3rd Quarter Results

Embargoed until 7:00am on Thursday 13 January 2011

                                FIRSTGROUP PLC                                 

                         INTERIM MANAGEMENT STATEMENT                          

FirstGroup plc ("The Group") provides the following update on trading during
the third quarter ("the period") from 1 October to 31 December 2010.

Summary

  * Overall trading in line with management expectations
   
  * Remain on course to achieve earnings and cash targets for the year
   
  * Confident of achieving Group's target of 2.5x net debt: EBITDA by March
    2011
   
  * Continued proactive management of debt - $1.4bn of new 5 year committed
    bank facilities signed to replace debt due to mature in February 2012
   
The Group provided an update on trading as part of its half-yearly financial
results announcement on 3 November 2010. Since then, the trading environment
has remained challenging. The prolonged and widespread disruption, particularly
in the UK, caused by severe weather during the period impacted UK Bus and Rail
profits by around £7m. However, the Group remains on course to achieve its
earnings and cash targets for the year.

The inherent strength of the Group is demonstrated by the continued strong cash
generation. Initiatives to increase cash generation within the Group and to
deliver improvements in working capital continue to produce encouraging
results. We remain confident of achieving our target ratio of 2.5x net debt:
EBITDA by March 2011.

In December 2010 we announced that the Group had signed US$1,400m of 5-year
committed bank facilities to refinance US$1,500m and £505m of existing
revolving bank facilities that were due to mature in February 2012. The outcome
of the re-financing supports the maturity of our debt portfolio, prudent levels
of liquidity over the medium term and reflects the Group's ongoing proactive
management of its debt arrangements. In addition the reduction in the amount of
bank facilities, enabled mainly from headroom created by the two sterling bond
transactions in 2009 and the competitive pricing on the new facilities will
support efficient management of interest costs over the medium term.

UK Bus

UK Bus continues to deliver a steady performance with like-for-like passenger
revenues increased by 2.1% during the third quarter. The actions we continue to
implement to increase efficiencies, reduce costs and manage our local networks
in line with passenger demand will enable the business to deliver good
operating margin development. The reduction of 20% in Bus Service Operators
Grant, announced in the UK Government's Comprehensive Spending Review, will
take effect from April 2012 which allows us to implement mitigating actions to
manage any impact through further efficiencies, network management and pricing.
Similarly, the impact of the Government's revised guidance on concessionary
fares reimbursement in England from April 2011 will have to be taken into
account when planning future service provision and fares.

UK Rail

The continued strong demand for services has helped to deliver a further period
of solid improvement across all of our passenger rail franchises. Like-for-like
passenger revenues grew by 5.2% during the period. We are encouraged that
investment in transport infrastructure, including the Thameslink Programme and
Crossrail, has been protected. The Government's commitment to delivering
additional capacity on the rail network recognises that transport is one of the
key enablers in economic growth. As the UK's largest rail operator and an
experienced, long term player in the industry, we are supportive of the new
franchising structure and look forward to bidding for new contracts in due
course.

First Student

The continued budgetary pressure experienced by school boards across North
America remains a feature of the current school bus market. As previously
reported, we expect full year revenue to be slightly reduced compared to prior
year as a result of reduced charter activity and some route consolidations.
Against the current economic backdrop the operating environment remains
challenging and we continue to prioritise further cost savings and efficiencies
to partially offset the pressure on margin.

First Transit

Transit continues to perform in line with our expectations following a strong
start to the year with a number of new contracts commencing during the first
half. We continue to see revenue growth from our core transit activities albeit
at a slightly lower rate. During the period we continued to win new business
including a number of contracts to provide shuttle bus services including
Rutgers University in New Jersey.

Greyhound

We continue to make progress in transforming Greyhound's operations. Greyhound
Express was launched in Chicago in December 2010 and has attracted good growth
and positive customer feedback. Plans are being developed to roll the service
out to further locations across the US. In Canada our actions to improve the
performance of the business are delivering encouraging results.

During the period revenues were reduced by 2.5% as a result of continued
economic conditions, high unemployment and the subsequent impact on consumer
confidence. However, despite this tough trading backdrop our rigorous
management of the network and cost base will enable the business to achieve an
improved operating margin performance.

Outlook

Overall trading remains in line with management's expectations. Our drive to
increase cash generation within the Group is delivering results and, as
previously reported, we continue to expect moderate earnings growth in the
current financial year. This, together with the Board's confidence in the
Group's ability to continue to deliver long term value for shareholders,
supports the commitment to grow dividends by at least 7% per annum.

A conference call for analysts and investors will be held at 9am today. Please
call [phone] / 0512 in advance of the call to register and receive
dial-in details.

Contacts FirstGroup plc:

Jeff Carr, Finance Director

Rachael Borthwick, Corporate Communications Director

Tel: [phone]