Trading Statement

1 April 2015

                                FirstGroup plc                                 

                       2014/15 Pre-Close Trading Update                        

FirstGroup plc (the "Group") reports the following update in respect of trading
for the financial year ended 31 March 2015 (the "year"), ahead of preliminary
results due to be announced on 10 June 2015.

Summary

Overall trading for the Group in the fourth quarter was in line with
management's expectations, and our transformation plans continue to progress:

  * First Student: second year of contract pricing strategy achieving improved
    terms to date; fourth quarter trading modestly affected by adverse weather
    in the North Eastern US
   
  * First Transit: solid fourth quarter completes another year of growth and
    margin performance
   
  * Greyhound: actively managing cost base to mitigate contraction in passenger
    demand from cheaper fuel; yield management implementation on track
   
  * UK Bus: delivering volume growth and achieving positive yield, with
    progress on cost efficiencies
   
  * UK Rail: passenger demand continues to drive revenue and earnings
    outperformance; First Great Western and First TransPennine Express
    franchise agreements signed
   
Commenting, Chief Executive Tim O'Toole said:

"Overall trading for the year is in line with our expectations and we continue
to make progress with our multi-year transformation plans, which will improve
the Group's financial performance and ensure we deliver sustainable value
creation in the medium term.

"The pricing improvements we made in the 2014 bid season together with further
cost savings mean we expect to make solid margin progress in First Student for
the year, and we are also encouraged by the results achieved at this stage in
the 2015 bid season. In UK Bus we continue to deliver passenger volume growth,
positive yield and further cost efficiencies. Greyhound has flexed mileage,
timetables and pricing in response to the rapid reduction in passenger demand
from lower fuel prices and is on track with the yield management programme,
while our First Transit and UK Rail businesses have maintained the good growth
momentum and margins achieved throughout the year. In recent weeks we were
delighted to secure a contract to operate the Great Western franchise for up to
four and a half years, and will continue to work closely with the Department
for Transport and Network Rail to deliver the £7.5bn Great Western Mainline
modernisation programme. We have also signed an agreement to run the
TransPennine Express franchise through to 1 April 2016, and look forward to
submitting our bid for the new franchise later in the spring.

"In early March we were pleased to announce that Wolfhart Hauser will join the
Board of FirstGroup in May, and will become Chairman following our AGM in July.
Wolfhart has an exemplary track record of sustained value creation and his
experience and counsel will be invaluable as we drive forward the
transformation of the Group. I would also like to thank John McFarlane for the
important contribution he has made during his tenure and wish him every success
as Chairman of Barclays."

First Student

US Dollar revenue in First Student is expected to be 1.3% higher for the year,
principally benefitting from our successful pricing strategy during the 2014
bid season and modest organic growth. As anticipated, our overall bus portfolio
at the end of the year is broadly similar to the prior year. The 2015 bid
season is the second year of our strategy to improve contract returns, with
approximately one third of our bus portfolio up for renewal. We continue to
focus on only winning or retaining contracts at prices that deliver an
appropriate return on capital employed, and are encouraged by the results we
are achieving at this stage of the bid season. In the year we have taken action
to deliver approximately $20m of our $50m per annum cost savings target as
planned. The full benefits of our pricing strategy and cost savings will be
partially offset this year by the adverse weather conditions in the North
Eastern US in the fourth quarter, but despite this headwind we expect to
deliver margins of approximately 7.5% for the year, and are confident of
delivering our double digit margin target in the medium term.

First Transit

As previously indicated, First Transit has achieved organic growth on existing
contracts in the second half that was towards the top of our planning range. As
a result US Dollar revenue growth for the year is expected to be 5.5%. We
continue to expect margins of around 7% for the year and into the medium term
in this low capital intensity business.

Greyhound

In the fourth quarter, Greyhound's like-for-like US Dollar revenues are
expected to decrease by 5.5%, reflecting the adverse effect on customer demand
from sharply lower fuel prices, which improves the affordability of other forms
of transport for some trips compared with Greyhound. As a result US dollar
revenue for the year is expected to be flat. Greyhound is actively managing
mileage, timetables and pricing in response to changed market conditions. Given
recent levels of activity we expect margins for the year will be modestly below
the prior year level. Greyhound Express revenues have been more resilient, with
like-for-like US dollar revenues expected to increase by 3.0% for the year. Our
project to roll out real-time pricing and yield management capabilities across
our nationwide network continues to progress as planned and we remain confident
of achieving our 12% margin target, recognising that long term oil price trends
may impact the timing.

UK Bus

Our UK Bus transformation programme continues to deliver like-for-like
passenger volume growth, expected to increase by 1.1% for the year, despite the
mixed economic conditions across the division. Our plans are particularly
focused on driving commercial passenger volume growth, which is expected to
increase by 2.6% on a like-for-like basis for the year. Now that many parts of
our business have reached the anniversary of our fare rebasing actions, revenue
growth is also expected to benefit from positive yield from periodic price
increases in line with the market. As a result, overall like-for-like revenue
growth is expected to be 2.3% for the year. This growth, coupled with our cost
efficiency programmes, is expected to result in margin progress of
approximately 1% for the year, as we continue to work toward our medium term
target of double digit margins.

We believe that our strategy, which is based on delivering a competitive
customer proposition coupled with improved operating discipline and strong
partnerships with local authorities, is the most responsive, efficient and
cost-effective way to deliver the outcomes that bus passengers and taxpayers
want. Our confidence is reinforced by the validation of our efforts to improve
our customer proposition as measured in the recent Passenger Focus survey of
bus users across the UK - particularly on value for money, where our score has
improved by 17% over two years and is now above the national average.

UK Rail

Strong demand continues to drive passenger volume and revenue growth in our
rail business, with like-for-like passenger revenue expected to increase by
6.6% for the year, at the top end of our expectations. We recently signed an
agreement with the Department for Transport ('DfT') to run the First Great
Western franchise to at least 1 April 2019. The franchise will see new or
refurbished trains on every part of the network, resulting in more frequent and
faster journeys and an increase in the number of seats over the period to the
end of the decade. We also recently signed an agreement with the DfT to run
First TransPennine Express for an additional year to the start of the next
competitive franchise, expected on 1 April 2016. We continue to progress our
bid proposal for that competition, which will be submitted towards the end of
May. We have been, and will continue to be, disciplined in our approach to
bidding for UK rail franchises which aims to balance appropriate returns at an
acceptable level of risk.

Financial position

We expect a total cash outflow for the current financial year of up to £100m,
which is principally due to the cash outflow of approximately £70m associated
with the end of the First Capital Connect franchise in September 2014. As
previously indicated, we expect net cash flow for our next financial year to be
broadly flat excluding an outflow of approximately £60m associated with the end
of the ScotRail franchise. As our plans continue to drive improvements in our
returns, we expect the sustainable cash generation of the Group to increase
over the medium term, which in turn will allow us to continue to strengthen the
Group's financial position. We are part way through a multi-year programme of
investing at an increased rate in our businesses to support the turnaround in
financial performance, and over time we expect our financing costs to continue
to reduce, as cash generation increases and our relatively high coupon bonds
mature.

  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 receive  
                               joining details.                                


Contacts at FirstGroup:
Rachael Borthwick, Group Corporate Communications Director
Faisal Tabbah, Group Investor Relations Manager
Stuart Butchers, Group Head of Media
Tel: [phone]

Contacts at Brunswick PR:
Michael Harrison / Andrew Porter, Tel: [phone]


Notes

Unless otherwise stated, all financial figures refer to the twelve month period
ended 31 March 2015 (the "year"), with growth compared to the same period to 31
March 2014. The '"fourth quarter" refers to the three month period ending 31
March 2015. No account is taken of foreign exchange translation effects in the
description of divisional performance and outlook. Recent US dollar exchange
rate movements have an impact at the adjusted operating profit level but the
net impact at the adjusted earnings per share level is not significant due to
the Group's natural hedge, whereby exposure to US dollar earnings in the North
American divisions is largely offset by US dollar denominated fuel purchases
for the UK businesses, together with some US dollar denominated interest and
tax costs.

Figures presented in this announcement are not audited. Certain statements
included or incorporated by reference within this announcement may constitute
"forward looking statements" in respect of FirstGroup's operations,
performance, prospects and/or financial condition. Such statements are based on
FirstGroup's current expectations and beliefs concerning future events and are
subject to a number of known and unknown risks and uncertainties that could
cause actual events or results to differ materially from any expected future
events or results referred to in these forward looking statements. Such
statements are also based on numerous assumptions regarding FirstGroup's
present and future strategy and the environment in which we operate, which may
not be accurate. FirstGroup undertakes no obligation to update any forward
looking statements contained in this announcement or any other forward looking
statements we may make. Nothing in this announcement should be construed as a
profit forecast. Past performance cannot be relied upon as a guide to future
performance and persons needing advice should consult an independent financial
adviser.

FirstGroup plc (LSE: FGP.L) is the leading transport operator in the UK and
North America. With revenues of more than £6.7 billion in 2013/14 and around
110,000 employees, we transported around 2.5 billion passengers last year. Each
of our five divisions is a leader in its field: First Student is the largest
provider of student transportation in North America with a fleet of around
49,000 yellow school buses, First Transit is one of the largest providers of
outsourced transit management and contracting services in the US, while
Greyhound is the only national operator of scheduled intercity coach services
across North America. In the UK, FirstGroup is one of Britain's largest bus
operators running a fleet of some 6,400 buses, and we are one of the largest
operators of passenger rail services in the UK, carrying more than 330 million
passengers last year, with experience of running all types of rail network.

Our vision is to provide solutions for an increasingly congested world...
keeping people moving and communities prospering.

Visit our website at www.firstgroupplc.com