential)

–

N/A

33.4

–

N/A

82.1

72.9

LTIP vesting (% of maximum potential)

16.3

–

N/A

12.5

14.6

88.5

N/A

–

100

No EABP was paid to Tim O’Toole in 2017 or 2018. He received a conditional deferred share award in 2017.

Remuneration for Tim O’Toole until he stepped down as CEO on 31 May 2018. Tim O’Toole was not eligible for an annual bonus or LTIP awards.

Remuneration for Wolfhart Hauser for his period as Executive Chairman, 1 June to 12 November 2018. Wolfhart Hauser was not eligible for EABP or LTIP awards.

Remuneration for Matthew Gregory as Chief Executive Officer from 13 November 2018 until he stepped down on 13 September 2021.

Remuneration for David Martin for his period as Interim Executive Chairman from 13 September 2021 until 30 June 2022. David Martin was not eligible for EABP or LTIP awards.

Remuneration of Graham Sutherland from his appointment as Chief Executive Officer on 16 May 2022. Salary and EABP have been pro-rated for time served.

The graph above shows the TSR performance of £100 invested in FirstGroup plc shares over the past ten years compared with an equivalent investment in the FTSE 250. The FTSE 250 Index has been selected as it

provides an established and broad-based index, of which the Company is a constituent.

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Annual report on remuneration

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Directorate changes

Effective 25 July 2025, Myrtle Dawes was appointed to the role of Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel. For FY 2025, she received an additional fee of £6,110 p.a. for this

role. As a result of this change Ant Green (Employee Director) retired at the AGM in July 2025.

Payments for loss of office (audited)

Anthony Green was paid six months’ notice (£31,935) in respect of him retiring from the Board as Group Employee Director.

Payments to past Directors (audited)

No payments to past Directors were made during FY 2026.

Chair and Non-Executive Directors’ fees (audited)

NED fees were increased by 2.8% effective 1 April 2025, resulting in NED fees of £63,870 p.a. with additional fees of £13,220 p.a. payable to the Senior Independent Director and the Chairs of the Audit, Responsible Business and

Remuneration Committees. The fee for the Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel was set at £6,110 p.a. for FY 2026. No changes were made to the Chair’s fee in FY 2026.

From 1 April 2026 NED fees and the Chair fee increased by 3.0%, taking the basic NED fee to £65,790, the Chair fee to £298,700, the additional fee for the Senior Independent Director and Chairs of the Audit, Responsible

Business Committee Chairs and Senior Independent Director to £13,617 and the fee for the Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel to £6,294.

FY 2026

FY 2025

£’000

Basic fee

Committee

Chair

SID

Taxable

benefits

Total

Basic fee

Committee

Chair

SID

Taxable

benefits

Total

Lena Wilson

290

–

300

–

Sally Cabrini

–

Myrtle Dawes

–

Claire Hawkings

–

Jane Lodge

–

Peter Lynas

–

Anthony Green

–

The Company meets all reasonable travel, subsistence, accommodation and other expenses, including any tax where such expenses are deemed taxable, incurred by the Chair of the Board and NEDs in the course of performing their duties.

Lena Wilson was appointed to the Board as Chair on 1 February 2025, with a fee of £290,000, and her fees for FY 2025 were pro-rated.

Myrtle Dawes was appointed Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel as of 25 July 2025. The additional fee for this appointment is £6,110 p.a. and her additional fee for FY 2026 has been pro-rated.

Peter Lynas, Senior Independent Director, acted as Chairman from 10 September 2024 until the appointment of Lena Wilson on 1 February 2025. For this period, he was paid an additional fee of £22,005 bringing his total fees for FY 2025 to £96,995.

Anthony Green retired from the Board as Group Employee Director at the 2025 AGM. In addition to his fee as Group Employee Director, he received earnings from the Group as an employee amounting to £32,024 in FY 2025 and £32,367 in FY 2026.

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Annual report on remuneration

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Implementation of Remuneration Policy for FY 2027

Annual base salary

The Committee carefully considered base salary increases for the Executive Directors holistically, taking into

account FY 2027 base salary increases applied to the wider workforce (see page 95 for more information),

investor guidance, the Group’s strong performance in FY 2026 as well as the macroeconomic environment.

The Committee decided it would be appropriate to award a base salary increase of 3.0% for Graham Sutherland

and Ryan Mangold, increasing their base salary to £623,900 and £523,500, respectively, from 1 April 2026.

FY 2027 Executive Directors’ annual bonus

For FY 2027, the EABP will continue to incentivise improved performance against a range of financial and

non-financial metrics. The financial targets are set by the Committee based on a number of factors such

as the Group’s business plan, individual business unit level performance, consensus and expectations for

FY 2027. Changes from FY 2026 include inclusion of First Rail London, and increasing the weighting of Group

adjusted operating profit from 50% to 60% following the removal of the personal performance element

from the Executive Directors’ annual bonus. The personal performance of the Executive Directors will still

be assessed, however, personal performance will no longer be bonusable. This change further strengthens

alignment with shareholder experience by increasing the proportion of bonus linked directly to Group

financial performance. The precise measures under the operational scorecard may change each year

depending on annual business priorities.

The performance measures for FY 2027 are:

Measure

Weighting

Group adjusted operating profit

60%

Group adjusted cash flow

20%

Operational scorecard:

First Bus Net Promoter Score

3.5%

First Bus employee engagement score

3.5%

First Bus overall fleet MPG

First Rail scorecard

First Rail open access TOC on self-cancellations

The targets for FY 2027 will be disclosed in next year’s report when they are no longer commercially sensitive.

The FY 2027 annual bonus maximum and threshold levels of bonus as a percentage of base salary will be as follows:

Executive Director

Maximum

Threshold

Graham Sutherland

150%

Ryan Mangold

150%

All payouts will be subject to the Committee’s discretion as well as malus and clawback provisions.

Half of any bonus earned will be deferred into the Company’s shares for three years, conditional upon

continued employment. The Committee has demonstrated, in assessing bonus outcomes, including in

respect of FY 2021 and FY 2020, that it is prepared to set aside the formulaic outcome and reduce awards

or introduce a further condition, to ensure that business performance or the impact of a significant event

is properly reflected.

2026 Long‑Term Incentive awards

It is the Committee’s intention to make awards under the LTIP this year. Awards of 200% and 175% of salary will

be made to the Chief Executive Officer and Chief Financial Officer, respectively. The Committee has agreed

that the 2026 LTIP awards will be subject to EPS, relative TSR and ESG performance measures. These measures

are consistent with recent LTIP awards, although refinements have been made to the ESG metric. As noted on

page 93, Scope 1&2 emissions reduction targets and gender and ethnicity representation targets have not

been included within the 2026 LTIP meaning the ESG metric will be based solely on ZE bus fleet targets. By

increasing our ZE bus fleet management can directly reduce our greenhouse gas emissions. The achievement

of the maximum ZE buses target is expected to result in a reduction of over 41,000 tCO

Setting meaningful Scope 1&2 targets that the Executive Directors can influence would be extremely complex

in light of the changes to our business. Additionally, the re-nationalisation of the DfT TOCs and potential

changes arising from bus franchising are expected to materially alter our employee demographics. As a

result, it would not be feasible to set meaningful and robust three-year gender and ethnicity representation

targets at this time. We remain fully committed to reducing our greenhouse gas emissions and to our ED&I

agenda, and progress will continue to be monitored and driven through inclusion within the Board KPIs.

Details of the performance metrics, targets and comparator group for the 2026 LTIP awards are set out below.

The Committee is mindful of the importance of ensuring that any awards under the 2026 LTIP are aligned

with shareholder value. The EPS target range of 20.7p to 24.7p has been set based on internal forecasts. The

Committee considers the target range to be appropriately stretching, taking into account the impact of the

renationalisation of the DfT TOCs and future earnings potential from portfolio growth and diversification.

Adjusted EPS

Relative

TSR vs FTSE

250

Additional ZE

buses in

service or on

order by 31

March 2029

%Weighting

55%

35%

10%

Threshold (20% vesting)

20.7p

Median

590

Maximum (100% vesting)

24.7p

Upper

Quartile

750

Vesting will be on a straight-line basis between threshold and maximum.

Relative TSR will be assessed against the FTSE 250 Index (excluding Investment Trusts).

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Annual report on remuneration

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Directors’ interests in share awards (audited)

The outstanding LTIP, deferred share bonus awards of Directors are set out in the table below. There have been no changes to the terms of any share awards granted to Directors.

During year

Director

Plan

Date

of grant

Number of shares

under award

as at

29.03.25

Awards

granted

Awards

released

Awards

lapsed

Number of shares

under award

as at

28.03.26

Exercise

price

(£)

Face value

of awards

(£)

Date on which

awards vest/

become

exercisable

Expiry date

Graham Sutherland

LTIP

18.08.22

972,590

nil

1,100,000

18.08.25

N/A

09.06.23

838,017

nil

1,133,000

09.06.26

N/A

12.06.24

715,048

nil

1,178,400

12.06.27

N/A

12.06.25

556,198

nil

1,211,400

12.06.28

N/A

Deferred bonus

09.06.23

252,191

252.191

nil

340,963

09.06.26

N/A

12.06.24

242,343

nil

399,381

12.06.27

N/A

12.06.25

166,574

nil

362,800

12.06.28

N/A

SAYE

13.07.23

13,621

1.11

18,743

01.09.26

01.03.27

11.07.24

2,413

1.23

3,701

01.09.27

01.03.28

Ryan Mangold

LTIP

18.08.22

713,770

nil

807,275

18.08.25

N/A

09.06.23

615,088

nil

831,600

09.06.26

N/A

12.06.24

524,893

nil

865,025

12.06.27

N/A

12.06.25

408,333

nil

889,350

12.06.28

N/A

Deferred bonus

18.08.22

289,456

nil

327,375

18.08.25

N/A

09.06.23

240,545

nil

325,217

09.06.26

N/A

12.06.24

203,286

nil

335,015

12.06.27

N/A

12.06.25

139,745

nil

304,365

12.06.28

N/A

SAYE

13.07.23

13,621

1.11

18,743

01.09.26

01.03.27

11.07.24

2,413

1.23

3,701

01.09.27

01.03.28

Ant Green

SAYE

13.07.23

1,945

1.11

2,676

01.09.26

01.03.27

11.07.24

1,508

1.23

2,313

01.09.27

01.03.28

11.07.25

824

1.78

1,831

01.09.28

01.03.29

LTIP – from FY 2023 onwards, granted in the form of conditional share awards under the Long-Term Incentive Plan. Awards are subject to clawback and malus and subject to an additional two-year holding period.

Deferred bonus shares – 50% of the bonus awarded. Awards after FY 2023 are granted in the form of conditional share awards under the EABP. Awards are subject to clawback and malus.

SAYE – options granted under the all-employee share scheme.

Participants are entitled to receive accrued dividends or dividend equivalents under the LTIP and EABP pro-rated in proportion to the amount of the award that vests.

The table above shows the maximum number of shares that could be released if awards were to vest in full. In respect of LTIP and deferred bonus awards, participants are entitled to receive dividends or dividend equivalent amounts, once the share awards have vested.

The face value of LTIP and deferred bonus awards made has been calculated by multiplying the maximum number of shares that could vest by or become exercisable by the average closing mid-market share price on the day preceding the grant date. For deferred bonus and LTIP

awards made on 12.06.25, this is 217.8p. For SAYE awards, the face value of options under the 2023 scheme is determined by multiplying the number of options subscribed for by the closing mid-market share price on the date before grant (137.6p). The face value of the 2024 and 2025

SAYE awards is determined by multiplying the number of options subscribed for, including the tax-free savings bonus, by the closing mid-market share price on the date before grant (2024 SAYE: 153.4p, 2025 SAYE: 222.2p).

LTIP awards will not vest until the date the Committee determines whether performance conditions have been met, or if later, the date specified above. If dealing restrictions apply on the date of vesting, then vesting will occur on the first date after dealing restrictions cease to apply.

The market share price on the date of vest, 18 August 2025, was 225.0p.

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Annual report on remuneration

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Directors’ shareholding, shareholding guidelines and summary of outstanding

share interests (audited)

Under the terms of the Policy approved by shareholders at the 2024 AGM, Executive Directors are expected

to hold shares, or rights to shares in the Company, equivalent to a minimum of 200% of base salary within

a five-year period from their date of appointment to create greater alignment of the Executive Directors’

interests with those of shareholders. Executive Directors are also normally expected to hold the in-employment

guideline (or full actual holding if lower) in the first year following cessation of employment and 50% (or full

actual holding if lower) in the second year following cessation of employment.

The Committee reserves the right to relax or waive the application of such guidelines in certain

circumstances, including the impending retirement of an Executive Director.

The table below sets out the shareholdings of the Executive Directors and their connected persons’

shareholdings (including beneficial interests) and a summary of outstanding and unvested share awards

as at 28 March 2026. It shows that Graham Sutherland’s current shareholding is 277.5% of his base salary

and Ryan Mangold’s current shareholding is 534.5% of his base salary.

The Committee believes that it is an essential part of the Policy that Executive Directors build significant

shareholdings. The retention and build-up of equity is important in a long-term business such as FirstGroup, as it

encourages decisions to be made on a long-term, sustainable basis for the benefit of customers and shareholders.

There has been no change in the Directors’ interests in the ordinary share capital of the Company between

those set out below and the date of approval of this report with the exception of Ryan Mangold’s partnership

shares acquired through our all-employee SIP. The beneficial interests of Directors who served during the

year ending 28 March 2026 and their connected persons in the shares of the Company as at that date and

29 March 2025 are shown below.

Ordinary shares beneficially owned

Directors

Date of

appointment

At 29.03.25 or

appointment

date if later

28.03.26

Unvested

EABP/SAYE/

SIP shares

3,4

Unvested

LTIP

Vested but not

exercised

EABP/

LTIP awards

Shareholding

requirement

as % of salary

Current

shareholding

as % of

salary

6,7

shareholding

requirement

achieved

Executive Directors

Graham Sutherland

16.05.22

250,005

644,675

677,142

2,109,263

N/A

200%

277.5%

138.7%

Ryan Mangold

31.05.19

1,766,290

1,298,277

600,381

1,548,314

N/A

200%

534.5%

267.3%

Non-Executive Directors

Lena Wilson

01.02.25

14,000

31,000

Sally Cabrini

24.01.20

10,000

Myrtle Dawes

01.04.22

3,497

Anthony Green

15.09.20

1,674

4,277

Claire Hawkings

21.01.22

10,000

Jane Lodge

30.06.21

15,000

Peter Lynas

30.06.21

80,000

Or date of leaving, if earlier.

Ryan Mangold participates in the all-employee SIP. His partnership shares are held in trust and are not at risk of forfeiture. Ryan Mangold acquired an additional 264 partnership shares between 28 March 2026 and the date of approval of this report.

EABP shares are deferred shares that are subject to continued employment, but not subject to further performance conditions.

SIP matching shares awarded to Ryan Mangold are held in trust and are at risk of forfeiture if the corresponding partnership shares are withdrawn from trust within three years. No matching shares were awarded between 28 March 2026 and the date of approval of this Report.

LTIP awards are conditional share awards and nil cost options subject to ongoing performance conditions.

Based on the closing share price on 27 March 2026 (168.9p).

The percentage shown includes the after-tax value of vested but unexercised awards and the after-tax value of unvested EABP awards that are subject to continued employment.

Shares for Non-Executive Directors are held outright, with no attaching performance conditions.

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Dilution

The Company ensures that the level of shares granted under the Company’s share plans and the means

of satisfying such awards remains within best practice guidelines, so that dilution from employee share

awards does not exceed 10% of the Company’s issued share capital for all share plans and 5% in respect

of executive share plans in any ten-year rolling period. The Committee monitors dilution levels at least

once a year. At 28 March 2026, 3.9% of the Company’s issued share capital had been issued for the

purpose of the SAYE, BAYE and LTIP over a ten-year period.

Employee Benefit Trust (EBT)

The FirstGroup EBT has been established to acquire ordinary shares in the Company, by subscription or

purchase, from funds provided by the Group to satisfy rights to shares arising on the exercise or vesting of

awards under the Group’s share-based incentive plans. As at 28 March 2026, 19,922,152 shares were held

by the EBT to hedge outstanding awards of 42,566,919. This means that the EBT holds sufficient shares to

satisfy approximately 46.8% of outstanding awards.

External board appointments

Where Board approval is given for an Executive Director to accept an outside non-executive directorship,

the Director is entitled to retain any fees received, unless the appointment is in connection with the business

of the Group. Graham Sutherland was appointed as Non-Executive Director of HICL Infrastructure PLC with

effect from 21 May 2025.

Company

Retained fees (£)

Graham Sutherland

HICL Infrastructure PLC

59,953

Percentage change in remuneration levels

The table below shows the movement in the salary, benefits and annual bonus for all Directors between the

current and previous financial year compared with that for the average UK employee (First Bus and First Rail,

but excluding the corporate centre). For the benefits and bonus per employee, the figures are based on those

employees eligible to participate in such schemes.

Executive Directors

Non-Executive Directors

Average UK

employees

6,7

change

FY 2026

Salary/fees

3.5%

2.8%

12.7%

2.8%

Benefits

5.5%

41.0%

6.5%

145.7%

29.8%

78.8%

(48.1)%

9.6%

107.1%

0.0%

Annual bonus

(28.7)%

(6.9)%

(6.8)%

change

FY 2025

Salary/fees

4.0%

N/A

4.0%

Benefits

135.6%

51.0%

5.7%

N/A

10.9%

40.8%

(30.7)%

67.2%

67.6%

0.0%

Annual bonus

(19.0)%

(9.2)%

(9.1)%

–

change

FY 2024

Salary/fees

6.0%

3.0%

N/A

3.0%

Benefits

(15.6)%

(46.2)%

(2.6)%

N/A

102%

(4.8)%

(30.9)%

48.8%

(47.5)%

0.0%

Annual bonus

9.1%

3.0%

–

change

FY 2023

Salary/fees

5.9%

N/A

2.4%

N/A

0.0%

N/A

0.0%

(14.6)%

0.0%

Benefits

(7.3)%

N/A

0.0%

N/A

(41.8)%

N/A

24.0%

116.2%

0.0%

Annual bonus

(32.3)%

N/A

(0.7)%

–

change

FY 2022

Salary/fees

11.1%

N/A

7.1%

N/A

6.1%

N/A

0.0%

Benefits

4.2%

N/A

0.0%

N/A

0.0%

Annual bonus

576.6%

N/A

–

We use all UK employees as a reference, as we believe this provides a more accurate reference point. Pay increases for the majority of UK employees in First Bus and First Rail are collectively bargained with trade unions in individual operating companies in First Bus and First Rail.

Some of these agreements are multi-year deals.

Graham Sutherland was appointed to the Board as Chief Executive Officer on 16 May 2022. As such, no comparison to FY 2022 is available and his FY 2023 pay has been annualised for comparison purposes.

Bonuses were not paid in FY 2020 or FY 2021, therefore, the percentage change in annual bonus to FY 2022 is ‘N/A’, meaning that the year-on-year change cannot be calculated.

Lena Wilson was appointed as Chair on 1 February 2025. As such, no comparison before FY 2026 is available, her FY 2025 fee has been annualised for comparison purposes.

Myrtle Dawes was appointed as designated NED for Workforce and Chair of the Colleague on 25 July 2025, the additional fee she receives has been annualised for comparison purposes. Myrtle Dawes was appointed to the Board on 1 April 2022. As such, no comparison to before FY

2024 is available.

Claire Hawkings, Jane Lodge and Peter Lynas were appointed to the Board in FY 2022. FY 2022 fees have been annualised for comparison purposes.

Peter Lynas served as Chair of Board Safety Committee from September 2021 to March 2022. For comparison purposes, the fee he received as Committee Chair has been annualised. Peter Lynas’ fees decreased in FY 2023 compared with FY 2022 as he no longer served as Chair of a

Committee. Peter Lynas acted as Chairman from 10 September 2024 until the appointment of Lena Wilson as Chair on 1 February 2025. As such, he received a fee of £22,005 for this role. Peter Lynas resumed the role of Senior Independent Director on 1 February 2025. For comparison

purposes, FY 2025 fees relate to the fees he receives as a Senior Independent Director.

Anthony Green retired from the Board as Group Employee Director at the 2025 AGM, his FY 2026 fee has been annualised for comparison purposes.

Private medical insurance premium rates for all employees, including the Executive Directors, were lower in FY 2024 compared with previous years due to a Covid rebate. Likewise, premium rates increased by 51% for all employees in FY 2025.

Directors’ salary/fee figures for FY 2021 reflect the voluntary 20% reduction between April to July 2020. There were no changes to NED fees between FY 2020 and FY 2023, but an increase of 3.0% in FY 2024 and 4.0% in FY 2025.

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Annual report on remuneration

continued

CEO pay ratio

In line with reporting requirements, the table below sets out the ratio at the 25th, 50th and 75th percentiles

of the total remuneration received by the Chief Executive Officer, compared with the total remuneration

received by our UK employees. The Company has calculated the ratios in accordance with the methodology

of Option B as it was deemed the most reasonable and practical approach given the collation of data

exercise required for gender pay gap reporting. There has been no departure from this methodology and

no element of pay has been omitted. It should be noted that the pay ratio may vary year-on-year and the

incentive outcomes for the Chief Executive Officer can impact the results significantly. We will provide an

explanation in each year’s report around the change in the ratio as well as any additional context, where

helpful, to understand variance. The UK employees at the lower quartile, median and upper quartiles were

identified as at 5 April 2025 and their salary and total remuneration were calculated in respect of actual pay

data from 30 March 2025 to 28 March 2026.

The Committee is satisfied that these pay ratios are consistent with our pay, reward and progression policies

and that these colleagues are representative of the relevant percentiles across the organisation, as they

represent frontline workers in our First Bus and First Rail divisions, i.e., the large majority of our UK workforce

receiving basic pay, overtime, holiday pay and employer pension contributions. The figures also include

sick pay (where relevant).

The decrease in the CEO pay ratio compared with FY 2025 is driven by the variable pay awards. The FY 2026

EABP vesting outcome is slightly reduced compared to FY 2025 and the share price movement between

FY 2025 and FY 2026 affects the reported value of the 2023 LTIP award.

The Committee is satisfied that the data included in the CEO pay ratio table reflect the goals of the Group’s

Remuneration Policy to support colleagues in the performance of their roles in collectively delivering the

Group’s strategy. In particular, the performance-based framework that rewards employees for their

individual efforts and the performance of the Company, and to structure pay in a simple and transparent

manner, have been applied consistently.

Pay ratio

Year

Method

25th

percentile

50th

percentile

75th

percentile

FY 2026

Option B

83:1

77:1

55:1

Total remuneration

£35,690

£38,807

£53,737

Salary only

£32,166

£34,636

£45,530

FY 2025

Option B

116:1

90:1

61:1

FY 2024

Option B

42:1

40:1

26:1

FY 2023

Option B

34:1

30:1

22:1

FY 2022

Option B

68:1

62:1

41:1

FY 2021

Option B

30:1

25:1

16:1

FY 2020

Option B

32:1

25:1

17:1

For FY 2026 the CEO total remuneration was £2,974,310 and the CEO salary was £605,700.

Relative importance of spend on pay

The table below sets out the Company’s expenditure on pay relative to adjusted operating profit, shareholder distributions by way of dividends and share buybacks, as well as spend on zero emission vehicles, an area of

significant investment.

FY 2026

£m

FY 2025

£m

change

Adjusted operating profit

221.5

222.2

-0.3%

Distributions to shareholders

88.9

84.2

5.6%

Spend on zero emission vehicles

86.0

38.9

121.1%

Total employee pay

1,704.1

1,710.9

-0.4%

Group adjusted operating profit, as reported in note 5 in the notes to the consolidated financial statements, has been used as a comparison as it is a key financial metric that the Board considers when assessing Company performance.

Distributions to shareholders, as reported in the consolidated statement of changes in equity, of £88.9m in FY 2026 consists of £38.9m in dividends (£45.6m including non-controlling interests) and £50.0m share buyback (£50.4m including related costs). Distributions to shareholders

in FY 2025 of £84.2m consists of £34.2m in dividends (£37.6m including non-controlling interests) and £50.0m share buyback (£50.4m including related costs).

Spend on zero emission vehicles is our spend, net of grant funding.

Total employee pay is the total pay for all Group employees, including pension and social security costs. The average monthly number of employees in FY 2026 was 30,995 (FY 2025: 30,763).

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Introduction

Annual report on remuneration

continued

Committee membership and attendance

The membership of the Committee is shown on page 92 and attendance is set out on page 82. After each

meeting, the Chair of the Committee presents a report on its activities to the Board. The Chief Executive

Officer, General Counsel and Company Secretary and the Committee’s external remuneration adviser

will normally attend meetings by invitation, to provide advice and respond to specific questions. Other

attendees may include the Chair, Chief People Officer, Chief Financial Officer and the Director of Group

Reward. Attendees are not involved in any decisions and are specifically excluded from any matter

concerning their own remuneration. The Group Company Secretary and General Counsel acts as

secretary to the Committee.

Who supports the Committee?

The Committee can obtain the advice of external remuneration consultants and is solely responsible for

their appointment, retention and termination, and for the approval of the basis of their fees and other

terms. The Chair of the Committee agrees the protocols under which the external remuneration

consultants provide advice.

During the early part of FY 2026, the Committee was supported by Willis Towers Watson (WTW). WTW

provided independent advice and commentary on a range of topics, including Directors’ remuneration,

discretionary share plans, corporate governance and executive remuneration trends. WTW’s fees for advice

provided to the Committee were £58,800 (FY 2025: £60,040), charged on a time-spent basis. WTW provided

remuneration advice, including the provision of benchmark data, to the Company.

In November 2025, following a competitive tender process led by the Chair of the Committee, Deloitte was

appointed. During the year Deloitte provided independent advice and commentary on a range of topics,

including Directors’ remuneration, discretionary share plans, corporate governance and executive

remuneration trends. Deloitte’s fees for advice provided to the Committee were £20,500, charged

on a time-spent basis.

WTW and Deloitte are both members of the Remuneration Consultants Group Code of Conduct and adhere

to this Code in their dealings with the Committee. The Committee reviews the appointment of its advisers

annually and is satisfied that the advice it receives is objective and independent.

Shareholder voting on remuneration

At the 2025 AGM, shareholders approved the Directors’ remuneration report. Shareholders approved the

Directors’ Remuneration Policy at the 2024 AGM, which was published in the FY 2024 Annual Report and

Accounts. The results of these votes are shown below.

To approve the Directors’ remuneration

report at the 2025 AGM

To approve the Directors’ Remuneration

Policy at the 2024 AGM

2025 AGM voting

2024 AGM voting

Votes for

441,012,155

Votes against

15,310,095

Votes withheld

198,405

Votes for

426,755,092

Votes against

29,479,055

Votes withheld

286,508

Note: A ‘Vote withheld’ is not a vote in law and is not counted in the calculation of the votes ‘for’ and ‘against’ a resolution.

To approve the relevant Directors’ remuneration report

Votes for

Votes against

2025 AGM

98.33%

1.67%

Note: A ‘Vote withheld’ is not a vote in law and is not counted in the calculation of the votes ‘for’ and ‘against’ a resolution.

To approve the Directors’ Remuneration Policy

Votes for

Votes against

2024 AGM

93.54%

6.46%

Further engagement

The Committee values its continued dialogue with shareholders and engages directly with them and their

representative bodies at the earliest opportunity. Shareholder feedback received in relation to the AGM, as

well as any additional feedback and guidance received during the year, is considered by the Committee

as it develops the Company’s remuneration framework and practices.

In line with Provision 3 of the Code, the Committee Chair welcomes questions from shareholders on the

Committee’s activities.

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Introduction

Annual report on remuneration

continued

The current Remuneration Policy was approved at the 2024 Annual General Meeting on 26 July 2024. The full Policy can be found on the FirstGroup plc website and on pages 144 to 155 in the FY 2024 Directors’ Remuneration report.

The Company’s Policy remains to attract, retain and motivate its leaders and to ensure they are focused on delivering business priorities within a framework designed to promote the long-term success of FirstGroup and

align with shareholder interests. In order to prevent any conflicts of interest, the Committee is composed entirely of independent Non-Executive Directors. No individual is involved in deciding their own remuneration.

Malus and clawback

Malus and clawback provisions apply to the EABP and LTIP awards. Malus provisions allow us to reduce the amount of any unvested awards, potentially to zero, prior to payment or vesting. Cash bonuses under the EABP can

be clawed back up to the third anniversary of payment and deferred share awards may be subject to malus up to the vesting date. LTIP awards can be clawed back up to the fifth anniversary of grant. The period in which

malus and clawback provisions may apply is appropriate as it aligns with the vesting period of incentives and reflects the time during which risks or exposure may materialise.

Events that may trigger the Remuneration Committee to apply malus and/or clawback include, but are not limited to:



a material misstatement (including any omission) in the Company’s financial results



where the award, or the vesting outcome of the award, was based on a material error, or any inaccurate or misleading information



any form of misconduct



insolvency or corporate failure



regulatory censure or significant reputational damage

The Committee confirms that malus and clawback provisions were not exercised during the year.

The diagram below illustrates the balance of pay and time period of each element of the Policy for Executive Directors.

Total pay over five years

Year 1

Year 2

Year 3

Year 4

Year 5

Fixed pay

Salary

Fixed pay

Benefits, Pension

EABP

(Malus and clawback

provisions apply)

Up to 150% of salary

50% in cash

50% in shares. Three-year deferral period

No further performance conditions

LTIP

(Malus and clawback

provisions apply)

Up to 200% of salary

Three-year performance period

Two-year holding period

No further performance conditions

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Remuneration Policy summary

The table below sets out an overview of the key areas of the Policy and summarises how the Committee applied the Policy in FY 2026, together with details of how the Committee intends to implement the Policy in FY 2027.

Purpose and link

to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2026

How we plan to implement

the Policy in FY 2027

Salary

To attract and maintain

high calibre executives with

the attributes, skills and

experience required

to deliver the Group’s strategy.

Typically reviewed annually, effective from 1 April.

Any increases take account of:



Company and individual performance

and experience



role and responsibilities



market positioning



external indicators, such as inflation and market

conditions, and



pay increases made to the wider workforce

No recovery or withholding applies.

Salary increases (in percentage terms) for Executive

Directors will normally be with reference to increases

made to the wider workforce, however there is no formal

maximum. Where the Committee considers it necessary

or appropriate, larger increases may be awarded in

individual circumstances, including, but not limited to,

factors such as an increase in the size or scope of the

role, or the individual’s development and performance

in the role.

The Committee has the flexibility to set the salary of

a new hire at a discount to the market level and to

realign it in subsequent years as the individual gains

experience in the role. In exceptional circumstances,

the Committee may agree to pay above market levels

to secure or retain an individual who is considered by

the Committee to possess significant and relevant

experience that is critical to the delivery of the

Company’s strategy.

An increase of 2.8% was

applied to the CEO and CFO

from 1 April 2025. This increase

was aligned to the general

non-collectively bargained

employee salary increase.

An increase of 3.0% was applied

to the CEO and CFO from 1 April

2026. This increase was aligned

to the increase for the general

non-collectively bargained

employee salary increase. See

page 103 for more information.

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Introduction

Remuneration Policy summary

continued

Purpose and link

to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2026

How we plan to implement

the Policy in FY 2027

Benefits

Provide market-competitive

benefits to assist in attracting

and retaining executives and

to support them in the

performance of their roles.

A range of benefits may be provided, including,

but not limited to, private medical insurance,

life assurance, long-term disability insurance,

company car allowance, general employee

benefits, including participation in our all-employee

share plans and travel and related expenses.

The cost of benefits is not pre-determined, reflecting

the need to allow for increases associated with the

provision of benefits. As such, there is no formal maximum.

Normal Company

benefit provision.

No change to FY 2026.

Pension benefits

Allows executives to build

long-term savings for their

retirement and ensures the

total remuneration package

is competitive.

Payment may be made into a pension scheme

or delivered as a cash allowance.

Executive Directors receive a pension contribution, or

cash allowance, of up to the average pension benefit

for the wider UK workforce, up to a maximum of 15% of

base salary.

The CEO receives a pension

contribution or cash allowance

of 5% of base salary. The CFO

pension contribution remains

at 15% of base salary.

No change to FY 2026.

Annual bonus

To focus on the delivery

of annual goals, to strive

for superior performance and

to achieve specific targets

which support the strategy.

The deferred share element

provides alignment with

shareholders and

supports retention.

Bonuses are awarded annually under the

Executive Annual Bonus Plan (EABP).

At least half the bonus awarded in any year will

be deferred into shares, normally for a period

of three years.

The EABP is reviewed annually to ensure

performance measures and targets are

appropriate and support the strategy.

Dividend equivalent payments may accrue on

shares which vest under the EABP.

The Committee retains the discretion, acting fairly

and reasonably, to alter the bonus outcome in light

of the underlying performance of the Group, taking

into account any factors it considers relevant.

Malus and clawback provisions apply.

The maximum annual bonus opportunity for

the Executive Directors is 150% of salary.

Performance measures

(as a % of maximum):

Operating profit – 50%

Cash flow – 20%

Operational – 20%

Personal objectives – 10%

FY 2026 bonus awards of

109.4% (72.9% of maximum)

for the CEO and 107.9% of base

salary (71.9% of maximum) for

the CFO. See pages 98 and 99

for further details.

No change to the maximum

opportunity for FY 2026.

Performance measures

(as a % of maximum):

Operating profit – 60%

Cash flow – 20%

Operational – 20%

See page 103 for further details.

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Introduction

Remuneration Policy summary

continued

Purpose and link

to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2026

How we plan to implement

the Policy in FY 2027

Long-Term Incentive Plan (LTIP)

Incentivises the execution of

strategy, and drives long-term

value creation and alignment

with shareholders.

Awards under the LTIP are conditional rights

to receive shares or nil cost options over

shares, subject to continued employment

or good leaver status and the achievement

of performance conditions.

Up to 20% of the maximum may be payable for

threshold performance, with maximum vesting

being equal to 100% of any award made.

Shares which vest under the LTIP are typically

subject to an additional holding period of

two years.

Dividend equivalent payments may accrue

on shares which vest under the LTIP.

The Committee retains the discretion, acting fairly

and reasonably, to alter the LTIP outcome in light of

the underlying performance of the Group, taking

account any factors it considers relevant.

Malus and clawback provisions apply.

Normal award policy is for a maximum annual

award opportunity of 200% of base salary for

the Chief Executive Officer and 175% for other

Executive Directors.

In exceptional circumstances, awards of up to 300% of

base salary may be made, such as to aid recruitment.

Performance measures

(as a % of maximum):

EPS – 50%

Relative TSR – 30%

ESG Scorecard – 20%

Grant levels:

CEO – 200% of salary

CFO – 175% of salary

See page 100 for details of the

targets for the 2025 LTIP awards

granted in the year.

The 2023 LTIP had a vesting

outcome of 100%. See page 99

for further details.

No change to maximum

LTIP opportunities. Performance

measures (as a %of maximum):

EPS – 55%

Relative TSR – 35%

Additional ZE buses – 10%

See page 103 for detail on

LTIP awards to be granted

for FY 2027.

Shareholding guidelines

To ensure that Executive

Directors’ interests are aligned

with those of shareholders.

During employment

The Executive Directors are expected to hold

shares, or rights to shares, equivalent in value

to a minimum of 200% of base salary within a

five-year period from their date of appointment.

Post-employment

Following cessation, Executive Directors are

normally expected to hold:



the in-employment guideline (or full actual

holding if lower) for the first year following

cessation of employment, and



50% of the in-employment guideline (or full

actual holding if lower) for the second year

following cessation of employment

The post-employment guideline will apply to share

awards granted under incentive plans from the

2021 AGM onwards and will not include shares

purchased outright by an Executive Director.

Not applicable.

CEO – 200% of salary

CFO – 200% of salary

See page 105 for further details

on shareholding requirements

and outstanding share awards.

No change to requirements.

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Introduction

Remuneration Policy summary

continued

Compliance with the Corporate Governance Code

P Remuneration policies and practices designed to support strategy

The Directors’ Remuneration Policy, which was approved at the 2024 AGM, was designed with consideration of the UK Corporate Governance Code. The majority of the Executive Directors’ remuneration is through

performance-related incentives linked to the Group’s strategic goals. Half of any Executive Director’s annual bonus that vests under the EABP is deferred into shares that vest after three years. Any awards that vest

under the LTIP are subject to a further two-year holding period. Additionally, the Executive Directors have shareholding guidelines and post-cessation shareholding guidelines provide a clear link to the Group’s

ongoing performance and shareholder experience. See pages 144 to 155 of the 2024 Annual Report for the 2024 Policy.

Q Formal and transparent procedure for developing policy on executive remuneration

FirstGroup welcomes open and frequent dialogue with shareholders on its approach to remuneration. Major shareholders have been consulted on the Committee’s approach to remuneration.

R Directors to exercise independent judgement and discretion when authorising remuneration outcomes

The Remuneration Policy allows for the use of discretion to adjust the formulaic incentive outcomes if they are not reflective of underlying performance of the Group. As noted under Provision 37, discretion has been

applied to reduce formulaic outcomes under the EABP in FY 2020 and FY 2021, resulting in no bonus being awarded in either year. The Committee also used its discretion to apply a downward adjustment resulting

in an overall reduction of 10% of the 2020 LTIP award that vested in June 2023.

32 Establish a remuneration committee

The Company has a Remuneration Committee in accordance with the requirements of the Code.

33 Delegation of responsibilities and review of workforce remuneration and related policies

When determining senior team pay, the Committee considers it in the context of wider workforce pay, policies and practices. Each year, a number of items are tabled at Committee meetings to ensure the approach

throughout the Group is fair. See pages 95 and 96 for further information.

34 Non-executive director remuneration

The Company’s NEDs each receive an annual fee reflecting the time commitment for their roles. An additional fee is paid to the Senior Independent Director and Chairs of the Audit, Remuneration and Responsible

Business Committees to reflect the additional time commitment associated with these roles. The NEDs do not receive any performance-related pay or equity awards. NEDs are permitted to buy shares in the Company,

subject to the Company’s share dealing code. See page 102 for fees paid to NEDs and the Chair.

35 Consultants appointed by the committee

Following a formal tender process, Deloitte was appointed by the Committee in November 2025, replacing Willis Towers Watson.

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Compliance with the Corporate Governance Code

36 Remuneration schemes should promote long-term holdings by executive directors

Executive Directors are required to hold shares to the value of 200% of base salary within five years of appointment. Post-cessation, Executive Directors must maintain 100% of their in-employment shareholding guideline

in the first year following employment, dropping to 50% in the second year (or the full actual holding if lower).

37 Use of discretion

As noted in Principle R, the Committee has the ability to use discretion to override formulaic outcomes.

The Committee used its discretion to reduce formulaic outcomes under the FY 2020 and FY 2021 EABP, resulting in no payout in both years, to ensure performance is reflective of the Company’s underlying performance

and aligned with the shareholder experience. The Committee also used its discretion to apply a downward adjustment resulting in an overall reduction of 10% of the 2020 LTIP award that vested in June 2023.

38 Malus & clawback provisions

Malus and clawback provisions apply to both the EABP and LTIP. Malus and clawback provisions were not exercised during the year.

39 Only basic salary to be pensionable

The Company complies with this provision and pension contributions are aligned with the wider workforce. See page 96 for further information.

40 Notice and contractual periods

The notice and contractual periods for the Executive Directors are for one year.

41 Report on the work of the committee and reporting requirements

The strategic rationale for our Executive Director remuneration policies and structures is set out in the Remuneration Committee Chair’s letter on pages 92 and 93 and in the Annual report on remuneration on pages 97

to 108. The Committee is satisfied that the remuneration outcomes are appropriate, considering internal and external measures and the wider workforce pay.

We encourage an open dialogue with shareholders on executive remuneration matters.

In developing the Remuneration Policy, we consider alignment with the wider workforce pay policies. The Committee reviews wider workforce pay and practices and Myrtle Dawes chairs the Colleague Advisory Panel

and answers questions.

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Introduction

Directors’ report and additional disclosures

Powers of the Directors

The Directors are responsible for the management

of the business of the Company and may exercise

all powers of the Company subject to applicable

legislation and regulation and the Company’s

Articles of Association (Articles).

Conflicts of interest

The Directors have a statutory duty under the

Companies Act 2006 to avoid situations in which

they have, or can have, a direct or indirect interest

that conflicts, or may conflict, with the interests of the

Company. This duty is in addition to the existing duty

that a Director owes to the Company to disclose to

the Board any transaction or arrangement under

consideration by the Company. The Company’s

conflict of interest procedures are reflected in the

Articles. In line with the Companies Act 2006, the

Articles allow the Directors to authorise conflicts

and potential conflicts of interest where appropriate.

The decision to authorise a conflict can only be

made by non-conflicted Directors. Directors do

not participate in decisions concerning their own

remuneration or interests.

The Company Secretary minutes the consideration

of any conflict or potential conflict of interest and

authorisations granted by the Board. On an ongoing

basis, the Directors inform the Company Secretary

of any new, actual or potential conflict of interest

that may arise or if there are any changes in

circumstances that may affect an authorisation

previously given. Even when authorisation is given,

a Director is not absolved from their duty to promote

the success of the Company.

Furthermore, the Articles include provisions relating

to confidential information, attendance at Board

meetings and availability of Board papers to protect

a Director from breaching their duty if a conflict of

interest arises.

The Directors present their report on the affairs of the

Group, together with the audited financial statements

and the report of the auditor for the 52 weeks ended

28 March 2026. Information required to be disclosed

in the Directors’ report may be found below and is

incorporated into the Directors’ report by cross-

reference to the following sections of the Annual

Report and financial statements in accordance with

the Companies Act 2006 (the 2006 Act) and Listing

Rule 9.8.4R of the Financial Conduct Authority.

Information

Page

Sustainability governance

Greenhouse gas emissions

Proposed final dividend

Risk factors and principal risks;

going concern and viability

statements

60 to 71

Governance arrangements;

human rights and anti-

corruption and bribery matters

32 to 33

Long-term incentive schemes

99 to 100

Financial instruments and

related market transactions

161 to 167

Directors

The Directors of the Company who served during

the year are shown on pages 75 to 77.

Details of the Directors’ interests in shares can

be found in the Directors’ remuneration report

on page 104.

During the year, no Director had any interest in any

shares or debentures in the Company’s subsidiaries,

or any material interest in any contract with the

Company or a subsidiary being a contract of

significance in relation to the Company’s business.

These provisions will only apply where the

circumstance giving rise to the potential conflict

of interest has previously been authorised by the

Directors. The Board considers that the formal

procedures for managing conflicts of interest

currently in place have operated effectively

during the year under review.

Election and re-election of Directors

Directors are required under the Articles to submit

themselves for election by shareholders at the AGM

following their appointment by the Board. Also, in

accordance with best practice and the Code, all

Directors put themselves forward for re-election by

shareholders annually. This year they will do so at

the AGM on 30 July.

Directors’ indemnities and

liability insurance

FirstGroup maintains liability insurance for its

Directors and Officers. The Company has also

granted indemnities to the extent permitted by law

to each of the Directors, the Company Secretary and

a number of other executives and senior managers.

These indemnities were in place throughout the

period and are uncapped in amount in relation to

certain losses and liabilities which they may incur

to third parties in the course of acting as a Director

or Officer of the Company, or any of its associated

companies. Neither the indemnity, nor insurance

cover provides protection in the event a Director

or Officer is proved to have acted fraudulently or

dishonestly. The indemnity is categorised as a

‘qualifying third party indemnity’ for the purposes

of the Companies Act 2006 and will continue in

force for the benefit of Directors and Officers on

an ongoing basis.

Research and development

The Group does not conduct any meaningful

research or development.

Disclosure of information to the

external auditor

Each of the Directors who held office at the date of

approval of this report confirm that, so far as they

are aware, there is no relevant audit information

(being information needed by the auditor in

connection with preparing its audit report), of which

the Company’s auditor is unaware, and each of the

Directors has taken all the steps that they ought

reasonably to have taken as a Director in order to

make themselves aware of any relevant audit

information and to establish that the Company’s

auditor is aware of that information.

This confirmation is given and should be interpreted

in accordance with the provisions of Section 418 of

the Companies Act 2006.

Share capital

As at 28 March 2026, the Company’s issued share

capital was 570,695,015 ordinary shares of 5 pence,

each credited as fully paid, and the Company held

8,164,166 of these shares in treasury. The issued

share capital of the Company which carries voting

rights of one vote per share comprised 562,530,849

ordinary shares. Further details of the Company’s

issued share capital are shown in note 25 to the

Company’s financial statements.

The Company’s shares are listed on the London

Stock Exchange.

Articles of Association

The description in this section summarises certain

provisions of the Company’s Articles and applicable

Scottish law concerning companies. This summary

is qualified in its entirety by reference to this

Company’s Articles and the Companies Act 2006.

The Company’s Articles may be amended by a

special resolution of the Company’s shareholders.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

115

Directors’ report and additional disclosures

continued

Substantial shareholdings

As at 28 March 2026, the Company had been notified under the FCA’s Disclosure, Guidance and

Transparency Rule of the following interests in its total voting rights of 3% or more:

Name of shareholder

Number of

ordinary shares

% of total

voting rights

Date of

notification

Ameriprise Financial, Inc.

56,164,499

9.98

19 November 2025

BlackRock, Inc

34,142,655

5.96

4 August 2025

Schroders Plc

28,079,627

4.99

5 January 2026

Dimensional Fund Advisors LP

28,034,918

4.97

25 September 2025

Majedie Asset Management Limited

60,915,714

4.99

3 February 2021

Aberforth Partners LLP

33,717,348

4.97

6 September 2023

Coast Capital Management LP

25,169,383

3.35

20 May 2022

Between 28 March 2026 and the date of this report:

Name of shareholder

Number of

ordinary shares

% of total

voting rights

Date of

notification

Equiniti Trust (Jersey) Limited as trustee of the

FirstGroup plc Employee Benefit Trust

23,092,254

4.10

26 May 2026

Dimensional Fund Advisors LP

28,167,366

5.01

29 May 2026

Going concern and viability

Directors are required to consider if it is appropriate

to adopt the going concern basis of accounting.

Disclosure of the Directors’ deliberations to determine

whether it is appropriate to adopt the going concern

basis of accounting in addition to consideration of

whether there are any material uncertainties which

may affect the Group’s ability to continue to adopt

this basis can be found in the Going concern

statement on page 71, the Audit Committee report

starting on page 85 and in note 2 to the financial

statements. In summary, the Directors have

concluded that it is appropriate to prepare the

financial statements on a going concern basis.

Directors are also required to provide a broader

assessment of viability over a longer period, which

can be found on page 70.

Employee share plans

The Company operates a number of employee

share plans, details of which are set out in note 33

and in the Directors’ remuneration report that starts

on page 92.

All of the Company’s employee share plans

contain provisions relating to change of control.

On a change of control, options and awards granted

to employees may vest and in the case of options

become exercisable, subject to the satisfaction of

any applicable performance conditions at the time.

Stakeholder engagement

The Board has determined that the Group’s

stakeholders are customers, investors, government,

employees, communities and our strategic partners

and suppliers. The Board is aware that its actions

and decisions impact our stakeholders. Effective

engagement with stakeholders is important to the

Board as it strengthens the business and helps to

deliver a positive result for all our stakeholder

groups. In order to comply with Section 172 of the

Companies Act, the Board is required to take into

consideration the interests of stakeholders and

include a statement setting out the way in which

Directors have discharged this duty during the year.

The Group’s stakeholders are identified on pages

56 to 58 of the Strategic report and the statement of

compliance with Section 172 is set out on page 59.

Further information on workforce engagement can

also be found on page 46.

Purchase of own shares

At the AGM of the Company in 2024, authority was

granted for the Company to purchase up to 14.99%

of its ordinary shares. The Company announced a

£50m buyback programme on 10 June 2025 under

the authority granted at the 2024 AGM and restricted

this to 14.99% of the issued share capital on the day

before the programme commenced. The £50m

buyback programme completed on 2 October 2025.

Any buybacks commencing before the 2026 AGM

will be conducted under the authority granted at

the 2025 AGM although if the authority is renewed

then the renewed authority may be relied upon. The

Company anticipates seeking authority to purchase

up to 14.99% of its ordinary shares at the AGM in 2026.

Political donations

At the 2025 AGM, shareholders passed a resolution

to authorise the Company and its subsidiaries to

make political donations to political parties or

independent election candidates, to other political

organisations, or to incur political expenditure (as

such terms are defined in Sections 362 to 379 of the

2006 Act), in each case in amounts not exceeding

£100,000 in aggregate. As the authority granted at

the 2025 AGM will expire, renewal of this authority

will be sought at this year’s AGM. Further details

are available in the Notice of AGM.

As a result of the broad definition used in the 2006

Act of matters constituting political donations, it

is possible that normal business activities, which

might not be thought to be political expenditure

in the usual sense, could be covered. Accordingly,

authority is being sought as a precaution to ensure

that the Company’s normal business activities do

not infringe the 2006 Act, but it is not the policy of

the Company to make donations to UK or EU political

organisations, nor to incur other political expenditure

in the UK or EU.

No political donation nor expenditure was incurred

by the Company and its subsidiaries during FY 2026.

The rights attached to the ordinary shares of the

Company are defined in the Company’s Articles.

No person has any special rights of control over

the Company’s share capital and all issued

shares are fully paid.

Voting rights

Shareholders are entitled to attend and vote at any

general meeting of the Company. It is the Company’s

practice to hold a poll on every resolution at general

meetings. This means that each member present in

person or by proxy has one vote for every share held.

In the case of joint holders the vote of the senior

shareholder who tenders a vote, whether in person

or by proxy, shall be accepted to the exclusion of the

votes of the other joint holders and, for this purpose,

seniority shall be determined by the order in which

the names stand in the Register of Members in

respect of the joint holding.

Dividend rights

The Directors may declare an interim dividend and

shareholders may by ordinary resolution declare

final dividends, but the amount of the final dividend

may not exceed the amount recommended by

the Board.

Transfer of shares

There are no specific restrictions on the size of

a holding, nor on the transfer of shares which are

both governed by the general provisions of the

Company’s Articles and prevailing legislation. The

Directors are not aware of any agreements between

holders of the Company’s shares that may result in

restrictions on the transfer of securities or on voting

rights at any meeting of the Company.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

116

Directors’ report and additional disclosures

continued

First Rail

As at 31 March 2026, the Group’s contracted

passenger rail operators, First Greater Western

Limited and First Trenitalia West Coast Rail Limited

(jointly owned with Trenitalia) are each party to

a contractual agreement with the Secretary of

State for Transport. These agreements are subject

to termination clauses which may apply on a

change of control.

First Greater Western Limited, First Trenitalia West

Coast Rail Limited and the Group’s non-contracted

rail operators, Hull Trains Company Limited and East

Trains Limited each hold railway licences as required

by the Railways Act 1993 (as amended); these

licences may be revoked on three months’ notice

if a change of control occurs without the approval

of the ORR. All of these operators also require and

hold track access agreements with Network Rail

Infrastructure Limited under which they are

permitted to access railway infrastructure.

Failure by any of the operators to maintain its railway

licence is a potential termination event under the

terms of the track access agreements. The Group’s

railway operators also lease rolling stock from

specialist rolling stock leasing companies such as

Eversholt Rail Group, Rock Rail Limited, Beacon Rail

Limited, Porterbrook Leasing Company Limited and

Angel Trains Limited. A material number of the

individual leasing agreements include change of

control provisions. The Group is also involved from time

to time in bidding processes for transport contracts in

the UK and further afield which customarily include

change in circumstance provisions which would be

triggered on a change of control and could result in

termination or rejection from further participation in

the relevant competitions.

On 25 May 2025, the operations of First MTR South

Western Trains Limited (jointly owned with MTR

Corporation) were transferred to the Department for

Transport Operator (South Western Railway Limited).

Certain provisions of First MTR South Western Trains

Limited National Rail Contract will remain in force

until the final net assets of First MTR South Western

Limited have been settled and the company wound

down. This process is expected to take a number of

years, in line with experience on previous franchises.

Change of control – significant

agreements

Financing agreements

As at 28 March 2026, the Group had a £300m

multi-currency revolving credit and guarantee

facility between, amongst others, the Company

and The Royal Bank of Scotland plc dated

30 January 2025, maturing in January 2031.

Following any change of control of the Company,

individual lenders may negotiate with the Company

with a view to resolving any concerns arising from

such change of control. If the matter has not been

resolved within 30 days, an individual bank may

cancel its commitment and the Company must

repay the relevant proportion of any drawdown.

The Group also had a £100m term loan facility

between, amongst others, the Company and The

Royal Bank of Scotland plc dated 10 March 2025,

maturing in March 2028. Following any change of

control of the Company, individual lenders may

negotiate with the Company with a view to resolving

any concerns arising from such change of control.

If the matter has not been resolved within 30 days,

an individual bank may cancel its commitment and

the Company must repay the relevant proportion of

any drawdown.

The Group also had a £150m Green Hire Purchase

Finance Facility between, amongst others, the

Company and Lloyds Bank plc dated 21 December

2023, maturing in December 2026. Following any

change of control of the Company, individual

lenders may negotiate with the Company with a

view to resolving any concerns arising from such

change of control. If the matter has not been

resolved within 30 days, an individual bank may

cancel its remaining available commitment under

the facility and immediately terminate any hire

agreements already in place.

In addition:



(i) Open access operations – We are mobilising

First Rail Stirling Limited to operate services

between Stirling and Euston and First Wales &

Western Limited to operate services between

Paddington and Carmarthen. Both of these

operators hold track access agreements with

Network Rail Infrastructure Limited. First Rail Stirling

Limited holds a safety certificate and operator

licence and First Wales & Western Limited will apply

for the same in due course. As with the Group’s

other railway operators, each of these operators

have leases for rolling stock from specialist rolling

stock leasing companies in place.



(ii) London Overground concession – The Group

was awarded the contract to operate the London

Overground network, to be delivered through

its subsidiary, First Rail London Limited. The

contract commenced on 3 May 2026 and, as

at 31 March 2026, the business was in the process

of mobilisation. As with the Group’s other rail

activities, the concession is subject to customary

contractual and regulatory requirements,

including operator licensing, safety certification

and change of control provisions.

Significant shareholders’ agreements

The Group, through First Rail Holdings Limited, has

shareholders’ agreements governing its relationship

with MTR Corporation in relation to the SWR rail

operator, and with Trenitalia in relation to the West

Coast Partnership rail operator. As is customary, these

agreements include provisions addressing change

of control. Notwithstanding the transfer of the SWR

operations to the DfTO, the shareholder agreement

with MTR Corporation survives this transfer.

FirstGroup plc entered into a strategic partnership

with Hitachi Zero Carbon (HZC), via a 50:50 joint

venture, to purchase up to 1,000 bus batteries as

part of its fleet decarbonisation journey.

Streamlined Energy and Carbon

Reporting (SECR) compliance

In compliance with the SECR requirements, our GHG

emissions and our energy consumption and energy

and emissions reduction initiatives are reported on

page 36.

Management report

The Strategic and Directors’ reports together are the

management report for the purposes of the FCA’s

DGTR 4.1.5R.

The Directors’ report was approved by a Board

Committee on behalf of the Board on 17 June 2026.

David Blizzard

General Counsel and Company Secretary

17 June 2026

395 King Street

Aberdeen AB24 5RP

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

117

Statement of Directors’ responsibilities

The Directors are responsible for safeguarding the

assets of the Group and Company and hence for

taking reasonable steps for the prevention and

detection of fraud and other irregularities.

The Directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and Company’s

transactions and disclose with reasonable accuracy

at any time the financial position of the Group

and Company and enable them to ensure that the

financial statements and the Directors’ Remuneration

report comply with the Companies Act 2006.

The Directors are responsible for the maintenance

and integrity of the Company’s website. Legislation

in the United Kingdom governing the preparation

and dissemination of financial statements may

differ from legislation in other jurisdictions.

Directors’ confirmations

Each of the Directors, whose names and functions

are listed in the Governance report confirms that,

to the best of their knowledge:



The Group financial statements, which have been

prepared in accordance with UK-adopted

international accounting standards, give a true

and fair view of the assets, liabilities, financial

position and profit of the Group;



The Company financial statements, which

have been prepared in accordance with United

Kingdom Accounting Standards, comprising FRS 101,

give a true and fair view of the assets, liabilities

and financial position of the Company; and



The Strategic report includes a fair review of the

development and performance of the business

and the position of the Group and Company,

together with a description of the principal risks

and uncertainties that it faces.

Statement of Directors’ responsibilities

in respect of the financial statements

The Directors are responsible for preparing the

Annual Report and Accounts 2026 and the financial

statements in accordance with applicable law

and regulation.

Company law requires the Directors to prepare

financial statements for each financial year. Under

that law the Directors have prepared the Group

financial statements in accordance with UK-

adopted international accounting standards and

the Company financial statements in accordance

with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards,

comprising FRS 101 ‘Reduced Disclosure Framework’,

and applicable law).

Under company law, Directors must not approve the

financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of

the Group and Company and of the profit or loss of

the Group for that period. In preparing the financial

statements, the Directors are required to:



Select suitable accounting policies and then

apply them consistently;



State whether applicable UK-adopted

international accounting standards have been

followed for the Group financial statements and

United Kingdom Accounting Standards,

comprising FRS 101 have been followed for the

Company financial statements, subject to any

material departures disclosed and explained in

the financial statements;



Make judgements and accounting estimates

that are reasonable and prudent; and



Prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the Group and Company will

continue in business.

In the case of each Director in office at the date the

Directors’ report is approved:



So far as the Director is aware, there is no relevant

audit information of which the Group’s and

Company’s auditors are unaware; and



They have taken all the steps that they ought

to have taken as a Director in order to make

themselves aware of any relevant audit information

and to establish that the Group’s and Company’s

auditors are aware of that information.

Ryan Mangold

Chief Financial Officer

17 June 2026

395 King Street

Aberdeen AB24 5RP

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

118

Independent auditors’ report to the members of FirstGroup plc

Report on the audit of the financial statements

Opinion

In our opinion:



FirstGroup plc’s group financial statements and company financial statements (the “financial

statements”) give a true and fair view of the state of the group’s and of the company’s affairs as at

28 March 2026 and of the group’s profit and the group’s cash flows for the 52 week period then ended;



the group financial statements have been properly prepared in accordance with UK-adopted

international accounting standards as applied in accordance with the provisions of the Companies

Act 2006;



the company financial statements have been properly prepared in accordance with United Kingdom

Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101

“Reduced Disclosure Framework”, and applicable law); and



the financial statements have been prepared in accordance with the requirements of the Companies

Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts 2026

(the “Annual Report”), which comprise:



the Consolidated balance sheet as at 28 March 2026;



the Company balance sheet as at 28 March 2026;



the Consolidated income statement for the period then ended;



the Consolidated statement of comprehensive income for the period then ended;



the Consolidated statement of changes in equity for the period then ended;



the Company statement of changes in equity for the period then ended;



the Consolidated cash flow statement for the period then ended; and



the notes to the financial statements, comprising material accounting policy information and other

explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities

for the audit of the financial statements section of our report. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to

our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to

listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with

these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical

Standard were not provided.

Other than those disclosed in Note 6, we have provided no non-audit services to the company in the period

under audit.

Our audit approach

Context

The Group consists of two main divisions, Rail and Bus. In the Rail division, two train operating companies

(‘TOCs’) have continued to operate under contracts with the Department for Transport (‘DfT’) with Great

Western Railway (‘GWR’) and Avanti West Coast (‘AWC’) on National Rail Contracts for the full year. Under

each contract this has meant a fixed management fee was received to operate at agreed service levels,

as well as a performance-based fee element. The structure of the contracts within the Rail division reduces

the revenue and cost risk compared to previous franchise arrangements. On 4 December 2024, the Government

announced its programme to transition passenger rail services into public ownership. As a result, the Group’s

third TOC, South Western Railway (‘SWR’), transferred back to public ownership when their national rail contract

expired on 25 May 2025. On the 8 May 2026, the government confirmed that GWR will move into public ownership on

13 December 2026. This is a non-adjusting post balance sheet event. The programme is expected to continue

with AWC to follow. Outside of the TOCs the Rail Division also includes open access contracts – Hull Trains

and East Coast Trains (‘Lumo’) – which have experienced growth year on year. First Bus continued to receive

government support and has continued to receive funding with a £3 bus fare cap in England since December 2024.

The period to 28 March 2026 was the first full 52 weeks of trading for First Bus London as part of the Group,

following its acquisition from RATP in February 2025.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

119

Independent auditors’ report to the members of FirstGroup plc

continued

Overview

Audit scope

The scope of our audit determines where we go and what we do, the best types of audit evidence to obtain,

the right areas of operations to focus on and the resources needed to deliver this. As group auditors we are

required to obtain sufficient audit evidence from the components of the group. In addition to FirstGroup plc,

the parent company, we have determined there are four in scope components for group reporting purposes:



Each TOC is a separate component, with GWR and AWC in scope for group reporting



First Bus



East Coast Trains (‘Lumo’)

Key audit matters



Valuation of pension liabilities driven by salary increase, mortality, discount rate and inflation level

assumptions (group)



Valuation of complex investments within the pension assets (group)



Valuation of First Bus Holdings investment subject to impairment reversal assessment (parent)

Materiality



Overall group materiality: £18,500,000 (2025: £20,000,000) based on 0.4% of revenue (2025: 0.4% of revenue)



Overall company materiality: £12,400,000 (2025: £12,400,000) based on 1% of total assets (2025: 1% of

total assets)



Performance materiality: £13,900,000 (2025: £15,000,000) (group) and £9,300,000 (2025: £9,300,000)

(company)

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement

in the financial statements.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

120

Independent auditors’ report to the members of FirstGroup plc

continued

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in

the audit of the financial statements of the current period and include the most significant assessed risks of

material misstatement (whether or not due to fraud) identified by the auditors, including those which had the

greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of

the engagement team. These matters, and any comments we make on the results of our procedures thereon,

were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

The key audit matters below are consistent with last year.

Key audit matter

How our audit addressed the key audit matter

Valuation of pension liabilities driven by salary increase, mortality, discount rate and

inflation level assumptions (group)

The group has significant gross defined benefit

obligations. The total liabilities reduced due to the

handover of the South Western Rail Train Operating

Contract (‘TOC’) before contract adjustment. The

valuation of pension plan liabilities requires estimation

in determining appropriate assumptions such as

salary increases, mortality rates, discount rates and

inflation levels. Movement in these assumptions can

have a material impact on the determination of the

liability, and these assumptions are considered to be

the significant audit risk. Management uses external

actuaries to assist in determining these assumptions,

and management’s actuaries carry out the valuation

of the pension liabilities based on these assumptions.

In addition to the significant audit risk, there are

restrictions under IAS 19 and IFRIC 14 as to when a

net pension surplus should be recognised, as well

as balance sheet adjustments in respect of First Rail

due to the Rail contract adjustments. Refer to note

34 and the critical accounting judgements and key

sources of estimation uncertainty section in note 2.

Refer to the Audit Committee report for a description

of its assessment of the significant judgements.

We engaged our PwC Actuarial team as Auditor’s

Experts to help the audit team assess whether

the assumptions used in calculating the defined

benefit liabilities were reasonable and that the

methodology aligns to appropriate accounting

standards. We assessed whether mortality rate

assumptions were appropriate for each plan

selected for testing and, where applicable,

incorporated considerations of relevant national

actuarial data. We also assessed whether the

discount rates and inflation rates were consistent

with our internally developed benchmarks and in

line with market information for these schemes.

We examined the salary increase assumptions to

consider whether they represent management’s

best estimate. In addition to our significant risk

areas, we reviewed the trust deeds and statutory

legislation relevant to each plan where applicable.

We also assessed management’s judgement with

regard to the rail contract adjustment and found no

exceptions. We evaluated the calculations prepared

by the external actuaries to assess whether the

disclosed pension liabilities are consistent with the

assumptions used. We have reviewed the scheme

contract terms and conclude that it is appropriate

to recognise a net surplus under IFRIC 14. Based

on procedures performed and our materiality,

we consider that the assumptions used to value

the pension obligation are within an acceptable

range. We assessed the appropriateness of

the related disclosures in note 34 of the group

financial statements and consider them to be

materially appropriate.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

121

Independent auditors’ report to the members of FirstGroup plc

continued

Key audit matter

How our audit addressed the key audit matter

Valuation of complex investments within the pension assets (group)

As set out in note 34, the group has significant gross

defined benefit plan assets. The pension schemes in

which the Group participates hold unquoted pooled

investment vehicles which invest in private equity,

infrastructure, and property funds. There is significant

estimation uncertainty in determining the valuation

of these investments which are based on inputs that

are not directly observable. The funds where the

valuation requires significant judgement and has

a higher risk of material error across the group total

£238.7m (2025: £316.9m). The funds are present in

the FirstGroup UK Bus Section of the FGPS. There

is a potential range of reasonable outcomes to

the valuations of these assets greater than our

materiality for the financial statements as a whole.

We obtained pricing confirmations directly from

investment managers as primary sources of

evidence. We performed additional procedures

on investments that are more complex in nature

and with a higher potential risk of material error

to evaluate whether there is any contradictory

evidence suggesting that the pricing confirmations

do not reflect an appropriate valuation as at the

balance sheet date. For those investments these

procedures included one or more of the following:

Obtained the most recent third party controls

assurance reports and bridging letters on

the valuation procedures and investment

managers’ operations;

Reviewed the pricing of transactions taking

place close to the balance sheet date;

Performed look back testing of previous valuations

provided by investment managers to their audited

financial statements;

Performed independent internet based

searches for information suggesting any doubts in

the investment managers’ capability of pricing;

and/or

Reviewed investment contributions and

distributions between the valuation date and the

balance sheet date and obtained affirmations

from investment managers that the price taken

is the latest price available where the valuation

date is different to the balance sheet date.

Based on the procedures performed we have no

findings to report.

Key audit matter

How our audit addressed the key audit matter

Valuation of First Bus Holdings investment subject to impairment reversal

assessment (parent)

Investments in subsidiaries are measured in the

Company balance sheet at cost less accumulated

impairment. The carrying value of the investment

in the Bus division is supported by its recoverable

amount, which has historically been determined

using a value-in-use methodology. Investments

are reviewed for impairment where indicators of

impairment exist and for potential reversal where

there is evidence that a previous impairment may

no longer apply. Management identified an

impairment reversal trigger during the year. Under

IAS 36, this requires evidence of a change in the key

assumptions underpinning the original impairment.

Management’s assessment is that these conditions

have now been met. An impairment reversal is

judgemental and contains significant assumptions

that are materially sensitive to change. Further

details are set out in note 5 to the plc Company

accounts and in the Key sources of estimation

uncertainty section of note 1.

An impairment provision in First Bus Holdings Limited

(‘FBH’) primarily arose during FY20 when provisions

of £434m were recognised. The impairment was

partially reversed in FY22 due to the recovery from

Covid-19 when the Bus division demonstrated

improved performance. Revenues and operating

profit have continued to grow organically since then.

We have evaluated management’s assessment of

the reversal trigger and the resulting value-in-use

(“VIU”) calculation, focusing on whether the

improvement in underlying assumptions is both

sustained and supportable. Our procedures over the

assessment provided by management included:

Assessing management’s forecasting of revenue

growth and passenger volume assumptions

against historical trends and observed recovery;

corroborating operating margins and cost

assumptions, including inflationary pressures;

reviewing capital expenditure plans for

consistency with the operational requirements

of the business;

evaluating the discount rate and long term

growth assumptions, with support from our

valuations team;

verified adjustments made in relation to

debt balances and tax cash flows; and

assessed reasonableness of cashflow from

dividends from subsidiaries of FBH. From the

procedures performed we consider the cash

flow forecasts to be reasonable and the existence

of a relevant reversal trigger to be present.

Based on the above factors we concur with

management’s level of impairment reversal

recorded in the investment in FBH. We have also

assessed the disclosures in the Annual Report and

Accounts and consider them to be appropriate.

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Independent auditors’ report to the members of FirstGroup plc

continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion

on the financial statements as a whole, taking into account the structure of the group and the company,

the accounting processes and controls, and the industry in which they operate.

The Group is organised into two primary operating divisions, First Bus and First Rail. There are over 130 reporting

units within the consolidation, the majority of which are inactive although there is some trading activity in

nine reporting units in addition to those included in Group reporting scope. We have defined a component

as a business unit where legal entities have been grouped together based on the fact they have the same

management, the same control environment and also considering the way the component reports to the

group. We have determined there are four components required for Group reporting as follows: GWR, AWC

and First Bus as full scope components, with Lumo reporting on certain financial statement line items

contributing to operating profit. We have also performed audit procedures over significant or large

balances outside of the in scope entities.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the process management adopted

to assess the extent of the potential impact of climate risk on the Group’s financial statements and support

the disclosures made within the Note 2 and Note 11.

In addition to enquiries with management, we also:



Read the governance processes in place to assess climate risk



Read additional reporting made by the entity on climate including its Environmental Performance Report

We challenged the completeness of management’s climate risk assessment by:



Reading external reporting made by management including the Carbon Disclosure Project submissions



Reading the entity’s website /communications for details of climate related impacts

Management has made commitments to operate a fully zero emission Bus fleet by 2035. Management

considers the impact of climate risk does give rise to a potential material financial statement impact.

The key areas of the financial statements where management evaluated that climate risk has a potentially

significant impact are disclosures relating to impairment assessment of goodwill and carrying value of

investments in subsidiaries.

Using our knowledge of the business we evaluated management’s risk assessment, its estimates as set out

in note 2 of the financial statements and resulting disclosures where significant. We considered the following

areas that could potentially be materially impacted by climate risk and consequently we focused our audit

work in these areas:



Valuation of goodwill



Carrying value of investment in subsidiaries

To respond to the audit risks identified in these areas we tailored our audit approach to address these, in

particular, we:



Challenged management on how the impact of climate commitments made by the Group would impact

the assumptions within the discounted cash flows prepared by management that are used in the Group’s

and Company’s impairment analysis.



Evaluated whether the impact of both physical and transition risks arising due to climate risk had been

appropriately included in the recoverable value of the Group’s assets.



Challenged whether the impact of climate risk in the Directors’ assessments and disclosures of going

concern and viability were consistent with management’s climate impact assessment.

We also considered the consistency of the disclosures in relation to climate change (including the

disclosures in the Task Force on Climate-related Financial Disclosures (TCFD) section) within the Annual

Report with the financial statements and our knowledge obtained from our audit.

Our procedures did not identify any material impact in the context of our audit of the financial statements

as a whole, or our key audit matters for the period ended 28 March 2026.

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Annual Report and Accounts 2026

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Independent auditors’ report to the members of FirstGroup plc

continued

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope

of our audit and the nature, timing and extent of our audit procedures on the individual financial statement

line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate

on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole

as follows:

Financial statements – group

Financial statements – company

Overall materiality

£18,500,000 (2025: £20,000,000).

£12,400,000 (2025: £12,400,000).

How we determined it

0.4% of revenue (2025: 0.4%

of revenue)

1% of total assets (2025: 1% of

total assets)

Rationale for benchmark applied

Overall materiality is based on

the Group’s revenue. We consider

revenue to continue to be an

appropriate benchmark due to

the Rail business operating on

contracts with the DfT and the

business model of the Bus

operations. In recognition of other

benchmarks that can be applied

to the business, we have therefore

used 0.4% of revenue (consistent

with prior year) resulting in an

appropriate materiality for the

size and scale of the Group.

The entity is a holding company

of the rest of the Group and is not

a trading entity. Therefore an

asset based measure is

considered appropriate.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall

group materiality. The range of materiality allocated across components was between £1,080,000 and

£17,575,000.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate

of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance

materiality in determining the scope of our audit and the nature and extent of our testing of account balances,

classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality

was 75% (2025: 75%) of overall materiality, amounting to £13,900,000 (2025: £15,000,000) for the group financial

statements and £9,300,000 (2025: £9,300,000) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements,

risk assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at

the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit

above £925,000 (group audit) (2025: £1,000,000) and £620,000 (company audit) (2025: £620,000) as well as

misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt

the going concern basis of accounting included:



obtaining and agreeing management’s going concern assessment to the business’ board approved plan

and ensuring that the base case scenario indicates that the business generates sufficient cash flows to

meets its obligations within the going concern assessment period while complying with covenant

arrangements;



considering the extent to which the group’s and company’s future cash flows might be adversely affected

by discontinuation of Government support, return of National Rail Contracts to public ownership, the

impact of contingent liabilities, pending litigation, or cost of living;



reviewing management’s cash flow forecasts, assessing the existing sources of finance and considering

the overall impact on liquidity;



ensuring the mathematical accuracy of management’s models;



evaluating management’s severe but plausible scenario and ensuring this is appropriately modelled

through the cash flows;



considering the risk of breach of the covenant arrangements in place for external borrowings under the

severe but plausible scenario;



evaluating whether the cash flows in the going concern period include the costs associated with achieving

the group’s climate change goals such as capital expenditure on battery, electric and hydrogen fuel cell

vehicle fleet;



performing further sensitivity analysis on the severe but plausible scenario; and



considering the adequacy of the disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s

ability to continue as a going concern for a period of at least twelve months from when the financial

statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis

of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee

as to the group’s and the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to the directors’ statement in the financial statements

about whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in

the relevant sections of this report.

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Annual Report and Accounts 2026

124

Independent auditors’ report to the members of FirstGroup plc

continued

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, accordingly, we do

not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of

assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial statements

or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an

apparent material inconsistency or material misstatement, we are required to perform procedures to conclude

whether there is a material misstatement of the financial statements or a material misstatement of the other

information. If, based on the work we have performed, we conclude that there is a material misstatement

of this other information, we are required to report that fact. We have nothing to report based on

these responsibilities.

With respect to the Strategic report and Directors’ report and additional disclosures, we also considered

whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report

certain opinions and matters as described below.

Strategic report and Directors’ report and additional disclosures

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic

report and Directors’ report and additional disclosures for the period ended 28 March 2026 is consistent with

the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in

the course of the audit, we did not identify any material misstatements in the Strategic report and Directors’

report and additional disclosures.

Directors’ Remuneration

In our opinion, the part of the Remuneration Committee report to be audited has been properly prepared

in accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term

viability and that part of the corporate governance statement relating to the company’s compliance with

the provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities

with respect to the corporate governance statement as other information are described in the Reporting on

other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements

of the corporate governance statement is materially consistent with the financial statements and our

knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:



The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;



The disclosures in the Annual Report that describe those principal risks, what procedures are in place to

identify emerging risks and an explanation of how these are being managed or mitigated;



The directors’ statement in the financial statements about whether they considered it appropriate to

adopt the going concern basis of accounting in preparing them, and their identification of any material

uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve

months from the date of approval of the financial statements;



The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this

assessment covers and why the period is appropriate; and



The directors’ statement as to whether they have a reasonable expectation that the company will be able

to continue in operation and meet its liabilities as they fall due over the period of its assessment, including

any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company was

substantially less in scope than an audit and only consisted of making inquiries and considering the directors’

process supporting their statement; checking that the statement is in alignment with the relevant provisions of

the UK Corporate Governance Code; and considering whether the statement is consistent with the financial

statements and our knowledge and understanding of the group and company and their environment obtained

in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the corporate governance statement is materially consistent with the financial statements and

our knowledge obtained during the audit:



The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary for the members to assess the group’s and

company’s position, performance, business model and strategy;



The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems; and



The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to

the company’s compliance with the Code does not properly disclose a departure from a relevant provision

of the Code specified under the Listing Rules for review by the auditors.

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Introduction

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Annual Report and Accounts 2026

125

Independent auditors’ report to the members of FirstGroup plc

continued

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements,

the directors are responsible for the preparation of the financial statements in accordance with the

applicable framework and for being satisfied that they give a true and fair view. The directors are also

responsible for such internal control as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

company’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the directors either intend to liquidate

the group or the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our

opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to employment laws and regulations, and health and safety

legislation, and we considered the extent to which non-compliance might have a material effect on the

financial statements. We also considered those laws and regulations that have a direct impact on the

financial statements such as the Companies Act 2006 and UK tax legislation. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of

override of controls), and determined that the principal risks were related to posting inappropriate journal

entries including those to manipulating revenue, earnings before interest and tax (‘EBIT’) and management

bias within accounting estimates. The group engagement team shared this risk assessment with the

component auditors so that they could include appropriate audit procedures in response to such risks in

their work. Audit procedures performed by the group engagement team and/or component auditors

included:



Enquiries of management at the Group and divisional levels;



Enquiries of the Group’s legal teams;



Enquiries with component auditors;



Review of internal audit reports in so far as they related to the financial statements;



Identifying and testing journal entries, in particular certain journal entries posted with unusual account

combinations which result in an impact to revenue or EBIT; and



Challenging estimates and judgements made by management in determining significant accounting

estimates, in particular in relation to valuation of pensions liabilities, valuation of complex investments

within the pension assets and recoverability of investments held by the parent.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of

instances of non-compliance with laws and regulations that are not closely related to events and transactions

reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is

higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment

by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly

using data auditing techniques. However, it typically involves selecting a limited number of items for testing,

rather than testing complete populations. We will often seek to target particular items for testing based on

their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion

about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s

website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

126

Independent auditors’ report to the members of FirstGroup plc

continued

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body

in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in

giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom

this report is shown or into whose hands it may come save where expressly agreed by our prior consent

in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:



we have not obtained all the information and explanations we require for our audit; or



adequate accounting records have not been kept by the company, or returns adequate for our audit have

not been received from branches not visited by us; or



certain disclosures of directors’ remuneration specified by law are not made; or



the company financial statements and the part of the Remuneration Committee report to be audited are

not in agreement with the accounting records and returns; or



a corporate governance statement has not been prepared by the company.

We have no exceptions to report arising from this responsibility.

Appointment

We were first appointed by the company for the financial year ended 27 March 2021. Our uninterrupted

engagement covers 6 financial years.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to

include these financial statements in an annual financial report prepared under the structured digital format

required by DTR 4.1.15R – 4.1.18R and filed on the National Storage Mechanism of the Financial Conduct

Authority. This auditors’ report provides no assurance over whether the structured digital format annual

financial report has been prepared in accordance with those requirements.

Andy Ward (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Watford

17 June 2026

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Annual Report and Accounts 2026

127

Continuing Operations

Notes

2026

£m

2025

(restated)

£m

Revenue

3,5

4,751.9

5,233.9

Operating costs

(4,532.5)

(5,011.3)

Operating profit

5,6

219.4

222.6

Investment income

7.1

7.7

Finance costs

(69.8)

(65.4)

Profit before tax

156.7

164.9

Tax

(37.3)

(31.3)

Profit from continuing operations

119.4

133.6

Profit from discontinued operations

2.1

4.7

Profit for the year

121.5

138.3

Attributable to:

Equity holders of the parent

118.3

127.5

Non‑controlling interests

3.2

10.8

121.5

138.3

Earnings per share

Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the Company

Basic earnings per share

21.0p

20.5p

Diluted earnings per share

20.2p

19.7p

Earnings per share for profit attributable to the ordinary equity holders of the Company

Basic earnings per share

21.4p

21.3p

Diluted earnings per share

20.6p

20.5p

Adjusted results (from continuing operations)

Adjusted operating profit

219.4

222.8

Adjusted profit before tax

156.7

165.1

Adjusted EPS

20.3p

19.4p

Adjusted diluted EPS

19.6p

18.6p

Adjusted for certain items as set out in note 4.

and expenses by £167.6m. The restatement has no impact on any profitability measure or other primary statements. Full details are provided in note 2.

The accompanying notes form an integral part of this consolidated income statement.

Consolidated income statement

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

128

Notes

2026

£m

2025

£m

Profit for the year

121.5

138.3

Items that will not be reclassified subsequently to profit or loss

Actuarial (losses)/gains on defined benefit pension schemes

(26.9)

32.9

Deferred tax on actuarial gains/(losses) on defined benefit pension schemes

6.6

(7.5)

(20.3)

25.4

Items that may be reclassified subsequently to profit or loss

Hedging instrument movements

22.9

(4.0)

Deferred tax on hedging instrument movements

(5.8)

1.0

Exchange differences on translation of foreign operations – continuing operations

(2.8)

(2.1)

Exchange differences on translation of foreign operations – discontinued operations

3.2

3.1

17.5

(2.0)

Other comprehensive (loss)/income for the year

(2.8)

23.4

Total comprehensive income for the year

118.7

161.7

Attributable to:

Equity holders of the parent

115.5

150.9

Non‑controlling interests

3.2

10.8

118.7

161.7

Total comprehensive income for the year attributable to owners of FirstGroup plc arises from:

Attributable to:

Continuing operations

113.4

151.6

Discontinued operations

5.3

10.1

118.7

161.7

The accompanying notes form an integral part of this consolidated statement of comprehensive income.

Consolidated statement of comprehensive income

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

129

Notes

2026

£m

2025

(restated

)

£m

Non‑current assets

Goodwill

157.0

144.7

Other intangible assets

21.9

14.8

Property, plant and equipment

1,727.1

2,037.2

Non‑current receivables

1.5

–

Deferred tax assets

18.2

46.5

Retirement benefit assets

22.0

27.3

Derivative financial instruments

3.9

0.3

Financial assets

71.6

104.2

Investments

2.3

2.6

Investments in associates

2.0

–

2,027.5

2,377.6

Current assets

Inventories

29.3

30.8

Trade and other receivables

586.4

761.6

Current tax assets

6.2

7.4

Cash and cash equivalents

432.0

487.1

Derivative financial instruments

19.6

0.2

Financial assets

0.4

–

1,073.9

1,287.1

Total assets

3,101.4

3,664.7

Current liabilities

Trade and other payables (restated

)

888.9

1,072.7

Tax liabilities – Other tax and social security

56.8

59.6

Borrowings

447.1

481.4

Derivative financial instruments

0.6

3.0

Provisions

68.5

92.1

Current liabilities

1,461.9

1,708.8

Net current liabilities

(388.0)

(421.7)

Notes

2026

£m

2025

(restated

)

£m

Non‑current liabilities

Other payables (restated

)

120.5

135.5

Borrowings

710.2

991.3

Derivative financial instruments

–

1.0

Retirement benefit liabilities

2.1

4.6

Provisions

87.2

111.0

920.0

1,243.4

Total liabilities

2,381.9

2,952.2

Net assets

719.5

712.5

Equity

Share capital

28.5

37.5

Share premium

693.3

Hedging reserve

15.6

(2.2)

Other reserves

31.4

22.4

Own shares

(37.5)

(31.1)

Translation reserve

(21.5)

(21.9)

Retained earnings

0.2

(1.3)

Equity attributable to equity holders of the parent

710.0

696.7

Non‑controlling interests

9.5

15.8

Total equity

719.5

712.5

See note 28 for details on the prior year restatement arising from the finalisation of the First Bus London acquisition accounting

adjustments.

The Group has restated the analysis between Current and Non‑current Other payables for the prior year, to correct the expected maturity

of deferred capital grants previously classified as Current liabilities. This reduces Current Other payables by £135.5m and increases

Non‑current Other payables by the same amount.

The accompanying notes form an integral part of this consolidated balance sheet.

Ryan Mangold

17 June 2026

Consolidated balance sheet

As at 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

130

Share capital

(note 25)

£m

premium

£m

Hedging

reserve

(note 26)

£m

Other

reserves

(note 26)

£m

Own shares

(note 26)

£m

Translation

reserve

(note 27)

£m

Retained

earnings/

(deficit)

£m

Total

£m

Non-

controlling

interests

£m

Total

equity

£m

Balance at 31 March 2024

37.5

693.3

(1.8)

22.4

(20.4)

(22.9)

(74.8)

633.3

8.4

641.7

Profit for the period

–

127.5

10.8

138.3

Other comprehensive income/(loss) for the period

–

(3.0)

–

1.0

25.4

23.4

–

23.4

Total comprehensive income/(loss) for the period

–

(3.0)

–

1.0

152.9

150.9

10.8

161.7

Hedging instrument movements transferred to balance sheet (net of tax)

–

2.6

–

2.6

–

2.6

Transactions with owners in their capacity as owners

Shares bought back but not yet cancelled

–

(50.4)

–

(50.4)

Dividends paid

–

(34.2)

(3.4)

(37.6)

Movement in EBT and treasury shares

–

(10.7)

–

(5.4)

(16.1)

–

(16.1)

Share‑based payments

–

10.5

–

10.5

Deferred tax on share‑based payments

–

0.1

–

0.1

Balance at 29 March 2025

37.5

693.3

(2.2)

22.4

(31.1)

(21.9)

(1.3)

696.7

15.8

712.5

Balance at 30 March 2025

37.5

693.3

(2.2)

22.4

(31.1)

(21.9)

(1.3)

696.7

15.8

712.5

Profit for the period

–

118.3

3.2

121.5

Other comprehensive income/(loss) for the period

–

17.1

–

0.4

(20.3)

(2.8)

–

(2.8)

Total comprehensive income for the period

–

17.1

–

0.4

98.0

115.5

3.2

118.7

Hedging instrument movements transferred to balance sheet (net of tax)

–

0.7

–

0.7

–

0.7

Transactions with owners in their capacity as owners

Shares bought back but not yet cancelled

–

(50.4)

–

(50.4)

Cancellation of treasury shares

(9.0)

–

9.0

–

Dividends paid

–

(38.9)

(9.5)

(48.4)

Movement in EBT and treasury shares

–

(6.4)

–

(17.6)

(24.0)

–

(24.0)

Share‑based payments

–

10.4

–

10.4

Balance at 28 March 2026

28.5

693.3

15.6

31.4

(37.5)

(21.5)

0.2

710.0

9.5

719.5

The accompanying notes form an integral part of this consolidated statement of changes in equity.

Consolidated statement of changes in equity

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

131

Notes

2026

£m

2025

£m

Cash generated by operations

681.5

828.2

Tax paid

(0.9)

(6.0)

Interest paid

(65.0)

(68.0)

Net cash from operating activities

615.6

754.2

Investing activities

Interest received

4.9

7.7

Proceeds from disposal of property, plant and equipment

45.7

17.9

Purchases of property, plant and equipment

(241.8)

(150.7)

Purchases of software

(11.2)

(5.7)

Proceeds from capital grant funding

51.5

66.4

Investment in associate

(2.0)

–

Acquisition of businesses (net of cash acquired)

(33.3)

(86.5)

Net cash used in investing activities

(186.2)

(150.9)

Financing activities

Shares purchased by Employee Benefit Trust

(24.3)

(16.1)

Treasury shares purchased via share buyback scheme and directly associated costs

(50.4)

(91.8)

External dividends paid

(38.9)

(34.2)

Dividends paid to non‑controlling shareholders

(6.7)

(3.4)

Term loan drawdown

35.0

65.0

Proceeds from rolling credit facility

150.0

80.0

Repayment of rolling credit facility

(150.0)

(75.0)

Repayment of bond issues

–

(96.2)

Repayment of lease liabilities

(411.4)

(503.5)

Repayment of asset backed financial liabilities

(21.1)

(9.8)

Proceeds from asset backed financial liabilities

57.4

36.7

Proceeds from NextGen facility

7.5

6.8

Fees for finance facilities

(0.6)

–

Net cash flow used in financing activities

(453.5)

(641.5)

Net decrease in cash and cash equivalents before foreign exchange movements

(24.1)

(38.2)

Cash and cash equivalents at beginning of year

430.7

468.7

Foreign exchange movements

(0.1)

0.2

Cash and cash equivalents at end of year

406.5

430.7

Cash flows of discontinued operations are shown in note 20.

Notes

2026

£m

2025

£m

Reconciliation to cash flow statement

Cash and cash equivalents – balance sheet

432.0

487.1

Bank overdraft

(25.5)

(56.4)

Cash and cash equivalents at end of year per consolidated balance sheet

406.5

430.7

Consolidated cash flow statement

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

132

Notes

2026

£m

2025

£m

Net decrease in cash and cash equivalents in year

(24.1)

(38.2)

(Increase)/decrease in debt excluding leases

(42.5)

19.4

Repayment of lease liabilities and asset backed financial liabilities

432.4

513.3

Inception and reassessment of leases and asset backed financial liabilities (restated

)

(104.9)

(335.5)

Foreign exchange movements

(0.1)

0.2

Other non‑cash movements

(0.5)

–

Movement in net debt in year (restated

)

260.3

159.2

Net debt at beginning of year (restated

)

(985.6)

(1,144.8)

Net debt at end of year (restated

)

(725.3)

(985.6)

The finalisation of the First Bus London acquisition accounting exercise increased the value of lease liabilities acquired, resulting in a restatement of the Inception of leases and the prior year closing net debt in the table above. See note 2 for more details of the restatement.

The accompanying notes form an integral part of this consolidated cash flow statement.

Note to the consolidated cash flow statement – reconciliation of net cash flow to movement in net debt

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Annual Report and Accounts 2026

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Financial

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Annual Report and Accounts 2026

134

Notes to the consolidated financial statements

1 General information

FirstGroup plc is a company incorporated by shares and domiciled in the United Kingdom under the

Companies Act 2006. The address of the registered office is 395 King Street, Aberdeen, Scotland, United

Kingdom AB24 5RP. The nature of the Group’s operations and its principal activities are set out in the Strategic

report on pages 04 to 71.

These financial statements are presented in pounds sterling. Foreign operations are included in accordance

with the accounting policies set out in note 2.

2 Material accounting policies

Basis of accounting

The consolidated financial statements of FirstGroup plc comply with UK‑adopted international accounting

standards and with the requirements of the Companies Act 2006. There were no unendorsed standards

effective for the period ended 28 March 2026 affecting these consolidated and separate financial statements.

The financial statements have been prepared on the historical cost basis, except for the revaluation of

certain financial instruments, and on a going concern basis as described in the going concern statement

within the Strategic report on page 71.

As set out on page 70, the Group has undertaken detailed reviews of a range of severe but plausible financial

and operational scenarios using financial outlook modelling. Based on their review of the financial forecasts

and having regard to the risks and uncertainties to which the Group is exposed, the Directors believe that

the Company and the Group have adequate resources to continue in operational existence for at least a

12‑month period from the date on which the financial statements were approved. Accordingly, the financial

statements have been prepared on a going concern basis.

The financial statements for the 52 weeks ended 28 March 2026 include the results and financial position

of the First Rail businesses for the year ended 31 March 2026 and the results and financial position of all the

other businesses for the 52 weeks ended 28 March 2026. The financial statements for the 52 weeks ended

29 March 2025 include the results and financial position of the First Rail businesses for the year ended

31 March 2025 and the results and financial position of all the other businesses for the 52 weeks ended

29 March 2025.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities

controlled by the Company (its subsidiaries). Control exists when the Company has power over an investee

entity, exposure to variable returns from its involvement with the entity and the ability to use its power over

the entity to affect its returns.

Non‑controlling interests in subsidiaries are identified separately from the Group’s equity interest therein.

The present ownership interests of non‑controlling shareholders entitle their holders to a proportionate share

of net assets upon liquidation, and may initially be measured at fair value, or at the non‑controlling interests’

proportionate share of their fair value of the acquiree’s identifiable net assets. The choice of measurement

is made on an acquisition‑by‑acquisition basis. Other non‑controlling interests are initially measured at fair

value. Subsequent to acquisition, the carrying amount of non‑controlling interests is the amount of those

interests at initial recognition plus the non‑controlling interests’ share of subsequent changes in equity. Total

comprehensive income is attributed to non‑controlling interests even if this results in the non‑controlling

interests having a deficit balance.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income

statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting

policies used into line with those used by the Group.

All intra‑group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The acquisition of subsidiaries is accounted for using the acquisitions method. The consideration for

each acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given,

liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the

acquiree. Acquisition‑related costs are recognised in the income statement as incurred.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition

under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date.

Assets and disposal groups held for sale and dis

continued

operations

Non‑current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is

highly probable that they will be recovered primarily through sale rather than through continuing use. This

condition is regarded as met only when the sale is highly probable and the asset is available for immediate

sale in its present condition. Management must be committed to the sale which should be expected to

qualify for recognition as a completed sale within one year of the date of classification.

Such assets, or disposal groups, are measured at the lower of their carrying amount and fair value less costs

to sell. Impairment losses on initial classification as held for sale and subsequent gains and losses on

remeasurement are recognised in profit or loss.

A disposal group qualifies as a discontinued operation if it is a component of an entity that either has been

disposed of, or is classified as held for sale, and:



represents a separate major line of business or geographical area of operations; or



is part of a single coordinated plan to dispose of a separate major line of business or geographical area

of operations; or



is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single

amount as profit or loss after tax from discontinued operations in the income statement.

Goodwill and intangible assets

Goodwill arising on consolidation is recognised as an asset at the date that control is acquired. Goodwill

is measured as the excess of the sum of the consideration transferred, the amount of any non‑controlling

interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity

over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units

(CGUs) which are tested for impairment annually, or more frequently where there is an indication that the

CGU may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the CGU,

the impairment loss is allocated to the goodwill of the CGU and then to the other assets of the CGU pro‑rata

on the basis of the carrying amount of each asset in the CGU. An impairment loss recognised for goodwill is

not reversed in a subsequent period. On disposal of a subsidiary, associate or jointly controlled entity, the

attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Computer software is recognised separately as an intangible asset and is carried at cost less accumulated

amortisation and accumulated impairment losses. Costs include software licences, website development,

costs attributable to the development, design and implementation of the computer software and internal

costs directly attributable to the software. Software is amortised on a straight‑line basis over its useful

economic life (three to five years).

Financial

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FirstGroup

Annual Report and Accounts 2026

135

Notes to the consolidated financial statements

continued

2 Material accounting policies

continued

Revenue recognition

Under IFRS 15 revenue is recognised when control of a good or service transfers to the customer. The point at which

goods and services are transferred to the customer is based on the fulfilment of performance obligations.

As the Group has the right to consideration corresponding directly with the value of performance completed to

date, customer contract revenue is recognised consistent with the amount that the Group has a right to invoice.

The Group is therefore exercising the practical expedient not to explain transaction prices allocated to unsatisfied

performance obligations at the end of the reporting period.

Revenue principally comprises revenue from train passenger services, road passenger transport, and certain

management and maintenance services in the UK. Where appropriate, amounts are shown net of rebates and

sales taxes. An explanation of the types of revenue is set out below.

Note that revenues include contractual and direct fiscal support. This is covered in more detail further on

in this note.

Passenger revenues

Passenger revenues primarily relate to ticket sales through First Bus and the First Rail businesses. Passenger

revenue is recognised at both a point in time and over time. Ticket sales for journeys of less than one week’s

duration are recognised on the first date of travel. Ticket sales for season tickets, travel cards and open‑return

tickets are initially deferred then recognised over the period covered by the relevant ticket. Concessionary

amounts are recognised in the period in which the service is provided. Where customers are due compensation

due to delays in their journeys, such payments are treated as a reduction in passenger revenue in line with IFRS 15

Revenue from Contracts with Customers.

Contract revenues

Contract revenues mainly relate to tenders and route contracts in First Bus. Revenues are recognised as the

services are provided over the length of the contract and based on a transaction price which is defined in the

terms of the contract.

Rail contract subsidy receipts

Revenue in the First Rail businesses includes subsidy receipts from the Department for Transport (DfT) for National

Rail Contracts (NRCs), with amounts receivable under these arrangements including certain funded operational

projects. Revenue also includes amounts attributable to the Train Operating Companies (TOCs), predominantly

based on models of route usage, by the Railway Settlement Plan in respect of passenger receipts. Revenue is

recognised over time as the performance obligations are met as agreed between the individual TOCs and the DfT.

Other revenue sources

Other revenue sources mainly relate to non‑rail subsidies, revenue arising from ancillary services to other rail and

road passenger service providers for maintenance, refuelling and other associated services and to sundry third

parties for the use of space at terminals and on‑board vehicles for other business activities, e.g. retail outlets, taxi

ranks, catering and advertising. Other revenues are recognised at both a point in time and over time.

Service agreement premium/subsidy

DfT TOCs are subject to fixed payments in the form of a premium paid to, or subsidy received from, the DfT. TOCs

are entitled to earn performance based fees and a contracted margin, and the service agreement premium/

subsidy is calculated to deliver this margin. It is calculated with direct reference to costs and revenues for each

annual accounting period, and there is no clawback mechanism for payments received, or linkage between

calculations from one annual period to the next, and as such the unit of account is deemed to be each annual

reporting period. Periodic payments are received from or made to the DfT. In annual periods where a net subsidy

is received from the DfT this is considered to be an IAS 20 government grant and is accounted for accordingly.

The grant is considered to provide for the contracted margin, the performance based fees, and compensates

for the excess of allowed costs over revenues, however it is not IFRS 15 revenue from a contract with a customer.

Where revenues exceed allowable costs, and the associated premium payment is made to the DfT, this is

considered to be an operating levy, and the payments are presented within operating costs.

Contractual and direct fiscal support

The principal direct fiscal support recognised during the year comprised £376.9m (2025: £347.8m) of NRC funding

in the First Rail businesses, and £20.0m (2025: £21.9m) of funding in First Bus. These are recognised within revenue

in accordance with IFRS 15 when control of the good or service is transferred to the customer and the Group is

entitled to the consideration.

First Bus

The English, Scottish and Welsh Governments have each supported bus operators, through a variety of

funding schemes since March 2020. In England, the BSOG+ scheme provides funding through enhanced

BSOG rates per litre and an additional payment per km operated for eligible miles. In addition to this the DfT

implemented a cap on all single fares across the country in January 2023, starting at £2 and increasing to £3

in January 2025, with operators being reimbursed for any revenue foregone as a result of the reduced ticket

prices, and funding being confirmed through to March 2027. In Scotland, funding is provided by the NSG

scheme which replaced their BSOG scheme. In Wales funding is provided through BSSG and the tendering

of routes which are no longer commercially viable.

First Rail

The DfT TOC NRCs transferred substantially all revenue and substantially all cost risk to the government and for

the current and prior periods our First Rail contracts were operated under the terms of these arrangements:



GWR operated under an NRC to June 2028. On 7 May 2026, First Greater Western Railway Ltd received notice

from the Department for Transport that its National Rail Contract would expire on 13 December 2026, at which

point GWR will hand over to the DfT Operator.



WCP/Avanti were awarded a nine‑year NRC in September 2023, with a minimum core three‑year term to

October 2026.



SWR operated under an NRC which expired on 25 May 2025.

Under the arrangements, our franchised TOCs are paid a fixed management fee to continue to operate the

rail network at a service level agreed with the government. Performance‑based fees are earned through a

combination of scorecards and quantified target methodologies benchmarked off this agreed service level.

DfT funding including the management and performance fee is recognised as revenue in rail contracts subsidy

receipts, in line with the revenue recognition policy for contract subsidy receipts from the DfT.

Disaggregated revenue by operating segment is set out in note 5.

Leasing

Lease identification

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,

a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for

consideration.

Right of use asset

At the commencement date, the right of use asset is initially measured at cost, which comprises the initial amount

of the lease liability adjusted for any lease payments made at or before the commencement date, less any

incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the Group

to dismantle and remove the underlying asset or restore the underlying asset or the site on which it is located.

The right of use asset is depreciated on a straight‑line basis over the shorter of the estimated useful life

of the asset, the lease term or current expected contract terms for rail TOCs at the balance sheet date. In

addition, the right of use asset is periodically reduced by impairment losses, if applicable, and adjusted

for certain remeasurements of the lease liability.

Financial

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Annual Report and Accounts 2026

136

Notes to the consolidated financial statements

continued

2 Material accounting policies

continued

Lease liability

At the commencement date of the lease, the lease liability is initially measured at the present value of

lease payments to be made over the lease term. The lease payments include fixed payments (including

in‑substance fixed payments) less any lease incentives receivable, variable lease payments that depend

on an index or a rate, and amounts expected to be paid by the Group under residual value guarantees.

The lease payments also include the exercise price of a purchase option if the Group is reasonably certain

to exercise that option. Payments of penalties for terminating a lease, if the lease term reflects the Group

exercising the option to terminate the lease, are also included. The payments are discounted at the

incremental borrowing rate since the rates implicit in the leases are not readily available.

The lease liability is measured by increasing the carrying amount to reflect the interest on the lease liability

and reducing the carrying amount to reflect the lease payments made. The carrying value is remeasured

when there is a change in future lease payments arising from a change in an index or rate, if there is a

change in the Group’s estimate of the amount expected to be payable under a residual value guarantee,

or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

Lease incentives

The Group assesses reimbursements from lessors, to establish whether these represent lease incentives.

Where a lease incentive is identified, the income is spread over the term of the related lease.

Short‑term leases and leases of low‑value assets

The Group applies the short‑term lease recognition exemption to selected leases that have a lease term

of 12 months or less from the commencement date and do not contain a purchase option and where it is

not reasonably certain that the lease term will be extended. It also applies the low‑value assets recognition

exemption to leases of assets of low value based on the value of the asset when it is new, regardless of the

age of the asset being leased. Lease payments on short‑term leases and leases of low‑value assets are

recognised as an expense on a straight‑line basis over the lease term.

On the balance sheet, right of use assets have been included in property, plant and equipment and lease

liabilities have been included in borrowings.

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary

economic environment in which it operates (its functional currency). For the purpose of the consolidated

financial statements, the results and financial position of each Group company are expressed in pounds

sterling, which is the functional currency of the Company, and the presentation currency for the consolidated

financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than

the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions.

At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are

retranslated at the rates prevailing on the balance sheet date. Non‑monetary assets and liabilities carried at

fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when

the fair value was determined. Non‑monetary items that are measured in terms of historical cost in a foreign

currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary

items, are included in profit or loss for the period. Exchange differences arising on the retranslation of

non‑monetary items carried at fair value are included in profit or loss for the period, except for differences

arising on the retranslation of non‑monetary items in respect of which gains and losses are recognised

within other comprehensive income. For such non‑monetary items, any exchange component of that gain

or loss is also recognised within other comprehensive income.

In order to hedge its exposure to certain foreign exchange risks, the Group holds currency swaps and borrowings

in foreign currencies (see note 22 for details of the Group’s policies in respect of foreign exchange risks).

On consolidation, the assets and liabilities of the Group’s overseas operations are translated at the closing

exchange rates on the balance sheet date. Income and expense items are translated at the average exchange

rates for the period. Exchange differences arising from the average exchange rates used and the period

end rate, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation

differences are recognised as income or as expenses in the period in which the operation is disposed of.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,

which are assets that necessarily take a substantial period of time to get ready for their intended use or

sale, are added to the cost of those assets, until such time as the assets are substantially ready for their

intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Non‑GAAP measures and performance

In measuring the Group and divisional adjusted operating performance, additional financial measures

derived from the reported results have been used by management in order to eliminate factors which distort

year‑on‑year comparisons. The Group’s adjusted performance is used to explain year‑on‑year changes

when the effect of certain items is significant, including strategic items (including material M&A and Group

restructuring projects), costs of acquisitions including aborted acquisitions, and impairment of assets. Other

items below £5.0m would not normally be considered as adjusting items unless part of a larger strategic

project, but items which distort year‑on‑year comparisons that exceed this amount could potentially be

classified as an adjusting item and are assessed on a case‑by‑case basis. Such potential adjusting other

items may include: restructuring and reorganisation costs; property gains or losses; aged legal and

self‑insurance claims; movements on insurance discount rates; onerous contract provisions; pension

settlement gains or losses; and other items which management has determined as not being relevant to an

understanding of the Group’s underlying business performance. Subsequent remeasurements of adjusting

items are also recognised as an adjusting item in the future period in which the remeasurement occurs.

Management considers that this overall basis supports year‑on‑year business performance comparisons,

to underpin planning and decision making on resource allocation. The Group does not consider the

non‑GAAP measures to be more important than, or superior to, IFRS measures. See note 4 for the

reconciliation to non‑GAAP measures and performance.

Retirement benefit costs

The Group operates or participates in a number of pension schemes, which include both defined benefit

schemes and defined contribution schemes.

Payments to defined contribution plans are charged as an expense as they fall due. There is no further

obligation to pay contributions into a defined contribution plan once the contributions specified in the plan

rules have been paid.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit

Method, with actuarial updates being carried out at each balance sheet date. Actuarial gains and losses are

recognised in full in the period in which they occur. They are recognised outside the income statement and

presented in the consolidated statement of other comprehensive income.

All past service costs are recognised immediately in the consolidated income statement.

Financial

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FirstGroup

Annual Report and Accounts 2026

137

Notes to the consolidated financial statements

continued

2 Material accounting policies

continued

Where changes to the benefits in payment on defined benefit pension schemes require a change in scheme

rules or ratification by the Trustees, the change is recognised as a past service charge or credit in the income

statement. Where changes in assumptions can be made without changing the Trustee agreement, these are

recognised as a change in assumptions in other comprehensive income.

The retirement benefit position recognised in the balance sheet represents the present value of the defined

benefit obligation as reduced by the fair value of scheme assets. Any residual asset resulting from this

calculation is limited to refunds economically available to the Company, in the form of either a public

sector payment or the present value of future service costs recognised via suspension of cash contributions.

Various TOCs in the First Rail business participate in the Railways Pension Scheme (RPS), which is an industry‑wide

defined benefit scheme. The Group is obligated to fund the relevant section of the scheme over the period for

which the contract is held. The full liability is recognised on the balance sheet, which is then reduced by a

‘contract adjustment’ so that the net liability reflects the Group’s obligations to fund the scheme over the

contract term, subject to any changes in the schedule of contributions following a statutory valuation.

Retirement benefits are also covered in the Key sources of estimation uncertainty section of note 2 below.

Tax

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as

reported in the income statement because it excludes items of income or expense that are taxable or

deductible in other years and it further excludes items that are never taxable or deductible. The Group’s

liability for current tax is calculated using tax rates that have been enacted or substantively enacted by

the balance sheet date and includes an estimate of the tax which could be payable as a result of differing

interpretation of tax laws.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts

of assets and liabilities in the financial statements and the corresponding tax bases used in the computation

of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are

generally recognised for all taxable temporary differences and deferred tax assets are recognised to the

extent that it is probable that taxable profits will be available against which deductible temporary differences

can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the

initial recognition of goodwill, or from the initial recognition (other than in a business combination) of other

assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries

and associates, and interests in joint ventures, except where the Group is able to control the reversal of the

temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the

extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the

asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled

or the asset is realised and is based on the estimated tax consequences of items that are subject to differing

interpretations of tax laws. Deferred tax is charged or credited in the income statement, except when it

relates to items charged or credited in other comprehensive income or directly to equity, in which case

the deferred tax is also dealt with within other comprehensive income or directly in equity respectively.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax

assets against current tax liabilities and when they relate to income taxes levied by the same tax authority

and the Group intends to settle its current tax assets and liabilities on a net basis.

The Group follows IFRIC 23 Uncertainty over Income Tax Treatments. IFRIC 23 sets out how to determine the

accounting tax position when there is uncertainty over income tax treatments. The interpretation requires

the Group to determine whether uncertain tax positions are assessed separately or as a Group, and



Assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed

to be used, by an entity in its income tax filings:

•

If yes, the Group should determine its accounting tax position consistently with the tax treatment used

or planned to be used in its income tax filings.

•

If no, the Group should reflect the effect of uncertainty in determining its accounting tax position using

either the most likely amount or the expected value method.

Property, plant and equipment

Properties for provision of services or administrative purposes are carried at cost, less any recognised

impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in

accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other

property assets, commences when the assets are ready for their intended use.

Passenger carrying vehicles and other plant and equipment are stated at cost less accumulated

depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, other than freehold land, the land element of

long leasehold properties or on assets in the course of construction, over their estimated useful lives, using

the straight‑line method, on the following bases:



Freehold buildings	50 years straight‑line
Passenger carrying vehicles	seven to 17 years straight‑line
Other plant and equipment	three to 25 years straight‑line

Assets specific to TOCs are depreciated over the lesser of their estimated useful lives or the rail contract term

expected at the balance sheet date.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the

sales proceeds and the carrying amount of the asset and is recognised in income.

Capital grants

Capital grants relating to property, plant and equipment are held in other payables and released to the

income statement over the expected useful lives of the assets concerned. Capital grants are not recognised

until there is a reasonable assurance that the Group will comply with the conditions attaching to them and

that the grants will be received.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to

determine whether there is any indication that those assets have suffered an impairment loss. If any such

indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairment loss (if any). Where the asset does not generate cash flows that are independent from other

assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,

the estimated future cash flows are discounted to their present value using a pre‑tax discount rate that

reflects current market assessments of the time value of money and the risks specific to the asset for which

the estimates of future cash flows have not been adjusted.

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If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of

the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised

estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount

that would have been determined had no impairment loss been recognised for the asset or CGU in prior years.

A reversal of an impairment loss is recognised as income immediately.

Inventories

Inventories of spare parts and consumables are stated at the lower of cost and net realisable value, after making

appropriate allowances for obsolete and slow‑moving items. Cost comprises direct materials and, where applicable,

those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is

calculated using the weighted average cost method. Where the purchase of inventory was the hedged item in a cash

flow hedge relationship, the initial carrying amount of the recognised inventory is adjusted by the associated hedging

gain or loss transferred from the hedging reserve (a basis adjustment). There are no material inventory allowances.

Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group

becomes a party to the contractual provisions of the instrument.

Financial assets

Financial assets can be measured at amortised cost, fair value through profit or loss or fair value through

other comprehensive income. The measurement basis is determined by reference to both the business

model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

Financial assets are classified into one of three primary categories:

Financial assets at amortised cost

Financial assets at amortised cost are non‑derivative financial assets held for collection of contractual cash flows

where those cash flows represent solely payments of principal and interest. Financial assets at amortised cost are

subsequently measured using the effective interest method and are subject to impairment. Gains and losses are

recognised in profit or loss when the asset is derecognised, modified or impaired.

Fair value through profit and loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets

designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily

required to be measured at fair value. Financial assets are classified as held for trading if they are acquired

for the purpose of selling or repurchasing in the near term. Derivatives are also classified as held for trading

unless they are designated as effective hedging instruments.

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair

value with net changes in fair value recognised in the income statement within finance costs. Transaction

costs arising on initial recognition are expensed in the income statement.

Fair value through other comprehensive income

The Group does not have any financial assets held at fair value through other comprehensive income.

The Group also includes restricted cash balances within Financial assets, where balances are held as

collateral for third party arrangements and are not readily available for general use by the business.

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangements entered into. An equity instrument is any contract that evidences a residual interest in the

assets of the Group after deducting all of its liabilities. Equity instruments issued by the Company are

recorded at the proceeds received net of direct issue costs.

Financial liabilities

Bank borrowings

Interest‑bearing bank loans, asset backed financial liabilities and overdrafts are measured on an amortised cost basis.

Bonds and loan notes

These are measured either on an amortised cost basis or at fair value, if designated.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using

the effective interest rate method.

Derivative financial instruments and hedge accounting

The Group uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate

and commodity risks. Use of such financial instruments is governed by policies and delegated authorities

approved by the Board. The Group does not hold or issue derivative financial instruments for trading purposes.

The main derivative financial instruments used by the Group are interest rate swaps, fuel swaps, and cross

currency interest rate swaps. Such instruments are initially recognised at fair value and subsequently

remeasured to fair value at the reported balance sheet date. The fair values are calculated by reference

to market exchange rates, interest rates and fuel prices at the period end, and supported by counterparty

confirmations. Where derivatives do not qualify for hedge accounting, any gains or losses on remeasurement

are immediately recognised in the Group income statement. Where derivatives qualify for hedge accounting,

recognition of any resultant gain or loss depends on the nature of the hedge relationship and the item being

hedged. At inception of designated hedging relationships, the Group documents the risk management

objective and strategy for undertaking the hedge, the nature of the risks being hedged and the economic

relationship between the item being hedged and the hedging instrument.

Fair value hedging

The fair value change on qualifying hedging instruments is recognised in profit or loss. The carrying amount

of a hedged item not already measured at fair value is adjusted for the fair value change attributable to the

hedged risk with a corresponding entry in profit or loss.

Cash flow hedging

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are

designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated

under the heading of hedging reserve, limited to the cumulative change in fair value of the hedged item from

inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or

loss. Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified

to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised

hedged item. However, when the hedged forecast transaction results in the recognition of a non‑financial item

such as inventory, the gains and losses previously recognised in other comprehensive income and accumulated

in equity are removed from equity and included as a basis adjustment in the initial measurement of the cost of

that item. This transfer does not affect other comprehensive income, however the hedging gains and losses that

will subsequently be transferred as basis adjustments are categorised as amounts that may be reclassified

subsequently to profit or loss, as such a reclassification may occur in the event that the hedged transaction is no

longer expected to occur. Furthermore, if the Group expects that some or all of the loss accumulated in the cash

flow hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss.

Net investment hedging

Derivative financial instruments are classified as net investment hedges when they hedge the Group’s

net investment in an overseas operation. The effective element of any foreign exchange gain or loss

from remeasuring the derivative instrument is recognised directly in other comprehensive income and

accumulated in the foreign currency translation reserve. Any ineffective element is recognised immediately

in the Group income statement. Gains and losses accumulated in the foreign currency translation reserve

are included in the Group income statement on the disposal or partial disposal of the foreign operation.

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Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is

probable that the Group will be required to settle that obligation. Provisions are measured at the Directors’

best estimate of the expenditure required to settle the obligation at the balance sheet date and are

discounted to present value where the effect is material.

Self‑insurance

The Group’s policy is to self‑insure high‑frequency, low‑value claims within the businesses. In addition there

are typically a smaller number of major claims during a financial year for which cover is obtained through

third party insurance policies subject to an insurance deductible. Where the Group holds legacy self‑insurance

exposures related to disposed businesses, insurance and re‑insurance policies have been purchased to

de‑risk this exposure. Provision is made under IAS 37 Provisions, Contingent Liabilities and Contingent Assets

for the estimated cost of settling uninsured claims for incidents occurring prior to the balance sheet date.

The provision is discounted to appropriately reflect the timing of future cash claims settlements. Self‑insurance

is also covered in the Key sources of estimation uncertainty section of note 2 below.

Share‑based payments

The Group issues equity‑settled share‑based payments to certain employees. Equity‑settled share‑based

payments are measured at fair value at the date of grant. The fair value is expensed over the vesting period,

based on the Group’s estimate of shares that will eventually vest and is adjusted for the effects of

non‑market‑based vesting conditions.

Fair value is measured by use of a Black‑Scholes or other appropriate valuation model. The expected life used

in the model has been adjusted, based on management’s best estimate, for the effects of non‑transferability,

exercise restrictions and behavioural considerations.

Joint operations

Where the Group assesses a joint arrangement to be a joint operation, it recognises its direct right to the

assets, liabilities, revenue and expenses of the joint operation, and its share of any jointly held or incurred

assets, liabilities, revenue and expenses. These have been incorporated in the financial statements under

the appropriate headings.

Dividend distributions

Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

Adoption of new and revised standards

The accounting policies adopted are consistent with those of the previous financial year except for the

changes arising from new standards and amendments to existing standards which have been adopted

in the current year.

The following amended standards and interpretations were adopted by the Group during the year:



Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates

There has been no material change as a result of applying this amendment. No significant impact is expected

from any of the future standards and amendments that are visible, with the exception of IFRS 18 Presentation

and Disclosure in Financial Statements, which is effective from 1 January 2027, and which is expected to

change the presentation of the consolidated financial statements.

The Group is currently in the process of determining the expected impact of applying IFRS 18. A transition plan

has been developed and an initial impact assessment has been undertaken, and the Group is on track to

report its first IFRS 18‑compliant interim financial statements for the period ending 25 September 2027, and

annual financial statements for the year ending 25 March 2028. The application of the new Standard will

change the presentation of the consolidated financial statements, most notably the categorisations within

the income statement and related disclosure detail, as well as classifications within the statement of cash

flows. It will also require the presentation of management‑defined performance measures to complement

the structured summary on the face of the income statement, and the Group is presently assessing the

appropriate measures to be reported under this definition.

Restatements

National Rail Contracts – premium payments

During the year, the Group has reassessed its accounting policy regarding DfT subsidy receipts and premium

payments under its NRCs. Subsidies received under the NRCs continue to represent amounts for lost passenger

revenues and the subsidy income from the DfT is therefore recognised within revenue in line with IAS 20

Government grants. When amounts are due to be paid back to the DfT (the obligating event being generation

of profits above contractual fixed profit margins), the Group has concluded that these do not represent a

refund of government grant amounts received in previous periods, instead per IAS 37 Provisions, Contingent

Liabilities and Contingent Assets and IFRIC 21 Levies the premium amounts above the contractual margin

should have previously been treated as a levy expense rather than as a deduction of revenue.

The Group has therefore restated its FY 2025 income statement to correct this classification. A levy expense of

£167.6m has been recognised, rather than a deduction from revenue, therefore increasing both revenue and

expenses by £167.6m. The restatement has no impact on any profitability measure or other primary statements.

Acquisition accounting adjustments relating to First Bus London

During the year, the Group finalised its IFRS 3 acquisition accounting adjustments in relation to the acquisition

on 28 February 2025 of London bus operator RATP Dev Transit Limited and its subsidiaries (First Bus London).

Provisional adjustments were reported in the FY 2025 Annual Report, and therefore the Group has now restated

the prior year comparative information to reflect these finalised adjustments. The final acquisition adjustments

are detailed in note 28. There is no material impact on the FY 2025 income statement as a result of the finalisation

exercise, and as such the prior year income statement has not been restated.

Deferred capital grant liabilities

The Group has restated the analysis between Current and Non‑current Other payables for the prior year, to

reflect the expected maturity of deferred capital grants previously classified as Current liabilities. This reduces

Current Other payables by £135.5m and increases Non‑current Other payables by the same amount.

Key sources of estimation uncertainty and significant judgements

The preparation of financial statements in conformity with generally accepted accounting principles requires

the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of

the financial statements and the reported amounts of revenues and expenses during the reporting period.

Although these estimates are based on management’s best knowledge, actual results may ultimately differ

from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions

to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only

that period, or in the period of revision and future periods if the revision affects both current and future periods.

The following are the critical estimates and judgements that the Directors have made in the process of

applying the Group’s accounting policies and that have the most significant effect on the amounts

recognised in the financial statements.

Defined benefit pension arrangements

Railway Pension Scheme

As at the balance sheet date, the Group sponsored two sections of the Railway Pension Scheme (RPS), relating

to its obligations for its contracted TOCs, and a further section for Hull Trains, its open access operator. The RPS

is a defined benefit pension scheme which covers the whole of the UK rail industry. The RPS is partitioned into

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sections and, for the sections that relate to contracts, the Group is responsible for the funding of these

sections only while it operates the relevant contract. In contrast to the pension schemes operated by most

businesses, the RPS is a shared cost scheme which means that costs are formally shared 60% employer and

40% employee. The Group only recognises amounts in relation to its share of costs in the income statement,

and for the contracted TOCs, those amounts are then reimbursed to the TOCs as part of the overall allowable

contracted operating expenses. Management of the RPS is not the responsibility of the Group, nor is it able to

benefit from any future surplus, or liable for any deficit, of those funds.

At the end of the contract term, responsibility for funding the relevant section of the scheme, and consequentially

any deficit or surplus existing at that date, is passed to the next contractor. At each balance sheet date a

contract adjustment is recognised against the IAS 19 net pension asset or liability to reflect that portion

expected to pass to the next contractor.

The Directors view this arrangement as analogous to the circumstances described in paragraphs 92‑94 of

IAS 19 (Revised) with a third party taking on the obligation for future contributions. As there is no requirement

to make contributions to fund the current deficit, it is assumed that all of the current deficit will be funded by

another party and hence none of that deficit is attributable to the current contractor. In respect of the future

service costs, there is currently no pension obligation in respect of those costs. When the costs are recognised

in the income statement, the extent to which the committed contributions fall short determines the amount

that is to be covered by contributions of another party in future, which is recognised as an adjustment to

service cost in the income statement. Under circumstances where contributions are renegotiated, such as

following a statutory valuation, an adjustment will be recognised in the income statement, whilst changes

in actuarial assumptions continue to be recognised through other comprehensive income.

The Directors consider this judgement to be the most appropriate interpretation of IAS 19 to reflect the

specific circumstances of the RPS where the contract commitment is only to pay contributions during the

period in which we run the contract.

Actuarial assumptions

The UK schemes’ retirement benefit obligations are discounted at a rate set by reference to market yields at

the end of the reporting period on high‑quality corporate bonds. Significant assumptions are made when

setting the criteria for bonds to be included in the population from which the yield curve is derived. The most

significant criteria considered for the selection of bonds include the issue size of the corporate bonds, quality

of the bonds and the identification of outliers which are excluded to align with the characteristics of each

scheme. Management follows actuarial advice from a third party when determining these judgements.

Other key estimates include the longevity of members, expected rates of salary increases and inflation.

We take specialist advice on these from our actuarial advisers which aims to consider the likely experience

taking into account each scheme’s characteristics. Our approach is to review these assumptions for each

scheme following completion of their funding valuations, and more frequently only if appropriate to do so.

The majority of invested pension scheme assets are held in asset classes where a deep market exists and

therefore where market prices are readily available. Some of the more illiquid assets do not have such a

deep market, and so a discounted cash flow valuation methodology is adopted, using cash flows provided

by fund managers using their best estimates of the distributions from the investments. The critical estimate

in respect of these cash flows is the discount rate applied with reference to the yield on a government bond

of suitable duration, adjusted to take into account the relevant asset‑specific risks (primarily credit default

risk and liquidity risk). Both the quantum of the cash flows and the discount rate adopted require an element

of judgement, and changes to either could alter the valuation ascribed to the assets.

The carrying amount of the Group’s continuing retirement benefit arrangements at 28 March 2026 was an

asset of £19.9m (2025: asset of £22.7m). Further details and sensitivities are set out in note 34.

Other areas of judgement and accounting estimates

The consolidated financial statements include other areas of judgement and accounting estimates, and

while these do not meet the IAS 1 definition of significant accounting estimates or critical accounting

judgements, the recognition and measurement of certain material assets and liabilities are based on

assumptions, or are subject to longer‑term uncertainties.

Acquisition accounting adjustments relating to First Bus London

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

Limited and its subsidiaries (First Bus London). The Group has now finalised the purchase price allocation

exercise for First Bus London, and this identified a number of adjustments to reflect the fair value of the assets

and liabilities acquired.

The key sources of estimation uncertainty and significant judgements resulting from the transaction relate to

the acquisition accounting exercise, and the recognition and measurement of assets acquired and liabilities

assumed. Key areas of judgement include, but are not limited to, the measurement of contract intangibles

and onerous contract provisions, the valuations of property, plant and equipment (including freehold land

and buildings), recognition of other liabilities and provisions, recognition and valuation of deferred tax assets,

and the resulting goodwill arising from the transaction. Note 28 provides more details on the finalised

acquisition accounting exercise.

Impairment of assets in CGUs

The key sources of estimation uncertainty in relation to the potential risk of impairment of assets in CGUs

relate to the cash flow forecasts including significant judgements in deciding what assumptions to make

regarding the future financial performance of the CGU, the ongoing macroeconomic uncertainty, and the

Group’s future climate‑related targets and ambitions. This is covered in more detail in note 11.

Determining First Rail National Rail Contract expiry dates

On 28 November 2024, the Passenger Railway Services (Public Ownership) Act 2024 received Royal Assent,

allowing passenger train operators with contracts with the DfT to be brought into public ownership.

An initial timetable for this process was published in December 2024. The Group’s South Western Railway NRC

expired in May 2025. The timetable published at that time indicated that other TOCs would be taken into

public ownership by October 2027, but with no dates then specified for Great Western Railway or West Coast

Partnership. At the FY 2026 balance sheet date, no NRC expiry dates had been announced for Great Western

Railway or West Coast Partnership. The Group was therefore required to make judgements to assess the

most likely expiry dates for these NRCs at the balance sheet date.

These expiry date judgements are then used to identify lease terms in certain situations and useful lives

of property, plant and equipment for TOCs. If there were to be a change in the judgement regarding lease

expiry dates, this would result in a reassessment of the right of use asset and lease liabilities. Similarly, a

change in useful lives for TOC property, plant and equipment would result in a change to the carrying value

of those assets. There were no changes during the year to the Group’s judgements for NRC expiry dates.

On 7 May 2026, First Greater Western Railway Ltd received notice from the Department for Transport

that its NRC would expire on 13 December 2026, at which point GWR will hand over to the DfT Operator.

As this notification was received after the balance sheet date, the Group has concluded that it represents

a non‑adjusting event.

DfT TOCs – income statement classification

South Western Railway transferred to DfT ownership in May 2025 when its NRC expired, and Great Western

Railway’s NRC will expire on 13 December 2026. A detailed timetable has yet to be announced for the Group’s

West Coast Partnership TOCs, but the Government has indicated that all TOCs would be taken into public

ownership by October 2027. The Group has therefore reviewed the application of IFRS 5 Non‑current Assets

Held for Sale and Discontinued Operations in respect of its DfT TOCs.

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The Group’s DfT TOCs will no longer be a part of the Group when each TOC’s individual NRC expires, whether at

their specified end dates, or when the appropriate contractual notice period is given by the DfT. However, the

Group does not consider that these contract expiries would represent discontinued operations per IFRS 5 as they

are not considered a disposal of operations. The contracts represent the vehicle for the Group’s arrangements

with the DfT to provide rail passenger services, rather than a separate discontinued operation, and the contracts

expire upon their enforceable end point. Furthermore, the Group’s First Rail operating segment will continue to run

passenger rail operations via its open access businesses and its contract to operate the London Overground rail

services, and the Group remains committed to investing in, and further expanding, its First Rail passenger rail

operations and services in the future. This is further evidenced by the acquisition of new open access licences

and further applications to operate open access passenger rail services.

Climate change

In the preparation of the Group’s consolidated financial statements, management has considered the

potential impact of climate change, particularly in the context of the disclosures included in the Strategic

report (including the Task Force for Climate‑related Disclosures), and the Group’s own climate‑related

ambitions and targets, including its stated Sustainability strategic pillar. This includes an assessment of how

the Group’s accounting estimates and judgements are impacted by the Group’s pathway to achieving its

stated ambitions and targets and delivering on its Sustainability strategic pillar, as well as by climate‑related

risks and opportunities for the Group.

Actions required to drive the Group’s climate‑related ambitions and targets and to deliver on its Sustainability

strategic pillar, including their financial impacts, are factored into the longer‑term business planning cycles

of the Group. The following areas of estimation have been considered as part of these planning cycles, in

addition to those detailed in the Key sources of estimation uncertainty section. Management does not

believe that these areas will have a material impact on financial reporting estimates and judgements in

the next year. Owing to the inherent medium/longer‑term uncertainty with regard to climate‑related risks

and opportunities, it is not currently possible to assess whether in the future, these areas of estimation and

judgement may have a more material impact on carrying values of assets and liabilities. Management will

continue to regularly assess climate‑related risks in the context of the estimates and judgements made in

the preparation of the Group’s financial statements.

Going concern and viability

There may be a risk of increased future costs and capital investment requirements to ensure compliance

with environmental regulatory requirements (for example carbon taxes/charges, or other emissions‑related

restrictions), and to achieve the Group’s stated sustainability targets and ambitions. However, the Group

believes that there is likely to be an increasing modal shift towards public transport, as awareness grows

among customers of climate‑related issues, and with governmental support for transport decarbonisation,

which could create new opportunities for the Group.

Carrying value of non‑current assets

Environmental regulatory requirements, in parallel with the Group’s climate‑related targets and ambitions,

may further accelerate the transition to electrification of vehicle fleets. Transitional risks relating to the

evolution of climate‑related technologies may alter the expected obsolescence profile of existing vehicle

fleets. These factors may impact the Group’s estimates of the useful lives of existing assets, their residual

values, and the risk of asset impairment. The Group monitors closely the accounting estimates in relation

to its vehicle fleets to ensure they remain reasonable.

Provisions

Climate‑related legislative and regulatory changes may, in future, require the Group to assess whether

environmental provisions are necessary, for example the potential introduction of carbon taxes/charges. In

parallel with the work towards achieving its climate‑related ambitions and targets, the Group tracks such

legislative changes to ensure the impact on the business is well understood and managed effectively.

Other areas of the financial statements which may also be impacted by climate‑related risks and

opportunities include:



Share‑based payments – certain of the Group’s share‑based payments arrangements include a

sustainability target (see note 33), and the Group’s ability to meet these targets may impact the amount

or timing of any share‑based payments.



Deferred tax assets – recoverability of deferred tax assets is dependent on future profitability, which may

be impacted by climate‑related factors.



Borrowing facilities – during the year, the Group has entered into innovative funding arrangements for the

future purchase of both electric bus batteries and electric bus bodies (chassis and drivetrain). The timing

of the utilisation of these facilities to support the Group’s decarbonisation and sustainability targets may

impact levels of borrowing and finance costs for the Group.

Going concern

The Board carried out a review of the Group’s financial projections for the 18 months to 30 September 2027

and evaluated whether it was appropriate to prepare the full year results on a going concern basis. In doing

so, the Board considered whether any material uncertainties exist that cast doubt on the Group’s and the

Company’s ability to continue as a going concern over the going concern period.

Consistent with prior years, the Board’s going concern assessment is based on a review of future trading

projections, including whether banking covenants are likely to be met and whether there is sufficient

committed facility headroom to accommodate future cash flows for the going concern period.

Divisional management teams prepared detailed, bottom‑up projections for their businesses reflecting the

impact of macroeconomic considerations on the operating environment, assumptions on passenger volumes

and government support, as well as the impact of actions required to address the Group’s climate‑related

targets and ambitions, and having regard to the risks and uncertainties to which the Group is exposed.

Base case scenario

The Board considered the annual budget to 31 March 2027 and medium‑term plan including the period to

September 2027 to be the base case scenario for the purpose of the going concern assessment for the FY

2026 year end. These projections were the subject of a series of executive management reviews and were

used to establish the base case scenario that was used for the purposes of the going concern assessment.

The Bus base case assumes a gradual net profit increase from passenger volumes and yields in FY 2027,

with some offset from cost inflation. The base case also reflects the impact of the acquisitions completed

in FY 2025 and FY 2026, including First Bus London and coaching businesses. The Rail base case reflects the

expected expiry of the Group’s remaining NRCs, and the commencement of the London Overground contract

in May 2026. The macro projections in the updated base case assume that the UK operates in a low‑growth

economy with inflationary pressures. The annual budget and medium‑term plan also capture the expected

financial impact of the actions required to support the Group’s climate‑related targets and ambitions, and

the cash flow impact of other capital allocation decisions which the Group may consider.

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continued

Downside scenario

In addition, a downside case was also modelled which assumes a more adverse macroeconomic recovery

profile, including the potential impacts of geopolitical instability. In First Bus the downside case assumes a

reduction in passenger volumes as well as the impact of other unexpected cost inflation, driving a 25%

reduction in Bus profitability. In First Rail, the downside case assumes TOC performance fee awards at 50%

of expected levels, volume and revenue reductions in Hull Trains and Lumo driving a 25% reduction in open

access profitability, and other unbudgeted cost and inflationary risks. The downside scenario also considers

potential impacts of a significant climate‑related event or unbudgeted decarbonisation costs, as well as the

risk of one‑off safety, regulatory non‑compliance or technology incidents. The downside scenario also takes

into account some controllable mitigating actions available to the Group.

Mitigating actions

If the performance of the Group were to be more adversely impacted than assumed in the base case or

downside case scenarios, the Group would reduce and defer planned growth capital expenditure and further

reduce costs in line with a lower‑volume operating environment to the extent that the essential services we

operate in First Bus are not required to be run for the governments and communities we support, as well as

further reviews of other Group capital allocation decisions.

Going concern statement

Based on the review of the financial forecasts for the period to September 2027 and having regard to the risks

and uncertainties to which the Group is exposed, the Directors have a reasonable expectation that the Group

has adequate resources to continue in operational existence for at least the 12‑month period from the date

on which the financial statements were approved, including compliance with banking covenants under both

the base case and downside scenarios. Accordingly, they continue to adopt a going concern basis of

accounting in preparing the consolidated financial statements in this full year report.

3 Revenue

| | | |
| --- | --- | --- |
| | |
| | | 2025 |
| | 2026 | (restated

1

) |
| | £m | £m |
| Services rendered | 4,013.1 | 4,317.2 |
| First Rail contract subsidy receipts | 419.2 | 580.4 |
| Other revenues | 319.6 | 336.3 |
| Revenue from continuing operations | 4,751.9 | 5,233.9 |
| Discontinued operations | – | – |
| Revenue | 4,751.9 | 5,233.9 |

The Group has identified certain funding mechanisms with the DfT where amounts due to the DfT have previously been treated as

deductions from revenue. Upon further review, the Group has judged that these amounts should instead be recognised as an expense in

the income statement. The prior year income statement comparative information has been re‑presented accordingly. The re‑

presentation is within the income statement and has no impact on profit measures or the other primary statements.

Disaggregated revenue by operating segment is set out in note 5.

Other revenues principally represent funding mechanisms in First Bus and the First Rail businesses.

4 Reconciliation to non‑GAAP measures and performance

In measuring the Group and divisional adjusted operating performance, additional financial measures derived

from the reported results have been used by management in order to eliminate factors which distort

year‑on‑year comparisons, and to enable the like‑for‑like monitoring of the Group’s recurring operations

over time. The Group’s adjusted performance is used to explain year‑on‑year changes when the effect of

certain items is significant, including strategic items (including material M&A and Group restructuring

projects), costs of acquisitions including aborted acquisitions, and impairment of assets. Other items below

£5.0m would not normally be considered as adjusting items unless part of a larger strategic project, but

items which distort year‑on‑year comparisons that exceed this amount could potentially be classified as an

adjusting item and are assessed on a case‑by‑case basis. Such potential adjusting other items may include:

restructuring and reorganisation costs; property gains or losses; aged legal and self‑insurance claims;

movements on insurance discount rates; onerous contract provisions; pension settlement gains or losses;

and other items which management has determined as not being relevant to an understanding of the

Group’s underlying business performance. Subsequent remeasurements of adjusting items are also

recognised as an adjusting item in the future period in which the remeasurement occurs.

The Group’s statutory revenue measure will be impacted as NRCs are taken into public ownership. As a result,

during FY 2025 the Group identified Adjusted revenue as a new performance measure, to provide an indication

of the Group’s revenue excluding that from NRCs. Adjusted revenue is defined as revenue excluding that

element to DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no

revenue risk. The Adjusted revenue measure includes management and performance fee income earned by

the Group from its DfT TOC contracts.

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Notes to the consolidated financial statements

continued

4 Reconciliation to non‑GAAP measures and performance

continued


	2026	2025
Reconciliation of operating profit to adjusted operating profit on a continuing basis	£m	£m
Operating profit on a continuing basis	219.4	222.6
Adjustments for:
Greyhound Canada	–	0.2
Total operating profit adjustments on a continuing basis	–	0.2
Adjusted operating profit on a continuing basis (note 5)	219.4	222.8


	2026	2025
Reconciliation of operating profit to adjusted operating profit/(loss) on a discontinued basis	£m	£m
Operating profit from discontinued operations	2.1	4.9
Adjustments for:
CARES receipt	–	(0.4)
Retirement benefit restructuring credits	–	(5.1)
Total operating profit adjustments from discontinued operations	–	(5.5)
Adjusted operating profit/(loss) from discontinued operations	2.1	(0.6)


	2026	2025
Reconciliation of profit before tax to adjusted profit before tax and adjusted earnings	£m	£m
Profit before tax (including discontinued operations)	158.8	169.6
Adjusting operating profit items – continuing operations	–	0.2
Adjusting operating profit items – discontinued operations	–	(5.5)
Adjusted operating profit items – total operations	–	(5.3)
Adjusted profit before tax including discontinued operations	158.8	164.3
Rail management fee‑based operations – IFRS 16 adjustment	(2.8)	(1.1)
Adjusted tax charge	(37.3)	(41.1)
Non‑controlling interests 1	(4.0)	(7.1)
Adjusted earnings including discontinued operations	114.7	115.0

Statutory non‑controlling interests in 2026 and 2025 reflect Avanti West Coast and South Western Railway.


	2026	2025
Reconciliation of tax charge to adjusted tax charge	£m	£m
Tax charge (note 9)	37.3	31.3
Non‑recurring historical tax refund (note 9)	–	3.0
Write‑back of previously unrecognised deferred tax assets (note 9)	–	6.8
Adjusted tax charge (including discontinued)	37.3	41.1
Adjusted tax charge – continuing operations	37.3	41.1
Adjusted tax charge – discontinued operations	–	–

Adjusting items – 2026

There were no adjusting items in the year for either continuing or discontinued operations.

Adjusting items –

continued

operations –2025

Greyhound Canada

A net £0.2m charge was incurred in the period relating to the continued winding down of Greyhound

Canada operations.

Adjusting items – dis

continued

operations –2025

CARES receipt

A credit of £0.4m was recognised in the period on receipt of CARES funding in relation to the discontinued

North American operations.

Legacy US pensions scheme buy‑out

On 16 July 2024, the Group agreed terms with an insurance company to buy out the remaining liabilities

of the legacy Greyhound US pension plan, with the plan being terminated thereafter. Following a Group

contribution of $6m, gross liabilities valued at $155m (£123m) at the FY 2024 year end were removed from

the Group’s balance sheet and the Group recognised a net settlement gain after related costs of £5.1m in

the income statement as an adjusting item.

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Notes to the consolidated financial statements

continued

4 Reconciliation to non‑GAAP measures and performance

continued


	2026	2025
First Bus EBITDA comprises:	£m	£m
Pre‑IFRS 16 EBITDA	164.7	144.0
IFRS 16 adjustments 1	36.1	16.1
First Bus adjusted EBITDA per segmental results table (note 5)	200.8	160.1


	2026	2025
First Rail EBITDA comprises:	£m	£m
Non‑management fees‑based TOCs pre‑IFRS 16 EBITDA	51.2	40.8
Group’s share of management fee income available for dividends (net of tax and non‑controlling interest)	29.3	39.0
Tax on management fee income	11.1	15.4
Non‑controlling interest	4.0	7.2
IFRS 16 adjustments 1	415.1	537.3
First Rail adjusted EBITDA per segmental results table (note 5)	510.7	639.7


	2026	2025
Group items EBITDA comprises:	£m	£m
Pre‑IFRS 16 EBITDA	(13.3)	(21.4)
IFRS 16 adjustments 1	2.6	2.0
Group items adjusted EBITDA per segmental results table (note 5)	(10.7)	(19.4)


	2026	2025
First Rail adjusted operating profit comprises:	£m	£m
Non‑management fees‑based TOCs	45.4	40.3
Group’s share of management fee income available for dividends (net of tax and non‑controlling interest)	29.3	39.0
Tax on management fee income	11.1	15.4
Non‑controlling interest	4.0	7.2
IFRS 16 adjustments 1	40.1	46.9
First Rail adjusted operating profit per segmental results table (note 5)	129.9	148.8


	2026	2025
Reconciliation of pre‑IFRS 16 adjusted EBIT to post‑IFRS 16 adjusted EBIT	£m	£m
Pre‑IFRS 16 adjusted EBIT	173.8	173.4
IFRS 16 adjustments 1	45.6	49.4
Post‑IFRS 16 adjusted EBIT	219.4	222.8


	2026	2025
Reconciliation of statutory revenue to adjusted revenue 2	£m	£m
Revenue – statutory basis (restated 3 )	4,751.9	5,233.9
Deduct: DfT TOC revenue (restated 3 )	(3,160.1)	(4,048.6)
Add back: DfT TOC management and performance fees	46.8	71.7
Add back: Intercompany eliminations related to DfT TOCs	77.1	113.0
Adjusted revenue	1,715.7	1,370.0


	2026	2025
Reconciliation of reported net debt to adjusted net debt	£m	£m
Reported net debt (note 30)	725.3	985.6
IFRS 16 lease liabilities (note 20)	(850.0)	(1,214.4)
Ring‑fenced cash (note 18)	262.4	315.7
Adjusted net debt	137.7	86.9

IFRS 16 adjustments to EBITDA principally reflect the add back of operating lease rental costs charged to the income statement before the adoption of IFRS 16. IFRS 16 adjustments to operating profit reflect operating lease rental costs less depreciation charges on right of use assets.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk. The Adjusted revenue measure includes management and performance fee income earned by the Group from its DfT TOC contracts.

The Group has identified certain funding mechanisms with the DfT where amounts due to the DfT have previously been treated as deductions from revenue. Upon further review, the Group has judged that these amounts should instead be recognised as an expense in the income

statement. The prior year income statement comparative information has been re‑presented accordingly. The re‑presentation is within the income statement and has no impact on profit measures or the other primary statements.

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Notes to the consolidated financial statements

continued

5 Business segments and geographical information

For management purposes, the Group is organised into three divisions – First Bus, First Rail and Group items. Greyhound Canada is categorised as a continuing operation, and sits within Group items as its trading operations

have ceased.

The divisions are managed separately in line with the differing services that they provide and the geographical markets in which they operate. There is a clear distinction between each division and no judgement is

required to identify each reportable segment.

The segment results for the 52 weeks ended 28 March 2026 are as follows:



	Continuing operations
					Discontinued
	First Bus	First Rail	Group items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Passenger revenue	810.5	2,638.3	–	3,448.8	–	3,448.8
Contract revenue	583.6	–	(19.3)	564.3	–	564.3
Rail contract subsidy receipts	–	419.2	–	419.2	–	419.2
Other	49.5	270.1	–	319.6	–	319.6
Revenue	1,443.6	3,327.6	(19.3)	4,751.9	–	4,751.9
Rail TOC revenue adjustments	–	(3,055.2)	19.0	(3,036.2)	–	(3,036.2)
Adjusted revenue 2	1,443.6	272.4	(0.3)	1,715.7	–	1,715.7
Adjusted EBITDA 3	200.8	510.7	( 10.7)	700.8	2.1	702.9
Depreciation	(107.8)	(450.4)	(2.2)	(560.4)	–	(560.4)
Software amortisation	(1.8)	(2.5)	(0.4)	(4.7)	–	(4.7)
Capital grant amortisation	11.6	72.1	–	83.7	–	83.7
Segment results	102.8	129.9	(13.3)	219.4	2.1	221.5
Other adjustments (note 4)	–	–	–	–	–	–
Operating profit/(loss) 4	102.8	129.9	(13.3)	219.4	2.1	221.5
Investment income	2.0	0.4	4.7	7.1	–	7.1
Finance costs	(21.9)	(36.4)	(11.5)	(69.8)	–	(69.8)
Profit/(loss) before tax	82.9	93.9	(20.1)	156.7	2.1	158.8
Tax						(37.3)
Profit after tax						121.5



	Continuing operations
					Discontinued
	First Bus	First Rail	Group Items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Capital additions	206.8	52.6	–	259.4	–	259.4

Capital additions comprises intangible asset additions and acquisitions (note 12) and property, plant and equipment acquisitions and additions (note 13).

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Notes to the consolidated financial statements

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5 Business segments and geographical information

continued


			Net assets/
	Total assets	Total liabilities	(liabilities)
Balance sheet 5	£m	£m	£m
Greyhound retained	22.9	(27.2)	(4.3)
First Bus	1,308.5	(351.8)	956.7
First Rail	1,187.8	(737.1)	450.7
	2,519.2	(1,116.1)	1,403.1
Group items	125.8	(51.7)	74.1
Borrowings and cash	432.0	(1,157.3)	(725.3)
Taxation	24.4	(56.8)	(32.4)
Total	3,101.4	(2,381.9)	719.5

Group items comprise central management and other items.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk.

EBITDA is adjusted operating profit less capital grant amortisation plus depreciation plus software amortisation.

Although the segment results are used by management to measure performance, statutory operating profit by operating division is also disclosed for completeness.

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intercompany balances, net debt and taxation.

The segment results for the 52 weeks ended 29 March 2025 were as follows:


	Continuing operations
		First Rail			Discontinued
	First Bus	(restated 6 )	Group items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Passenger revenue	785.6	3,310.7	–	4,096.3	–	4,096.3
Contract revenue	249.2	–	(28.3)	220.9	–	220.9
Rail contract subsidy receipts	–	580.4	–	580.4	–	580.4
Other	46.7	289.6	–	336.3	–	336.3
Revenue	1,081.5	4,180.7	(28.3)	5,233.9	–	5,233.9
Rail TOC revenue adjustments	–	(3,891.9)	28.0	(3,863.9)	–	(3,863.9)
Adjusted revenue 2	1,081.5	288.8	(0.3)	1,370.0	–	1,370.0
Adjusted EBITDA 3	160.1	639.7	(19.4)	780.4	(0.6)	779.8
Depreciation	(77.0)	(541.1)	(2.1)	(620.2)	–	(620.2)
Software amortisation	(0.9)	(1.3)	(0.5)	(2.7)	–	(2.7)
Capital grant amortisation	13.8	51.5	–	65.3	–	65.3
Segment results	96.0	148.8	(22.0)	222.8	(0.6)	222.2
Other adjustments (note 4)	–	–	(0.2)	(0.2)	5.5	5.3
Operating profit/(loss) 4	96.0	148.8	(22.2)	222.6	4.9	227.5
Investment income	0.5	0.2	7.0	7.7	0.1	7.8
Finance costs	(9.5)	(47.8)	(8.1)	(65.4)	(0.3)	(65.7)
Profit/(loss) before tax	87.0	101.2	(23.3)	164.9	4.7	169.6
Tax						(31.3)
Profit after tax						138.3


	Continuing operations
					Discontinued
	First Bus	First Rail	Group items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Capital additions (restated) 6	240.1	47.0	–	287.1	–	287.1

Capital additions comprises intangible asset additions and acquisitions (note 12) and property, plant and equipment acquisitions and additions (note 13).

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5 Business segments and geographical information

continued


	Total	Total	Net assets/
	assets	liabilities	(liabilities)
	(restated 6 )	(restated 6 )	(restated 6 )
Balance sheet 5	£m	£m	£m
Greyhound retained	34.3	(44.8)	(10.5)
First Bus	1,198.8	(374.0)	824.8
First Rail	1,745.4	(947.0)	798.4
	2,978.5	(1,365.8)	1,612.7
Group items	145.2	(54.1)	91.1
Borrowings and cash	487.1	(1,472.7)	(985.6)
Taxation	53.9	(59.6)	(5.7)
Total	3,664.7	(2,952.2)	712.5

Group items comprise central management and other items.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk.

EBITDA is adjusted operating profit less capital grant amortisation plus depreciation plus software amortisation.

Although the segment results are used by management to measure performance, statutory operating profit by operating division is also disclosed for completeness.

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intercompany balances, net debt and taxation.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Geographical information

The Group’s operations are located predominantly in the United Kingdom, with the prior year also including residual United States of America and Canada segment assets. The following table provides an analysis of the

Group’s revenue by geographical market:



		2025
	2026	(restated 1 )
Revenue	£m	£m
United Kingdom/Republic of Ireland	4,751.9	5,233.9
Total continuing operations	4,751.9	5,233.9
United States of America – discontinued operations	–	–
Total discontinued operations	–	–
Total revenue	4,751.9	5,233.9

The following is an analysis of non‑current assets excluding financial instruments, deferred tax and pensions, the carrying amount of segment assets, and additions to property, plant and equipment and intangible assets,

analysed by the geographical area in which the assets are located:



	Non‑current assets excluding financial		Additions to property, plant and		Carrying amount of
	instruments deferred tax and pensions		equipment and intangible assets		segment total assets
		2025		2025		2025
	2026	(restated 1 )	2026	(restated 1 )	2026	(restated 1 )
	£m	£m	£m	£m	£m	£m
United Kingdom/Republic of Ireland	1,909.5	2,196.7	259.4	287.1	3,054.1	3,576.5
Canada – continuing operations	–	–	–	–	0.5	0.5
Unallocated corporate items	–	–	–	–	24.4	53.9
Total – continuing operations	1,909.5	2,196.7	259.4	287.1	3,079.0	3,630.9
USA – discontinued operations	2.3	2.6	–	–	22.4	33.8
Total – discontinued operations	2.3	2.6	–	–	22.4	33.8
	1,911.8	2,199.3	259.4	287.1	3,101.4	3,664.7

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

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Notes to the consolidated financial statements

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6 Operating profit

Operating profit has been arrived at after charging/(crediting):



		2025
	2026	(restated 1 )
	£m	£m
Depreciation – owned assets	152.0	113.8
Depreciation – right of use assets	408.4	506.4
Operating commitments	360.8	505.8
Other intangible asset amortisation charges	4.7	2.7
Capital grant amortisation	(83.7)	(65.3)
Cost of inventories recognised as an expense	219.6	236.0
Employee costs (note 7)	1,704.1	1,710.7
Gain on disposal of property, plant and equipment	(9.4)	(0.2)
Impairment reversal	(0.9)	–
Auditor’s remuneration (see below)	3.9	3.6
Rail contract payments	208.5	168.2
Bus service operator grants and fuel duty rebates	46.0	40.9
Foreign exchange	0.1	0.3
Other operating costs	1,518.4	1,788.4
Operating costs – continuing operations	4,532.5	5,011.3
Operating income – discontinued operations	(2.1)	(4.9)
Operating costs – continuing and discontinued operations	4,530.4	5,006.4

statement. The prior year income statement comparative information for ‘Rail contract payments’ in the table above has been re‑presented accordingly. The re‑presentation is within the income statement and has no impact on profit measures or the other primary statements.

See note 1 Restatements section for more information.

Amounts payable to PricewaterhouseCoopers LLP and its associates by the Company and its subsidiary undertakings for continuing and discontinued operations in respect of audit and non‑audit services are shown below:

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Fees payable to the Company’s auditor for the audit of the Company’s annual accounts | 0.3 | 0.2 |
| Fees payable to the Company’s auditor and its associates for the audit of the Company’s subsidiaries pursuant to legislation | 3.3 | 3.2 |
| Total audit fees | 3.6 | 3.4 |
| Audit‑related assurance services | 0.2 | 0.1 |
| Other non‑audit services | 0.1 | 0.1 |
| Total non‑audit fees | 0.3 | 0.2 |

Fees payable to PricewaterhouseCoopers LLP and its associates for non‑audit services to the Company are not required to be disclosed because the consolidated financial statements are required to disclose such fees on

a consolidated basis.

Details of the Group’s policy on the use of auditors for non‑audit services, the reasons why the auditor was used rather than another supplier and how the auditor’s independence and objectivity were safeguarded are set

out in the Corporate Governance report on page 90. No services were provided pursuant to contingent fee arrangements.

Non‑audit services principally reflect the review of the half yearly financial information and other regulatory reporting.

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Notes to the consolidated financial statements

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7 Employee costs

The average monthly number of employees including discontinued operations (including Executive Directors) was:



	2026	2025
	Number	Number
Operational	27,768	27,698
Administration	3,227	3,065
	30,995	30,763

The aggregate remuneration including discontinued operations (including Executive Directors) comprised:



	2026	2025
	£m	£m
Wages and salaries	1,478.2	1,486.4
Social security costs	157.4	149.1
Pension costs (note 34)	68.5	75.2
	1,704.1	1,710.7

Wages and salaries include a charge in respect of share‑based payments of £10.4m (2025: £10.5m).

Disclosures on Directors’ remuneration, share options, long‑term incentive schemes and pension entitlements required by the Companies Act 2006 and those specified for audit by the Financial Conduct Authority (FCA)

are contained in the tables/notes within the Annual report on remuneration on pages 92 to 108. Directors’ emoluments in aggregate were £6.0m (2025: £6.1m).

8 Investment income and finance costs

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Bank interest receivable | (4.9) | (7.2) |
| Interest on pensions | (2.2) | (0.6) |
| Total investment income (including discontinued operations) | (7.1) | (7.8) |
| Bonds | – | 3.1 |
| Bank interest and facility fees | 14.5 | 8.2 |
| Finance charges payable in respect of lease liabilities | 48.1 | 49.6 |
| Finance charges payable in respect of asset backed financial liabilities | 6.5 | 3.7 |
| Interest on long‑term provisions | 0.7 | 1.0 |
| Interest on pensions | – | 0.1 |
| Total finance costs (including discontinued operations) | 69.8 | 65.7 |

Finance costs are stated after charging fee expenses of £1.6m (2025: £1.1m). There was no interest capitalised into qualifying assets in either the current or prior period.

Investment income of £nil (2025: £0.1m) and finance costs of £nil (2025: £0.3m) relate to discontinued operations (note 19).

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9 Tax on profit on ordinary activities

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Current tax charge | 1.4 | 6.6 |
| Adjustments with respect to prior years | 1.2 | (2.8) |
| Total current tax charge (including discontinued operations) | 2.6 | 3.8 |
| Origination and reversal of temporary differences | 34.8 | 36.2 |
| Adjustment in respect of prior years | (0.1) | (1.9) |
| Write‑back of previously unrecognised deferred tax assets | – | (6.8) |
| Total deferred tax charge (note 23) | 34.7 | 27.5 |
| Total tax charge (including discontinued operations) | 37.3 | 31.3 |
| Tax charge attributable to: | | |
| Profit from continuing operations | 37.3 | 31.3 |
| Profit from discontinued operations | – | – |

UK corporation tax is calculated at 25% (2025: 25%) of the estimated assessable profit for the year. Tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Deferred tax has been provided

at 25% on temporary differences at the balance sheet date.

As the Group’s parent company is domiciled and listed in the UK, the Group uses the UK corporation tax rate to reconcile its effective tax rate. The tax charge for the year can be reconciled to the UK corporation tax rate as follows:



	2026	2026	2025	2025
	£m	%	£m	%
Profit from continuing operations before income tax expense	156.7	N/A	164.9	N/A
Profit from discontinued operations before income tax expense	2.1	N/A	4.7	N/A
Profit from total operations	158.8	100.0	169.6	100.0
Tax at the UK corporation tax rate of 25% (2025: 25%)	39.7	25.0	42.4	25.0
Non‑deductible expenditure	0.6	0.4	–	–
Non‑taxable income	(3.4)	(2.1)	–	–
Tax rates outside of the UK	(0.1)	(0.1)	0.1	0.1
Unrecognised losses	(0.6)	(0.4)	0.3	0.2
Non‑recurring historical tax refund	–	–	(3.0)	(1.8)
Other adjustments in relation to prior years	1.1	0.7	(1.7)	(1.0)
Write‑back of previously unrecognised deferred tax assets	–	–	(6.8)	(4.0)
Tax charge and effective tax rate for the year	37.3	23.5	31.3	18.5

Future years’ tax charges would be impacted if the final liability for currently open years is different from the amount currently provided for. The future tax charge may also be affected by the levels and mix of profits in the countries

in which we operate including differing foreign exchange rates that apply to those profits. Changes to the prevailing tax rates and tax rules in any of the countries in which we operate may also impact future tax charges.

In addition to the amount charged/(credited) to the income statement, deferred tax relating to actuarial gains/(losses) on defined benefit pension schemes of £(6.6)m (2025: £7.5m) and cash flow hedges of £5.8m

(2025: £(1.0)m) have been (credited)/charged to comprehensive income together with a further £0.2m (2025: £0.8m) on cash flow hedges and £nil (2025: £0.1m) on share‑based payments taken directly to equity.

These amount to a total (credit)/charge of £(0.6)m (2025: £7.2m) recognised in other comprehensive income and equity.

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Notes to the consolidated financial statements

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10 Earnings per share (EPS)

EPS is calculated by dividing the profit/loss attributable to equity shareholders of £118.3m (2025: profit of £127.5m) by the weighted average number of ordinary shares of 553.4m (2025: 597.7m). The number of ordinary

shares used for the basic and diluted calculations is shown in the table below.

The difference in the number of shares between the basic calculation and the diluted calculation represents the weighted average number of potentially dilutive ordinary share options.



	2026	2025
	Number	Number
	m	m
Weighted average number of shares used in basic calculation	553.4	597.7
Executive share options	21.6	25.0
Weighted average number of shares used in the diluted calculation	575.0	622.7

The adjusted EPS is intended to highlight the recurring operating results of the Group before certain other adjustments as set out in note 4, and before IFRS 16 charges relating to the Group’s management fee‑based Rail

operations. A reconciliation is set out below:



	2026		2025
		EPS		EPS
	£m	(pence)	£m	(pence)
Basic profit/EPS	118.3	21.4	127.5	21.3
Management fee‑based Rail operations – IFRS 16 adjustments	(2.8)	(0.6)	0.5	0.1
Other adjustments (note 4)	–	–	(5.3)	(0.9)
Non‑controlling interest	(0.8)	(0.1)	2.1	0.4
Non‑recurring historical tax refund	–	–	(3.0)	(0.5)
Write‑back of previously unrecognised deferred tax assets	–	–	(6.8)	(1.1)
Adjusted profit/EPS attributable to the ordinary equity holders of the Company	114.7	20.7	115.0	19.3
Adjusted profit/(loss)/EPS from discontinued operations	2.1	0.4	(0.8)	(0.1)
Adjusted profit/EPS from continuing operations	112.6	20.3	115.8	19.4



	2026	2025
	pence	pence
Diluted EPS	20.6	20.5
Adjusted diluted EPS	19.9	18.5

The adjusted EPS on a continuing basis is set out below:



	2026		2025
		EPS		EPS
	£m	(pence)	£m	(pence)
Basic profit/EPS	116.2	21.0	122.8	20.5
Management fee‑based Rail operations – IFRS 16 adjustments	(2.8)	(0.6)	0.5	0.1
Other adjustments (note 4)	–	–	0.2	–
Non‑controlling interest	(0.8)	(0.1)	2.1	0.4
Non‑recurring historical tax refund	–	–	(3.0)	(0.5)
Write‑back of previously unrecognised deferred tax assets	–	–	(6.8)	(1.1)
Adjusted profit/EPS from continuing operations	112.6	20.3	115.8	19.4



	2026	2025
	pence	pence
Diluted EPS	20.2	19.7
Adjusted diluted EPS	19.6	18.6

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Notes to the consolidated financial statements

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11 Goodwill

| | |
| --- | --- |
| | |
| | £m |
| Cost | |
| At 29 March 2025 (restated

1

) | 144.7 |
| Additions (note 28) | 12.3 |
| At 28 March 2026 | 157.0 |
| Accumulated impairment losses | |
| At 29 March 2025 | – |
| At 28 March 2026 | – |
| Carrying amount | |
| At 28 March 2026 | 157.0 |
| At 29 March 2025 (restated

1

) | 144.7 |

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting

adjustments.

Impairment testing

At the year end, the carrying value of goodwill was reviewed for impairment in accordance with IAS 36

Impairment of Assets.

In carrying out this review, climate‑related impacts were considered, in line with the TCFD disclosures.

This work assessed FirstGroup’s potential exposure to climate‑related transition and physical risks, across

different climate scenarios, over the short, medium and long term, and estimated cumulative Enterprise

Value at Risk over the period FY 2026 to FY 2030.

Transition risks included potential impacts from increased carbon prices and route constraints due to

new zero emission zones, as well as technology costs from an accelerated shift to a zero emission fleet

and the impairment of carbon‑intensive vehicles. Physical risks concentrated mainly on flooding as the

most material impact. Key findings are outlined on pages 50 to 54 of this report and focus on direct risks

to FirstGroup.

For impairment calculations, the 2.5°C (Stated Policy) scenario modelled by Marsh was used, which identified

technology risks as ‘medium impact’ and flooding risks as ‘low impact’ over the next four years.

The Group’s stated CGUs and goodwill balances are First Bus (excluding London) (£135.7m); First Bus London

(£7.2m); First Rail DfT TOCs (£nil); and First Rail (excluding DfT TOCs) (£14.1m).

Full detailed impairment testing has been performed on a value in use basis on the First Bus (excluding

London) CGU. Following the finalisation of the First Bus London acquisition accounting adjustments,

impairment testing was also performed for the goodwill arising from that transaction, with no impairment

noted. The value of the DfT TOC asset base is protected by the passthrough and termination arrangements

of the respective NRCs, such that no impairment is expected to arise on these assets. Impairment testing was

undertaken for the First Rail (excluding DfT TOCs) CGU, with no impairment noted.

The Group prepares cash flow forecasts derived from the Board‑approved plan for 2026/27 to 2028/29 which

takes account of both past performance and expectations for future developments. Cash flows beyond the

plan period are extrapolated using estimated long‑term growth rates which do not exceed the long‑term

average growth rate for the market. Cash flows are discounted using a pre‑tax discount rate derived from

a market participant’s weighted average cost of capital, benchmarked to externally available data.

Impairment testing – First Bus (excluding London)

First Bus (excluding London) value in use has been assessed based on the projected cash flows for FY 2027

to FY 2029 from the Board‑approved forecasts. These have been extrapolated to perpetuity cash flows and

discounted to a net present value based on the following assumptions.

First Bus (excluding London) has £278m of positive headroom at 28 March 2026 (29 March 2025: £277m)

based on a 1.9% long‑term growth rate assumption (2025: 1.9%), 11.7% discount rate (2025: 11.2%) and 9.8%

terminal margin (2025: 9.8%), which reflects the impact of expected future passenger volumes and yields,

as well as planned resizing of the network.

Break‑even would arise at:



14.5% discount rate (with a 9.8% terminal margin);



6.2% terminal operating margin (applying the cap to just the final year/terminal value) using a 11.7%

discount rate; or



7.5% terminal operating margin throughout the forecast period and terminal margin (applying the cap

in all years at 7.5%, not just in the terminal years) using a 11.7% discount rate.

As the break‑even points lie outside management’s range of reasonable expectation, no impairment of

First Bus is proposed.

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Notes to the consolidated financial statements

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12 Other intangible assets

| | | | |
| --- | --- | --- | --- |
| | |
| | Customers | | |
| | contracts | | |
| | (restated

2

) | Software | Total |
| | £m | £m | £m |
| Cost | | | |
| At 31 March 2024 | – | 41.0 | 41.0 |
| Acquisitions | 2.3 | 0.3 | 2.6 |
| Additions | – | 5.7 | 5.7 |
| Disposals | – | (1.2) | (1.2) |
| Reclassifications

1 | – | (2.7) | (2.7) |
| At 29 March 2025 | 2.3 | 43.1 | 45.4 |
| At 30 March 2025 | 2.3 | 43.1 | 45.4 |
| Additions

3 | – | 11.2 | 11.2 |
| Disposals | – | (5.1) | (5.1) |
| Reclassifications | – | 0.3 | 0.3 |
| At 28 March 2026 | 2.3 | 49.5 | 51.8 |
| Accumulated amortisation and impairment | | | |
| At 31 March 2024 | – | 30.6 | 30.6 |
| Charge for year | – | 2.7 | 2.7 |
| Reclassifications

1 | – | (2.7) | (2.7) |
| At 29 March 2025 | – | 30.6 | 30.6 |
| At 30 March 2025 | – | 30.6 | 30.6 |
| Charge for year | 0.4 | 4.3 | 4.7 |
| Disposals | – | (5.1) | (5.1) |
| Reclassifications

1 | – | (0.3) | (0.3) |
| At 28 March 2026 | 0.4 | 29.5 | 29.9 |
| Carrying amount | | | |
| At 28 March 2026 | 1.9 | 20.0 | 21.9 |
| At 29 March 2025 | 2.3 | 12.5 | 14.8 |

As part of the Group’s continuing efforts to streamline reporting processes it was identified that £0.3m (2025: £2.7m) had been incorrectly classified between cost and accumulated amortisation.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Additions in the year include £1.3m of internally generated intangible assets.

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Notes to the consolidated financial statements

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13 Property, plant and equipment

Owned assets

| | | | | |
| --- | --- | --- | --- | --- |
| | |
| | | Passenger | | |
| | Land and | carrying vehicle | | |
| | buildings | fleet | Other plant and | Total |
| | (restated

2

) | (restated

2

) | equipment | (restated

2

) |
| | £m | £m | £m | £m |
| Cost | | | | |
| At 31 March 2024 | 235.1 | 828.3 | 689.6 | 1,753.0 |
| Acquisitions (note 28) | 48.3 | 56.0 | 14.0 | 118.3 |
| Additions | 31.4 | 60.0 | 69.1 | 160.5 |
| Disposals | (1.4) | (44.1) | (10.9) | (56.4) |
| Reclassifications

1 | 16.3 | – | (13.6) | 2.7 |
| Transfers to right of use assets | – | (2.3) | (8.4) | (10.7) |
| Foreign exchange movements | – | (0.3) | – | (0.3) |
| At 29 March 2025 | 329.7 | 897.6 | 739.8 | 1,967.1 |
| At 30 March 2025 | 329.7 | 897.6 | 739.8 | 1,967.1 |
| Acquisitions (note 28) | 7.0 | 7.3 | 0.7 | 15.0 |
| Additions | 21.5 | 118.9 | 92.8 | 233.2 |
| Disposals | (29.9) | (63.7) | (301.6) | (395.2) |
| Reclassifications | (12.3) | – | 12.3 | – |
| Transfers to right of use assets | (0.6) | – | (5.6) | (6.2) |
| Foreign exchange movements | 0.1 | 1.0 | – | 1.1 |
| At 28 March 2026 | 315.5 | 961.1 | 538.4 | 1,815.0 |
| Accumulated depreciation and impairment | | | | |
| At 31 March 2024 | 62.9 | 426.8 | 515.2 | 1,004.9 |
| Charge for year | 10.8 | 53.4 | 49.6 | 113.8 |
| Disposals | (0.6) | (41.1) | (7.4) | (49.1) |
| Reclassifications

1 | – | – | 2.7 | 2.7 |
| Foreign exchange movements | – | (0.1) | – | (0.1) |
| At 29 March 2025 | 73.1 | 439.0 | 560.1 | 1,072.2 |
| At 30 March 2025 | 73.1 | 439.0 | 560.1 | 1,072.2 |
| Charge for year | 11.6 | 59.1 | 81.3 | 152.0 |
| Disposals | (24.1) | (59.1) | (270.6) | (353.8) |
| Impairment reversal | – | – | (0.9) | (0.9) |
| Foreign exchange movements | 0.1 | 0.5 | – | 0.6 |
| At 28 March 2026 | 60.7 | 439.5 | 369.9 | 870.1 |
| Carrying amount | | | | |
| At 28 March 2026 | 254.8 | 521.6 | 168.5 | 944.9 |
| At 29 March 2025 | 256.6 | 458.6 | 179.7 | 894.9 |

As part of the Group’s continuing efforts to streamline reporting processes it was identified that £16.3m of assets had been incorrectly classified between Land and buildings, and Other plant and equipment, and that £2.7m had been incorrectly classified between cost and

accumulated depreciation.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

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Notes to the consolidated financial statements

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13 Property, plant and equipment

continued

An amount of £85.0m (2025: £58.0m) in respect of assets under construction is included in the carrying amount of land and buildings and other plant and equipment, mainly relating to development of electric charging

infrastructure in First Bus.

At 28 March 2026 the Group had entered into contractual capital commitments amounting to £365.2m (2025: £341.5m), principally representing purchase of passenger carrying vehicles, electrical infrastructure and DfT

TOC and open access operation commitments.

Right of use assets

| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | |
| | | | Passenger | | |
| | | Land and | carrying vehicle | | |
| | | buildings | fleet | Other plant and | Total |
| | Rolling stock | (restated

1

) | (restated

1

) | equipment | (restated

1

) |
| | £m | £m | £m | £m | £m |
| Cost | | | | | |
| At 31 March 2024 | 3,743.4 | 65.1 | 60.4 | 25.6 | 3,894.5 |
| Additions | 6.5 | 6.2 | 8.0 | 1.2 | 21.9 |
| Acquisitions | – | 18.9 | 64.7 | – | 83.6 |
| Disposals | (75.5) | (3.3) | (10.0) | (1.5) | (90.3) |
| Reassessment | 124.6 | 1.0 | – | – | 125.6 |
| Transfers from owned assets | – | – | 2.3 | 8.4 | 10.7 |
| At 29 March 2025 | 3,799.0 | 87.9 | 125.4 | 33.7 | 4,046.0 |
| At 30 March 2025 | 3,799.0 | 87.9 | 125.4 | 33.7 | 4,046.0 |
| Additions | 9.0 | 8.8 | 23.2 | 2.0 | 43.0 |
| Acquisitions | – | 0.7 | – | – | 0.7 |
| Disposals | (782.4) | (8.4) | (1.5) | (1.4) | (793.7) |
| Transfers from owned assets | – | 0.6 | – | 5.6 | 6.2 |
| At 28 March 2026 | 3,025.6 | 89.6 | 147.1 | 39.9 | 3,302.2 |
| Accumulated depreciation and impairment | | | | | |
| At 31 March 2024 | 2,395.6 | 33.2 | 50.2 | 8.2 | 2,487.2 |
| Charge for period | 485.4 | 8.8 | 8.3 | 3.9 | 506.4 |
| Disposals | (75.2) | (3.3) | (9.9) | (1.5) | (89.9) |
| At 29 March 2025 | 2,805.8 | 38.7 | 48.6 | 10.6 | 2,903.7 |
| At 30 March 2025 | 2,805.8 | 38.7 | 48.6 | 10.6 | 2,903.7 |
| Charge for period | 370.0 | 11.5 | 23.3 | 3.6 | 408.4 |
| Disposals | (782.4) | (7.4) | (1.2) | (1.1) | (792.1) |
| At 28 March 2026 | 2,393.4 | 42.8 | 70.7 | 13.1 | 2,520.0 |
| Carrying amount | | | | | |
| At 28 March 2026 | 632.2 | 46.8 | 76.4 | 26.8 | 782.2 |
| At 29 March 2025 | 993.2 | 49.2 | 76.8 | 23.1 | 1,142.3 |

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The discounted lease liability relating to the right of use assets included above is shown in note 21.

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Notes to the consolidated financial statements

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13 Property, plant and equipment

continued


			Passenger
		Land and	carrying vehicle
		buildings	fleet	Other plant and	Total
	Rolling stock	(restated 1 )	(restated 1 )	equipment	(restated 1 )
Owned assets and right of use assets	£m	£m	£m	£m	£m
Carrying amount
At 28 March 2026	632.2	301.6	598.0	195.3	1,727.1
At 29 March 2025	993.2	305.8	535.4	202.8	2,037.2

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The maturity analysis of lease liabilities is presented in note 21.


	2026	2025
Amounts recognised in income statement (including discontinued operations)	£m	£m
Depreciation expense on right of use assets	408.4	506.4
Interest expense on lease liabilities	48.1	49.6
Expense relating to leases of short‑term leases	0.3	–
Expense relating to leases of low‑value assets	0.4	–
	457.2	556.0

14 Investments

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Other investments | 2.3 | 2.6 |
| Investments in associates | 2.0 | – |

In August 2025, the Group announced a minority investment in Palmer Energy Technology to bring the latest, innovative battery storage units to its First Bus sites.

15 Inventories

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Spare parts and consumables from continuing operations | 29.3 | 30.8 |

In the opinion of the Directors there is no material difference between the balance sheet value of inventories and their replacement cost. There was no material write‑down of inventories during the current or prior year.

16 Trade and other receivables


	2026	2025
Amounts due within one year (from continuing operations)	£m	£m
Trade receivables	255.2	364.1
Loss allowance	(0.4)	(10.6)
Trade receivables net	254.8	353.5
Other receivables	94.7	171.0
Amounts recoverable on contracts	33.7	57.5
Prepayments	54.8	37.2
Accrued income	148.4	142.4
	586.4	761.6


	2026	2025
Amounts due over one year (from continuing operations)	£m	£m
Other receivables	1.5	–

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Notes to the consolidated financial statements

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16 Trade and other receivables

continued


	2026	2025
Movement in accrued income:	£m	£m
Balance as at 30 March 2025/31 March 2024	142.4	229.0
Additions	241.8	382.1
Accrued income invoiced during the year	(235.8)	(468.7)
Balance as at 28 March 2026/29 March 2025	148.4	142.4

The loss allowance is assessed against all receivables within the scope of IFRS 9, with the majority relating to credit loss allowances arising from contracts with customers.

Other receivables includes £35.7m (2025: £60.4m) of VAT receivables, £19.8m (2025: £13.8m) of receivables from government bodies for fuel duty rebates, and £16.0m (2025: £31.0m) of insurance recoveries.

Amounts recoverable on contracts relates to amounts due from governmental and similar bodies for agreed contractual changes.

Accrued income principally comprises amounts relating to contracts with customers billed each month. Any amount previously recognised as accrued income is reclassified to trade receivables at the point at which it is

invoiced to the customer.

Credit risk

Credit risk is the risk that financial loss arises from failure by a customer or counterparty to meet its obligations under a contract.

Credit risk exists in relation to the Group’s financial assets, which comprise trade receivables, amounts recoverable on contracts and accrued income of £432.0m (2025: £564.0m), cash and cash equivalents of £432.0m

(2025: £487.1m) and derivative financial instruments of £23.5m (2025: £0.5m).

The Group’s maximum exposure to credit risk for all financial assets at the balance sheet date was £892.8m (2025: £1,051.6m). The exposure is spread over a large number of unconnected counterparties and the maximum

single concentration with any one counterparty was £192.0m (2025: £228.0m) at the balance sheet date.

The Group’s credit risk is primarily attributable to its trade receivables, amounts recoverable on contracts and accrued income. The amounts presented in the balance sheet are net of credit loss allowances, estimated by

the Group’s management based on prior experience and their assessment of the current economic environment. The credit loss allowance at the balance sheet date was £0.4m (2025: £10.6m).

Most trade receivables, amounts recoverable on contracts and accrued income are with public or quasi‑public bodies, principally the DfT, Network Rail and local authorities in the UK. The Group does not consider any of

these counterparties to be a significant risk. Each division within the Group has a policy governing credit risk management on receivables.

The counterparties for bank balances and derivative financial instruments are mainly represented by lending banks and large banks with a minimum of ‘A’ credit ratings assigned by international credit rating agencies.

These counterparties are subject to approval by the Board. Group Treasury policy limits the maximum deposit with any one counterparty to £150.0m and limits the maximum term to three months.

Impairment of trade receivables amounts recoverable on contracts and accrued income

The Group applies the IFRS 9 simplified approach to measuring expected credit losses for all trade receivables, amounts recoverable on contracts and accrued income at each reporting date.

Provision matrices are used to measure expected losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns, such as geographical region, service type,

and customer type and rating. The calculation reflects the probability‑weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current conditions and

forecasts of future economic conditions.

Trade receivables, amounts recoverable on contracts and accrued income are written off when there is no reasonable expectation of recovery.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

The majority of the Group’s customers are governmental or similar bodies and hence there are not considered to be any issues with the recoverability of these receivables. Further there have not been any significant issues

with the recoverability of non‑governmental receivables.

The gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income for which the loss allowance is measured at an amount equal to the lifetime expected credit losses under the

simplified method, is analysed below:



			Days past due:
			2026
	Carrying amount	Current	Less than 30 days	30‑90 days	90‑180 days	Over 180 days
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	0.1%	–	0.3%	–	–	0.3%
Gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income	437.3	293.3	76.8	22.3	13.7	31.2
Loss allowance (from continuing operations)	0.4	0.1	0.2	–	–	0.1

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Notes to the consolidated financial statements

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16 Trade and other receivables

continued

| | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | |
| | | | Days past due: | | | |
| | | | 2025 | | | |
| | Carrying amount | Current | Less than 30 days | 30‑90days | 90‑180days | Over 180 days |
| | £m | £m | £m | £m | £m | £m |
| Expected credit loss rate | 1.9% | – | 0.1% | – | – | 19.8% |
| Gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income | 564.0 | 354.3 | 98.3 | 44.1 | 14.2 | 53.1 |
| Loss allowance (from continuing operations) | 10.6 | – | 0.1 | – | – | 10.5 |

The table above is an aggregation of different provision matrices for each of the customer segment groupings, as outlined above. The expected loss rate for each ageing category is the weighted average loss rate across

these groupings. The ‘current’ category consists primarily of receivables from groupings for which, based on historical losses and both the current and forecast economic conditions, the expected credit losses are negligible,

resulting in the application of a close to 0% loss rate.


	2026	2025
Movement in the loss allowance for trade receivables	£m	£m
At 30 March 2025/31 March 2024	10.6	41.7
Amounts written‑off during the year	(0.3)	–
Increase in allowance recognised in the income statement	0.2	2.5
Amounts recovered during the year	–	(1.6)
Reversal of provision	(10.1)	(32.0)
At 28 March 2026/29 March 2025	0.4	10.6

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.

17 Trade and other payables


		2025
	2026	(restated 1 )
Amounts falling due within one year (from continuing operations)	£m	£m
Trade payables	286.6	352.2
Other payables	138.7	157.4
Accruals	320.5	398.1
Deferred income	132.4	140.2
Season ticket deferred income – Rail	10.7	24.8
	888.9	1,072.7


		2025
	2026	(restated 1 )
Amounts falling due after one year (from continuing operations)	£m	£m
Other payables	120.5	135.5
	120.5	135.5


	2026	2025
Movement in deferred income	£m	£m
Balance as at 30 March 2025/31 March 2024	140.2	129.0
Additions	173.3	208.2
Recognised during the period	(157.0)	(198.4)
Business acquisitions	–	1.4
Expiry of SWR NRC	(24.1)	–
Balance as at 28 March 2026/29 March 2025	132.4	140.2

The Group has restated the analysis between Current and Non‑current Other payables for the prior year, to reflect the expected maturity of deferred capital grants previously classified as Current liabilities. This reduces Current Other payables by £135.5m and increases Non‑current

Other payables by the same amount.

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Annual Report and Accounts 2026

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Notes to the consolidated financial statements

continued

17 Trade and other payables

continued

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. Deferred income and season ticket deferred income principally comprises amounts relating to contracts

with customers.

Other payables includes £15.9m (2025: £32.0m) for the purchase of property, plant and equipment where increased payment terms have been agreed with the supplier due to the nature of the payable. Other payables also

include deferred capital grants from government or other public bodies of £201.8m (2025 restated: £245.3m).

The average credit period taken for trade purchases is 41 days (2025: 39 days). The Group has controls in place to ensure that all payments are paid within the appropriate credit timeframe. The Directors consider that the

carrying amount of trade and other payables approximates to their fair value.

18 Cash and cash equivalents

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Cash and cash equivalents | 432.0 | 487.1 |

The fair value of cash and cash equivalents approximates to the carrying value. Cash and cash equivalents includes ring‑fenced cash of £262.4m (2025: £315.7m). Ring‑fenced cash is cash held in the Group which has

restrictions around its use or distribution. The most significant ring‑fenced cash balances are held by the Group’s First Rail subsidiaries. All non‑distributable cash in franchised Rail subsidiaries is considered ring‑fenced

under the terms of the NRC.

19 Discontinued operations


	2026	2025
Discontinued operations	£m	£m
Revenue	–	–
Operating income	2.1	4.9
Operating profit	2.1	4.9
Investment income	–	0.1
Finance costs	–	(0.3)
Profit before tax	2.1	4.7
Tax	–	–
Profit for the year after tax	2.1	4.7
Attributable to:
Equity holders of the parent	2.1	4.7
Non‑controlling interests	–	–
	2.1	4. 7


	2026	2025
EPS	pence	pence
Basic EPS	0.4	0.8
Diluted EPS	0.4	0.8


	2026	2025
Cash flow	£m	£m
Net cash outflow from operating activities	(5.7)	(8.0)
Net cash inflow from investing activities	–	0.7
Net decrease in cash generated	(5.7)	(7.3)


	2026	2025
Other comprehensive income	£m	£m
Actuarial gain on defined benefit pension schemes	–	1.9
Exchange differences on translation of discontinued operations	3.2	3.1
Total	3.2	5.0

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Notes to the consolidated financial statements

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20 Borrowings

| | | |
| --- | --- | --- |
| | | 2025 |
| | 2026 | (restated

3

) |
| | £m | £m |
| On demand or within one year | | |
| Lease liabilities (note 21)

1,2 | 400.2 | 408.8 |
| Asset backed financial liabilities (note 21)

2 | 21.4 | 16.2 |
| Bank overdraft | 25.5

56.4 | |
| Total current liabilities | 447.1 | 481.4 |
| Within one to two years | | |
| Lease liabilities (note 21)

1,2 | 262.3 | 392.6 |
| Asset backed financial liabilities (note 21)

2 | 19.9 | 12.9 |
| NextGen battery debt | 1.6 | – |
| Syndicated loan facilities | 99.6 | 64.3 |
| | 383.4 | 469.8 |
| Within two to five years | | |
| Lease liabilities (note 21)

1,2 | 135.5 | 362.5 |
| NextGen battery debt | 20.8 | 15.0 |
| Asset backed financial liabilities (note 21)

2 | 67.4 | 39.8 |
| Syndicated loan facilities | 2.5 | 2.4 |
| | 226.2 | 419.7 |
| Over five years | | |
| Lease liabilities (note 21)

1,2 | 52.0 | 50.5 |
| NextGen battery debt | 5.0 | 4.9 |
| Asset backed financial liabilities (note 21)

2 | 43.6 | 46.4 |
| | 100.6 | 101.8 |
| Total non‑current liabilities at amortised cost | 710.2 | 991.3 |

The right of use assets relating to lease liabilities are shown in note 13.

The maturity analysis of lease liabilities and asset backed financial liabilities is presented in note 21.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Effective interest rates

The effective interest rates at the balance sheet dates were as follows:



	2026	Maturity	2025	Maturity
Bank overdraft	SONIA +1%	–	SONIA + 1%	–
Revolving credit facility	SONIA +0.95%	January 2031	SONIA + 0.75%	January 2030
Term loan facility	SONIA +1.55%	March 2028	SONIA +1.35%	March 2027
	Average fixed		Average fixed
Asset backed financial liabilities	rate of 4.8%	Various	rate of 4.6%	Various

All borrowings are denominated in pounds sterling, except for £7.2m (2025: £0.2m), which are denominated in euro.

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Notes to the consolidated financial statements

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20 Borrowings

continued

Borrowing facilities

The Group had £295.0m (2025: £295.0m) of undrawn committed borrowing available under its revolving credit facility as at March 2026. In addition there was £43.0m (2025: £92.4m) committed headroom available

under the Husk Finance facility and £26.1m (2025: £40.9m) under the NextGen Battery facility, and £nil (2025: £85.0m) under the term loan facility. Total undrawn bank borrowing facilities at year end stood at £374.1m

(2025: £523.3m) of which £364.1m (2025: £513.3m) was committed and £10.0m (2025: £10.0m) was uncommitted.

Capital management

The Group aims to maintain an investment grade credit rating and appropriate balance sheet liquidity headroom. The Group has a net debt to EBITDA ratio of 1.0 times as at March 2026 for the continuing Group

(2025 (restated

): 1.3 times).

Liquidity within the Group has remained strong. At year end there was £508.2m (2025: £628.3m) of committed headroom and free cash. The Group’s Treasury policy requires a minimum of £250m of committed headroom

at the year end and half year for the budget year, and £200m for year two of the three‑year plan. The Group’s net debt at 28 March 2026, was £725.3m (2025 (restated

): £985.6m) as set out in the Financial review on page 28.

The Group’s primary objectives of capital management is to ensure that the Group is able to continue as a going concern, to maintain an optimal capital structure and adequate liquidity headroom to deliver on

shareholder and stakeholder expectations. The Group’s capital structure consists of equity and net debt. The Group actively manages its capital structure and will adjust it when appropriate should economic conditions

change. The Group’s debt is monitored on the basis of a gearing ratio, being net debt divided by EBITDA, further details of which are provided in the Chief Financial Officer’s review.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

21 Lease liabilities and asset backed financial liabilities

The Group had the following lease liabilities and asset backed financial liabilities at the balance sheet dates, excluding liabilities relating to the discontinued operations:


			Asset backed	Asset backed
		Lease liabilities	financial	financial
	Lease liabilities	2025	liabilities	liabilities
	2026	(restated 1 )	2026	2025
Maturity analysis	£m	£m	£m	£m
Due in less than one year	432.3	451.1	22.4	16.9
Due in more than one year but not more than two years	279.2	418.8	21.9	14.2
Due in more than two years but not more than five years	155.3	382.7	81.2	47.8
Due in more than five years	71.2	68.4	61.5	68.7
	938.0	1,321.0	187.0	147.6
Less future financing charges	(88.0)	(106.6)	(34.7)	(32.2)
	850.0	1,214.4	152.3	115.4

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The total cash outflow for the lease liabilities and asset backed financial liabilities recorded on the balance sheet amounted to £459.5m and £27.2m respectively (2025: £553.3m and £13.8m).

The right of use assets related to the lease liabilities is presented in note 13.

22 Derivative financial instruments and financial assets

Non‑derivative financial assets



	2026	2025
	£m	£m
Total non‑derivative financial assets
Total non‑current assets	71.6	104.2
Total current assets	0.4	–
Total non‑derivative financial assets	72.0	104.2

Certain pension partnership structures were implemented during 2023. These structures involved the creation of special purpose vehicles (SPVs) to hold cash to fund the Bus and Group pension schemes, if required, based

on a designated funding mechanism. Management have concluded that these amounts represent financial assets under IAS 32. During the year £40.6m was redeemed from these entities, of which £20.6m was returned to

the Bus section of the FirstGroup Pension Scheme as part settlement of the Group’s funding obligations and £20m was returned to the Group.

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Notes to the consolidated financial statements

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22 Derivative financial instruments and financial assets

continued

Derivative financial instruments

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Total derivatives | | |
| Total non‑current assets | 3.9 | 0.3 |
| Total current assets | 19.6 | 0.2 |
| Total assets from continuing operations | 23.5 | 0.5 |
| Total current liabilities | 0.6 | 3.0 |
| Total non‑current liabilities | – | 1.0 |
| Total liabilities from continuing operations | 0.6 | 4.0 |
| Derivatives designated and effective as hedging instruments carried at fair value | | |
| Non‑current assets | | |
| Fuel derivatives (cash flow hedge) | 3.8 | 0.3 |
| Currency forwards (cash flow hedge) | 0.1 | – |
| | 3.9 | 0.3 |
| Current assets | | |
| Fuel derivatives (cash flow hedge) | 19.3 | 0.2 |
| Currency forwards (cash flow hedge) | 0.3 | – |
| | 19.6 | 0.2 |
| Current liabilities | | |
| Fuel derivatives (cash flow hedge) | – | 2.1 |
| Currency forwards (cash flow hedge) | 0.6 | 0.9 |
| | 0.6 | 3.0 |
| Non‑current liabilities | | |
| Fuel derivatives (cash flow hedge) | – | 0.4 |
| Currency forwards (cash flow hedge) | – | 0.3 |
| Interest rate swaps (NextGen) | – | 0.3 |
| | – | 1.0 |

The Group enters into derivative transactions under International Swaps and Derivatives Association Master Agreements that allow for the related amounts to be set‑off in certain circumstances. The amounts set out

as Fuel derivatives and Currency forwards in the table above represent the derivative financial assets and liabilities of the Group that may be subject to the above arrangements and are presented on a gross basis.

Derivative liabilities of £nil (2025: £nil) were subject to netting arrangements. Total cash flow hedges are an asset of £22.9m (2025: £3.5m liability).

The following losses were transferred from equity into inventory as basis adjustments during the year:


	2026	2025
	£m	£m
Operating losses	0.9	3.3

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Notes to the consolidated financial statements

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22 Derivative financial instruments and financial assets

continued

The estimated fair values of the Group’s financial assets and financial liabilities (including trade and other receivables and trade and other payables) are a reasonable approximation to the carrying value of these items.

The estimated fair value of cash and cash equivalents, financial assets and bank overdrafts are a reasonable approximation to the carrying value of these items.


	Fair values at	Fair values at
	28 March	29 March
	2026	2025	Fair value
Financial assets/(liabilities)	£m	£m	hierarchy	Valuation technique(s) and key inputs
Derivative contracts
1) Fuel derivatives	23.1	(2.0)	Level 2	Discounted cash flow; future cash flows are estimated based on forward fuel prices and contract
				rates and then discounted at a rate that reflects the credit risk of the various counterparties.
2) Currency forwards	(0.2)	(1.2)	Level 2	Discounted cash flow; future cash flows are estimated based on forward foreign exchange rates and
				contract rates and then discounted at a rate that reflects the credit risk of the various counterparties.
3) Interest rate swaps	–	(0.3)	Level 2	Future cash flows are estimated based on interest rates and then discounted at a rate that reflects the
				credit risk of the various counterparties.

The following table illustrates the carrying value of all financial assets and liabilities held by the Group on a continuing basis:


	2026
	Assets and	At fair value
	liabilities at	through profit and	At fair value	Derivatives used
	amortised costs	loss	through OCI	for hedging	Total
Classification of financial instruments	£m	£m	£m	£m	£m
Financial assets and derivatives
Cash and cash equivalents	432.0	–	–	–	432.0
Trade receivables, amounts recoverable under contracts
and accrued income	437.3	–	–	–	437.3
Non‑derivative financial instruments	72.0	–	–	–	72.0
Derivative financial instruments	–	–	–	23.5	23.5
	941.3	–	–	23.5	964.8
Financial liabilities and derivatives
Interest bearing loans and borrowings 1	1,157.3	–	–	–	1,157.3
Trade and other payables	807.5	–	–	–	807.5
Derivative financial instruments	–	–	–	0.6	0.6
	1,964.8	–	–	0.6	1,965.4

Includes lease liabilities and asset backed financial liabilities as set out in note 21.

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22 Derivative financial instruments and financial assets

continued

| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | 2025 (restated

2

) | | | | |
| | Assets and | At fair value | | | |
| | liabilities at | through profit and | At fair value | Derivatives used | |
| | amortised costs | loss | through OCI | for hedging | Total |
| Classification of financial instruments | £m | £m | £m | £m | £m |
| Financial assets and derivatives | | | | | |
| Cash and cash equivalents | 487.1 | – | – | – | 487.1 |
| Trade receivables, amounts recoverable under contracts | | | | | |
| and accrued income | 564.0 | – | – | – | 564.0 |
| Non‑derivative financial instruments | 104.2 | – | – | – | 104.2 |
| Derivative financial instruments | – | – | – | 0.5 | 0.5 |
| | 1,155.3 | – | – | 0.5 | 1,155.8 |
| Financial liabilities and derivatives | | | | | |
| Interest bearing loans and borrowings

1 | 1,472.7 | – | – | – | 1,472.7 |
| Trade and other payables (restated

3

) | 962.9 | – | – | – | 962.9 |
| Derivative financial instruments | – | – | – | 4.0 | 4.0 |
| | 2,435.6 | – | – | 4.0 | 2,439.6 |

Includes lease liabilities and asset backed financial liabilities as set out in note 21.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Deferred capital grants of £81.9m had not been excluded from trade and other payables in the prior year.


	Commodity price	Electricity price	Foreign exchange
As at 28 March 2026	risk	risk	price risk
Nominal amount of hedging	0.72m bbls	118,336 MWh	$62.6m
< 1 year	048m bbls	61,320 MWh	$42.4m
1–2 years	0.24m bbls	57,016 MWh	$20.2m
2–5 years	–	–	–
> 5 years	–	–	–
Average hedged rate	$87.45/bbl	£71.8/MWh	1.32
	Apr 26 – Mar	Apr 26 – Mar	Apr 26 – Mar
Maturity	28	28	28
Carrying amount of hedging instruments
Assets – Derivatives (£m)	20.7	2.4	0.4
Liabilities – Derivatives (£m)	–	–	(0.6)
Liabilities – Borrowings (£m)	–	–	–
Carrying amount of hedged item
Liabilities – Borrowings (£m)	N/A	N/A	N/A
Accumulated amount of fair value hedging adjustments included in carrying amount of hedged item
Liabilities – Borrowings (£m)	N/A	N/A	N/A
Changes in fair value of hedged item used for calculating hedge ineffectiveness	(21.4)	(2.1)	0.9
Changes in fair value of hedging instrument used in calculating hedge effectiveness	21.4	2.1	(0.9)
Changes in fair value of hedging instrument accumulated in cash flow hedge reserve	14.9	2.0	0.8

No gains and losses on derivatives designated for hedge accounting have been charged through the consolidated income statement in either the current or prior year.

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22 Derivative financial instruments and financial assets

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Financial risk management

The Group is exposed to financial risks including liquidity risk, credit risk and certain market‑based risks principally being the effects of changes in foreign exchange rates, interest rates and fuel prices. The Group manages

these risks within the context of a set of formal policies established by the Board. Certain risk management responsibilities are formally delegated by the Board, principally to a sub‑committee of the Board and to the Chief

Financial Officer and to the Treasury Committee. The Treasury Committee comprises the Chief Financial Officer and certain senior finance employees and is responsible for approving hedging transactions permitted

under Board‑approved policies, monitoring compliance against policy and recommending changes to existing policies.

Liquidity risk

Liquidity risk is the risk that the Group may encounter difficulty in meeting obligations associated with financial liabilities. The objective of the Group’s liquidity risk management is to ensure sufficient committed liquidity

resources exist. The Group has a diversified debt structure largely represented by medium‑term unsecured syndicated committed bank facilities, medium‑ to long‑term unsecured bond debt and finance leases. It is a

policy requirement that debt obligations must be addressed well in advance of their due dates.

The Group’s Treasury policy requires a minimum of £250m of committed headroom at the year end and half year for the budget year, and £200m for year two of the three‑year plan. At year end, the total amount of these

facilities stood at £632.4m (2025: £682.4m), and committed headroom was £364.1m (2025: £513.3m), in addition to free cash balances of £144.1m (2025: £115.3m). The next material contractual expiry of revolver bank facilities

is in January 2031.

The average duration of net debt (excluding ring‑fenced cash) at 28 March 2026 was 4.1 years (2025: 4.1 years).

The following tables detail, on a continuing basis, the Group’s expected maturity of payables for its borrowings, derivative financial instruments and trade and other payables. The amounts shown in these tables are

prepared on an undiscounted cash flow basis and include future interest payments in the years in which they fall due for payment.



					2026
	< 1 year £m	1‑2 years £m	2‑5 years £m	> 5 years £m	Total £m
Borrowings 1	480.2	402.3	259.9	138.5	1,280.9
FX forwards	0.6	–	–	–	0.6
Trade and other payables	807.5	–	–	–	807.5
	1,288.3	402.3	259.9	138.5	2,089.0
	2025 (restated 2 )
	< 1 year £m	1‑2 years £m	2‑5 years £m	> 5 years £m	Total £m
Borrowings 1	524.4	497.3	447.9	142.9	1,612.5
Fuel derivatives	2.1	0.4	–	–	2.5
FX forwards	0.9	0.3	–	–	1.2
Interest rate derivatives	–	0.3	–	–	0.3
Trade and other payables	962.9	–	–	–	962.9
	1,490.3	498.3	447.9	142.9	2,579.4

Includes lease liabilities and asset backed financial liabilities as set out in note 21.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments, and adjustments to the current/non‑current analysis of deferred capital grants.

No derivative financial instruments had collateral requirements or were due on demand in any of the years. Derivative financial instruments are net settled.

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22 Derivative financial instruments and financial assets

continued

Currency risk

Currency risk is the risk of financial loss to foreign currency net assets, earnings and cash flows reported in pounds sterling due to movements in exchange rates.

‘Certain’ and ‘highly probable’ foreign currency transaction exposures may be hedged at the time the exposure arises for up to two years at specified levels, or longer if there is a very high degree of certainty. The Group is

also exposed to currency risk relating to its UK fuel costs which are denominated in US dollars. This is hedged through entering a series of average rate forward contracts on a similar profile to our fuel hedging programme.

Forward currency risk is designated in the cash flow hedges, however valuation movements arising from changes in currency‑basis spreads are excluded from the relationships as costs of hedging. At the balance sheet

date the value to be recorded in a separate component of equity was immaterial, and as such no separate reserve has been shown within the primary financial statements.

IFRS 7 requires the Group to show the impact on profit after tax and hedging reserve on financial instruments from a movement in exchange rates. The following analysis details the Group’s sensitivity to a 10% strengthening

in pounds sterling against the US dollar. A 10% weakening in pounds sterling against the US dollar would have an equal but opposite effect to that shown below. The analysis has been prepared based on the change taking

place at the beginning of the financial year and being held constant throughout the reporting period. A positive number indicates an increase in earnings or equity where pounds sterling strengthens against the US dollar.


	2026	2025
	£m	£m
Impact on profit after tax	0.3	0.4
Impact on hedging reserve	(1.2)	0.2

Interest rate risk

The Group has variable rate debt and cash and therefore net income is exposed to the effects of changes to interest rates. The Group Treasury policy objective is to maintain fixed interest rates at a minimum of 50% of

on‑balance sheet net debt over the medium term, so that volatility is substantially reduced year‑on‑year to EPS. The policy objective is primarily achieved through fixed rate debt. The policy on interest rate risk within

operating leases is to hedge 100% by agreeing fixed rentals with the lessors. The main floating rate benchmarks on variable rate debt is sterling SONIA.

At 28 March 2026, 64% (2025: 87%) of gross debt (pre‑IFRS 16 and overdraft) was fixed. This fixed rate protection had an average duration of 4.1 years (2025: 4.0 years).

Interest rate risk within operating leases is hedged 100% by agreeing fixed rentals with the lessors prior to inception of the lease contracts.

The following sensitivity analysis details the Group’s sensitivity to a 100 basis points (1%) increase in interest rates throughout the reporting period with all other variables held constant.


	2026	2025
	£m	£m
Impact on profit after tax	(0.5)	(1.2)

Diesel fuel price risk

The Group purchases its fuel on a floating price basis and is therefore exposed to changes in diesel prices, primarily in relation to First Bus operations. The Group’s policy objective is to maintain a significant degree of fixed

price protection in the short term with lower levels of protection in the medium term, so that the businesses affected are protected from any sudden and significant increases and have time to prepare for potentially higher

costs, whilst retaining some access for potentially lower costs over the medium term. To achieve this the Group operates a progressive hedging policy. The policy hedge target levels differ by division but are monitored

monthly and appropriate actions taken to maintain satisfactory hedge levels. Diesel derivatives are used to hedge UK exposure. Risk component hedging has been adopted under IFRS 9, meaning that the hedged price

risk component of the purchased diesel matches that of the underlying derivative commodity. The hedged risk component is considered to be separately identifiable and reliably measurable. Variances in pricing of the

derivative commodities and the purchased fuel are primarily driven by further refinement of the fuel or the associated transportation costs which were excluded from the hedge relationship. Currently First Bus diesel

exposure is hedged 88% to March 2027 and 53% to March 2028.

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22 Derivative financial instruments and financial assets

continued

The Group has entered into swaps for periods from April 2026 to March 2028 with the majority of these swaps relating to the 52 weeks ending 31 March 2027. The swaps give rise to monthly cash flow exchanges with

counterparties to offset the underlying settlement of floating price costs, except where they have a deferred start date. Gains or losses on fuel derivatives are recycled from equity into inventory on qualifying hedges

to achieve fixed rate fuel costs within operating results.

The following analysis details the Group’s sensitivity on profit after tax and equity if the price of diesel fuel had been $10 per barrel higher during the 52 weeks ending 29 March 2026 and at the year end:



	2026	2025
	£m	£m
Impact on profit after tax	(0.3)	(0.4)
Impact on hedging reserve	4.1	4.3

Electricity price risk

The Group purchases electricity on a floating price basis and is therefore exposed to changes in electricity prices, primarily in relation to First Bus. The Group’s policy objective is to maintain a significant degree of fixed

price protection in the short term, so that the businesses affected have time to prepare for prices after the current hedge period expires. To achieve this the Group uses cash flow hedge financial instruments to achieve

significant fixed price certainty.

The Group has entered into swaps for periods from April 2026 to March 2028, hedging 77% of ‘at risk’ exposure to March 2027 and 72% of ‘at risk’ exposure to March 2028. The swaps give rise to monthly cash flow exchanges

with counterparties to offset the underlying settlement of floating price costs, except where they have a deferred start date. Gains or losses on electricity derivatives will be recycled from equity to the income statement on

qualifying hedges to achieve fixed rate electricity costs within operating results.

During the year to 31 March 2026 the Group hedged 70% of electricity price risk in relation to First Bus.

The following analysis details the Group’s sensitivity on profit after tax and equity if the price of electricity had been £50 per MWh higher during the 52 weeks ending 29 March 2026 and at the year end:



	2026	2025
	£m	£m
Impact on profit after tax	(0.7)	(0.4)
Impact on hedging reserve	4.4	2.6

23 Deferred tax

The major deferred tax (assets)/liabilities recognised by the Group and movements thereon during the current and prior reporting periods are as follows:



	Accelerated tax	Retirement benefit	Other temporary
	depreciation	schemes	differences	Tax losses	Total
	£m	£m	£m	£m	£m
At 30 March 2024	32.4	(4.6)	(27.4)	(40.0)	(39.6)
Charge/(credit) to income statement	(0.1)	1.9	16.6	9.1	27.5
Charge/(credit) to other comprehensive income and equity	–	7.5	(0.3)	–	7.2
Acquisitions and disposals of subsidiaries (restated 1 )	12.3	(0.3)	(5.8)	(47.8)	(41.6)
At 29 March 2025 (restated 1 )	44.6	4.5	(16.9)	(78.7)	(46.5)
Charge/(credit) to income statement	27.3	6.2	(0.4)	1.6	34.7
Charge/(credit) to other comprehensive income and equity	–	(6.6)	6.0	–	(0.6)
Acquisitions and disposals of subsidiaries	2.0	–	(0.8)	(7.0)	(5.8)
At 28 March 2026	73.9	4.1	(12.1)	(84.1)	(18.2)

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

With respect to the total net deferred tax asset of £18.2m, net deferred tax assets of £17.3m have been recognised in the UK and Ireland as the Group forecasts sufficient taxable profits in future periods and a deferred tax

asset of £0.9m relating to the US is recognised because it is probable that book gains will arise on the remaining US property portfolio.

No deferred tax has been recognised on tax losses of £352.3m (2025: tax losses of £413.9m) as there are insufficient future profits forecast in North America.

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24 Provisions

| | | | | |
| --- | --- | --- | --- | --- |
| | |
| | Onerous contracts | Insurance claims | Legal and other | Total |
| | £m | £m | £m | £m |
| At 29 March 2025 | 36.5 | 94.3 | 79.4 | 210.2 |
| First Bus London acquisition accounting adjustments

1 | (9.9) | 1.0 | 1.8 | (7.1) |
| At 29 March 2025 (restated

1

) | 26.6 | 95.3 | 81.2 | 203.1 |
| Charged to the income statement | 4.2 | 16.8 | 11.1 | 32.1 |
| Utilised in the year | (21.3) | (36.8) | (8.9) | (67.0) |
| Notional interest | – | 0.7 | – | 0.7 |
| Expiry of SWR NRC | – | – | (12.0) | (12.0) |
| Foreign exchange movements | – | (1.0) | (0.2) | (1.2) |
| At 28 March 2026 | 9.5 | 75.0 | 71.2 | 155.7 |
| Current liabilities | 9.5 | 23.7 | 35.3 | 68.5 |
| Non‑current liabilities | – | 51.3 | 35.9 | 87.2 |
| At 28 March 2026 | 9.5 | 75.0 | 71.2 | 155.7 |
| Current liabilities | 16.6 | 32.6 | 42.9 | 92.1 |
| Non‑current liabilities | 10.0 | 62.7 | 38.3 | 111.0 |
| At 29 March 2025 (restated

1

) | 26.6 | 95.3 | 81.2 | 203.1 |

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The insurance claims provision arises from estimated exposures for incidents occurring prior to the balance sheet date. It is anticipated that the majority of such claims will be settled within the next four years although

certain liabilities in respect of lifetime obligations of £1.1m (2025: £1.0m) can extend for more than 25 years. The utilisation of £36.8m (2025: £34.9m) represents payments made against the current liability of the preceding

year as well as the settlement of claims resulting from incidents occurring in the current year.

The insurance claims provisions, of which £19.2m (2025: £34.7m) relates to legacy Greyhound claims, includes £16.0m (2025: £31.0m) which is recoverable from insurance companies and a receivable is included within other

receivables in note 16.

Legal and other provisions relate to estimated exposures for cases filed or thought highly likely to be filed for incidents that occurred prior to the balance sheet date. It is anticipated that most of these items will be settled

within ten years. Also included are provisions in respect of costs anticipated on the exit of surplus properties which are expected to be settled over the remaining terms of the respective leases and dilapidation, other

provisions in respect of contractual obligations under rail franchises and restructuring costs. The dilapidation provisions are expected to be settled at the end of the respective franchise.

The onerous contract provision of £28.1m was recognised on acquisition of London bus operator RATP Dev Transit London Limited and its subsidiaries in the prior year. The provision recognises that a number of contracts between

the acquired business and TfL are loss making and therefore the Group has provided for the expected shortfall in these contracts, where the unavoidable costs of fulfilling these contracts outweigh the expected benefits.

25 Called up share capital


	Number of shares
Allotted, called up and fully paid (ordinary shares of 5p each)	million	£m
Balance as at 29 March 2025	750.7	37.5
Cancellation of treasury shares	(180.0)	(9.0)
Balance as at 28 March 2026	570.7	28.5

The Company has one class of ordinary shares which carries no right to fixed income.

On 10 June 2025, the Company announced a share buyback programme to purchase up to £50m of ordinary shares. This buyback programme completed on 3 October 2025 having repurchased 22,439,652 shares for

a total consideration of £50.4m including transaction costs.

On 26 January 2026, the Company announced that 180,000,000 shares held in treasury were cancelled. The nominal value of these shares was £9.0m.

The Board is proposing that a final dividend of 5.0p per share, resulting in a total dividend payment of c.£27m, be paid on 7 August 2026 to shareholders on the register at 3 July 2026, subject to approval by shareholders

at the 2026 AGM.

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Notes to the consolidated financial statements

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26 Reserves

The share premium account represents the premium on shares issued since 1999 and arose principally on the rights issue on the Ryder acquisition in 1999 and the share placings in 2007 and 2008. The reserve is

non‑distributable. The hedging reserve records the movement on designated hedging items. The own shares reserve represents the cost of shares in FirstGroup plc purchased in the market and either held as treasury

shares or held in trust to satisfy the exercise of share options.

Hedging reserve

The movements in the hedging reserve were as follows:



	2026	2025
	£m	£m
Balance at 29 March 2025/30 March 2024	(2.2)	(1.8)
Transfer to hedging reserve through consolidated statement of comprehensive income
Diesel derivatives	21.4	(4.3)
Electricity derivatives	2.1	1.2
Interest rate swaps – NextGen	0.3	0.2
Currency forwards	(0.9)	(1.1)
	22.9	(4.0)
Tax on derivative hedging instrument movements through statement of comprehensive income	(5.8)	1.0
Transfer from hedging reserve to the balance sheet:
Diesel derivatives	(1.6)	0.9
Electricity derivatives	0.5	1.6
Currency forwards	2.0	0.9
	0.9	3.4
Tax on derivative hedging instrument movements to the balance sheet	(0.2)	(0.8)
	15.6	(2.2)
Cumulative loss on hedging instruments reclassified to the income statement	–	–
Balance at 28 March 2026/29 March 2025	15.6	(2.2)

Own shares

The number of own shares held by the Group at the end of the year was 28,086,318 (2025: 185,125,956) FirstGroup plc ordinary shares of 5p each. Of these, 19,922,152 (2025: 19,401,442) were held by the FirstGroup plc Employee

Benefit Trust and 157,229 (2025: 157,229) were held as treasury shares, with a further 8,006,937 (2025: 165,567,285) held as treasury shares as a result of the share buyback programmes. Both trusts and treasury shares have

waived the rights to dividend income from the FirstGroup plc ordinary shares. The market value of the shares at 28 March 2026 was £47.4m (2025: £303.6m).



	Capital
	redemption	Capital	Total other
	reserve	reserve	reserves
	£m	£m	£m
At 29 March 2025	19.7	2.7	22.4
Cancellation of treasury shares	9.0	–	9.0
At 28 March 2026	28.7	2.7	31.4

The capital redemption reserve represents the cumulative par value of all shares bought back and cancelled, less the associated transaction costs and stamp duty. The capital reserve arose on acquisitions made in 2000.

Neither reserve is distributable.

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27 Translation reserve

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| At 29 March 2025/30 March 2024 | (21.9) | (22.9) |
| Movement for the financial year | 0.4 | 1.0 |
| At 28 March 2026/29 March 2025 | (21.5) | (21.9) |

The translation reserve records exchange differences arising from the translation of the balance sheets of foreign currency denominated subsidiaries offset by movements on loans used to hedge the net investment in

those foreign subsidiaries.

28 Acquisition of businesses and subsidiary undertakings

| | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | |
| | Tetley’s Motor | London and Bath | | | | |
| | Services | Sightseeing | J& B Travel | Keane Travel | Hills Coaches | Total |
| | £m | £m | £m | £m | £m | £m |
| Provisional fair value of net assets acquired | | | | | | |
| Property, plant and equipment | 2.0 | 10.0 | 1.8 | – | 1.9 | 15.7 |
| Deferred tax | (0.3) | 6.9 | (0.4) | – | (0.4) | 5.8 |
| Inventories | – | 0.3 | – | – | – | 0.3 |
| Trade and other receivables | 2.7 | 0.9 | 1.7 | – | 0.3 | 5.6 |
| Cash and cash equivalents | 2.1 | 0.4 | 0.6 | – | 0.3 | 3.4 |
| Trade and other payables | (0.1) | (3.5) | (0.7) | – | (0.1) | (4.4) |
| Taxation | (0.2) | – | (0.1) | – | (0.1) | (0.4) |
| Provisions | – | (0.5) | – | – | – | (0.5) |
| Lease liabilities | – | (0.7) | – | – | – | (0.7) |
| Asset backed financial liabilities | – | (0.3) | (0.1) | – | – | (0.4) |
| Net identifiable assets acquired | 6.2 | 13.5 | 2.8 | – | 1.9 | 24.4 |
| Goodwill | 5.0 | 2.4 | 2.2 | 0.5 | 2.2 | 12.3 |
| Net assets acquired | 11.2 | 15.9 | 5.0 | 0.5 | 4.1 | 36.7 |
| Satisfied by: | | | | | | |
| Cash consideration | 11.2 | 15.9 | 5.0 | 0.5 | 4.1 | 36.7 |
| Less: cash and cash equivalents acquired | (2.1) | (0.4) | (0.6) | – | (0.3) | (3.4) |
| Net cash outflow in respect of acquisitions | 9.1 | 15.5 | 4.4 | 0.5 | 3.8 | 33.3 |

Acquisitions in 52 weeks to 28 March 2026

On 27 July 2025, the Group announced the acquisition of Tetley’s Motor Services Limited, a Leeds‑based coach and bus business which has been in operation for more than 75 years.

On 29 August 2025, the Group purchased the business of Keane Travel Limited, an Essex‑based coach operator.

On 11 December 2025, the Group announced the acquisition of RATP Dev’s sightseeing operations in London and Bath. Currently operating under the brand Tootbus. The acquisition strengthens FirstGroup’s presence across

London and the south‑west of England. Entering the sightseeing market in London and Bath will further diversify FirstGroup’s business, and the additional depots will provide operational and cost efficiencies and create

opportunities for future expansion.

On 18 December 2025, the Group acquired J&B Travel Limited, a Leeds‑based coach operator with a fleet of 15 coaches. The acquisition will further strengthen the Group’s position in the UK coach market and enhance its

presence in key UK regions.

On 27 January 2026, the Group acquired Hills Coaches of Wolverhampton. Hills Coaches operates a fleet of 22 coaches and provides a range of services including private hire, day excursions and long‑term contracts.

The acquisition underlines the Group’s commitment to growing the coach divisions and expands the Group’s operational footprint into the West Midlands.

The businesses acquired during the year contributed £6.7m to Group revenue and £(1.7)m of losses to Group operating profit from the date of acquisition, with the losses mainly from the London Sightseeing business.

If the acquisitions had been completed on the first day of the financial year, revenue from the acquisitions for the year would have been £22.4m and operating losses from the acquisitions would have been £(4.2)m,

with the losses mainly from the London Sightseeing business.

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28 Acquisition of businesses and subsidiary undertakings

continued

Acquisitions in 52 weeks to 29 March 2025

On 21 October 2024, the Group announced its acquisition of Anderson Travel, a coach operator providing contracted school, private hire, mini coach and tour services in and around London.

On 25 October 2024, the Group announced its acquisition of Lakeside Group, a Shropshire and Cheshire‑based company that provides school, B2B and B2C private hire services, with a fleet of around 145 buses and coaches.

On 4 February 2025, the Group announced its acquisition of Matthews Coach Hire Limited, a coach and bus operator in Ireland with a fleet of more than 40 vehicles.

On 28 February 2025, the Group announced the acquisition of London bus operator RATP Dev Transit London Limited and its subsidiaries (First Bus London).

On 19 August 2024, the Group acquired Grand Union Trains WCML Holdings Limited and its subsidiary companies, which owns the open access track access rights for the London Euston to Stirling route. On 4 December 2024,

the Group acquired Grand Union Trains GWML Holdings Limited and its subsidiary companies, which owns the open access track access right for the London Paddington to Carmarthen route.

The businesses acquired during FY 2025 contributed £34.6m to Group revenue and £2.2m profit to Group operating profit from the date of acquisition.

If the acquisitions had been completed on the first day of FY 2025, revenue from the acquisitions for the year would have been £315.7m and operating losses from the acquisitions would have been £(17.7)m.

First Bus London – finalisation of acquisition accounting adjustments

During the year, the Group finalised its IFRS 3 acquisition accounting adjustments in relation to the acquisition on 28 February 2025 of London bus operator RATP Dev Transit Limited and its subsidiaries (First Bus London).

Provisional adjustments were reported in the FY 2025 Annual Report, and therefore the Group has now restated the prior year comparative information to reflect these finalised adjustments. There is no material impact on

the FY 2025 income statement as a result of the finalisation exercise, and as such the prior year income statement has not been restated.



	Provisional	Adjustments	Final
	£m	£m	£m
First Bus London – fair value of net assets acquired
Intangible assets	3.9	(1.3)	2.6
Property, plant and equipment	169.9	9.2	179.1
Deferred tax	44.3	(0.6)	43.7
Inventories	2	–	2
Trade and other receivables	12	–	12
Cash and cash equivalents	0.4	–	0.4
Trade and other payables	(24.7)	–	(24.7)
Taxation	(3.9)	–	(3.9)
Provisions	(54.2)	7.1	(47.1)
Lease liabilities	(69.9)	(10.8)	(80.7)
Asset backed financial liabilities	(43.3)	–	(43.3)
Net identifiable assets acquired	36.5	3.6	40.1
Goodwill	10.8	(3.6)	7.2
Net assets acquired	47.3	–	47.3

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29 Net cash from operating activities

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Operating profit from: | | |
| Continuing operations | 219.4 | 222.6 |
| Discontinued operations | 2.1 | 4.9 |
| Total operations | 221.5 | 227.5 |
| Adjustments for: | | |
| Depreciation charges | 560.4 | 620.2 |
| Capital grant amortisation | (83.7) | (65.3) |
| Software and other intangible amortisation charges | 4.7 | 2.7 |
| Reversal of impairments | (0.9) | – |
| Share‑based payments | 10.4 | 10.5 |
| Profit on disposal of property, plant and equipment | (9.4) | (0.2) |
| Operating cash flows before working capital and pensions | 703.0 | 795.4 |
| Decrease/(increase) in inventories | 1.8 | (2.4) |
| Decrease in receivables | 188.0 | 109.4 |
| Decrease in payables | (175.2) | (31.3) |
| Decrease/(increase) in financial assets | 35.0 | (1.0) |
| Decrease in provisions due within one year | (23.9) | (13.9) |
| Decrease in provisions due over one year | (23.8) | (14.0) |
| Defined benefit pension payments greater than income statement charge | (23.4) | (14.0) |
| Cash generated by operations | 681.5 | 828.2 |
| Tax paid | (0.9) | (6.0) |
| Interest paid¹ | (65.0) | (68.0) |
| Net cash from operating activities

2 | 615.6 | 754.2 |

Interest paid includes £48.1m relating to lease liabilities (2025: £49.6m).

Net cash from operating activities is stated after an outflow of £3.7m (2025: outflow of £3.2m) in relation to financial derivative settlement.

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30 Analysis of changes in net debt

| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | |
| | At | | | | |
| | 29 March | | Foreign | | At |
| | 2025 | Cash | exchange | | 28 March |
| | (restated

4

) | flow | movements | Other

3 | 2026 |
| | £m | £m | £m | £m | £m |
| Components of financing activities: | | | | | |
| Bank loans | (66.7) | (35.0) | – | (0.4) | (102.1) |
| Lease liabilities

1 | (1,214.4) | 459.5 | – | (95.1) | (850.0) |
| Asset backed financial liabilities

2 | (115.3) | (30.2) | – | (6.8) | (152.3) |
| NextGen battery debt | (19.9) | (7.5) | – | – | (27.4) |
| Total components of financing activities | (1,416.3) | 386.8 | – | (102.3) | (1,131.8) |
| Cash | 171.4 | (1.8) | – | – | 169.6 |
| Bank overdrafts | (56.4) | 30.9 | – | – | (25.5) |
| Ring‑fenced cash | 315.7 | (53.3) | – | – | 262.4 |
| Cash and cash equivalents | 430.7 | (24.2) | – | – | 406.5 |
| Net debt (including held for sale – discontinued operations) | (985.6) | 362.6 | – | (102.3) | (725.3) |

Lease liabilities ‘other’ includes £95.1m net inception of new leases and interest charges. Net inception of leases comprises £48.6m inception of new leases, being £4.4m of rolling stock leases, £23.2m of passenger carrying vehicle leases and £21.0m of property and other leases,

offset by £1.6m termination of leases. Termination of leases includes £0.3m of passenger carrying vehicle leases and £1.3m of property and other leases. Interest charges are £48.1m.

Asset backed financial liabilities ‘other’ of £6.8m comprises of interest charges of £6.5m and fee amortisation of £0.7m, offset by the capitalisation of new facility set up costs of £(0.4)m.

The ‘other’ column for debt items consists of the net inception/acquisition of new leases, as well as interest charges. The ‘cash flow’ column consists of repayments of principal and interest (financing activities and operating activities respectively in the consolidated cash flow

statement).

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.



	At		Foreign		At
	30 March	Cash	exchange	Other 3	29 March
	2024	flow	movements	(restated 4 )	2025 (restated 4 )
	£m	£m	£m	£m	£m
Components of financing activities:
Bank loans	–	(70.0)	–	3.3	(66.7)
Bonds	(96.2)	102.8	–	(6.6)	–
Lease liabilities 1	(1,458.5)	553.3	–	(309.2)	(1,214.4)
Asset backed financial liabilities 2	(45.6)	(22.9)	–	(46.8)	(115.3)
Share of NextGen battery debt	(13.2)	(6.8)	–	0.1	(19.9)
Total components of financing activities	(1,613.5)	556.4	–	(359.2)	(1,416.3)
Cash	246.9	(75.7)	0.2	–	171.4
Bank overdrafts	(27.8)	(28.1)	–	(0.5)	(56.4)
Ring‑fenced cash	249.6	66.1	–	–	315.7
Cash and cash equivalents	468.7	(37.7)	0.2	(0.5)	430.7
Net debt (including held for sale – discontinued operations)	(1,144.8)	518.7	0.2	(359.7)	(985.6)

Lease liabilities ‘other’ of £309.2m comprises £125.6m from lease term reassessments and £0.4m termination of leases. In addition there is £50.8m inception of new leases, being £24.7m of rolling stock leases, £10.3m of passenger carrying vehicle leases and £15.8m of property and

other leases, and interest charges of £49.6m. A further £80.7m of lease liabilities were recognised as a result of the First Bus London acquisition and £2.9m as a result of other acquisitions.

Asset backed financial liabilities ‘other’ of £46.8m comprises £43.3m passenger carrying vehicle asset backed financial liabilities on acquisition of First Bus London, and interest charges of £3.5m.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Accrued interest of £nil (2025: £nil) is excluded from the values above and derivative valuations are presented as the clean values.

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31 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 £58.4m

(2025: £47.2m) and letters of credit for £111.3m (2025: £123.3m). The performance bonds primarily relate to First Rail franchise operations of £56.4m (2025: £47.1m), UK Bus operations of £2.0m (2025: £nil) and residual North

American obligations of £nil (2025: £0.1m). The letters of credit relate substantially to insurance arrangements in the UK and North America. The parent company has committed further support facilities of up to £80.1m to

First Rail TOCs of which £64.5m remains undrawn. Letters of credit remain in place to provide collateral for legacy Greyhound insurance and pension obligations.

The Group is party to certain unsecured guarantees granted to banks for overdraft and cash management facilities provided to itself and subsidiary undertakings. The Company has given certain unsecured guarantees

for the liabilities of its subsidiary undertakings arising under certain operating arrangements, HP contracts, finance leases, operating leases and certain pension scheme arrangements. It also provides unsecured cross

guarantees to certain subsidiary undertakings as required by VAT legislation. First Bus subsidiaries have provided unsecured guarantees on a joint and several basis to the FirstGroup Pension Scheme Trustee.

In its normal course of business the Group has ongoing contractual negotiations with government and other organisations. The Group is party to legal proceedings and claims which arise in the normal course of business,

including but not limited to employment and safety claims. The Group takes legal advice as to the likelihood of success of claims and counterclaims. No provision is made where due to inherent uncertainties, no accurate

quantification of any cost, or timing of such cost, which may arise from any of the legal proceedings can be determined.

The Group’s operations are required to comply with a wide range of regulations, including environmental and emissions regulations. Failure to comply with a particular regulation could result in a fine or penalty being

imposed on that business, as well as potential ancillary claims rooted in non‑compliance.

32 Operating commitments

| | | |
| --- | --- | --- |
| | |
| | 2026 | 2025 |
| | £m | £m |
| Minimum payments made under contractual terms recognised in the income statement for the year: | | |
| Plant and machinery | 0.9 | 5.6 |
| Track and station access | 356.3 | 481.3 |
| Other assets | 3.6 | 18.9 |
| | 360.8 | 505.8 |

At the balance sheet dates, the Group had outstanding commitments for future payments under non‑cancellable operating contracts, which fall due as follows:



	2026	2025
	£m	£m
Within one year	268.0	355.6
In the second to fifth years inclusive	73.9	175.3
After five years	171.9	198.1
	513.8	729.0

Included in the above commitments are contracts held by the First Rail businesses with Network Rail for access to the railway infrastructure, track, stations and depots of £270.0m (2025: £481.0m).

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33 Share‑based payments

Equity‑settled share option plans

The Group recognised total expenses of £10.4m (2025: £10.5m) related to equity‑settled share‑based payment transactions.

All Employee Plans

(a) Save As You Earn (SAYE)

The Group operates an HMRC‑approved savings‑related share option scheme. The scheme is based on eligible employees being granted options and their agreement to opening a sharesave account with a nominated

savings carrier and to save weekly or monthly over a three‑year period. Sharesave accounts are held with Computershare. The right to exercise the option is at the employee’s discretion in the six months following the end

of the three‑year period. The plan rules set out the treatment of those who leave employment before the end of the savings contract. The scheme was offered in FY 2024, FY 2025 and FY 2026. During FY 2026, 2,522 employees

accepted the invitation to join the scheme and just over 6.1 million options were granted at a price of 178 pence per share. Further information is provided in the table below.


	SAYE 2023	SAYE 2024	SAYE 2025
	Options	Options	Options
	Number	Number	Number
Outstanding at the beginning of the year	13,364,629	9,326,957	–
Granted during the year	–	–	6,105,523
Exercised during the year	(1,985,048)	(504,488)	(1,825)
Lapsed during the year	(2,110,747)	(2,349,333)	(443,989)
Outstanding at the end of the year	9,268,834	6,473,136	5,659,709
Exercisable at the end of the year	78,870	32,512	8,244
Weighted average exercise price (pence)	111.0	123.0	178.0
Weighted average share price at date of exercise (pence)	202.0	203.0	190.0

(b) Buy As You Earn (BAYE)

BAYE enables eligible employees to purchase shares from their gross income. If the shares are held in trust for five years or more, no income tax and National Insurance will be payable. Since August 2023 no matching

shares have been offered with the Company preferring to allocate the cost to support a larger number of options under the SAYE plan. The matching shares will be forfeited if the corresponding partnership shares are

removed from trust within three years of award.

In March 2026 there were 2,061 (March 2025: 2,655) participants who purchased shares during the month through the BAYE scheme. During the year, scheme participants have purchased 884,524 shares.

Discretionary plans

Prior to FY 2022 the discretionary awards were structured as nil cost options. Since that date the awards have been granted as conditional shares; there is no economic difference for the Company or participants following

this change.

DBS awards vest over a three‑year period following the financial year that they relate to and are typically settled by equity.


	DBS 2015	DBS 2016	DBS 2017	DBS 2018	DBS 2019	DBS 2020	DBS 2021
	Options	Options	Options	Options	Options	Options	Options
	Number	Number	Number	Number	Number	Number	Number
Outstanding at the beginning of the year	36,546	26,796	6,538	14,254	29,291	37,031	129,268
Granted during the year	–	–	–	–	–	–	–
Forfeited during the year	–	–	–	–	–	–	–
Exercised/released during the year	(26,085)	–	–	(6,594)	(17,334)	(15,860)	(102,105)
Lapsed during the year	(10,461)	–	–	–	–	–	(1,354)
Outstanding at the end of the year	–	26,796	6,538	7,660	11,957	21,171	25,809
Exercisable at the end of the year	–	26,796	6,538	7,660	11,957	21,171	25,809
Weighted average share price at date of exercise (pence)	186.5	N/A	N/A	223.0	204.1	207.1	195.9

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33 Share‑based payments

continued


	DBS 2022	DBS 2023	DBS 2024	DBS 2025
	Conditional	Conditional	Conditional	Conditional
	Shares Number	Shares Number	Shares Number	Shares Number
Outstanding at the beginning of the year	1,360,526	831,260	795,978	–
Granted during the year	–	–	–	546,037
Forfeited during the year	–	–	–	–
Exercised/released during the year	(1,357,790)	–	–	–
Lapsed during the year	(2,736)	–	–	–
Outstanding at the end of the year	–	831,260	795,978	546,037
Exercisable at the end of the year	–	–	–	–
Weighted average share price at date of exercise (pence)	210.8	N/A	N/A	N/A

(d) Long‑Term Incentive Plan (LTIP)

The LTIP awards granted in 2021 through to 2025 have relative TSR, EPS and sustainability targets. Where the threshold measures are exceeded, the awards are settled by equity.


	LTIP 2021	LTIP 2022	LTIP 2023	LTIP 2024	LTIP 2025
	Options	Conditional	Conditional	Conditional	Conditional
	Number	Shares Number	Shares Number	Shares Number	Shares Number
Outstanding at the beginning of the year	31,241	7,223,320	7,090,438	6,711,864	–
Granted during the year	–	–	–	–	5,129,273
Forfeited during the year	–	(72,944)	(271,825)	(492,499)	(82,695)
Lapsed during the year	–	–	–	–	–
Exercised during the year	(31,241)	(7,150,376)	–	–	–
Outstanding at the end of the year	–	–	6,818,613	6,219,365	5,046,578
Exercisable at the end of the year	–	–	–	–	–
Weighted average share price at date of exercise (pence)	183.4	225.7	N/A	N/A	N/A

(e) Executive Share Plan (ESP)

ESP awards vest over a three‑year period following the financial year that they relate to and are typically settled by equity.


	ESP 2015	ESP 2016	ESP 2017	ESP 2018	ESP 2019	ESP 2020	ESP 2021
	Options	Options	Options	Options	Options	Options	Options
	Number	Number	Number	Number	Number	Number	Number
Outstanding at the beginning of the year	38,167	41,444	17,308	63,657	250,881	14,718	350,832
Granted during the year	–	–	–	–	–	–	–
Forfeited/lapsed during the year	(21,285)	–	–	–	–	–	(6,854)
Exercised/released during the year	(16,882)	–	(4,282)	(21,063)	(88,757)	–	(210,255)
Outstanding at the end of the year	–	41,444	13,026	42,594	162,124	14,718	133,723
Exercisable at the end of the year	–	41,444	13,026	42,594	162,124	14,718	133,723
Weighted average share price at date of exercise/release (pence)	192.4	N/A	217.8	219.0	226.6	N/A	211.4
				ESP 2022	ESP 2023	ESP 2024	ESP 2025
				Conditional	Conditional	Conditional	Conditional
				Shares Number	Shares Number	Shares Number	Shares Number
Outstanding at the beginning of the year				16,001	7,972	467,304	–
Granted during the year				–	–	–	6,352
Forfeited/lapsed during the year				–	–	–	–
Exercised/released during the year				(16,001)	(3,986)	(2,874)	–
Outstanding at the end of the year				–	3,986	464,430	6,352
Exercisable at the end of the year				–	–	–	–
Weighted average share price at date of exercise/release (pence)				225.7	225.2	225.2	N/A

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continued

33 Share‑based payments

continued

The fair values of the awards granted during the last two years were measured using a Black‑Scholes model

except for the TSR element of the LTIPs which were measured using a Monte Carlo model. The inputs into the

models were as follows:


	2026	2025
	pence	pence
Weighted average share price at grant date (pence)
– DBS	217.8	164.8
– LTIP	217.8	164.5
– ESP	182.0	164.4
Weighted average exercise price at grant date (pence)
– DBS	–	–
– LTIP	–	–
– ESP	–	–
Expected volatility (%)
– DBS	N/A	N/A
– LTIP	38	59
– ESP	N/A	N/A
Expected life (years)
– DBS	3.0	3.0
– SAYE schemes	N/A	N/A
– LTIP	3.0	3.0
– ESP	3.0	3.0
Rate of interest (%)
– DBS	N/A	N/A
– LTIP	–	–
– ESP	–	–
Expected dividend yield (%)
– DBS	3.0	3.3%
– LTIP	3.0	3.3%
– ESP	3.0	3.3%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the

previous five years. The expected life used in the model has been adjusted based on management’s best

estimate, for the effects of non‑transferability, exercise restrictions and behavioural considerations.

Allowances have been made for the SAYE schemes for the fact that, amongst a group of recipients some

are expected to leave before an entitlement vests. The accounting charge is then adjusted over the vesting

period to take account of actual forfeitures, so although the total charge is unaffected by the pre‑vesting

forfeiture assumption, the timing of the recognition of the expense will be sensitive to it. Fair values for the

SAYE include a 10% per annum pre‑vesting leaver assumption whereas the Executive, LTIP and deferred share

plans exclude any allowance for pre‑vesting forfeitures.


	2026	2025
	pence	pence
Weighted average fair value of options at grant date
– DBS	205.2	154.4
– LTIP	158.8	116.3
– ESP	172.1	154.3

34 Retirement benefit schemes

The Group supports defined contribution (DC) and defined benefit (DB) schemes for the benefit of employees

across the following business areas:

First Bus

DB schemes: The FirstGroup Pension Scheme.

DC schemes: The First Bus Retirement Savings Plan and the Enhanced Lifetime Savings Plan.

Employees in Group corporate functions participate in the First Bus pension arrangements.

First Rail

DB schemes: Railways Pension Scheme (RPS) Shared Cost Sections. As at the balance sheet date, the Group

sponsored two sections of the RPS in respect of TOCs operating under NRCs. Since the obligations to the TOC

arrangements are considered to be limited to contributions during the period of the contract, these are

fundamentally different to the obligations to the other pension arrangements. Additionally, the Group

sponsors a section for its open access Hull Trains business, which closed to new entrants in March 2024.

DC schemes: RPS Industry‑Wide Defined Contribution (IWDC) Section. Hull Trains employees who are not

eligible for the DB section, and Tram Operations employees, are enrolled into the IWDC Section.

North America

The Group is winding up legacy schemes from operations which have now been sold. During the year, the

liabilities of the Greyhound Canada Retirement Income Plan were bought out with an insurer, removing

obligations from the balance sheet. There remains a modest surplus, which will be distributed to Plan

participants before the Plan is fully wound up. During the prior year, the remaining liabilities in the US were

bought out, and winding up of the legacy Greyhound US pension plan was completed in December 2024.

Each of these groups of arrangements have therefore been shown separately.

Overall, the duration of the Company’s obligations is approximately 14 years although the durations of the

individual schemes tend to vary.

The pension schemes in the UK are operated independently of the Group by the relevant pension scheme’s

trustee. All pension scheme assets are held separately from FirstGroup’s assets. The managers or trustees

(as appropriate) of the pension schemes are responsible for the investment policy, although the sponsor

is consulted.

The market value of the assets as at 28 March 2026 for all DB schemes (excluding RPS in respect of DfT TOCs)

totalled £982m (2025: £1,135m). The present value of scheme liabilities for all non‑contract rail operation

defined benefit schemes totalled £963m (2025: £1,112m).

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34 Retirement benefit schemes

continued

(a) First Bus and Group (including open access rail operators)

DC plans (shown on a continuing basis)

Payments to DC plans are charged as an expense as they fall due. There is no further obligation to pay

contributions into a DC plan once the contributions specified in the plan rules have been paid. The total

expense recognised in the consolidated income statement of £48.6m (2025: £36.0m) represents

contributions payable to these plans by the Group at rates specified in the rules of the plans.

The Group operates DC plans for all Group and First Bus employees, and First Rail employees who are not

eligible to join a DB arrangement. They receive a company match to their contributions, which varies by

salary and/or service.

DB plans (shown on a continuing basis)

The Group has full responsibility for the retirement benefits for former and current employees of Group, First

Bus and Hull Trains who are members of the schemes described in the following paragraphs, bearing all the

risks and responsibilities of sponsorship of these schemes. These comprise two funded DB plans across its

First Bus and Group operations (including Hull Trains which, unlike the majority of First Rail operations, is

operated under open access), covering approximately 24,700 former and current employees. All of these

schemes are closed to new entrants.

Triennial valuations assess the cost of future service (where relevant) and the funding position. The employer

and trustees are required to agree on assumptions for the valuations and to agree the contributions that

result from these. Deficit recovery contributions may be required in addition to future service contributions.

In agreeing contribution rates, reference must be made to the affordability of contributions by the employer.

At their last valuations, the DB schemes had funding levels between 74% and 108% (2025: 74% and 94%).

Surplus after benefits have been paid/secured can be repaid to the employer, in line with the rules

of the schemes.

The FirstGroup Pension Scheme

The FirstGroup Pension Scheme is a legacy DB scheme that is closed to benefit accrual. It now comprises two

sections – a Group Section (members already of the FirstGroup Pension Scheme prior to merging with The First

UK Bus Pension Scheme) and a Bus Section (members transferring from The First UK Bus Pension Scheme).

The rules governing both these schemes grant the employer influence over the allocation of any residual

surplus once the beneficiaries’ rights have been secured. Accordingly, the net surplus/deficit is recognised

in full for these schemes.

The Hull Trains Shared Cost Section of the Railways Pension Scheme

Hull Trains participates in its own Section of the Railways Pension Scheme. This scheme closed to new

entrants in March 2024, but remains open to the accrual of salary‑related benefits for employees who

became members before March 2024. Costs relating to accrual and to any deficit are shared with members.

Any deficit is now fully borne by the sponsor – the impact of this currently has a negligible impact on the

accounting balance sheet.

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continued

34 Retirement benefit schemes

continued

The table below is set out to show the movements in the fair value of schemes’ assets (Assets) along with the movements in the present value of Defined Benefit Obligations (DBO) (Liabilities) for the DB schemes described above:


	2026		2025
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
At beginning of period	992.5	970.1	1,147.8	1,161.8
Income statement
Operating
– Current service cost	–	4.1	–	5.9
– Settlement in relation to winding‑up lump sums	(3.9)	(4.2)	(21.3)	(24.1)
Total operating	(3.9)	(0.1)	(21.3)	(18.2)
Interest income/cost	55.7	53.7	54.8	53.8
Total income statement	51.8	53.6	33.5	35.6
Amounts paid to/(from) scheme
Employer contributions	25.9	–	8.6	–
Employee contributions	0.2	0.2	0.4	0.4
Benefits paid	(67.4)	(67.4)	(70.6)	(70.6)
Total	(41.3)	(67.2)	(61.6)	(70.2)
Expected closing position	1,003.0	956.5	1,119.7	1,127.2
Change in financial assumptions	–	(23.8)	–	(108.9)
Change in demographic assumptions	–	(8.7)	–	(2.5)
Employee share of changes	–	–	–	–
Return on assets in excess of discount rate	(25.1)	–	(127.2)	–
Experience	–	34.3	–	(45.7)
Total	(25.1)	1.8	(127.2)	(157.1)
At end of period	977.9	958.3	992.5	970.1


	2026		2025
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
Surplus in schemes	–	19.6	–	22.4
The amount is presented in the consolidated balance sheet as follows:	–		–
Non‑current assets	–	21.7	–	27.0
Non‑current liabilities	–	(2.1)	–	(4.6)

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34 Retirement benefit schemes

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Asset allocation


	Quoted	Unquoted	Total
At March 2026	£m	£m	£m
Equity	5.6	127.3	132.9
Other return seeking assets	–	4.5	4.5
Real estate	–	1.0	1.0
Fixed income/liability driven	537.1	228.1	765.2
Other income generating	–	26.2	26.2
Cash and cash equivalents	48.1	–	48.1
	590.8	387.1	977.9


	Quoted	Unquoted	Total
At March 2025	£m	£m	£m
Equity	17.0	159.3	176.3
Other return seeking assets	–	20.1	20.1
Real estate	–	1.6	1.6
Fixed income/liability driven	553.9	219.9	773.8
Other income generating	–	0.8	0.8
Cash and cash equivalents	19.9	–	19.9
	590.8	401.7	992.5

(b) North America

Greyhound pension arrangements

The Group has retained certain responsibilities for the provision of retirement benefits for some legacy schemes.

The Group no longer operates a pension plan in the US (2025: none), while in Canada, there is a legacy plan with a DB and a DC section that is currently being wound up – the majority of the benefits have been secured

through a buyout with an insurer, and all that remains is a modest surplus, which will be distributed to plan participants.

In the prior year, the Group agreed terms with an insurance company to buy out the remaining liabilities of the legacy Greyhound US pension plan, with the plan being terminated thereafter. Following a Group net

contribution of $5.3m, gross liabilities of $155m (£123m) at the FY 2024 year end were removed from the Group’s balance sheet and the Group recognised a net settlement gain after related costs of £5.1m in the Group’s

FY 2025 income statement as an adjusting item.

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34 Retirement benefit schemes

continued

The table below is set out to show the movements in the fair value of schemes’ assets (Assets) along with the movements in the present value of DBO (Liabilities) for the North American DB schemes:


	2026		2025
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
At beginning of period (including held for sale)	142.6	142.3	264.8	276.1
Income statement
Operating
– Current service cost	–	–	–	1.8
– Past service gain including curtailments and settlements	(132.8)	(132.8)	(106.7)	(113.2)
Total operating	(132.8)	(132.8)	(106.7)	(111.4)
Interest income/cost	3.7	3.7	8.4	8.6
Total income statement	(129.1)	(129.1)	(98.3)	(102.8)
Amounts paid to/(from) scheme
Employer contributions	–	–	4.1	–
Benefits paid	(7.6)	(7.6)	(23.4)	(23.4)
Total	(7.6)	(7.6)	(19.3)	(23.4)
Expected closing position	5.9	5.6	147.2	149.9
Change in financial assumptions	–	(0.3)	–	4.8
Change in demographic assumptions	–	(1.5)	–	2.0
Return on assets in excess of discount rate	(1.8)	–	9.8	–
Experience	–	–	–	0.3
Total	(1.8)	(1.8)	9.8	7.1
Currency gain/loss	0.9	0.9	(14.4)	(14.7)
At end of period	5.0	4.7	142.6	142.3

Asset allocation


	Quoted	Unquoted	Total
At March 2026	£m	£m	£m
Cash and cash equivalents	5.0	–	5.0
	5.0	–	5.0


	Quoted	Unquoted	Total
At March 2025	£m	£m	£m
Annuities	–	135.7	135.7
Cash and cash equivalents	6.9	–	6.9
	6.9	135.7	142.6

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34 Retirement benefit schemes

continued

The Railways Pension Scheme (RPS)

The Group is responsible for collecting and paying contributions for a number of sections of the RPS as

part of its obligations under the contracts which it holds for its TOCs. These responsibilities continue for the

periods of the TOCs and are passed to future contract holders when those TOCs terminate. Management

of the RPS is not the responsibility of the Group, nor is it liable to benefit from any future surplus or fund any

deficit of those funds. The RPS is managed by the Railways Pension Trustee Company Limited and is subject

to regulation from The Pensions Regulator and relevant UK legislation.

The RPS is a shared cost arrangement. All costs, and any deficit or surplus, are shared 60% by the employer

and 40% by the members.

As at the balance sheet date, the Group sponsored two sections of the RPS, relating to its contracting

obligations for its TOCs. In line with Government policy to take TOCs into public ownership, sponsorship

of these remaining sections is expected to transfer to new ownership in due course.

For the TOC sections, under the contractual arrangements with the DfT, the employer’s responsibility is to

pay the contributions following triennial funding valuations while it operates the contracted services. These

contributions are subject to change on consideration of future statutory valuations, though the Group is fully

protected from any such changes through its contracts with the DfT. At the end of the contract, any deficit or

surplus in the scheme section passes to the subsequent TOC with no compensating payments from or to

the outgoing TOC.

The statutory funding valuations of the various Rail Pension Scheme sections in which the Group is involved

(last finalised with an effective date of 31 December 2022) and the IAS 19 actuarial valuations are carried out

for different purposes and may result in materially different results. The IAS 19 valuation is set out in the

disclosures below.

The accounting treatment for the time‑based risk‑sharing feature of the Group’s participation in the RPS

is not explicitly considered by IAS 19 Employee Benefits (Revised). The contributions currently committed to

being paid to each TOC section are lower than the share of the service cost (for current and future service)

that would normally be calculated under IAS 19 (Revised) and the Group does not account for uncommitted

contributions towards the sections’ current or expected future deficits. Therefore, the Group does not need

to reflect any deficit on its balance sheet. A TOC adjustment (asset) exists that exactly offsets any section

deficit that would otherwise remain after reflecting the cost sharing with the members. This reflects the legal

position that some of the existing deficit and some of the service costs in the current year will be funded in

future years beyond the term of the current contract and committed contributions. The TOC adjustment on

the balance sheet date reflects the extent to which the Group is not currently committed to fund the deficit.

Movements in the TOC contract adjustment in a period arise from and are accounted for as follows:

Any service costs for the period for which the contribution schedule requires no contributions from the entity

are reflected as an adjustment to the service cost in the income statement, which is considered to be in line

with paragraphs 92‑94 of IAS 19 (Revised).

Under circumstances where contributions are renegotiated, such as following a statutory valuation, any

adjustment necessary to reflect an obligation to fund past service cost will be recognised in the income

statement.

The disclosed information has been set out to illustrate the effect of this on the costs borne by FirstGroup.

In particular, 40% of the costs, gains or losses and any deficit are attributed to the members. In addition, the

total surplus or deficit is adjusted by way of a ‘contract adjustment’ which includes an assessment of the

changes that will arise from contracted future contributions and which is the portion of the deficit or surplus

projected to exist at the end of the contract which the Group will not be required to fund or benefit from.

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34 Retirement benefit schemes

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			Adjustment for
			employee share of	Contract
	Assets	Liabilities	RPS deficits (40%)	adjustment	Net
	£m	£m	£m	£m	£m
At 1 April 2025	3,658.0	(3,070.4)	(235.0)	(352.6)	–
Impact of expiry of SWR NRC	(1,277.4)	1,088.1	75.7	113.6	–
Revised opening position, excluding SWR	2,380.6	(1,982.3)	(159.3)	(239.0)	–
Income statement
Operating
– Service cost	–	(78.3)	31.3	12.3	(34.7)
– Admin cost	–	(2.5)	1.0	–	(1.5)
Total operating	–	(80.8)	32.3	12.3	(36.2)
Financing	137.7	(112.0)	(10.3)	(15.4)	–
Total income statement	137.7	(192.8)	22.0	(3.1)	(36.2)
Amounts paid to/(from) scheme
Employer contributions	36.2	–	(14.5)	14.5	36.2
Employee contributions	24.0	–	(9.6)	(14.4)	–
Benefits paid	(99.5)	99.5	–	–	–
Total	(39.3)	99.5	(24.1)	0.1	36.2
Expected closing position	2,479.0	(2,075.6)	(161.4)	(242.0)	–
Change in financial assumptions	–	45.3	(18.1)	(27.2)	–
Change in demographic assumptions	–	(12.6)	5.0	7.6	–
Return on assets in excess of discount rate	70.3	–	(28.1)	(42.2)	–
Experience	–	(11.2)	4.5	6.7	–
Total	70.3	21.5	(36.7)	(55.1)	–
At 31 March 2026	2,549.3	(2,054.1)	(198.1)	(297.1)	–


			Adjustment for
			employee share of	Contract
	Assets	Liabilities	RPS deficits (40%)	adjustment	Net
	£m	£m	£m	£m	£m
At 1 April 2024	3,722.4	(3,588.7)	(53.4)	(80.3)	–
Income statement
Operating
– Service cost	–	(135.2)	54.1	34.4	(46.7)
– Admin cost	–	(6.5)	2.6	–	(3.9)
Total operating	–	(141.7)	56.7	34.4	(50.6)
Financing	180.6	(169.6)	(4.4)	(6.6)	–
Total income statement	180.6	(311.3)	52.3	27.8	(50.6)
Amounts paid to/(from) scheme
Employer contributions	50.6	–	(20.2)	20.2	50.6
Employee contributions	33.4	–	(13.4)	(20.0)	–
Benefits paid	(157.1)	157.1	–	–	–
Total	(73.1)	157.1	(33.6)	0.2	50.6
Expected closing position	3,829.9	(3,742.9)	(34.7)	(52.3)	–
Change in financial assumptions	–	604.0	(241.6)	(362.4)	–
Change in demographic assumptions	–	9.7	(3.9)	(5.8)	–
Return on assets in excess of discount rate	(171.9)	–	68.7	103.2	–
Experience	–	58.8	(23.5)	(35.3)	–
Total	(171.9)	672.5	(200.3)	(300.3)	–
At 31 March 2025	3,658.0	(3,070.4)	(235.0)	(352.6)	–

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34 Retirement benefit schemes

continued

During the year £2.5m (2025: £6.5m) of gross administrative expenses were incurred, included in benefits paid above.

Finance costs above include interest income of £82.6m (2025: £108.4m) and employee share of interest on assets of £55.1m (2025: £72.2m).

Income statement charges on liabilities above of £192.8m (2025: £311.3m) represent:


	2026	2025
	£m	£m
Current service costs	47.0	85.0
Interest costs	67.2	101.8
Employee share of change in DBO (not attributable to contract adjustment)	78.6	124.5
	192.8	311.3

Asset allocation


	Quoted	Unquoted	Total
At 28 March 2026/31 March 2026	£m	£m	£m
Equity	–	1,159.3	1,159.3
Other return seeking assets	–	696.3	696.3
Real estate	–	240.7	240.7
Fixed income/liability driven	–	442.9	442.9
Cash and cash equivalents	10.2	–	10.2
	10.2	2,539.2	2,549.4


	Quoted	Unquoted	Total
At 29 March 2025/31 March 2025	£m	£m	£m
Equity	–	1,630.1	1,630.1
Other return seeking assets	–	1,027.2	1,027.2
Real estate	–	335.0	335.0
Fixed income/liability driven	–	654.1	654.1
Cash and cash equivalents	11.6	–	11.6
	11.6	3,646.4	3,658.0

The Rail contracts’ assets are invested in pooled funds created specifically for the Rail schemes. As such, these assets have been categorised as unquoted.

(d) Valuation assumptions

The valuation assumptions used for accounting purposes have been made uniform to Group standards, as appropriate, when each scheme is actuarially valued.


	First Bus	First Rail	North America	First Bus	First Rail	North America
	2026	2026	2026	2025	2025	2025
At 28 March 2026/29 March 2025	%	%	%	%	%	%
Key assumptions used:
Discount rate	6.22 – 6.30	6.26	N/A	5.78 – 5.83	5.87	4.50
Expected rate of salary increases	N/A	3.07 – 3.32	N/A	N/A	2.83 – 3.12	N/A
Inflation – CPI	2.84 – 2.85	2.86	N/A	2.61 – 2.62	2.60	2.00
Future pension increases	2.51 2	2.86	N/A	2.37 2	2.60	N/A
Post‑retirement mortality (life expectancy in years) 1
Current pensioners at 65:	19.7	20.5	N/A	19.3	20.1	21.7
Future pensioners at 65 aged 45 now:	20.5	21.9	N/A	19.7	21.5	22.7

Life expectancies reflect the largest underlying plans in each region.

Weighted average for principal scheme.

The Group reviews its longevity assumptions for each scheme following completion of funding valuations. The assumptions adopted reflect recent scheme experience and views on future longevity which may include

industry‑specific adjustment where appropriate. The Group obtains specialist actuarial advice before agreeing longevity assumptions.

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Annual Report and Accounts 2026

185

Notes to the consolidated financial statements

continued

34 Retirement benefit schemes

continued

(e) Sensitivity of retirement benefit obligations to changes in assumptions (excluding Rail Pension Scheme)

The method used to derive the sensitivities is the same as that used to calculate the main disclosures. The exception is longevity where we have instead applied a general rule that one year’s extra life expectancy adds

c.3% to the DBO (with resultant impacts on rail and irrecoverable surplus adjustments). This is consistent with the method applied to deriving last year’s sensitivities.

A 1.0% movement in the discount rate would impact the DBO balance sheet position by approximately £10m. A 1.0% movement in the inflation rate would impact the DBO balance sheet position by approximately £6m.

A one‑year movement in life expectancy would impact the DBO balance sheet position by approximately £29m.

Management considers that the figures provide a suitable indication of the potential impact of reasonably possible changes in the financial assumptions and one‑year change in the mortality assumption. No allowance

has been made for any consequent change in the value of assets held. Sensitivities do not include the Rail Pension Scheme owing to the contract adjustment mechanism detailed above.

(f) Consolidated statement of comprehensive income

Amounts presented in the consolidated statement of comprehensive income comprise:



	2026	2025
	£m	£m
Actuarial gain on DBO	30.5	822.9
Actuarial gain/(loss) on assets	30.1	(289.6)
Actuarial (loss) on contract adjustments	(87.5)	(500.4)
Actuarial gains/(losses) on defined benefit schemes	(26.9)	32.9

(g) Cash contributions

The estimated amounts of employer contributions expected to be paid to the DB schemes during the 52 weeks ending 27 March 2027 is £33.8m based on current contributions schedules in force (28 March 2026: £64.6m).

(h) Risks associated with DB plans

Other than for the First Rail TOCs, the number of employees in defined benefit plans is reducing rapidly, as these plans are closed to new entrants, and plans are being terminated. This will serve to limit the risks associated

with DB pension provision by the Group.

Despite remaining open to new entrants and future accrual, the risks posed by the RPS are limited, as under the contractual arrangements with DfT, the First Rail TOCs are not responsible for any residual deficit at the end of

a contract. Furthermore, under these contractual arrangements with the DfT, the First Rail TOCs are indemnified against any short‑term cash flow risks arising from future triennial valuations.

The key risks relating to the other DB pension arrangements and the steps taken by the Group to mitigate them are as follows:



Risk	Description	Mitigation
Asset volatility	The liabilities are calculated using a discount rate set with reference to corporate bond	Asset liability modelling has been undertaken to ensure that any risks taken are expected
	yields; if assets underperform this yield, this will create a deficit. The assets held in the	to be rewarded and, in relation to the Company’s largest pension exposures, further work is
	DB arrangements are intended to meet the long‑term funding objectives of those	being undertaken to ensure that the investment strategy remains the most appropriate.
	arrangements, and therefore results in some risk in the short term and has the potential for
	material adverse movements relative to the liabilities as valued for accounting purposes.
Inflation risk	A significant proportion of the UK benefit obligations are linked to inflation and higher	Investment strategy reviews have led to increased inflation hedging, mainly through swaps
	inflation will lead to higher liabilities.	or holding Index Linked Gilts in the UK schemes.
Uncertainty over level of future	Contributions to DB schemes can be unpredictable and volatile as a result of changes	The Group engages with the trustees to consider how contribution requirements can be
contributions	in the funding level revealed at each valuation.	made more stable. The level of volatility and the Group’s ability to control contribution
		levels varies between arrangements.
Life expectancy	The majority of the scheme’s obligations are to provide benefits for the life of the	Linking retirement age to State Pension Age (as in The FirstGroup Pension Scheme) has
	member, so increases in life expectancy will result in an increase in the liabilities.	mitigated this risk to some extent.
Legislative risk	Future legislative changes are uncertain. In the past these have led to increases in	The Group receives professional advice on the impact of legislative changes.
	obligations, through introducing pension increases, vesting of deferred pensions,
	equalisation of certain benefits for men and women or reduced investment return
	through the ability to reclaim advance corporation tax.

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Annual Report and Accounts 2026

186

Notes to the consolidated financial statements

continued

35 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated

on consolidation and are not disclosed in this note.

Remuneration of key management personnel

The remuneration of the Directors, which comprise the plc Board who are the key management personnel

of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party

Disclosures. Further information about the remuneration of individual Directors is provided in the Annual

report on remuneration on pages 97 to 108.



	2026	2025
	£m	£m
Basic salaries 1	1.7	1.8
Fees	0.7	0.6
Post‑employment benefits	0.1	0.1
Share‑based payment	3.5	3.6
	6.0	6.1

Basic salaries include cash emoluments in lieu of retirement benefits, bonuses and car allowances.

36 Events after the reporting period

On 2 April 2026, the Group announced its acquisition of Eagle Coaches, a coaching business based in Bristol

with a fleet of 19 vehicles, operating private hire, school transport and group travel services.

On 10 April 2026, the Group announced its acquisition of Wilfreda Luxury Coaches Limited (Wilfreda Beehive),

a Doncaster‑based coaching business operating a fleet of 45 vehicles to provide private hire, school

contracts, contracted workplace shuttle services and holiday programmes.

Owing to the timing of these acquisitions, it has not been practical for the Group to yet undertake a detailed

assessment of the acquired assets and liabilities. A provisional assessment will be undertaken during the year.

On 3 May 2026, the Group’s First Rail London Limited (FRL) subsidiary commenced the operation of the

London Overground rail contract on behalf of Transport for London (TfL). FRL’s contract is for an initial

eight‑year period, with an option to extend for a further two years at TfL’s discretion. Under the terms

of the contract, TfL retains all revenue risk and will specify the service levels, with FRL responsible for

the delivery of train services, management of stations and customer service.

On 7 May 2026, First Greater Western Railway Ltd received notice from the DfT that its NRC would expire

on 13 December 2026, at which point GWR will hand over to the DfT Operator.

On 25 May 2026, the Group’s new Lumo West Coast open access rail operator commenced services between

London Euston and Stirling.

37 Information about related undertakings

In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries and equity accounted

investments as at 28 March 2026 is disclosed below. Unless otherwise stated, the Group’s shareholding

represents ordinary shares held indirectly by FirstGroup plc. The entities are unlisted, and have one type

of ordinary share capital. The year end is 28 March. The Group’s interest in the voting share capital is 100%

unless otherwise stated. No subsidiary undertakings have been excluded from the consolidation:

Subsidiaries – wholly owned and incorporated in the United Kingdom

Anderson Tours Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Tours Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Travel Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Travel Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Airporter Limited,

21 Arthur Street, Belfast, BT1 4GA

A.T. Brown (Coaches) Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Bath Bus Company Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

CCB Holdings Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

CentreWest Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

East Coast Trains Limited,

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Ensign Bus Company Limited,

3,7

The Rifle Range, Juliette Close, Purfleet Industrial Park, Aveley,

South Ockendon, Essex, RM15 4YF

Evolutionary Rail Limited,

3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FB Canada Holdings Limited,

395 King Street, Aberdeen, AB24 5RP

FG Canada Investments Limited,

395 King Street, Aberdeen, AB24 5RP

FG Properties Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FGI Canada Holdings Limited,

3,4

395 King Street, Aberdeen, AB24 5RP

First Aberdeen Limited,

3,7

395 King Street, Aberdeen, AB24 5RP

First Beeline Buses Limited,

3,7

Hoeford, Gosport Road, Fareham, Hampshire, PO16 0ST

First Bus Central Services Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Holdings Limited,

1,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus London Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Pension GP Limited,

4,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Retirement Savings Plan Trustee Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Capital Connect Limited,

5,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Capital East Limited,

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

First Customer Contact Limited,

8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

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Annual Report and Accounts 2026

187

Notes to the consolidated financial statements

continued

37 Information about related undertakings

continued

First Cymru Buses Limited,

3,7

Heol Gwyrosydd, Penlan, Swansea, SA5 7BN

First Eastern Counties Buses Limited,

3,7

Davey House, 7b Castle Meadow, Norwich, Norfolk, NR1 3DE

First Essex Buses Limited,

3,7

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

First Glasgow (No.1) Limited,

100 Cathcart Road, Glasgow, G42 7BH

First Glasgow (No.2) Limited,

3,7

100 Cathcart Road, Glasgow, G42 7BH

First Greater Western Limited,

7,9

Milford House, 1 Milford Street, Swindon, Wiltshire SN1 1HL

First Hampshire & Dorset Limited,

3,7

Hoeford, Gosport Road, Fareham, Hampshire, PO16 0ST

First International (Holdings) Limited),

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First International No.1 Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First London Cableway Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Manchester Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Midland Red Buses Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First North West Limited,

3,4

Wallshaw Street, Oldham, OL1 3TR

First Northern Ireland Limited,

3,7

21 Arthur Street, Belfast, BT1 4GA

First Potteries Limited,

3,7

Abbey Lane, Leicester, England, LE4 0DA

First Rail Holdings Limited,

1,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail London Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Open Access Holdings Limited,

1,3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Procurement Limited,

1,3,8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Stirling Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Stirling Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Wales and Western Limited,

3,7

Heol Gwyrosydd, Penlan, Swansea SA5 7BN

First Rail Wales and Western Holdings Limited,

3,4

Heol Gwyrosydd, Penlan, Swansea SA5 7BN

First ScotRail Limited,

5,9

395 King Street, Aberdeen, AB24 5RP

First South West Limited,

3,7

Union Street, Camborne, Cornwall, TR14 8HF

First South Yorkshire Limited,

3,7

Olive Grove, Sheffield, South Yorkshire, S2 3GA

First Student UK Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First TransPennine Express Limited,

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Travel Solutions Limited,

Unit 5 Petre Court, Petre Road Clayton Business Park,

Clayton Le Moors, Accrington, BB5 5HY

First West of England Limited,

Enterprise House, Easton Road, Bristol, BS5 0DZ

First West Yorkshire Limited,

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

First York Limited,

3,7

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

FirstBus (North) Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstBus Investments Limited,

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup American Investments,

3,4

395 King Street, Aberdeen, AB24 5RP

FirstGroup Canadian Finance Limited,

1,3,6

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Energy Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Holdings Limited,

1,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Pension GP Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup US Finance Limited,

1,3,6

395 King Street, Aberdeen, AB24 5RP

FirstGroup US Holdings,

395 King Street, Aberdeen, AB24 5RP

GRT Bus Group Limited,

1,3,4

395 King Street, Aberdeen, AB24 5RP

Hall and Davies Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Hills Coaches Limited,

Canal Side Hordern Rd, Whitmore Reans, Wolverhampton, West Midlands, WV6 0HS

Hull Trains Company Limited,

7,9

The Point, 8th Floor, 37 North Wharf Road, London, England, W2 1AF

J & B Travel Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

JR Davies & Son Holdings Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Lakeside Coaches Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Lakeside Property Portfolio Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Leicester CityBus Limited,

3,7

Abbey Lane, Leicester, England, LE4 0DA

London Mini Coaches Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

London Mini Coaches Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

London Sovereign Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

London Transit Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

London United Busways Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

Mistral Data Limited,

8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Rider Holdings Limited,

3,4

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

Scott’s Hospitality Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Southampton CityBus Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Specialist Passenger Solutions Ltd,

3,7

J24 Hinkley Point C, Park and Ride, Huntworth Business Park, Bridgwater, TA6 6TS

The FirstGroup Pension Scheme Trustee Limited,

5,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

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Annual Report and Accounts 2026

188

Notes to the consolidated financial statements

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37 Information about related undertakings

continued

The First UK Bus Pension Scheme Trustee Limited,

5,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

The Original Tour London,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

Tetley’s Motor Services Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Totaljourney Limited,

1,3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Tram Operations Limited,

3,7,9

Tramlink Depot, Coomber Way, Croydon, CR0 4TQ

Transportation Claims Limited,

Aquis House, 49‑51 Blagrave Street, Reading, RG1 1PL

Truronian Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

York Pullman Bus Company Limited,

3,7

2 Clifton Moor Business Village, York, North Yorkshire, YO30 4XG

YPBC Limited,

3,4

2 Clifton Moor Business Village, York, North Yorkshire, YO30 4XG

Subsidiaries – wholly owned and incorporated in the United States of America

FirstGroup Management,

Inc. 112 S French Street Suite 105, Wilmington, Delaware 19801

FirstGroup Services,

Inc. 112 S French Street Suite 105, Wilmington, Delaware 19801

Laidlaw Transportation Holdings,

Inc. 112 S French Street Suite 105, Wilmington, Delaware 19801

Transportation Realty Income Partners LP (50%),

600 Vine Street Suite 1400, Cincinnati, Ohio 45202

Subsidiaries – wholly owned and incorporated in Ireland

Aeroporto Limited,

25‑28 North Wall Quay, Dublin

First Bus Ireland Limited,

25–28 North Wall Quay, Dublin

Matthews Coach Hire Limited,

Callenberg, Inniskeen, Co. Monaghan, Monaghan

Subsidiaries – wholly owned and incorporated in Panama

First Transit de Panama, Inc.

Morgan & Morgan, Costa del Este, MMG Tower, 23rd Floor, Panama City

Subsidiaries – wholly owned and incorporated in Canada

GCT Holdings Ltd,4 Blake, Cassels & Graydon LLP, 3500, 855 – 2 Street SW, Calgary, Alberta, T2P 4J8

GCT Investment Limited Partnership,4 Blake, Cassels & Graydon LLP, 3500, 855 – 2 Street SW, Calgary, Alberta,

T2P 4J8

Greyhound Canada Transportation ULC,7 Blake, Cassels & Graydon LLP, 855 – 2 Street SW, Calgary, Alberta, T2P 4J8

Other entities – not wholly owned but incorporated in the United Kingdom

First/Keolis Holdings Limited (55%),

1,3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First/Keolis TransPennine Holdings Limited (55%),

3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First/Keolis TransPennine Limited (55%),

3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First MTR South Western Trains Limited (70%),

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Trenitalia West Coast Rail Limited (70%),

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

NextGen AssetCo Limited (50%),

8,10

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

NextGen MidCo Limited (50%),

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Palmer Energy Technology Limited (20%), 2 Pavilion Court, 600 Pavilion Drive, Northampton, United Kingdom,

NN4 7SL

Directly owned by FirstGroup plc.

All shares held in subsidiary undertakings are ordinary shares.

For the year ending 28 March 2026 these subsidiaries are exempt from audit of individual accounts under S479A of the UK Companies

Act 2006.

Primary business is a holding company.

Primary business is a dormant company.

Primary business is an intra‑group financing company.

Primary business is the provision of transportation services.

Primary business is an administrative or support services company.

Rail companies with 31 March year end.

The Group has assessed its arrangement with NextGen AssetCo Limited as a joint operation with Hitachi Zerocarbon Battery Holdings

Limited, to develop and finance an intelligent fleet decarbonisation business. The company is responsible for procuring and financing

batteries for use by First Bus operating companies. The key financial effects of the joint operation are the Group’s share of the company’s

leased assets and associated debt.

Certain pension partnership structures (FirstBus Pension Limited Partnership and FirstGroup Pension Limited

Partnership) were implemented during the 52 weeks ending 26 March 2022. These structures involved the

creation of special purpose vehicles (SPVs) to hold cash to fund the Bus and Group pension schemes if

required, based on a designated funding mechanism. The first accounting period end for these SPVs was

31 March 2023. The SPVs are consolidated into FirstGroup plc’s consolidated accounts, and therefore under

Partnership (Accounts) Regulations 2008, Regulation 7, the SPVs are exempt from the requirement to prepare

individual entity annual accounts.

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Annual Report and Accounts 2026

189

Group financial summary

Unaudited

Consolidated income statement (includes discontinued operations)


		2025
	2026	(restated 1 )	2024	2023	2022
	£m	£m	£m	£m	£m
Group revenue	4,751.9	5,233.9	4,715.1	4,759.0	5,588.0
Adjusted revenue	1,715.7	1,370.0	1,279.6	1,122.5	955.4
Operating profit before amortisation charges and other adjustments	221.5	222.2	202.4	154.4	226.8
Amortisation charges	–	–	–	–	(0.4)
Other adjustments	–	5.3	(161.2)	30.8	579.7
Operating profit	221.5	227.5	41.2	185.2	806.1
Finance costs	(69.8)	(65.7)	(82.4)	(69.3)	(153.5)
Investment income	7.1	7.8	16.8	12.8	1.5
Profit/(loss) before tax	158.8	169.6	(24.4)	128.7	654.1
Tax	(37.3)	(31.3)	15.0	(33.4)	(12.1)
Profit/(loss) for the year	121.5	138.3	(9.4)	95.3	642.0
EBITDA	702.9	779.8	746.8	755.8	862.1

Per share measures


	pence	pence	pence	pence	pence
Adjusted continuing EPS	20.3	19.4	16.7	11.6	1.6
Basic EPS	20.9	21.3	(2.4)	11.8	60.2
Dividend per share	7.2	6.5	5.5	3.8	1.1

Consolidated balance sheet


		(restated 2 )
	£m	£m	£m	£m	£m
Non‑current assets	2,027.5	2,377.6	2,425.4	2,651.9	2,267.2
Net current liabilities	(508.5)	(557.2)	(621.7)	(253.9)	(546.8)
Non‑current liabilities	(712.3)	(996.9)	(1,051.3)	(1,530.9)	(753.1)
Held for sale – continuing operations	–	–	–	8.3	–
Held for sale – discontinued operations	–	–	0.6	0.6	38.5
Non‑current provisions	(87.2)	(111.0)	(111.3)	(125.2)	(120.7)
Net assets	719.5	712.5	641.7	750.8	885.1


Share data
Number of shares in issue	millions	millions	millions	millions	millions
At year end	570.7	750.7	750.7	750.6	750.2
Average (excluding treasury shares and shares in trusts)	553.4	597.7	662.9	739.5	1,057.5


Share price	pence	pence	pence	pence	pence
At year end	169	164	180	101	107
High	233	183	188	140	107
Low	147	133	102	94	73

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Annual Report and Accounts 2026

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Group financial summary

continued

Unaudited


	2026	2025	2024	2023	2022
Market capitalisation	£m	£m	£m	£m	£m
At year end	950	959	1,154	803	1,124


		(restated 1 )
Continuing operations	£m	£m	£m	£m	£m
Revenue	4,751.9	5,233.9	4,715.1	4,755.0	4,591.1
Adjusted revenue	1,715.7	1,370.0	1,279.6	1,122.5	955.4
Adjusted operating profit	219.4	222.8	204.3	161.0	106.7
Operating profit	219.4	222.6	46.5	153.9	122.8
Adjusted EBITDA	700.8	780.4	748.6	762.4	731.2


First Bus	£m	£m	£m	£m	£m
Revenue	1,443.6	1,081.5	1,012.2	902.5	789.9
Adjusted operating profit	102.8	96.0	83.6	58.4	45.2
Operating profit/(loss)	102.8	96.0	(63.3)	51.4	45.2
Adjusted EBITDA	200.8	160.1	148.1	120.9	104.4


		(restated 1 )
First Rail	£m	£m	£m	£m	£m
Revenue	3,327.6	4,180.7	3,738.4	3,893.2	3,801.2
Adjusted revenue	272.4	288.8	267.8	220.4	165.5
Adjusted operating profit	129.9	148.8	143.3	124.8	87.8
Operating profit	129.9	148.8	143.3	124.8	91.8
Adjusted EBITDA	510.7	639.7	620.5	661.0	649.9

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

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Annual Report and Accounts 2026

191

Company balance sheet

As at 28 March 2026/29 March 2025


		2026	2025
	Notes	£m	£m
Non‑current assets
Trade and other receivables	3	434.0	425.4
Derivative financial instruments	4	0.1	–
Investments	5	873.5	759.3
		1,307.6	1,184.7
Current assets
Cash and cash equivalents		33.7	64.0
Trade and other receivables	3	0.5	1.8
Derivative financial instruments	4	0.3	–
		34.5	65.8
Total assets		1,342.1	1,250.5
Current liabilities
Trade and other payables	7	203.4	244.4
Derivative financial instruments	4	0.6	0.9
		204.0	245.3
Net current liabilities		(169.5)	(179.5)
Non‑current liabilities
Trade and other payables	7	101.6	65.7
Derivative financial instruments	4	–	0.3
		101.6	66.0
Total liabilities		305.6	311.3
Net assets		1,036.5	939.2
Equity
Share capital	8	28.5	37.5
Share premium		693.3	693.3
Other reserves		125.6	115.8
Own shares	9	(37.5)	(31.1)
Retained earnings		226.6	123.7
Total equity		1,036.5	939.2

The Company reported a profit for the 52 weeks ending 28 March 2026 of £202.0m (2025: profit of £14.4m).

Ryan Mangold

17 June 2026

Company number SC157176

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FirstGroup

Annual Report and Accounts 2026

192

Company statement of changes in equity

For the 52 weeks ended 28 March 2026/29 March 2025


							Capital
	Share	Share	Own	Hedging reserve	Merger	Capital	redemption	Retained	Total
	capital	premium	shares		reserve	reserve	reserve	earnings	equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 31 March 2024	37.5	693.3	(20.4)	(11.5)	13.9	93.8	19.7	188.8	1,015.1
Profit for the year	–	–	–	–	–	–	–	14.4	14.4
Other comprehensive loss for the year	–	–	–	(0.1)	–	–	–	–	(0.1)
Total comprehensive gain/(loss) for the year	–	–	–	(0.1)	–	–	–	14.4	14.3
Transactions with owners in their capacity as owners
Shares bought back but not yet cancelled	–	–	–	–	–	–	–	(50.4)	(50.4)
Movement in EBT and treasury shares	–	–	(10.7)	–	–	–	–	(5.4)	(16.1)
Share‑based payments	–	–	–	–	–	–	–	10.5	10.5
Dividends paid	–	–	–	–	–	–	–	(34.2)	(34.2)
Balance at 29 March 2025	37.5	693.3	(31.1)	(11.6)	13.9	93.8	19.7	123.7	939.2
Balance at 30 March 2025	37.5	693.3	(31.1)	(11.6)	13.9	93.8	19.7	123.7	939.2
Profit for the year	–	–	–	–	–	–	–	202.0	202.0
Other comprehensive profit for the year	–	–	–	0.8	–	–	–	–	0.8
Total comprehensive gain for the year	–	–	–	0.8	–	–	–	202.0	202.8
Transactions with owners in their capacity as owners
Shares bought back but not yet cancelled	–	–	–	–	–	–	–	(50.4)	(50.4)
Cancellation of treasury shares	(9.0)	–	–	–	–	–	9.0	–	–
Movement in EBT and treasury shares	–	–	(6.4)	–	–	–	–	(20.2)	(26.6)
Share‑based payments	–	–	–	–	–	–	–	10.4	10.4
Dividends paid	–	–	–	–	–	–	–	(38.9)	(38.9)
Balance at 28 March 2026	28.5	693.3	(37.5)	(10.8)	13.9	93.8	28.7	226.6	1,036.5

Merger reserves relating to disposal of investments for qualifying consideration, and those relating to the extent related investments are impaired are considered realised and transferred to retained earnings.

Financial

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Annual Report and Accounts 2026

193

Notes to the Company financial statements

1 Material accounting policies

Basis of accounting

The separate financial statements of the Company are presented as required by the Companies Act 2006.

The financial statements have been prepared on a historical cost basis, except for the revaluation of certain

financial instruments and on a going concern basis as described in the Going concern statement within the

Strategic report on page 71.

The Company meets the definition of a qualifying entity under Financial Reporting Standard (FRS 101)

‘Reduced Disclosure Framework’ issued by the Financial Reporting Council. Accordingly, these financial

statements have been prepared in accordance with FRS 101.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available

under that standard in relation to share‑based payments, financial instruments, capital management,

presentation of a cash flow statement, certain related party transactions and the requirement to present

a statement of financial position as at the beginning of the preceding period when an entity applies an

accounting policy retrospectively or makes a retrospective restatement of its financial statements.

The financial statements for the current period include the results and financial position of the Company

for the 52 weeks ending 28 March 2026. The financial statements for the prior period include the results and

financial position of the Company for the 52 weeks ending 29 March 2025.

Where relevant, equivalent disclosures have been given in the consolidated financial statements. The

principal accounting policies adopted are the same as those set out in note 2 to the consolidated financial

statements except as noted below.

Investments

Investments in subsidiaries and associates are shown at cost less provision for impairment. For investments

in subsidiaries acquired for consideration in the form of shares, including the issue of shares qualifying for

merger relief, cost is measured by reference to the fair value only of the shares issued.

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

Dividends receivable from the Company’s subsidiaries are recognised only when they are approved

by shareholders.

Key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles

requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities

at the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period. Although these estimates are based on management’s best knowledge, actual results

may ultimately differ from those estimates. The estimates and underlying assumptions are reviewed on

an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate

is revised if the revision affects only that period, or in the period of revision and future periods if the revision

affects both current and future periods.

Investment in subsidiaries

Estimation is required in relation to the recoverability of the investments and is sensitive to changes in

cash flow forecasts supporting the recoverable amount, in particular for First Bus Holdings Limited (FBH)

which is the most significant entity holding the Group’s investments in the Bus division. There is a significant

risk that material adjustment to the carrying amounts of FBH’s investments could be required within the

next financial year, including the reversal of prior year impairments. The carrying value of investments

at 28 March 2026 is £873.5m (2025: £759.3m). See note 5 for more information.

2 Profit for the year

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own

income statement for the year. The Company reported a profit for the financial year ended 28 March 2026

of £202.0m (2025: profit of £14.4m).

Fees payable to the Company’s auditors for the audit of the Company’s annual financial statements are

disclosed in note 6 of the Group accounts. The Company had no employees in the current or preceding

financial year.

3 Trade and other receivables

2026

£m

2025

£m

Amounts due within one year

Prepayments

0.5

1.8

0.5

1.8

Amounts due after more than one year

Amounts due from subsidiary undertakings

406.9

397.4

Loss allowance

(0.8)

(0.7)

Net amounts due from subsidiary undertakings

406.1

396.7

Deferred tax asset (note 6)

27.9

28.7

434.0

425.4

4 Derivative financial instruments

2026

£m

2025

£m

Total derivatives

Total assets – due after more than one year

0.1

–

Total assets – due within one year

0.3

–

Total assets

0.4

–

Total creditors – amounts falling due within one year

0.6

0.9

Total creditors – amounts falling due after more than one year

–

0.3

Total creditors

0.6

1.2

Derivatives classified as held for trading

Non‑current assets

Currency forwards (cash flow hedge)

0.1

–

Current assets

Currency forwards (cash flow hedge)

0.3

–

Total assets

0.4

–

Current liabilities

Currency forwards (cash flow hedge)

0.6

0.9

Non‑current liabilities

Currency forwards (cash flow hedge)

–

0.3

Total liabilities

0.6

1.2

Full details of the Group’s financial risk management objectives and procedures can be found in note 22 of

the Group accounts. As the holding company for the Group, the Company faces similar risks over foreign

currency and interest rate movements.

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Annual Report and Accounts 2026

194

Notes to the Company financial statements

continued

5 Investments in subsidiary undertakings

Unlisted

subsidiary

undertakings

£m

Cost

At 29 March 2025

1,219.5

Additions

8.0

At 28 March 2026

1,227.5

Provision for impairment

At 29 March 2025

460.2

Impairment

28.4

Reversal of impairment

(134.6)

At 28 March 2026

354.0

Carrying amount

At 28 March 2026

873.5

At 29 March 2025

759.3

The carrying value of the investment in subsidiary undertakings is reviewed for impairment triggers on

an annual basis. The recoverable amount is the higher of fair value less cost of disposal or the net present

value of future cash flows which are estimated based on the continued use of the asset in the business. The

investments of £873.5m principally relate to an investment in the Group’s former North American divisions

and holding companies of £85.5m, FirstGroup Holdings Limited of £0.7m, and the First Bus business of

£787.3m, mainly through First Bus Holdings Limited.

The First Bus value in use requires the determination of appropriate assumptions (which are sources of

estimation uncertainty) in relation to the cash flow forecasts, the long‑term growth rate to be applied and

the discount rate used to discount the estimated cash flows to present value.

The reversal of impairment during the year relates primarily to the investments in the First Bus business, for

which the recoverable amount is £930m based on the Bus division’s value in use, and therefore the impact

of prior year impairments has been reversed by £128.0m. Key assumptions used for the future risk‑adjusted

cash flows over a five‑year period (incorporating the Board‑approved three‑year plan) include a 1.9%

long‑term growth rate assumption, a terminal operating margin of 9.4% and a discount rate of 11.7%.

Financial performance of the Bus division has consistently improved in recent years since the original

impairment was recognised during the COVID‑19 period. This is due to the increase in passenger volumes

which have now stabilised, as well as reduction in reliance on government funding which has resulted in

improved performance.

An impairment reversal of £6.6m was recognised in relation to the investment in the Group’s former North

American divisions, and an impairment charge of £18.0m was recognised in relation to the investment in

FirstGroup Holdings Limited. The impairment arose as no dividend generation is expected in FirstGroup

Holdings Limited and therefore the carrying value was reduced to the value of the net assets within the entity.

The additions in the year include IFRS 2 share‑based charges, which have subsequently been fully written down.

The investments in the First Bus business would break even using a discount rate of 12.4% or a reduction of

terminal margin to 7.7%.

A full list of subsidiaries and investments can be found in note 37 to the Group accounts.

6 Deferred tax

The deferred tax asset recognised by the Company and the movements thereon are as follows:

£m

At 29 March 2025

(28.7)

Charge to income statement

0.5

Charge to hedging reserve

0.3

At 28 March 2026

(27.9)

The following is the analysis of the deferred tax balances for financial reporting purposes:

2026

£m

2025

£m

Losses

(27.9)

(28.4)

Other timing difference

–

(0.3)

Deferred tax asset due after more than one year

(27.9)

(28.7)

7 Creditors

2026

£m

2025

£m

Amounts falling due within one year

Bank overdraft

25.5

56.4

Amounts due to subsidiary undertakings

172.7

185.8

Accruals and deferred income

5.2

2.2

203.4

244.4

Amounts falling due after more than one year

Syndicated loan facilities

101.6

65.7

101.6

65.7

Borrowing facilities

The maturity profile of the Company’s undrawn committed borrowing facilities is as follows:

2026

£m

2025

£m

Facilities maturing:

Revolving credit facility – due in more than two years

295.0

Green HP finance facility – due in more than two years

43.0

92.4

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Annual Report and Accounts 2026

195

Notes to the Company financial statements

continued

8 Called up share capital

Allotted, called up and fully paid (ordinary shares of 5p each)

Number of

million

£m

Balance at 29 March 2025

750.7

37.5

Cancellation of treasury shares

(180.0)

(9.0)

Balance at 28 March 2026

570.7

28.5

On 10 June 2025, the Company announced a share buyback programme to purchase up to £50m of ordinary

shares. This buyback programme completed on 3 October 2025 having repurchased 22,439,652 shares for

a total consideration of £50.4m including transaction costs.

On 26 January 2026, the Company announced that 180,000,000 shares held in treasury were cancelled.

The nominal value of these shares was £9.0m.

The Board is proposing that a final dividend of 5.0p per share, resulting in a total dividend payment of

c.£27m, be paid on 7 August 2026 to shareholders on the register at 3 July 2026, subject to approval by

shareholders at the 2026 AGM.

The number of ordinary shares of 5p in issue, excluding treasury shares held in trust for employees, at

the end of the period was 542.6 million (2025: 565.6 million). At the end of the period 28.1 million shares

(2025: 185.1 million shares) were being held as treasury shares and own shares held in trust for employees.

9 Own shares

Own

£m

At 29 March 2025

31.1

Movement in EBT and treasury shares during the year

6.4

At 28 March 2026

37.5

The number of own shares held by the Group at the end of the year was 28,086,318 (2025: 185,125,956)

FirstGroup plc ordinary shares of 5p each. Of these, 19,922,152 (2025: 19,401,442) were held by the FirstGroup

plc Employee Benefit Trust and 157,229 (2025: 157,229) were held as treasury shares, with a further 8,006,937

(2025: 165,567,285) held as treasury shares as part of the share buyback programmes. Both trusts and

treasury shares have waived the rights to dividend income from the FirstGroup plc ordinary shares. The

market value of the shares at 28 March 2026 was £47.4m (2025: £303.6m).

10 Contingent liabilities

To support subsidiary undertakings in their normal course of business, FirstGroup plc and certain subsidiaries

have indemnified certain banks and insurance companies who have issued performance bonds for £58.4m

(2025: £47.2m) and letters of credit for £111.3m (2025: £123.3m). The performance bonds primarily relate to First

Rail franchise operations of £56.4m (2025: £47.1m), UK Bus operations of £2.0m (2025: £nil) and residual North

American obligations of £nil (2024: £0.1m). The letters of credit relate substantially to insurance arrangements

in the UK and North America. The parent company has committed further support facilities of up to £80.1m

to First Rail TOCs of which £64.5m remains undrawn. Letters of credit remain in place to provide collateral for

legacy Greyhound insurance and pension obligations.

The Group is party to certain unsecured guarantees granted to banks for overdraft and cash management

facilities provided to itself and subsidiary undertakings. The Company has given certain unsecured

guarantees for the liabilities of its subsidiary undertakings arising under certain operating arrangements,

HP contracts, finance leases, operating leases and certain pension scheme arrangements. It also provides

unsecured cross guarantees to certain subsidiary undertakings as required by VAT legislation. First Bus

subsidiaries have provided unsecured guarantees on a joint and several basis to the FirstGroup Pension

Scheme Trustee.

In its normal course of business the Group has ongoing contractual negotiations with government and

other organisations. The Group is party to legal proceedings and claims which arise in the normal course of

business, including but not limited to employment and safety claims. The Group takes legal advice as to the

likelihood of success of claims and counterclaims. No provision is made where due to inherent uncertainties,

no accurate quantification of any cost, or timing of such cost, which may arise from any of the legal

proceedings can be determined.

The Group’s operations are required to comply with a wide range of regulations, including environmental

and emissions regulations. Failure to comply with a particular regulation could result in a fine or penalty

being imposed on that business, as well as potential ancillary claims rooted in non‑compliance.

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Annual Report and Accounts 2026

196

Shareholder information

General Meeting

The AGM will be held on 30 July 2026 at Brewers’ Hall, Aldermanbury Square, Barbican, London, EC2V 7HR.

The Notice of AGM is available on the Company’s website and will have been posted to you if you have

chosen to receive hard copy communications from the Company. Either a Form of Proxy or online Voting

Card has been posted to all shareholders registered on the Company’s register of members.

The AGM will be a physical meeting. Any changes to the arrangements will be communicated to

shareholders before the meeting through our website and, where appropriate, by RIS announcement.

Shareholders are encouraged to submit proxies for the 2026 AGM electronically by logging into your

Shareview Portfolio at www.shareview.co.uk. If you have not yet registered for a Shareview Portfolio, go to

www.shareview.co.uk and enter the requested information. Electronic proxy appointments must be received

by the Company’s Registrar, Equiniti, no later than 48 hours before the time fixed for the AGM.

Shareholders who wish to ask questions relating to the business of the AGM are encouraged to do so by

submitting questions in advance of the AGM by email to [email protected], or by post

for the attention of the Company Secretary (see addresses on the next page). We will consider all questions

received. For all other queries regarding the AGM, please contact the Company Secretary.

Website and shareholder communications

A wide range of information on FirstGroup is available at the Company’s website including:



financial information – annual and half‑yearly reports as well as trading updates;



share price information – current trading details and historical charts;



shareholder information – AGM results, details of the Company’s advisers and frequently asked questions;

and



news releases – current and historical.

FirstGroup uses its website as its primary means of communication with its shareholders provided that

the shareholder has agreed or is deemed to have agreed that communications may be sent or supplied

in that manner. Electronic communications allow shareholders to access information instantly as well as

helping FirstGroup to reduce its costs and its impact on the environment. Shareholders that have consented

or are deemed to have consented to electronic communications can revoke their consent at any time by

contacting Equiniti.

Shareholders can sign up for electronic communications online by registering with Shareview, the

internet‑based platform provided by Equiniti. In addition to enabling shareholders to register to receive

communications by email, Shareview provides a facility for shareholders to manage their shareholding

online by allowing them to:



receive trading updates by email;



view their shareholdings;



update their records, including change of address;



view payment and tax information; and



vote in advance of Company general meetings.

To find out more information about the services offered by Shareview, please visit www.shareview.co.uk.

Shareholder enquiries

The Company’s share register is maintained by Equiniti. Shareholders with queries relating to their

shareholding should contact Equiniti directly using one of the methods listed below:

Registrar

Equiniti Limited

Aspect House

Spencer Road

Lancing, West Sussex

BN99 6DA

Tel: +44 (0)371 384 2046*

Online: www.shareview.co.uk



Telephone lines are open from 8.30am to 5.30pm, Monday to Friday.

If you receive more than one copy of the Company’s mailings this may indicate that more than one account

is held in your name on the register. This happens when the registration details of separate transactions

differ slightly. If you believe more than one account exists in your name, please contact Equiniti to request

that the accounts are combined. There is no charge for this service.

Equiniti also offers a postal dealing facility for buying and selling FirstGroup plc ordinary shares; please write

to them at the address shown above or telephone 0371 384 2248. They also offer a telephone and internet

dealing service which provides a simple and convenient way of dealing in FirstGroup shares. For telephone

dealing call 0345 603 7037 between 8.30am and 4.30pm, Monday to Friday, and for internet dealing log on

to www.shareview.co.uk/dealing.

Shareholder information

continued

ShareGift

If shareholders have a small number of shares and the dealing costs or the minimum fee make it

uneconomical to sell them, it is possible to donate these to ShareGift, a registered charity, which provides

a free service to enable you to dispose charitably of such shares. More information on this service can be

found at www.sharegift.org or by calling +44 (0)20 7930 3737. A ShareGift transfer form can also be obtained

from Equiniti.

FirstGroup’s policy on discounts for shareholders

The Group does not offer travel or other discounts to shareholders.

Unsolicited advice on the Company’s shares

Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount, or offers of

free reports about the Company. These are typically from overseas‑based ‘brokers’ who target shareholders,

offering to sell them what often turn out to be worthless or high‑risk shares. These operations are commonly

known as ‘boiler rooms’ and the ‘brokers’ can be very persistent and extremely persuasive.

Shareholders are advised to deal only with financial services firms that are authorised by the FCA. You can

check a firm is properly authorised by the FCA before getting involved by visiting www.fca.org.uk/register.

If you do deal with an unauthorised firm, you will not be eligible to receive payment under the Financial

Services Compensation Scheme if anything goes wrong. For more detailed information on how you can

protect yourself from an investment scam, or to report a scam, go to www.fca.org.uk/consumers/report‑

scam or call 0800 111 6768.

Half‑yearly results

The half‑yearly results, normally announced to the market in November, will continue to be available on

the Company’s website in the form of a press release and not issued to shareholders in hard copy.

Contact information

Company Secretary

David Blizzard

Tel: +44 (0)20 7291 0505

Registered office

FirstGroup plc

395 King Street

Aberdeen AB24 5RP

Tel: +44 (0)1224 650 100

Corporate office

FirstGroup plc

8th Floor

The Point

37 North Wharf Road

London W2 1AF

Tel: +44 (0)20 7291 0505

Joint corporate brokers

RBC Europe Limited

(trading as RBC Capital Markets)

100 Bishopsgate

London

EC2N 4AA

Panmure Liberum Limited

Ropemaker Place

25 Ropemaker Street

London

EC2Y 9LY

External auditor

PricewaterhouseCoopers LLP

40 Clarendon Road

Watford WD17 1JJ

Strategic report

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Annual Report and Accounts 2026

197

Glossary

Direct current

DfT

Department for Transport (UK Government)

DfTO

DfT Operator to which DfT‑contracted train

operating companies will be transferred before

being absorbed into GBR

‘Disc’ or the Discontinued operations’

Refer to First Student, First Transit and Greyhound US

Dividend

Amount payable per ordinary share on an interim

and final basis

EABP

Executive Annual Bonus Plan

EBITDA

Earnings before interest, tax, depreciation and

amortisation, calculated as adjusted operating

profit less capital grant amortisation plus

depreciation

EBT

Employee benefit trust

ED&I

Equality, diversity and inclusion

EPS

Earnings per share

ESG

Environmental, social and governance

Electric vehicle

FCC

First Customer Contact – our customer

contact centre

FAME

Fatty acid methyl ester

FERA

Fuel and energy related activities

Set out below is a guide to commonly used financial,

industry and Group‑related terms in the Annual

Report and Accounts. These are not precise

definitions and are included to provide readers

with a guide to the general meaning of the terms.

Adjusted cash flow

Adjusted cash flow is described in the table shown

on page 27 of the Financial review

Adjusted measures (other)

References to ‘adjusted operating profit’, ‘adjusted

profit before tax’, ‘adjusted earnings’ and ‘adjusted

EPS’ throughout this document are before items

which management has determined as not being

relevant to an understanding of the Group’s

underlying business performance, as set out in note

4 to the financial statements. ‘Adjusted earnings’

and ‘adjusted EPS’ also exclude the impact of IFRS 16

depreciation and interest charges in relation to the

Group’s rail management fee‑based operations,

given the Group takes no cost risk on these rolling

stock leases

Adjusted net debt/(cash)

Net debt/(cash) excluding ring‑fenced cash and

IFRS 16 lease liabilities

Adjusted revenue

Adjusted revenue is defined as revenue excluding

that element of DfT TOC revenue, and related

intercompany eliminations, where the Group takes

substantially no revenue risk. The Adjusted revenue

measure includes management and performance

fee income earned by the Group from its DfT TOC

contracts

AGM

Annual General Meeting

Avanti

Avanti West Coast, a train operating company

B2B/B2C

Business to business/Business to customer

BAYE

Buy As You Earn

Bi‑mode train

A train that can be powered either by electricity

or by using an onboard diesel engine

GBR

Great British Railways – the organisation that

will oversee the operation of the DfT’s passenger

rail contracts

GHG

Greenhouse gas emissions

Group

FirstGroup plc and its subsidiaries

GWR

Great Western Railway, a train operating company

IAS

International Accounting Standards

IFRS

International Financial Reporting Standards

IOSH

Institution of Occupational Safety and Health

KPIs

Key performance indicators, financial and non‑

financial metrics used to define and measure

progress towards our strategic objectives

LBG

London Benchmarking Group, an organisation

that has created a framework for measuring

community impact

LGPS

Local Government Pension Scheme

Local authority

Local government organisations in the UK, including

unitary, metropolitan, district and county councils

BMS

Building management system

The Board

The Board of Directors of the Company

CDP

An international non‑profit organisation that

helps companies and cities disclose their

environmental impact

CEO

Chief Executive Officer

CFO

Chief Financial Officer

CGU

Cash generating unit

Company

FirstGroup plc, a company registered in Scotland

with number SC157176 whose registered office is

at 395 King Street, Aberdeen AB24 5RP

Commercial bus businesses

Regulated, open bus services for the general public,

provided without any dedicated financial support for

that discrete service

Commercial bus fleet

All operational single‑deck and double‑deck

buses certified to carry standing passengers,

deployed on the company’s commercial bus

network, operating on a mix of commercial,

supported and closed services

Commercial bus passengers

Passengers who travel on a commercially operated

bus service whose journey generates fare revenue

for First Bus. This includes journeys subject to the

£3 national fare cap in England, but excludes

concessionary travel and tendered service funding

‘Cont’ or the ‘Continuing operations’

Refer to First Bus, First Rail and Group items

CPI

Consumer price index, an inflation measure that

excludes certain housing‑related costs

CTP

Our Climate Transition Plan published in March 2025

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

198

Glossary

continued

SWR

South Western Railway, a train operating company

S&P

S&P Global Rating Agency

TCFD

Task Force on Climate‑related Financial Disclosures

tCO

(e)

Tonnes of carbon dioxide equivalent, allowing

other volumes of greenhouse gas emissions to

be expressed in terms of carbon dioxide based

on their relative global warming potential.

Usually expressed as per kilometre or per

passenger kilometre

TfGM

Transport for Greater Manchester

TfL

Transport for London, the transport authority

responsible for most aspects of London’s

transport system

TOC

Train operating company

TOL

Tram Operations Ltd, the operator

of London Trams on behalf of TfL

TOTO

Tap on, Tap off payment technology

TSR

Total shareholder return, the growth in value

of a shareholding over a specified period

assuming that dividends are reinvested to

purchase additional shares

VAWG

Violence against women and girls

WCP

West Coast Partnership, a train operating

company that includes Avanti West Coast

ZEBRA

Zero Emission Bus Regional Areas funding scheme

LTIP

Long‑Term Incentive Plan

LTIR

Lost time injury rate, a measure of safety

performance

MAA

Moving annual average – used in rail

punctuality data

M&A

Mergers and acquisitions

NED

Non‑Executive Director

Net debt

The value of Group external borrowings excluding

the fair value adjustment for coupon swaps

designated against certain bonds, excluding

accrued interest, less cash balances

Network Rail

Owner and operator of Britain’s rail infrastructure,

a UK public sector company that operates as a

regulated monopoly

NPS

Net Promoter Score – a measure used to assess

customer loyalty, satisfaction and enthusiasm

NRC

National Rail Contract

Ordinary shares

FirstGroup plc ordinary shares of 5p each

Open access

Open access rail operators bear all commercial

risk and opportunity. They make all commercial

decisions including ticket pricing, and set working

terms and conditions on the lines for which they

have track access agreements. These agreements

are awarded by the ORR, typically for ten years

ORR

Office of Rail and Road

PETL

Palmer Energy Technology battery storage

PLC

Public limited company

PPM

The UK rail industry’s Public Performance Measure

(punctuality and reliability). Trains are punctual if

they arrive at their destination, having made all

timetabled stops, within five minutes of scheduled

time for London and South East and regional/

commuter services and ten minutes for long‑

distance trains

RATP London

A well‑established bus business with a strong

operational footprint in West and Central London.

Acquired in February 2025

RCF

Revolving credit facility

REGO

Renewable Energy Guarantees of Origin

RLW

Real Living Wage – an hourly wage amount

suggested by the UK Government to sufficiently

cover the cost of living

RSSB

Rail Safety and Standards Board

SAYE

Save As You Earn

SBT

Science‑based target for reducing greenhouse

gas emissions

SBTi

Science Based Targets initiative

SECR

Streamlined Energy and Carbon Reporting

regulations, which took effect on 1 April 2019

SID

Senior Independent Director

SPS

Specialist Passenger Solutions – the subsidiary

contracted to manage workforce transport at

Hinkley Point C and Sizewell C

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

199

Cautionary comment concerning forward looking statements

This Annual Report and Accounts includes forward looking statements with respect to the business, strategy

and plans of FirstGroup and its current goals, assumptions and expectations relating to its future financial

condition, performance and results. Generally, words such as ‘may’, ‘could’, ‘will’, ‘expect’, ‘intend’, ‘estimate’,

‘anticipate’, ‘aim’, ‘outlook’, ‘believe’, ‘plan’, ‘seek’, ‘continue’, ‘potential’, ‘reasonably possible’ or similar

expressions are intended to identify forward looking statements.

By their nature, forward looking statements involve known and unknown risks, assumptions, uncertainties

and other factors which may cause actual results, performance or achievements of FirstGroup to be

materially different from any future results, performance or achievements expressed or implied by such

forward looking statements.

Forward looking statements are not guarantees of future performance, and shareholders are cautioned

not to place undue reliance on them. Forward looking statements speak only as of the date they are made

and except as required by the UK Listing Rules and applicable law, FirstGroup does not undertake any

obligation to update or change any forward looking statements to reflect events occurring after the date

of this Annual Report and Accounts. Nothing in this Annual Report and Accounts is intended as a profit

forecast or estimate for any period.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

200

This report was printed by Park Group, a

CarbonNeutral

printer, using vegetable based inks.

This report is printed on Revive 100, made from 100%

FSC

Recycled certified fibre sourced from de‑inked

post‑consumer waste. Revive 100 is a Carbon

balanced paper which means that the carbon

emissions from its manufacture have been offset.

The printer and the manufacturing mill are

both credited with ISO 14001 Environmental

Management Systems Standard and both

are FSC

certified. The mill also holds EMAS,

the EU Eco‑label.

Consultancy, design and production

www.luminous.co.uk

Registered office

FirstGroup plc

395 King Street, Aberdeen AB24 5RP

Tel. +44 (0)1224 650100

Registered in Scotland number SC157176

Corporate office

FirstGroup plc

8th floor, The Point, 37 North Wharf Road

Paddington, London W2 1AF

Tel. +44 (0)20 7291 0505

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