Trading Update

25 September 2003

                                Trading Update                                 

Ahead of a series of presentations to analysts to be held this week in Boston,
FirstGroup plc confirms that group sales and profit before tax and exceptional
items for the half year to 30 September 2003 will be in line with market
expectations.

In North America the Group's operations continue to grow strongly. First
Student is now operating approximately 1,400 (9%) more school buses at the
start of the autumn term (including 683 buses on a new management contract in
Boston). The division has an active pipeline of further business acquisitions
that are expected to be completed in the second half, bringing the level of new
business for the year to the top end of our expectations. The acquisition of
Coach USA's Transit business has been successfully integrated and we are
exploring a number of further opportunities for our Transit and Services
businesses.

In the UK, bus operations have continued to benefit from new and extended
contracts in London where turnover has increase by 20%. We have also seen
encouraging growth in our urban bus networks outside London with underlying
passenger growth of 1.5 % in the first 5 months of the year.

The acquisition of GB Railways has now been declared unconditional and the GB
team have submitted their bid for the new Greater Anglia rail franchise. We
have submitted our bid for the Northern franchise and the bid for the Scotrail
franchise will be submitted later this autumn. We were delighted to be selected
as preferred bidder for the new TransPennine franchise with our partner Keolis.
In the first five periods of the year, passenger income has increased by 5% on
First Great Western and First Great Eastern.

The company expects to announce its interim results for the half year to 30
September 2003 on 5 November 2003.

Contacts:

Iain Lanaghan Group Finance Director 07808 256272

Michael Mitchell Corporate Communications Director 07770 647353