Trading Statement

FIRSTGROUP PLC                                 

                           PRE-CLOSE TRADING UDPATE                            

FirstGroup plc ("the Group") provides the following update on trading for its
financial year ending 31 March 2011 ("the year" or "the period") ahead of
preliminary results due to be announced on 11 May 2011.

Summary

  * The Group remains on course to achieve overall earnings and cash targets
    for the year and 2.5x net debt:EBITDA at March 2011
   
  * Outperformance in UK operations, particularly Rail division, offset by
    further pressure on First Student's margin
   
Overall trading

The Group provided an update on trading in respect of the third quarter of its
financial year on 13 January 2010. The Group remains on course to achieve its
overall earnings and cash targets for the year and to achieve a net debt:EBITDA
ratio of 2.5x at 31 March 2011.

The strength of the Group is underpinned by the diversity of its portfolio with
separate areas of the business moving through the economic cycle at different
times. We remain encouraged by improving trends in some of our markets however,
the trading environment for First Student remains challenging.

The highly cash generative nature of the Group, together with the expectation
of moderate earnings growth this financial year supports the Board's policy to
increase dividends by at least 7% per annum alongside our net debt reduction
programme.

UK Bus

A continued steady performance is expected to deliver like-for-like passenger
revenue growth for the year of 1.4%. Good operating margin development is
enabled through our actions to increase efficiencies, reduce costs and the
proactive management of local networks to reflect passenger demand. As
previously reported, we expect to manage the impact of the Government's
Comprehensive Spending Review, in particular the reduction of Bus Service
Operators Grant from April 2012, through mitigating actions including increased
efficiencies. We also continue to progress negotiations with Local Authorities
in England on concessionary fares reimbursement and to participate in the
Competition Commission's review of the local bus industry.

UK Rail

Our UK Rail business has delivered a strong performance ahead of our
expectations with like-for-like passenger revenue growth for the year expected
to be 5.1%. We remain encouraged by the strong demand for services that has
continued to develop throughout the course of the year. We are also encouraged
by the Government's commitment to continued investment in transport
infrastructure including the Thameslink Programme, the Intercity Express
Programme and the electrification of part of the Great Western Main Line. We
are the UK's largest train operator and an experienced, long term player in the
industry. We continue to take an active role in shaping the future of our
existing operations and we expect to play a significant role in franchise
reform and in bidding for new contracts as the re-franchising process
continues.

First Student

The trading environment for our Student business is challenging with school
boards continuing to face significant budget pressure. Trading during the
fourth quarter (Q4) of our financial year, particularly in February, has been
disappointing and this has been further exacerbated by the impact of severe
weather. Margins have been further pressured by cost increases including higher
contract labour costs resulting partly from route changes as school boards look
to reduce their overall transportation costs. We now anticipate the full year
operating margin to be around 8%, which is closer to the industry average. With
limited pricing opportunities we continue to prioritise further cost savings
and efficiencies to partially offset these pressures. While it is still early
in the new school bidding season our retention strategy has shown some
encouraging results however we anticipate the pressure on margins will continue
into 2011/12.

First Transit

Trading within our Transit division continues to develop in line with our
expectations with full year revenue growth expected to be 2.4%. Following a
strong start to the year, which included a number of new contract start ups, we
continue to deliver encouraging revenue growth, albeit at a slower rate than
during the first half of the year.

Greyhound

Like-for-like revenue for the year is expected to increase by 0.6%, with Q4
delivering an encouraging return to revenue growth. Against a challenging
trading environment Greyhound has continued to apply a rigorous management of
the network and cost base to enable the business to achieve an improved
operating margin. During Q4 Greyhound has continued to expand its service
offering with the roll out of Greyhound Express to additional markets in the
Midwest and the expansion of BoltBus to create a new hub in New Jersey
providing services between Newark and Washington and Baltimore.

Outlook

Looking ahead we are encouraged by improving trends in UK Rail and Greyhound
and a continued steady performance in our UK Bus and Transit operations. We
expect that our North American Student business will continue to see pressure
on margins in the new financial year.

Building on our strong cash performance this year, we will continue to progress
the opportunities to increase cash generation within the Group. The Board is
committed to its key priorities of increased cash generation to support capital
investment, debt reduction and dividends.

Contacts FirstGroup plc:

Jeff Carr, Finance Director

Rachael Borthwick, Corporate Communications Director

Tel: [phone]

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Please call [phone] / 0512 in advance of the call to register and to  
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