Trading Statement

Thursday 29 September 2011

                                FIRSTGROUP PLC                                 

                           PRE-CLOSE TRADING UPDATE                            

FirstGroup plc ("FirstGroup" or "the Group") reports the following update on
trading for the six months to 30 September 2011* ("the period") ahead of its
half-yearly results to be announced on 9 November 2011.


The Group provided an update on trading as part of its Q1 update and AGM
announcement on 15 July 2011. Since then overall trading for the Group during
the first half of the current financial year has been in line with management's
expectations.

UK Bus


Like-for-like passenger revenue for the period is expected to increase by 1.2%
and we continued to deliver some improvement to operating margin. However,
looking ahead as the macroeconomic environment has continued to soften, we
anticipate more challenging trading conditions during the second half of the
current financial year as lower economic activity continues to impact regional
economies. Our focus remains to develop the opportunities that exist to
transition to increased growth within our networks while maintaining our strong
cost discipline.


UK Rail

The performance of our rail division continues to be strong. During the period
increased demand for rail services led to good volume growth across all of our
franchises and like-for-like passenger revenue is expected to increase by 9.0%.
In August we extended the First TransPennine Express franchise for a further
three years from February 2012, at an operating margin closer to the industry
average. First Capital Connect will be refranchised in 2012/13 with a
replacement franchise to commence from September 2013. This will facilitate the
continued project delivery of the Thameslink Programme, in particular the
introduction of new rolling stock funded by the Department for Transport (DfT),
which will be completed after the expiry date of the existing franchise. We
look forward to building on our market leadership position in rail and
developing further opportunities once the DfT's new rail franchising programme
commences next year.

First Student

During the period First Student's performance has developed in line with our
expectations. We are encouraged by the good progress made in embedding the
recovery plan to address performance and to strengthen the operating model.
With good momentum achieved across the business we are now seeing positive
early indicators. As we build the Student business for the future we continue
to invest in substantial training at the local level creating more efficient
and consistent practices.

As previously indicated, trading during the first six months of the current
financial year reflected last year's disappointing performance. Consequently,
US Dollar revenues during the period are expected to be reduced by 2.3% on a
like-for-like basis. Our strategy to focus on contract retention delivered an
improved performance during the recent bidding season for the 2011/12 school
year. As a result retention was approximately 90% and we expect operating
margin for the second half of the financial year to be broadly in line with the
same period last year.

First Transit


Our Transit division continues to deliver growth during the period from its
core business segments with US Dollar revenues expected to increase by 2.0% on
a like-for-like basis. During the period we saw a particularly strong
performance from our shuttle bus business with new contracts won to provide
university bus services and volume added to existing contracts. We continue to
develop a pipeline of opportunities and utilise our reputation and strong track
record to retain contracts and win new business.


Greyhound

Revenue trends during the period continued to be encouraging with like-for-like
passenger revenue expected to increase by 3.6%. Greyhound Express continues to
perform well and we expanded the service to new locations in the midwest,
northeast and southeast of the US. Against the background of slow economic
recovery we continue to progress our plans to transform Greyhound. Our rigorous
management of the network and cost base will enable the business to continue to
deliver an improved operating margin. In Canada our plans to reduce uneconomic
routes and modernise the network are progressing well and we are on track to
deliver our profit recovery plan.

Outlook

The Board is committed to its key priorities of increased cash generation to
support capital investment, debt reduction and dividend growth of at least 7%
per annum. We continue to target a net cash inflow of £150m for 2011/12
including some further small asset and business disposals. The Group has
diverse operations that are fundamentally strong and we have a clear focus on
creating a stronger business. While we continue to address the immediate
challenges presented by weak economic conditions in certain markets in which we
operate, the Board is confident that the Group has good prospects to continue
to deliver long term value for shareholders.

  A conference call for analysts and investors will be held at 9:00am today.   

Please call [phone] in advance of the call to register and to receive 
                               dial up details.                                

Contacts FirstGroup plc:

Jeff Carr, Finance Director
Rachael Borthwick, Corporate Communications Director
Tel: [phone] / mobile + 44 (0) 7771 945432

* The current financial year contains an additional week, therefore the period 
(6 months to 30 September 2011) includes 27 weeks versus 26 weeks for the same 
period last year. Revenue growth data has been adjusted for the extra week.