First Group Plc

Better journeys

FirstGroup plc

Annual Report

and Accounts 2026

Contents

We are

FirstGroup

FirstGroup is a leading private sector provider

of public transport. We create solutions that

reduce complexity, making travel smoother

and life easier. Our businesses are at the heart

of our communities, and the essential services

we provide are critical to delivering wider

economic, social and environmental goals.

Visit our website at www.firstgroupplc.com

and follow us on LinkedIn FirstGroup plc.

Introduction

At a glance

Highlights

Strategic report

Chair’s statement

Our markets

Our market drivers

Our business model

Chief Executive Officer’s review

Our strategic pillars

Key performance indicators

Business review

Financial review

Responsible business

Climate-related financial disclosures

Our stakeholders

Section 172 statement

Risk management

Viability and going concern

Governance report

Corporate Governance report

Governance at a glance

Board

Nomination Committee report

Audit Committee report

Responsible Business Committee report

Remuneration Committee report

115

Directors’ report and additional disclosures

118

Statement of Directors’ responsibilities

Financial statements

119

Independent auditors’ report

128

Consolidated income statement

129

Consolidated statement of comprehensive income

130

Consolidated balance sheet

131

Consolidated statement of changes in equity

132

Consolidated cash flow statement

134

Notes to the consolidated financial statements

189

Group financial summary

191

Company balance sheet

192

Company statement of changes in equity

193

Notes to the Company financial statements

196

Shareholder information

198 Glossary

Find out more about FirstGroup online

Read this report online

FirstGroup

Annual Report and Accounts 2026

At a glance

FirstGroup

First Rail

First Bus

1.07m

passenger

journeys a day

c.6,000

buses and coaches

(includes 1,400 zero

emission buses)

c.18,000

employees

c.70

depots

c.365,000

passenger

journeys a day

c.320

trains (includes

205 bi-mode or

electric trains)

c.12,440

employees

221

stations

First Bus is one of the largest bus companies

in the UK, with decades of experience working

closely with local authorities and partners

across the UK and Ireland. We carry more than

one million passengers a day and serve more

than 20% of the UK population with our regional

and London bus and coach services.

Regional Bus

We provide tendered bus services for local

authorities and are a leading operator in the

majority of our local areas, including major urban

centres such as Glasgow, Bristol and Leeds.

Business and Coach

Alongside the operation of our commercial

networks, our Business and Coach division

provides a range of services including

workplace shuttles at distribution centres

and major construction sites, school hire,

private tour operators, airports and airlines,

as well as rail replacement services.

Franchising

In London, First Bus London operates c.90

Transport for London (TfL) routes in west and

central London from ten depots, serving

180 million passengers annually. First Bus also

operates services in Rochdale on behalf of

Transport for Greater Manchester (TfGM).

First Rail has more than 25 years of experience

in the rail sector and has been one of the UK’s

leading operators for a number of years.

Open access

We have two open access rail operations, Hull

Trains and Lumo, with three routes in operation

(two on the East Coast Main Line and a new Stirling

to London service on the West Coast Main Line),

with a fourth service between Carmarthen and

London Paddington service entering mobilisation.

Transport for London contracts

We have operated London Trams and the London

Cable Car for a number of years on behalf of TfL

and, in 2025, we were awarded the contract to

operate the London Overground from May 2026.

Government-contracted operations

We have two Department for Transport (DfT)

train operating companies (TOCs), Great

Western Railway (GWR) and West Coast

Partnership (WCP), which includes Avanti West

Coast, and we operated South Western Railway

(SWR) from May 2021 to 25 May 2025, when it

transferred to the DfT Operator (DfTO).

Rail Services

Our Rail Services businesses include First

Customer Contact, Mistral Data and First Rail

Consultancy which offer a variety of solutions

for the rail industry, bringing experience,

expertise and benefits to the sector.

Regional Bus passengers only.

London

York

Aberdeen

Edinburgh

Stirling

Newcastle

Morpeth

Hull

York

Leeds

Shefﬁeld

Leicester

Ipswich

Slough

Basildon

Portsmouth

Glasgow

Cork

Galway

Belfast

Bristol

Manchester

Bradford

Stoke-on-Trent

Worcester

Penzance

Dublin

Weymouth

Plymouth

Crewe

Weston-super-Mare

Swansea

Carmarthen

Cardiff

Truro

Bath

Norwich

Chelmsford

London

Birmingham

Southampton

Oxford

Who we are

FirstGroup is one of the UK’s leading private sector

operators of public transport, with two divisions,

First Bus and First Rail, operating a diverse portfolio

of transport services. We have c.30,000 employees

and carry nearly 1.5 million passengers a day.

Avanti West Coast (Avanti)

Great Western Railway (GWR)

Hull Trains

Lumo

New open access routes

First Bus operations

Where we operate

Business split

First Bus

First Rail

Adjusted revenue share (as % of Group)

Adjusted EPS contribution (pence)

84%

16%

First Bus

Open access and

contracted rail

DfT TOCs and

Rail Services

7.9p

4.0p

14.0p

Committed to our customers

Supportive of each other

Dedicated to safety

Setting the highest standards

Accountable for performance

Our strategy

Our four strategic pillars help us to drive value

and sustainable growth for all our stakeholders.

Read more about our strategy on page 13

Our values

Our purpose

We provide efficient, reliable, safe and increasingly

sustainable transport links that connect communities.

Our businesses are at the heart of our communities

and the services we provide are critical to ensuring

local economies are vibrant and robust.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Highlights of the year

Successful execution of our proven UK-focused growth and diversification strategy has driven further earnings and portfolio growth, and material shareholder returns.

£1,716m

(

25%)

Group adjusted revenue, with strong

underlying performance in both divisions

c.£9m

of Group cost savings delivered in

FY 2026 from business restructuring

£219.4m

Group adjusted operating profit marginally lower:



Continued profit growth in First Bus with First Rail

lower due to additional costs in open access, the

transition of SWR in May 2025 and a £7m lower

IFRS 16 adjustment in the DfT TOCs



Excluding the DfT TOCs, Group adjusted

operating profit grew 18%

20.3p

Adjusted EPS (FY 2025: 19.4p)

Strong cash conversion and balance sheet

maintained; adjusted year-end net debt of £138m:



Free cash flow of £73.8m before acquisitions

and returns



c.£35m growth investment and accelerated

capex of c.£190m principally on First Bus

electrification



£89m returned to shareholders via dividends

and FY 2026 £50m buyback programme

Free cash generation of c.£400m anticipated

over the next three years

7.2p

Final dividend of 5.0p per share proposed

with FY total of 7.2p (FY 2025: 6.5p); policy

tightening towards 2.5x cover ratio over time

£100m

further buyback programme announced;

expected to complete over next 12 months

£1,443.6m

Total revenue up 33%

Adjusted operating profit up 7% to £102.8m

26%

of UK bus fleet zero emission (43% of London

red buses) at end of March 2026

acquisitions of well-established coach

businesses to further grow Business and

Coach operational and asset footprint in

key markets. Two further acquisitions post

period end

3.1m

open access passenger journeys, up 4%

Open access revenue increased to £109.3m;

on course to more than double open access

capacity over the next two to three years

Award of London Overground contract

in December 2025, with mobilisation on

3 May 2026

DfT TOCs’ performance in line with

expectations and further growth in

Rail Services during FY 2026

First Rail

First Bus

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Highlights of the year

continued

Our strong performance in FY 2026

against significant headwinds

has reinforced our track record

for delivery and shareholder

returns. Looking ahead, our focus

on operational excellence and our

diverse portfolio, robust asset base

and cash-generative businesses

will enable continued growth and

scope for further material returns.

As the UK bus and rail industries

evolve over the coming years, we

will continue to position the Group

as a leading UK transport company

with the commitment, expertise,

scale and financial strength to build

active, long-term partnerships to

create better transport services.”

Graham Sutherland

Chief Executive Officer

Performance summary

FY 2026 (£m)

FY 2025 (£m)

Cont.

Disc.

Total

Cont.

Disc.

Total

Adjusted revenue

1,715.7

–

1,715.7

1,370.0

–

1,370.0

Adjusted operating profit/(loss)

219.4

2.1

221.5

222.8

(0.6)

222.2

Adjusted operating profit margin

12.8%

12.9%

16.3%

16.2%

Adjusted profit/(loss) before tax

156.7

2.1

158.8

165.1

(0.8)

164.3

Adjusted EPS

3,4

20.3p

0.4p

20.7

19.4p

(0.1)p

19.3p

Dividend per share

7.2p

6.5p

Adjusted net debt

137.7

86.9

FY 2026 (£m)

FY 2025 (£m) (restated

)

Statutory

Cont.

Disc.

Total

Cont.

Disc.

Total

Revenue

4,751.9

–

4,751.9

5,233.9

–

5,233.9

Operating profit

219.4

2.1

221.5

222.6

4.9

227.5

Profit before tax

158.8

169.6

EPS

21.4p

21.3p

Net debt

725.3

985.6

Bonds, bank and other debt net of (cash)

(124.7)

(228.8)

IFRS 16 lease liabilities

850.0

1,214.4

‘Cont.’ refers to the continuing operations comprising First Bus, First Rail and Group items. ‘Disc.’ refers to discontinued operations, being First Student, First Transit and

Greyhound US.

‘Adjusted revenue’ is defined as revenue excluding that element of DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk. The Adjusted revenue measure

includes management and performance fee income earned by the Group from its DfT TOC contracts.

‘Adjusted operating profit/(loss)’ and ‘Adjusted profit/(loss) before tax’ are before adjusting items as set out in note 4 to the financial statements.

‘Adjusted earnings’ are shown before net adjusting items and excludes IFRS 16 impacts in First Rail management fee operations. For definitions of alternative performance measures and other key terms, see note 4

on pages 142 to 144.

‘Adjusted EPS’ and EPS are based on the weighted average number of shares in the period of 553.4 million (FY 2025: 597.7 million) reflecting the current year and prior year share buybacks.

‘Adjusted net debt’ is bonds, bank and other debt net of free cash (i.e. excludes IFRS 16 lease liabilities and ring-fenced cash).

The restatement of the 2025 income statement relates to the reclassification of a levy expense of £167.6m which had previously been treated as a deduction from revenue. The restatement therefore increases

both revenue and expenses by £167.6m. The restatement has no impact on any profitability measure or other primary statements. The finalisation of the First Bus London acquisition accounting exercise increased

the value of lease liabilities acquired, resulting in a restatement of the Inception of leases and the prior year closing net debt.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Chair’s statement

Introduction

Change has been the constant theme for all UK

businesses over the last twelve months – and no less

in our sector, with lots of significant shifts underway,

from rail nationalisation to bus franchising.

In moments of major transformation, what’s

key is how you respond. As Chair of FirstGroup,

I’ve been delighted to see how our teams have

adapted to meet and succeed in this shifting

external landscape: driving more improvements

for customers; further diversifying our range of

transport services in the UK; and drawing on the

expertise of our people to help us move from being

operators to active partners for stakeholders.

I saw this for myself at our Stamford Brook depot,

where I had the chance to meet our exceptional

teams that are overseeing First Bus London’s services.

This year I’ve also seen our electrification projects at

our Hengrove and Basildon bus depots, visited our

Lawrence Hill and Hadleigh depots, and met with

colleagues, shareholders and customers. I’m proud

to see how we are using our knowledge, investment

and insights to help our partners solve problems,

make transport cleaner, improve journeys for people,

and better connect the communities we serve.

Strategy

The last year has been an important one for FirstGroup

as we continue to execute our UK-focused growth

strategy, driven by the hard work, dedication and

expertise of our people.

The strategy was introduced in 2024, and it’s a

measure of its robustness that it remains central

as the guide for our future action today. Over the

year, we’ve reshaped and grown the business,

and maintained earnings growth for shareholders,

while at the same time navigating the far-reaching

reforms in the rail and bus industries, rising costs

and the effects of inflation.

Our work has been underpinned by strong cash

generation and a robust balance sheet which

supports continued investment, adding value and

further diversifying our service offering, while also

delivering on our commitments to shareholder value.

I’m also happy to record significant progress against

all four of our strategic priorities.

Making every journey better

The work our teams do day in, day out, to get people

where they need to be, fixing problems and creating

services that people can depend on, is foundational

to FirstGroup’s success.

We’ve achieved some important milestones in the

last twelve months on both rail and bus.

According to the Rail Customer Experience Report,

Hull Trains was the top scoring operator in the Rail

Customer Experience Survey covering the period

from October 2025 to January 2026.

First Bus also saw a significant lift in its Net Promoter

Score, from 11 in FY 2025 to 17 for FY 2026, which was

rooted in improvements in operational performance.

I’m also very pleased to see FirstGroup playing its

part in addressing the nationwide challenge of

harassment and violence against women and girls

(VAWG). Across FirstGroup, including First Bus, GWR,

Avanti West Coast, Hull Trains and Lumo, we are now

accredited by White Ribbon UK, the UK’s leading

charity working to end VAWG. This reflects our

commitment to helping drive real change. As part

of this, we are also rolling out training for our bus

and coach drivers to give them the skills to safely

intervene, so they can confidently support female

passengers if they experience harassment.

Getting more people on buses

and trains

Across bus and rail combined, we already take care

of nearly 1.5 million UK passengers every single day.

That’s something I know our team never takes for

granted. We want to go further in encouraging more

people to choose buses or trains, helping strengthen

our communities, cutting UK carbon emissions and

delivering business growth in the process.

This requires investment in new rail routes and trains,

technological solutions to make it more convenient

and easier to choose a bus, and creating adjacent

services to better meet passenger needs.

Seizing

opportunities

The last year has been an

important one for FirstGroup as

we continue to execute our UK-

focused growth strategy, driven

by the hard work, dedication

and expertise of our people.”

Lena Wilson CBE

Chair

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

On the first of those requirements, our plans will see

us more than double our open access capacity in

the next few years, delivering new routes for Lumo

and Hull Trains later this year, and with plans already

submitted for further extensions and new routes,

such as Cardiff to York.

We already know our open access services are

popular, with passenger journeys up by 4% to

3.1 million journeys across Lumo and Hull Trains, and

volumes on the East Coast Main Line significantly

ahead of pre-pandemic levels.

As part of this, I was thrilled to see the launch of

Lumo’s West Coast Stirling to London Euston service

in May 2026, something that has been praised by

local leaders as helping open up inward investment

and connect communities, as well as providing a

cheaper and more environmentally friendly

alternative to domestic short-haul flights.

We are also using technology to help make public

transport a convenient alternative to taking the car.

AI is now helping manage our bus scheduling and,

along with good progress in driver recruitment, we

saw a major cut in lost mileage (down by 20% in FY

2026), all helping to improve reliability for customers.

As the first nationwide operator to offer Tap on,

Tap off payment on all of our buses, over 80%

of our ticket transactions are now digital.

Investing in cleaner, smarter transport

The last twelve months have seen FirstGroup make

significant strides in our goals for sustainability.

What’s exciting about this is the potential for us

to improve customer experiences, reduce carbon

emissions, strengthen our asset base and unlock

future potential revenue streams, all with the

same actions.

We’ve continued to invest in cleaner buses and

trains, investing c.£500m over the last four years.

This has accelerated the number of zero emission

buses in our fleet to over 1,400, just over a quarter

of the entire fleet. We now have four fully electric

depots and 17 partially electric depots, services

that we are also monetising through the launch

of First Charge, providing third party access to

our charging infrastructure.

Our commitment to sustainability has also won

important external recognition in the last year.

FirstGroup was ranked the UK’s fourth top company

and 118th overall in the Carbon Clean 200 list, and

we were also recognised as one of Europe’s 50 Most

Sustainable Corporations, rising 15 places from last

year to number 31 in the rankings.

Diversifying our business

The last year has seen us continue to expand into

adjacent markets, bringing attractive opportunities

for growth of market share in the UK while benefiting

from efficiencies of scale and integration.

The opportunity in London is a great example of this.

The acquisition of RATP’s London operations in 2025

helped First Bus London to capture an 11% market

share of the bus network. Already running London

Trams, and the London Cable Car, and now with

First Rail’s appointment as operator of the London

Overground from May 2026, these strategic moves

have added to our reputation as a key transport

partner for the capital.

We continue to diversify our services by acquiring

long-standing family run regional coach operators

with strong local footprints. Acquisitions during FY

2026 included J&B Travel and Tetley’s Coaches in

Leeds and Hills Coaches in Wolverhampton – all

established businesses that are complementary to

our existing operations and reflect our strategy to

grow a high-quality, diversified coach portfolio in

key regional markets.

In Rail, too, we are looking to build on already existing

services to meet additional market opportunities.

Lumo’s recent expansion on the West Coast Main

Line from Stirling to London, along with an extension

of our Edinburgh service to Glasgow, opens up new

markets for us – and will hopefully bring even more

tourists to Glasgow to enjoy the Commonwealth

Games this summer.

People

Just as our business grows and adapts, so we need

the same from our workforce. As well as providing

support for personal development, I’m really pleased

that we have continued to enable colleagues from

different backgrounds to have their voices heard at

all levels in the company. In the last year, we’ve

introduced a new Colleague Advisory Panel which

gives the opportunity for colleagues to get together

with some of our Non-Executive Directors to discuss

their ideas and feed back on what’s working well

and where we can improve. I am a big fan of this

approach, encouraging an open, questioning

culture, and a sense of shared responsibility for

coming up with the solutions.

I’ve also been delighted to take part in several Women

@ First events. This colleague led network supports

and connects women across the business through

networking, mentoring and speaker programmes.

It helps raise the profile of women at FirstGroup,

fosters a strong sense of community, and

provides valuable opportunities for colleagues

to share experiences, build confidence and

support development.

Finally, I am very proud to see FirstGroup ranked 1st

in the FTSE 250 for female representation on our

Board by the FTSE Women Leaders Review. Women

make up two thirds of our Board. We are building a

business that values ability and performance more

than background and that is open for the full range

of talent our industry has to offer.

I wrote in my first statement as Chair last year that

I could see huge potential in this business. This year,

I see a huge amount of progress achieved and that

potential starting to be realised. Together we are

creating a stronger, more resilient FirstGroup that’s

better able to thrive in the new environment and

seize the many opportunities in front of us. Thank you

to all my colleagues for their brilliant work to ensure

we are set to meet the future with confidence.

Lena Wilson CBE

Chair

17 June 2025

First Bus London’s electrified Westbourne Park depot

Chair’s statement

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Our markets

The UK bus market

Contracts overview

Industry revenue in 2025

£7.7bn

Passenger journeys per annum

4.0bn

The UK bus market is fragmented

and competitive, with bus and

coach services operated by both

major national operators and a

large number of small businesses.

Revenue sources vary, but most

operators earn income from

a mix of commercial fares and

contracted work. In London, bus

routes are franchised by Transport

for London (TfL) but operated

by private companies under

contract. Outside London, a

number of mayoral authorities

have chosen franchising as

their preferred future option

for bus delivery so the regional

bus market will see significant

change over the next few years.

Franchising

Bus franchising is a regulatory model in which

a local authority designs, specifies and controls

the local bus network. Operators then compete

to run individual routes or a number of routes

under a contract.

In London, authorised private sector operators

bid for individual route contracts. TfL decides

the contract specifications for a given bus route,

controls ticket prices and collects passenger

revenue. Operators own or lease the buses and

depots, and recruit and employ drivers to run

routes. The route contracts bear no revenue risk

on the base price bid and operator performance

is measured and incentivised or penalised through

quality of service indicators within the contracts.

Outside London, contracts are typically issued

for an operator to run a package of routes within

a particular geographical area and will contain

the terms on which the authority wants to procure

the service. As these are bus operating contracts,

the authority generally takes the revenue risk.

Regional authorities can own bus depots and fleets

under franchising, but they are not required to.

Where authorities do opt to own depots and fleets,

lower margins will be offset by lower operator

capital expenditure. Once the contract comes into

effect, no other operators can run bus services on

the relevant routes unless the authority has given

its approval.

Regional bus operations

Outside of London, for the majority of services,

aside from franchising and enhanced partnerships,

operators set timetables and fares on a commercial

basis. Operators earn commercial fare revenue

directly from passengers and concessionary fare

revenue where they are reimbursed by local

authorities for passengers entitled to free or reduced

fares. A small proportion of services are operated on

behalf of local authorities on a contract basis, where

revenues are insufficient to support the operators.

Under an enhanced partnership the local

authority commits to measures and facilities,

and all operators are then bound to meet certain

standards of service. Facilities and measures can

include bus priority lanes, bus stop improvements,

fare and ticketing schemes, better or new

information including all-operator apps

and centralised customer service.

Business and Coach

The Business and Coach market includes private

bus and coach services that complement traditional

bus operations. These include workplace shuttles,

school transport and tours, airport services, private

hire services for events, scheduled express services

and rail replacement services.

Bus Services Act 2025

The Bus Services Act 2025 received Royal

Assent in October 2025. The Act empowers

all local transport authorities in England

to choose the bus operating model that

works for them, be it franchising, enhanced

partnerships or local authority bus

companies (previously known as municipal

bus companies). The Act also includes

provision for an end of diesel sale date,

as well as a number of mandates including

on staff training for disability awareness

and anti-social behaviour.

In June 2025, the Government’s Spending

Review confirmed a three-year settlement

for bus, mainly for local transport authorities,

introducing greater certainty. The £3 fare cap in

England was also extended to January 2027.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Our markets

continued

Railways Bill

The UK rail market

Contracts overview

Open access

Open access has been a successful component of

the UK rail industry for the past 25 years, improving

connectivity to underserved areas and adding

capacity that encourages a shift from less

sustainable modes of transport. Operated entirely

at the provider’s commercial risk, open access

services attract private investment, create jobs

and generate significant economic value.

There are currently five open access train

operating companies in the UK, including three

long-distance operators, Heathrow Express and

Eurostar. These operators take full responsibility

for commercial decisions such as pricing and

employment terms.

Open access track access agreements are

awarded by the Office of Rail and Road (ORR),

typically for ten-year periods with potential for

renewal. Routes are approved where there is a

clear case for enhancing competition, generating

new revenue and delivering broader economic

benefits to the communities served.

London Overground

Under the terms of the London Overground

contract, TfL retains all passenger revenue risk and

some cost risk for electricity pricing, regulatory

charges and inflation protection up to an agreed

amount. The contract also includes a profit margin

on concession payments.

TfL specifies the service levels, with the operator

responsible for the delivery of train services and

the management of stations. In addition, service

quality regimes provide the opportunity to earn

additional fees if the operator achieves greater

levels of performance in areas such as the delivery

of customer service levels, customer satisfaction

and ticketless travel.

Government-contracted operations

Under the terms of the DfT concession-based

National Rail Contracts (NRCs), operators

bear no revenue risk and very limited cost risk.

Operators earn an annual management fee

for service delivery, with the opportunity to earn

additional performance-based revenue. The

Government passed legislation in November 2024

allowing for the nationalisation of passenger train

operators; as a result, the DfT-contracted TOCs are

being transferred to the DfTO, before being

absorbed into GBR.

The principal development in rail policy

during FY 2026 has been the introduction of

the Railways Bill to Parliament. The Bill was

introduced to the House of Commons in

November 2025. Its primary purpose is to

enable the creation of GBR, which will be

the new publicly owned body that takes

responsibility for both railway infrastructure

and most passenger train services. The

stated aims of the Bill are to formally

establish GBR and set out its functions and

duties; provide funding for GBR; create a

statutory role for Mayors to facilitate local

influence; enable GBR to set fares and sell

tickets; establish a Passenger Watchdog and

establish an access regime which will allow

GBR to make decisions on which services

can access the tracks.

Industry revenue in 2025

£11.5bn

Passenger journeys per annum

1.7bn

The UK rail industry is transitioning

to a more unified structure with the

majority of passenger operators,

apart from open access, moving

to public ownership and ultimately

being integrated into Great British

Railways (GBR).

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Market drivers

Trend

Link to strategic pillars

Our actions

UK public transport is an attractive

and strategically important market

Modal shift

Buses, coaches and trains contribute less than 5% of the UK’s transport

emissions, compared to nearly 60% for cars. Encouraging people to switch

from car and air travel to bus, coach and rail can help reduce congestion,

lower emissions, improve air quality and boost operators’ performance.



We are extending our existing open access rail services and mobilising and applying for new

routes where we can attract more passengers to rail with reliable services and affordable fares



Across First Bus, we are using data and customer insights to deliver targeted services and

campaigns to encourage more people to use our services



In Business and Coach, we are expanding our portfolio and operational footprint and adding

more workplace shuttle contracts, transporting thousands of workers to their jobs every day

Decarbonisation

Beyond the environmental benefits, decarbonising fleets and infrastructure

can lower operating costs, improve energy efficiency, and enhance

reliability and performance. In the bus sector, electrification also creates

additional revenue opportunities, including third party use of charging

infrastructure, consultancy work, capacity trading and the reuse of batteries

for on-site energy storage or recycling at end of life.



In First Bus, we are expanding third party charging across our network outside London, making

use of innovative software to optimise energy consumption and installing battery energy storage

facilities at a number of depots



First Bus has a partnership and a number of apprentices learning at Reaseheath College

Cheshire, the UK’s first engineering academy specialising in zero emission mechanical

and electrical engineering



In First Rail, we have made a significant investment to grow our environmentally friendly open

access fleet and have successfully trialled and introduced a battery-electric train into service

Social and economic growth

Public transport networks are the lifeblood of vibrant towns and cities.

By improving access to jobs, services, leisure destinations and local

markets, they help strengthen economic activity and encourage

innovation. New and enhanced transport links can also support local

communities by creating jobs and new business opportunities.



Much of our workforce is recruited from our local areas, including some with high rates of

unemployment and, in 2024, First Bus was the first major bus operator to become a Real Living

Wage employer



We invest in careers, apprenticeships and lifelong learning. At Lumo, for example, nearly 90%

of employees have completed an apprenticeship



Hull Trains and Lumo are on track to contribute a collective £1.4bn in economic benefits by

the end of their current track access agreements in 2032 and 2033

New technologies

Technology is reshaping the public transport sector and how passengers

engage. Operators now have a better understanding of passenger

needs and can encourage people to travel by offering real-time updates,

contactless payments, smart tickets and better customer support.

Data tools are also helping to make services more reliable and efficient,

and to get the most out of zero and low emission buses and trains.



First Bus was the first regional bus operator in the UK to roll out Tap On, Tap Off (TOTO) payment

technology across its entire commercial bus fleet



We use our real-time, granular data and software tools to improve service delivery, continuously

enhance our networks and timetables, and introduce new ticketing options that better match

customer demand and preferences



In First Rail, Mistral Data provides industry-leading products and services to a number of TOCs,

including operational, staff messaging and customer engagement systems

Supply chain value creation

Transport operators are major purchasers of goods and services – from

engineering, construction, manufacturing and technology to professional

services. When they source these locally, operators support and help to

grow UK supply chains. Public transport networks also make supply chains

more efficient, reliable and sustainable, creating benefits for both

businesses and communities.



FirstGroup spends c.£2.8bn annually on goods and services, working with over 4,000, mostly UK

suppliers, ranging from small independent companies to global corporations



We engage with our key suppliers through collaborative relationship management systems,

regular meetings, and business reviews to strengthen relationships, manage risks, and ensure

environmental and ethical standards



Our £500m open access Hitachi train order created certainty for the factory in County Durham,

where the trains are being manufactured, securing the skills base and jobs in the local area

Demographics

With a growing UK population and increasingly congested cities, demand

for dependable public transport is rising. Young people are also choosing

public transport more often, influenced by the rising cost of car ownership

and insurance, cheaper fare options, better digital tools and a preference

for more sustainable travel choices.



We participate in fare incentive schemes to encourage more people to use our services



We are expanding our open access rail services and offering affordable fares to meet

and stimulate demand



We are enhancing our facilities and working alongside our partners to create integrated transport

systems to make it easier for customers to switch between different modes of transport

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social sustainability

Diversify

our portfolio

Key to our strategic pillars

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Our business model

Our business model leverages our strengths and resources to continue

to grow and diversify our business and create value for all our stakeholders.

Strengths and resources

Our operations

Delivering for our stakeholders

Customers

Safe, reliable, value-for-money and

easy-to-use travel services for millions

of passengers each year.

Investors

Sustainable financial performance and

long-term value creation underpinned

by a disciplined capital allocation

policy balanced between investment,

growth and shareholder returns.

Government

Efficient and reliable transport

services that meet wider policy

objectives, including social and

economic growth, decarbonisation

and improved air quality.

Employees

A workforce representative of our

communities. Quality jobs with

opportunities to grow and learn

in a safe, supportive and inclusive

working environment.

Communities

Stronger economies and local

communities through better

connections, good local services and

community engagement activities.

Strategic partners

and suppliers

Long-term relationships that optimise

value, mitigate risk and increase

sustainability and ethical standards

in our value chain.

Read more about our

financial platform on page 24

First Bus

First Rail

Our revenues are mainly derived from passenger

ticket sales and concessionary fare schemes

(with reimbursements by local authorities for

passengers entitled to free or reduced fares)

or from commercial partnerships with local

authorities (enhanced partnerships and

franchise contracts).

Income is also generated through bus and coach

contracts for workplace shuttles, schools, events

and rail replacement services, as well as tendered

local bus routes and services for local authorities

such as Park & Ride schemes. Bus operators also

receive funding to support the affordability and

availability of services, including the Bus Services

Operators Grant in England, with similar schemes

in Scotland and Wales.

Read more about the bus market on page 06

and First Bus on page 18

In our open access operations, Hull Trains and

Lumo, we make all commercial decisions and

retain all revenue, cost opportunity and risk.

Under the terms of the London Overground

contract, TfL retains all revenue risk and specifies

the service levels, with the operator responsible

for the delivery of train services and management

of stations.

Our two DfT TOCs, GWR and WCP, are operated

under National Rail Contracts where operators

bear no revenue risk and very limited cost risk,

earning an annual management fee and

additional revenue based on performance.

First Rail also generates income through its Rail

Services businesses. We believe private ancillary

services suppliers will continue to be vital to the

success of the industry as it transitions, bringing

experience, expertise and benefits to the sector.

Read more about the rail market on page 07

and First Rail on page 21.

A leading, experienced and

commercially agile operator

with a large and diverse portfolio

Deep sector experience and

expertise, with cash-generative

operations and a focus on growth

in open access

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Chief Executive Officer’s review

Consistent

strategic

execution

FY 2026 performance reinforces track

record of delivery and returns

I am pleased to report another strong set of results

for our 2026 financial year. Consistent strategic

execution has delivered further earnings growth

and diversification despite a challenging operating

environment in First Bus and the transfer of SWR to

the DfTO in May 2025.

Group adjusted revenue grew by £346m to £1.7bn

and adjusted earnings per share has grown from

19.4p in the prior year, to 20.3p, aided by the £50m

buyback programme we completed during the year.

We have maintained our robust balance sheet and

our disciplined capital allocation policy remains

unchanged, incorporating investment in future

growth, progressive shareholder dividends, which

over time, will move from our current 3x cover ratio

towards 2.5x, and a commitment to return surplus

cash to shareholders.

In FY 2026 we returned nearly £90m to our

shareholders and, as a result of the Group’s strong

financial performance and cash generation in FY 2026,

supported by a well-capitalised fleet strengthening

cash conversion in First Bus and a capital-light profile

in First Rail, the Board has proposed a full year dividend

of 7.2p (FY 2025: 6.5p) and a further £100m share

buyback programme which we expect to complete

over the next twelve months.

First Bus earnings growth despite

significant headwinds

Our First Bus division has grown revenues from

c.£800m to over £1.4bn over the last four years and

is a very different and more diverse business today.

In FY 2026, adjusted operating profit grew by 7% to

£102.8m despite a £26m reduction in fare funding

and a decrease in passenger volumes following

the transition to the £3 fare cap in England and a

c.£15m impact from increased employer National

Insurance contributions.

Regional Bus – an agile business

focused on service delivery

In Regional Bus, our expertise and strong focus on

continuous improvement allowed us to act quickly to

manage the unprecedented headwinds referenced

above. We have also continued to manage cost

inflation with multi-year wage settlements and

our fuel and electricity hedging programme.

Revenue grew 3% with further improvement in our

revenue per mile and lost mileage metrics and we

saw a marked improvement in our Net Promoter

Score, from 11 in FY 2025 to 17 for FY 2026.

Business and Coach – building a diverse

portfolio and asset footprint

In Business and Coach, revenue growth has

continued due to contract wins and extensions,

the launch of our Flixbus operations and the

contribution of our recently acquired businesses.

We have continued to bolster our operational and

depot footprint through the acquisition of well-

established, profitable businesses in key markets,

and we now have a fleet of over 1,000 vehicles,

including around 550 coaches and operate from

around 25 coach depots. Looking ahead, we still

have a strong pipeline of opportunities across

the UK to grow our share of this attractive market.

A material contribution from

First Bus London

We have successfully integrated First Bus London

into the Group and the business is performing ahead

of our expectations, contributing revenues of £310m

in FY 2026, supported by disciplined contract bidding

and strong operational performance. Looking

ahead, the addition of the depot in Wandsworth

following the acquisition of RATP’s UK sightseeing

operations in December 2025 provides scope to

grow our London route contracts over time.

The transformation of our

businesses over the last few years

has strengthened performance

and grown our portfolio in attractive

markets, positioning the Group for

sustained growth and material

returns as our industries continue

to evolve.”

Graham Sutherland

Chief Executive Officer

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Chief Executive Officer’s review

continued

A pivotal year for First Rail

We have made considerable progress against

our strategic priorities in First Rail in FY 2026. We

expanded our open access capacity, delivered on

our National Rail Contracts, including the successful

transition of SWR to the DfTO in May 2025, grew

earnings in Rail Services and secured the London

Overground contract, transforming our rail portfolio.

Growing our attractive open

access proposition

Our open access operators Hull Trains and Lumo

have continued to see positive growth in passenger

journeys during FY 2026, to just over three million,

and their seat capacity utilisation and customer

satisfaction ratings remain well above the

industry averages.

Following the December 2025 timetable change on

the East Coast Main Line our yields have seen some

downward pressure due to increased LNER capacity

and pricing competition, and lower consumer

confidence impacting leisure passenger demand.

Looking ahead, our attractive proposition remains

clear and we are confident we will remain

competitive and continue to attract demand.

We have successfully grown our open access capacity

in FY 2026, with the introduction of extra paths on

both Hull Trains and Lumo and the extension of some

of Lumo’s services from Edinburgh to Glasgow and

we remain on course to more than double our capacity

in the next two to three years. We have also now

launched Lumo on the West Coast with the mobilisation

of our Stirling service which will be fully operational

from July. This new route links Stirling directly to

London Euston and will provide the first ever direct

rail services to the capital for communities in

Greenfaulds and Larbert. We officially opened

our headquarters in Preston in March, creating

over 90 new jobs, including 16 apprentice drivers.

London Overground contract award

recognises deep sector expertise

We were delighted to have been awarded the

contract to operate the London Overground from

May 2026, representing revenue of c.£3bn over

the eight-year contract and two-year optional

extension period.

We were able to make use of our in-house

consultancy team for both the bid and mobilisation

process and we have a new, First Rail London team

in place with appointments from First Rail and

senior management from the previous concession.

We successfully took over the operation on 3 May

2026 and are very pleased to welcome the

employees who have now joined the Group.

The London Overground network has greatly

improved connectivity in London, with around four

million passengers now using the service every

week. We look forward to working on behalf of

TfL to deliver a range of benefits for everyone

who uses the network.

An experienced, active partner to

support the evolution of UK bus and rail

The UK bus and rail industries have entered a

period of transition, with the National Rail Contracts

transferring to public ownership, the formation

of Great British Railways and a number of regions

outside London adopting the bus franchising model.

We have decades of experience and proven

expertise, a strong focus on service delivery

underpinned by robust safety management

systems, and significant capital commitments

in decarbonisation and open access rail.

This will allow us to play an active role in the

evolution of both the bus and rail industries.

In First Rail, we have shown how companies such

as ours can bring innovation, enhanced service

delivery, private investment and effective cost

control. Our DfT TOCs have saved more than £400m

for the DfT in their annual business plans over the

last five years, and Hull Trains and Lumo have

demonstrated the benefits open access can bring

to the rail industry, as well as the UK taxpayer.

Case Study

Launching Lumo on the

West Coast Main Line:

connecting communities,

driving growth

FY 2026 has been another important year for

Lumo. Not only have we extended our existing

service from Edinburgh to Glasgow, but we have

also been getting ready to launch our Stirling–

London service, marking Lumo’s expansion to the

West Coast Main Line.

The new route links London Euston directly to

Stirling, calling at Milton Keynes, Nuneaton,

Crewe, Preston, Carlisle, Lockerbie, Motherwell

and Whifflet, as well as Greenfaulds and Larbert

which will have their first ever direct rail services

to London.

Our current track access agreement runs to 2030

and includes four return services a day (three on

Sundays) and an additional, fifth daily return

service between Preston and London, seven days

a week. Operating refurbished Class 222 trains,

with refreshed interiors and new seating, it is a

single-class standard service designed to offer

low-cost fares, as on Lumo’s East Coast service.

The benefits of open access rail and our new

Lumo service have been recognised by a range

of local stakeholders, including Dr Liz Cameron,

former Chief Executive of the Scottish Chambers

of Commerce, who said “Operators are not only

broadening choice for passengers but are also

driving economic growth – delivering benefits for

our businesses, people and communities, forging

stronger links between Scotland and key

economic hubs across England.”

Thanks to the hard work of our team, in

March 2026 we opened our new operational

headquarters in Preston, creating over 90 skilled

jobs. Speaking about the new HQ at the launch,

Sir Mark Hendrick MP for Preston, said:

“This new rail hub will bring jobs for local people,

quality apprenticeships, low-cost rail fares,

more route options and better connectivity

for all rail passengers.”

We are proud to have recruited apprentice drivers

from the local area. Following a rigorous training

scheme provided by specialist provider Train’d Up

at the Lumo head office in Newcastle, which

houses Lumo’s cutting-edge training simulator,

the apprentices have now obtained their Level 3

Train Driver apprenticeships. Lewis Gow, now a

fully qualified driver, said: “The support from Lumo

throughout this process has been amazing, with

the Customer Driver Managers in particular

offering invaluable guidance to myself and the

other apprentices.”

We look forward to bringing the benefits of open

access to our local communities on the West

Coast Main Line, with a reliable and value-for-

money service, as Lumo has done very

successfully on the East Coast Main Line.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Chief Executive Officer’s review

continued

Open access services use spare timetable

capacity to operate additional services and to

connect previously under-served communities.

They provide additional passenger choice and

support modal shift to rail from less sustainable

forms of transport. They operate without

government subsidy, bring considerable private

investment, pay for access to the infrastructure,

drive productivity in the sector, create jobs and

support economic growth in the areas they serve.

Although representing just 1% of services, open

access has accounted for nearly 20% of new train

orders in recent years, and Hull Trains and Lumo

are on track to deliver £1.4bn in economic benefits

by the end of their current track access agreements,

with the introduction of our new Lumo Stirling and

Carmarthen services set to grow this contribution.

As Great British Railways takes shape over the next

few years, we firmly believe there is a continued role

for private sector operators in the future railway,

with competition on a level playing field bringing

significant benefits to passengers in terms of

affordable fares, greater choice and investment

in new, environmentally friendly fleets.

In First Bus, regardless of the model, we know

that active partnerships with local and national

stakeholders are essential for thriving bus networks

and are committed to working with our current

and prospective partners to achieve this. We will

continue to participate in value accretive franchise

and partnership opportunities, making use of our

scale and expertise to position First Bus as the

partner of choice, capable of consistently high-

quality service delivery.

On track to generate over £400m free

cash flow over the next three years

Looking ahead, as we continue to grow earnings,

capital expenditure in First Bus is expected to

normalise to c.£80–100m from FY 2028 and First

Rail remains capital light, we anticipate free cash

generation after capital expenditure in excess of

£400m over the next three years.

In line with our UK-focused growth strategy, we

will continue to evaluate a strong pipeline of value

accretive growth opportunities in bus and rail. We

will deploy capital under a strict set of criteria to

ensure we retain a diverse, high quality earnings

base, and the Board remains committed to returning

any surplus cash to our shareholders. This will

include the anticipated return of c.£100m during

FY 2027 and FY 2028 through the buyback programme

announced today.

Positioned for growth and long-term

value creation

We are on course to maintain Group adjusted

earnings per share in FY 2027 and looking ahead,

the transformation of our businesses over the last

few years has strengthened performance and grown

our portfolio in attractive markets, positioning the

Group for sustained growth and material returns as

our industries continue to evolve.

In First Bus, we will develop our existing commercial

bus businesses, grow our Business and Coach market

share, leverage electrification efficiencies and unlock

adjacent revenue streams. As the regional bus

industry transitions, our scale, expertise, substantial,

well-capitalised fleet and depot network will enable

us to actively participate in upcoming franchise and

partnership opportunities. In First Rail, we are

focused on growing our successful open access

business and identifying adjacent opportunities

where we can apply our deep sector expertise.

I would like to close by thanking all employees

across the Group for their continued hard work to

ensure we provide the best possible services for

our customers and whose skill and commitment

once again drove a strong performance in FY 2026,

despite considerable headwinds.

Graham Sutherland

Chief Executive Officer

17 June 2026

Earlier this year, Steve Montgomery announced his

retirement at the end of this month. Steve has had

an outstanding 42-year career in the rail industry,

including 11 years leading First Rail. During his time

as Managing Director at First Rail he has successfully

overseen the significant growth of our open access

operations, the expansion and professionalisation

of our Rail Services businesses, our TOCs continuing

to deliver for customers despite the complexities

of moving to National Rail Contracts, significant

challenges during Covid and the preparation for

renationalisation. It has been a personal privilege

to work alongside Steve, and I wish him the best

for his retirement.

Launching the London Overground service on 3 May 2026

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

A clear, UK-focused growth strategy, driven by our people and their expertise

Deliver day in,

day out

Drive modal shift

Deliver a consistently safe and

reliable customer experience

Win and extend key contracts

in Bus and Rail

Pricing strategies to enhance

customer value, drive demand

and improve yield

Operational excellence to

improve customer experience,

reliability and cost efficiency

Drive a step change from car

and air travel to bus and rail

Grow open access rail to

improve connectivity and

stimulate demand

Focus the First Bus customer

proposition to increase usage

Expand First Bus Business and

Coach services where the car

is becoming less attractive

FY 2026 highlights



First Bus Net Promoter Score improved

from +11 in FY 2025 to +17 in FY 2026



First Bus lost mileage down 17% vs

FY 2025, at 1.5%



Hull Trains top scoring operator

in February 2026 Rail Customer

Experience Survey

FY 2027 objectives



Maintain Group adjusted EPS in

FY 2027



Retain focus on best-in-class service

delivery, demonstrating our strengths

as a key partner in bus and rail



Support integration and leverage

synergies in new First Bus businesses

to drive organic growth

FY 2026 highlights



Growth in Regional Bus operated

miles to 158m



Open access rail timetabled seat

miles up 8% following Lumo Glasgow

extension and extra paths on both

Hull Trains and Lumo



c.160 vehicles added to Business

and Coach fleet

FY 2027 objectives



Ensure our open access proposition

remains attractive, and maximise our

increased capacity



Begin the mobilisation programme

for Lumo’s new Carmarthen service



Deliver a digitally focused marketing

strategy in First Bus, integrating

customer experience and operations

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

A clear, UK-focused growth strategy, driven by our people and their expertise

continued

Lead in environmental

and social sustainability

Diversify our

portfolio

Deliver our decarbonisation

commitments

Continue the First Bus fleet and

infrastructure decarbonisation

and build out adjacent

electrification opportunities

Support prosperity, growth and

green jobs in the communities

we serve

Contribute to an economy-

wide climate transition through

modal shift to bus and rail travel

Invest to grow and diversify

our portfolio and ensure our

business remains resilient

Further growth in open

access rail

Continue to grow our First Bus

Business and Coach portfolio

and geographical footprint

Actively pursue bus franchise

and partnership opportunities

FY 2026 highlights



26% of our UK bus fleet zero emission

(c.43% of London red buses)



MSCI AAA ranking and fourth top UK

company in Carbon Clean 200 list



Third party charging at 15 First Bus

depots and battery storage units

at five sites

FY 2027 objectives



Leverage the Group’s strong

sustainability credentials when

bidding for new contracts



Maintain trajectory towards our

target of a zero emission commercial

bus fleet by 2035



Continue to recruit and develop

diverse talent through our

apprenticeship, talent and

retention schemes

FY 2026 highlights



c.£400m inorganic revenue growth

from 10 acquisitions in First Bus over

the last three years



First full year of First Bus London

contribution; performance ahead

of expectations



London Overground mobilisation and

Stirling open access service launch in

May 2026

FY 2027 objectives



Continue to evaluate strong pipeline

of UK growth opportunities



Leverage and scale Business and

Coach UK-wide portfolio to target

opportunities in key markets



Actively participate in franchise

and partnership opportunities

in Regional Bus

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Key performance indicators

The Group and our

divisions focus on a range

of financial and non-

financial key performance

indicators (KPIs) linked

to our four strategic pillars

to measure progress and

evaluate performance

over time.

We have indicated below each

KPI which strategic pillar or pillars

it is linked to. In many cases, there is

a link to more than one of the strategic

pillars. KPIs used in the calculation

of variable remuneration in FY 2026

are marked

REM

Read more on page 92

Adjusted revenue is defined as revenue

excluding that element of DfT TOC revenue,

and related intercompany eliminations, where

the Group takes substantially no revenue risk.

Adjusted operating profit is shown before net

adjusting items.

Adjusted EPS is shown before net adjusting

items, excludes IFRS 16 impacts in First Rail

management fee operations and uses the

weighted average number of shares in

the period.

Cash flow from operations comprises pre-IFRS

16 EBITDA, DfT TOC management fees net of

interest, tax and non-controlling interests, and

working capital cash flows.

Financial KPIs

Key to our strategic pillars

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social sustainability

Diversify

our portfolio

£1,715.7m

2026

1,715.7

2025

2024

2023

2022

1,370.0

First Bus

OA/Other Rail

DfT TOCs

1,279.6

1,122.5

955.4

Description

Group adjusted revenue reflects

the overall size and health of the

business driven by passenger

volumes, contract income and DfT

TOC management and variable fees.

Performance

Adjusted revenue from continuing

operations increased to £1,715.6m

(FY 2025: £1,370.0m). Strong

performance in First Bus from yield

growth in Regional Bus, revenue of

£310m from First Bus London,

contracts wins and revenue from

recent Business and Coach

acquisitions. First Rail reduced £19m

reflecting the transfer of SWR to

DfTO and normalised level fees in

the DfT TOCs offset by continued

growth in open access and

contracted rail.

Link to strategic pillars

£219.4m

2026

219.4

2025

2024

2023

2022

222.8

204.3

161.0

106.7

Description

Group adjusted operating profit

is a measure of our ability to

extract value from our revenue

and manage costs.

Performance

Adjusted operating profit from

continuing operations was £219.4m.

(FY 2025: £222.8m). First Bus

benefited from increased

passenger yield, efficiencies,

portfolio and network optimisation

offset by lower £3 fare funding and

higher National Insurance costs.

In First Rail, performance was

impacted by the transfer of SWR

and lower IFRS 16 impacts as well

as Stirling mobilisation costs and

higher infrastructure charges in

open access.

Link to strategic pillars

20.3p

2026

20.3

2025

2024

2023

2022

19.4

16.7

11.6

1.6

Description

Adjusted EPS summarises the

overall financial performance of

the Group and profit attributable

to shareholders.

Performance

Adjusted EPS for the continuing

business increased from 19.4p to

20.3p, due to strong growth in First

Bus EBIT and lower Group cost offset

by and lower First Rail EBIT. Interest

costs were higher due to higher net

debt following growth and capital

returns deployment and the

average share count was lower due

to the share buyback programme.

Link to strategic pillars

£266.2m

2026

266.2

2025

2024

2023

2022

213.1

143.7

168.3

138.8

Description

Cash flow from operations

underpins our capacity to invest

in the business and meet our

financing requirements.

Performance

The Group’s cash flow from

operations for FY 2026 increased by

25% to £266.2m driven by growth in

First Bus adjusted operating profit

and EBITDA, lower group costs, the

settlement of DfT TOC dividends,

and working capital inflows.

Link to strategic pillars

Group adjusted revenue

(£m)

Continuing operations

Group adjusted operating

profit (£m)

Continuing operations

REM

Group adjusted EPS (p)

Continuing operations

REM

Cash flow from operations

(£m)

Continuing operations

REM

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Key performance indicators

continued

Operational performance KPIs

Responsible business KPIs

98.5%

2026

98.5

2025

2024

2023

2022

98.2

98.6

96.3

96.7

50%

60%

70%

80%

90%

00%

Description

This measures bus miles operated

as a percentage of timetabled bus

miles. It is an important indicator

of service to customers and

contract fulfilment.

Performance

There has been further progress

in performance in FY 2026 driven

by improvements in operational

delivery and the successful

implementation of efficiencies,

yield, portfolio and

network optimisation.

Link to strategic pillars

80.5

76.4

83.5

66.2

Description

Hull Trains

Lumo

Great Western Railway

Avanti West Coast

Performance

This measures the percentage of

passenger trains punctual at final

destination1 by financial period

and moving annual average (MAA).

Punctual is defined as arriving

at the final destination within five

minutes of the planned timetable

for London and South East,

Regional and Scottish operators,

or within ten minutes for long-

distance operators.

Source: Network Rail.

Link to strategic pillars

601,308

tCO

2026

601,308

2025 (restated)

2024

2023

2022

645,368

695,213

739,650

704,365

Description

Measures the success of our actions

to combat climate change and

improve local air quality by

delivering low and zero emission

mobility solutions and infrastructure

for our customers and communities.

Performance

During FY 2026, we have continued

to drive carbon efficiencies across

our operations, progressing towards

our science-based targets, to

reduce Scope 1 and 2 greenhouse

gas (GHG) emissions by 63% by

FY 2035. Changes in carbon

emissions over the past year

were partly due to an increase in

traction electricity consumption.

Link to strategic pillars

142

tCO

e/£m

2026

142

2025

2024

2023

2022

149

159

169

185

Description

Normalised measure of our Scope 1,

2, 3 (limited) and out-of-scope

emissions, calculated as tonnes

of carbon dioxide equivalent

per £m of revenue.

Performance

Carbon intensity per £m

revenue has improved due to

strong revenue performance and

ongoing decarbonisation efforts

across the Group, indicating a

de-coupling of GHG emissions

from business growth.

Link to strategic pillars

2025 data has been recalculated so as to

align to the business entities that we are

reporting emissions against

First Bus total operated

mileage (%)

First Rail Public Performance

Measure (PPM) (%)

Scope 1&2 emissions

(tCO

REM

Carbon intensity

(tCO

e/£m revenue)

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Key performance indicators

continued

Responsible business KPIs

continued

25.9%

of bus fleet

2026

25.9

2025

2024

2023

2022

20.5

13.0

6.0

3.3

Description

Indicates the speed of investment

in decarbonising our bus fleet.

Performance

The number of zero emission buses

in our fleet continues to increase in

line with our ambition to achieve a

100% zero emission commercial bus

fleet by 2035.

Link to strategic pillars

£751,049

2026

0.75

2025

2024

2023

2022

1.3

1.4

0.62

1.58

Cash

Gift-in-kind

Time

Leverage

Description

Measures the Group’s contribution

to local communities using the

London Benchmarking Group (LBG)

model which tracks direct cash

contributions, employee volunteering

time, in-kind support, and leverage

including employee, customer and

supplier contributions.

Performance

This year we contributed over

£751,049 to the communities we

serve. Our three divisional charity

partners, Railway Children, Macmillan

and Samaritans are supported

through gift-in-kind advertising

spaces and other donations, and

other community-based charities

are supported via employee

matchfunding, volunteering,

payroll giving and other donations.

Link to strategic pillars

9.87

2026

9.87

2025

2024

2023

2022

9.60

9.81

8.79

9.70

Description

Measures the number of lost

time injuries per 1,000 employees

per year.

Performance

The lost time injury rate (LTIR) has

increased slightly compared to FY

2025. Injuries are largely driven by

behaviours rather than equipment

or environmental issues, so we are

focusing on awareness, training and

technology to drive improvements.

Link to strategic pillars

14.74

2026

14.74

2025

2024

2023

2022

13.73

13.53

12.37

10.13

We have updated our passenger safety KPI to

be based on passenger injuries per million miles

rather than per million journeys. This is because

journey data is not available for all businesses.

Description

Measures the number of injuries

per million journeys per year.

Historical data is restated annually

to incorporate the most accurate

information for the last 36 months.

Performance

Passenger injuries increased in FY

2026. The primary causes continue

to be passenger behaviour, along

with slip, trip and fall incidents across

both divisions. The Group’s safety

plans are focused on these areas,

using targeted measures to reduce

risks and help maintain a safe

environment for passengers.

Link to strategic pillars

Zero emission buses

(% of fleet)

REM

Social value – community

investment (£)

Employee lost time injury

rate (per 1,000 employees)

Passenger injury rate

(per million miles)*

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Business review

Key developments



Total revenue up 33% to £1,443.6m



Adjusted operating profit up 7% to £102.8m

despite £26m decrease in fare funding, lower

passenger volumes and c.£15m impact

of increased employer National Insurance

contributions



Regional Bus passenger volumes decreased by

3% vs FY 2025; 4% increase in concessions offset

6% decline in commercial volumes mainly due

to the transition to £3 fare cap and lower

consumer confidence



1.07 million Regional Bus passenger journeys

a day (FY 2025: 1.13 million)



Continued focus on performance, growth

and diversification:

•

Regional Bus lost mileage down 17% to 1.5%

and Net Promoter Score up from 11 to 17

•

Franchise revenues of £322.2m, includes

£310m from First Bus London, supported by

disciplined contract bidding and strong

operational performance

•

Business and Coach revenue grew 28%

to £230.1m

•

acquisition of three well-established coach

businesses to further grow Business and

Coach operational and asset footprint

in key markets; two further acquisitions

post-period end

•

successful launch and extension

of Flixbus services



Leading in electrification and unlocking

adjacent revenue opportunities:

•

26% of UK bus fleet zero emission (43% of

London red buses) at end of March 2026

•

four fully electric depots and 17 further depots

substantially electrified across the UK; third

party charging underway at fifteen depots

•

minority investment in Palmer Energy

Technology to bring battery energy

storage units to our depots

First Bus

£m

FY 2026

£m

FY 2025

Change

Revenue

1,443.6

1,081.5

+362.1

Adjusted operating profit

102.8

96.0

+6.8

Adjusted operating margin

7.1%

8.9%

(180)bps

EBITDA

200.8

160.1

+40.7

Revenue – Regional Bus

891.3

866.4

+24.9

Revenue – Business and Coach

230.1

179.9

+50.2

Revenue – Franchising

322.2

35.2

+287.0

Regional Bus passenger volumes (m)

390.4

403.3

(12.9)

Regional Bus Operational mileage (m)

157.5

155.2

+2.3

Regional revenue per mile (£)

5.66

5.58

+0.08

Net operating assets

956.7

824.8

+131.9

Net capital expenditure

188.2

88.2

+100.0

A strong performance despite

significant headwinds

We have grown revenue again in FY 2026, from £1.1bn

in FY 2025 to over £1.4bn. This was driven by yield and

operational efficiencies in Regional Bus, revenue of

£310m from First Bus London as well as contract wins

and extensions and the contribution of our recent

acquisitions in Business and Coach.

The work we have done to transform our business

over the last few years allowed us to act quickly to

manage considerable, unprecedented headwinds

in FY 2026. Despite a £26m step down in fare funding

and weaker passenger volumes following the

transition to the £3 fare cap, and a c.£15m impact

from increased employer National Insurance

contributions, adjusted operating profit grew by 7%

to £102.8m. This was the result of further efficiencies,

yield, portfolio and network optimisation which

included the closure of our loss-making operations

in Cornwall following a full consultation process.

The division’s adjusted operating profit margin

decreased by 1.8% in FY 2026, reflecting the £287m

increase in lower margin franchising revenues.

In Regional Bus we have reported an adjusted

operating profit margin of 8.8% (FY 2025: 9.7%)

with the National Insurance contributions

increase representing a (1.7)% impact on margin

Continuous improvement in service

delivery and customer experience

remains a key priority

Our focus remains on our Everyday Actions

programme, to deliver incremental improvements

in our operational performance, reliability and

customer experience to drive passenger demand

and revenue growth. Our commitment to the safety

of our customers, employees and all third parties

interacting with our businesses remains unwavering,

supported by our robust safety management

systems, and independent scrutiny. This positions

us well to participate in future partnership,

franchising and commercial opportunities.

In Regional Bus, revenue per mile improved to

£5.66 in FY 2026 (FY 2025: £5.58) and lost mileage

decreased to 1.5% from 1.8% in the prior year.

We are also very pleased to report a significant

improvement in our Net Promoter Score, from 11

in FY 2025, to 17 in FY 2026. In addition, in a recent

Transport Focus survey, our Leicester operations

The work we have done to

transform our business over the

last few years allowed us to act

quickly to manage considerable,

unprecedented headwinds in

FY 2026.”

Janette Bell

Managing Director, First Bus

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Business review

continued

ranked sixth overall across all operators in England,

a considerable improvement from 28th place last

year, and our operations in Hampshire were ranked

third overall, with a 92% customer satisfaction score.

Service is also core to our strategy in our franchised

operations, to drive client satisfaction and contract

performance incentives through enhanced

operational delivery. Both First Bus London and our

Rochdale operation in Manchester continue to rank

highly in the operator league tables.

Focus on data-led pricing and

network strategies to drive

volumes in Regional Bus

During FY 2026 we restructured our network planning

and marketing teams from several local units into

two central teams. This enables us to formulate and

implement data-led pricing strategies, network

efficiencies and marketing campaigns with greater

consistency and commercial control across all our

business units.

Looking at volumes, in FY 2026 we reported a c.3%

decrease in Regional Bus passenger volumes mainly

due to the passenger impact from the transition of

the fare cap in England from £2 to £3 and less

discretionary consumer spending due to wider

economic conditions. Our teams worked to manage

yield within the constraints of the £3 fare cap to

offset some of the decline, resulting in some growth

in commercial revenue in a number of regions, most

notably in Glasgow, the West of England and West

Yorkshire, which was partially offset by decline in

some of our smaller operating regions.

In Scotland, the free travel for under-22s scheme

continues to successfully drive passenger volumes

and in Wales, a pilot scheme offering £1 bus fares for

young people during the summer of CY 2025 saw our

child and student volumes grow by over 20% against

the previous summer. In Bristol, free travel for

children over the summer and Christmas holidays

led to a 70% and 60% increase in child trips

respectively, and we have maintained strong

volumes following the conclusion of the scheme.

This reinforces our support for young person funding

schemes to stimulate passenger growth and

encourage lifelong bus use, and we welcomed the

Government’s recent announcement of funding for

free bus travel for children on participating local

buses in England throughout August.

Strong cost discipline amid

ongoing inflationary pressures

Industry-wide inflationary pressures remained in FY

2026. Costs increased due to inflation by c.3%,

mainly in wages, where there was a c.4% average

increase in driver pay awards. In line with our focus

on staggered, multi-year pay award settlements,

we have now settled 76% of our driver pay awards

with multi-year awards.

We have also further restructured our business and

upgraded some of our core systems as we continue

to adapt and shape our organisation to be more

efficient for our employees and customers. We have

successfully introduced new HR and internal

communications platforms and upgraded our

customer mobile app during the year. These are

modern platforms that will provide greater insight

and improve communication with our employees to

drive engagement and operational performance.

We have also rolled out new ticket machines across

Regional Bus that will allow us to increase our

number of transactions thanks to greater reliability

and to further improve customer experience.

We continue to manage our fuel and electricity costs

with our two-year forward hedging programme. In

February 2026, having considered the potential

geopolitical risk escalation, the Group entered into

additional fuel hedges. As at June 2026, c.88% of our

fuel requirement for FY 2027 was hedged and c.54%

for FY 2028. Approximately 77% of the Group’s FY 2027

forecast floating rate electricity consumption is

hedged and c.72% for FY 2028.

Growing our market share and asset

footprint in Business and Coach

Earnings growth in our Business and Coach segment

continues. We have reported revenues of £230.1m in

FY 2026, up 28% against the prior year due to further

contract wins and extensions, the launch of our

Flixbus operations and the contribution of our

recently acquired businesses.

We continue to grow our operational and depot

footprint, building a portfolio of well-established,

profitable businesses to maintain our presence in

key markets, including areas that are moving to

franchising, and ensuring we have the right mix of

contract and private hire revenue streams. We now

have a fleet of over 1,000 vehicles which includes 550

coaches with an average age of 8.2 years and we

operate from c.25 coach depots.

Case Study

Everyday Actions lead

to everyday excellence

By focusing on the Everyday Actions programme,

we deliver incremental improvements in

operational performance, provide more reliable

services and support further revenue growth.

This approach ensures we are well positioned

to participate in future franchise, partnership

and commercial opportunities.

We have empowered our frontline colleagues to

take ownership of improvements and adopt a

practical problem-solving approach. Actions are

focused around five themes: safe, reliable, clean,

friendly and better every day. We track progress at

each depot through our First Bus Basics dashboard,

with clear operational metrics. Consistent

monitoring enables us to see what is working

quickly and deliver continuous improvements.

In Bradford, this approach led to an almost

20% annual improvement in vehicle collision

performance through vehicle and driver

risk profiling. Our central recruitment team

improved hiring outcomes and reduced driver

attrition, and we improved lost mileage through

a data-led approach.

Similarly, Olive Grove Depot in Sheffield exemplifies

our performance-driven culture and lean

management principles. In 2025, we embedded

standard procedures for depot activities, supported

by step-by-step guides and visual management

boards aligned with our Everyday Actions. Annual

performance improved 60% across our dashboard

metrics, including in start time adherence and

on-time vehicle inspections.

Our Everyday Actions deliver better services.

At Rochdale Depot, daily operational reviews

and regular co-operation with TfGM helped us

achieve 84% of Everyday Basics targets within

a year and 94.8% punctuality in the last period

of FY 2026 – a c.7% year-on-year improvement.

We recorded even stronger punctuality

performance in some Solent services and

increased operational consistency across the

Hampshire network.

Continuous operational improvement also

improves our commercial performance. For First

Bus London, Quality Incentive Contract revenue

increased significantly in FY 2026. This reflects

consistent delivery against the contractual

measures of service control through strategies

to mitigate roadworks and severe traffic delays.

Customers value our incremental service

improvements. In March 2026, we recorded our

best Net Promoter Score (NPS) in our monthly

survey, reflecting reliability, value for money, and

better customer experience. Year-on-year NPS

improved across all local business units,

especially in West of England, Manchester,

Midlands and South Yorkshire.

In the latest Transport Focus customer survey,

First Leicester City ranked sixth across all England

operators, up from 28th last year. Additionally,

First Hampshire ranked 3rd overall, achieving 92%

customer satisfaction, up from tenth last year.

By continuing to focus on Everyday Actions, we

will deliver better bus services for our customers.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Business review

continued

Looking ahead, our scale and ability to efficiently

cascade our fleet across our businesses will allow

us to take advantage of opportunities to grow

market share.

Acquisitions during FY 2026 included J&B Travel

and Tetley’s Coaches in Leeds and Hills Coaches

in Wolverhampton and, post year end, Wilfreda

Beehive, near Doncaster and Eagles Coaches

in Bristol. We also launched and subsequently

extended our operations for Flixbus, with 36

coaches operating out of a number of our

depots across England.

First Bus London is performing

ahead of expectations

FY 2026 marked the first full year of revenue

contribution from First Bus London, which is

performing ahead of our acquisition assumptions.

The business delivered revenue of £310m in FY 2026,

supported by disciplined contract bidding and

strong operational performance.

We continue to bid for route contracts in line with

our investment case and securing our routes as

planned. We now have 99% of our contracted

revenues secured for FY 2027 and 77% for FY 2028.

Looking ahead, the addition of the Wandsworth

depot following the acquisition of RATP’s UK

sightseeing operations provides scope to grow

our route contract portfolio over time. We are

on course to complete the first stage of the

electrification of the depot by the end of FY 2027.

Leading in electrification,

unlocking value

We remain at the forefront of bus fleet and

infrastructure decarbonisation. Thanks to our

accelerated investment of c.£500m over the last

four years, alongside co-funding of c.£107m, we

have one of the largest zero emission bus fleets

in the UK (26% of our fleet at the end of March),

four fully and 17 partially electrified depots, with

at least four further depots expected to be

electrified in FY 2027.

The electrification of our fleet and infrastructure

is a key component in the transformation of our

business. It allows us to standardise and reduce

the size of our commercial fleet to drive efficiency

and lower engineering costs whilst delivering the

same mileage. Furthermore, we have built

A key, active partner in franchising

and partnerships

We are a leading, highly experienced operator with

a large, well-capitalised fleet and depot footprint

and a track record of delivery. This positions us

well to actively take part in future franchising and

partnership opportunities as the regional bus

market in England evolves.

We have good experience and a proven track

record of consistently delivering quality services

under both models. In Leicester and Portsmouth,

investments of c.£100m and £76m respectively

in their enhanced partnerships between 2022

and 2025 have resulted in passenger growth well

ahead of industry averages. In Glasgow and Bristol,

two of our key markets, we are working with our City

Council and Mayoral Authority partners to identify

targeted bus priority measures and partnership

arrangements to accelerate the delivery of

sustainable improvements in bus services.

In franchising, our Rochdale operation, part of

Transport for Greater Manchester’s (TfGM) Bee

Network saw punctuality improve to 94.8% in the

last period of FY 2026 and we consistently top TfGM’s

operator league tables. In London, where we operate

routes under contract to TfL, our strong operational

performance is reflected in our leading positions in

TfL’s performance tables.

We are also proud to be part of the Project Coral

consortium of bus operators that has been working

with the West Midlands Combined Authority to

develop a mechanism to deliver multi-operator and

multi-modal capped contactless travel. A contract

has now been awarded to roll out the service across

the West Midlands, and from 2027 the broker service

will be available for deployment across the UK,

enabling customers to benefit from Tap on, Tap off

travel with prices capped on a daily or weekly basis

irrespective of how many bus or tram operators’

services they have used.

significant electricity capacity across our depots

and by making use of smart charging software and

charging our vehicles when electricity prices are

lower, we can also optimise our energy use, support

system stability, increase battery efficiency and

potentially extend battery life.

We are also starting to generate revenues from third

party charging at our depots and in FY 2026 we

officially launched the ‘First Charge’ brand, providing

third parties with access to our ultra rapid charging

infrastructure at competitive rates.

Our expertise in decarbonisation has also been

acknowledged by the South Yorkshire Mayoral

Combined Authority which has engaged First Bus to

support the electrification of two depots ahead of

franchising. This includes a comprehensive design,

tendering and project management service.

Looking ahead, we see real potential for material

adjacent electrification revenue streams over time.

These include consultancy and project management

work, capacity market trading, on-site battery

storage, opportunities on residual battery capacity

and efficient battery recycling post commercial use.

In August we invested in a minority stake in Palmer

Energy Technology (PETL) to bring battery storage

units to our sites, to drive further cost efficiencies

and create a scalable platform for value accretive,

second-life battery use. Bus batteries can typically

be used for between ten and fifteen years on bus

and can then be repurposed for a ‘second life’ as

static energy storage, as much of a battery’s

capacity remains at the end of its useful bus life.

This secondary use extends battery commercial

life by several more years, before it reaches end

of life and is recycled.

We installed a one-megawatt battery energy

storage facility at our Hoeford depot in Hampshire

in August. Designed to house three bus batteries,

the unit will be used to participate in grid-based

revenue streams by distributing power back into

the grid at peak times. We are expanding the

initiative across other sites and have recently

extended our partnership with PETL, with six live

projects now underway, including the installation

of a 2.15 megawatt battery energy storage system

in Aberdeen.

Looking ahead, it is expected that around £1bn

of annualised revenues in regional bus will be

competitively franchised over the next five years.

This includes in South Yorkshire, West Yorkshire and

Wales where we currently operate, representing

annual revenues of c.£250m. We are working

alongside our local authority partners to support

the transition to franchising, including through the

recent sale of depots in South Yorkshire and Wales,

and we will actively participate in value accretive

franchising opportunities where we can make use

of our substantial assets and expertise. In the near

term, these include Liverpool and West Midlands.

Outlook

Further portfolio and operational efficiencies

and yield management in Regional Bus, contract

evolution in First Bus London and the contribution of

our new coach businesses will drive further progress

in earnings in FY 2027, with revenue of just over

£1.5bn and further growth in FY 2027 adjusted

operating profit. We will continue our accelerated

investment in decarbonisation, given our success in

accessing co-funding, with anticipated net capital

expenditure of c.£140m alongside co-funding of

c.£15m during the year, with our success to date

meaning the well-capitalised fleet requires less

investment in future years where we expect this to

normalise at c.£80–100m per annum.

As we enter FY 2027, the decline in passenger

volumes has eased and we continue to monitor

this closely. The £3 fare cap in England is due to

end at the end of FY 2027, which will provide

scope to review our fare structures and network

to ensure we are effectively matching demand,

and working alongside our local authority

partners to ensure there is the necessary

coverage for local communities.

Looking further ahead, as the UK bus market evolves,

we will grow our earnings, leveraging our scale,

expertise, substantial asset base, operational

footprint and decarbonisation credentials.

We intend to win our fair share of the franchise

market, further progress our Regional Bus business,

grow annual revenue in First Bus London as the

route contracts evolve and continue to grow our

Business and Coach earnings and market share.

We will also continue to evaluate a strong pipeline

of growth opportunities in existing and new areas

across the UK.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Business review

continued

First Rail

Key developments



3.1 million open access passenger journeys

up 4% vs FY 2025



Open access revenue increased to £109.3m

(FY 2025: £106.4m); pence per seat mile 11.1p

in line with FY 2025 (11.1p)



Open access adjusted operating profit of

£25.6m (FY 2025: £34.1m) includes Stirling

mobilisation costs of £(6.3)m and a £2m

increase in Lumo’s infrastructure charge; in H2

2026 margin was also impacted by increased

capacity and price competition on East Coast

Main line and lower consumer confidence

impacting passenger demand



Further growth in Rail Services (Mistral, First

Customer Contact and First Rail Consultancy)

during FY 2026



DfT TOCs financial performance in line

with expectations; SWR transferred to DfTO

in May 2025



Award of London Overground contract in

December 2025, with mobilisation on 3 May

2026; anticipated annual revenues of c.£300m

over eight-year contract period and optional

two-year extension



On course to more than double open access

capacity over the next two to three years:

•

Launch of Lumo Glasgow extension and

additional paths on Hull Trains and Lumo

from December 2025



Lumo’s new Stirling–London service will be fully

operational from July 2026

•

Further growth in FY 2029 with new London-

Carmarthen service and ten car operations

on Lumo East Coast service

•

Applications for an additional c.1bn annual

seat miles under review by the regulator

Resilient earnings as the DfT

TOCs transition

We have reported total adjusted revenue of £272.4m

for FY 2026 (FY 2025: £288.8m) as revenue growth

in open access and Rail Services was offset by the

planned transition of SWR to the DfTO in May 2025

and a normalised level of variable fees in the DfT

TOCs following higher revenue incentives in FY 2025.

The division’s two open access operations, Hull

Trains and Lumo, delivered revenue of £109.3m in

FY 2026, up 3% against the prior year. Additional

costs in FY 2026 included c.£6m for the mobilisation

of the new Stirling service in line with expectations

and a c.£2m increase in Lumo’s infrastructure

charge to the maximum charge as it reached its

fifth year of operation in October 2025.

The DfT TOCs and Rail Services businesses

reported adjusted revenue of £130.6m in FY 2026

(FY 2025: £151.8m) and adjusted operating profit

of £62.2m (FY 2025: £65.5m), reflecting the transfer

of SWR and normalised fees in the DfT TOCs.

In line with the Government’s announced policy

to bring the National Rail Contracts into public

ownership at the earliest possible opportunity, the

DfTO took over the operation of SWR on 25 May 2025.

Net attributable fees earned by the Group from the

DfT TOCs were £29.3m after the non-controlling

interest of £4.0m. DfT TOC IFRS 16 leases recognised

on the balance sheet at the end of FY 2026 were

£649.2m (FY 2025: £1,020.4m).

£m

FY 2026

£m

FY 2025

Change

Adjusted revenue from DfT TOCs and Rail Services

1,2

130.6

151.8

(21.2)

Adjusted revenue from open access and rail contracts

141.8

137.0

+4.8

First Rail adjusted revenue

272.4

288.8

(16.4)

Adjusted operating profit from DfT TOCs and Rail Services

62.2

65.5

(3.3)

Adjusted operating profit from open access and contracted rail

28.9

37.7

(8.8)

DfT TOC IFRS 16 operating profit adjustment

38.8

45.6

(6.8)

First Rail adjusted operating profit

129.9

148.8

(18.9)

Open access passenger journeys (m)

3.1

2.9

0.2

Open access pence per seat mile (p)

11.1

–

‘Adjusted revenue’ is revenue excluding that element of DfT TOC revenue, and related intercompany eliminations, where the Group takes

substantially no revenue risk. The Adjusted revenue measure includes management and performance fee income earned by the Group

from its DfT TOC contracts; refer to note 4 for further detail.

Includes intra divisional eliminations related to affiliate trading with the open access operations.

DfT TOC adjusted operating profit on a pre-IFRS 16 basis.

FY 2026 has been a pivotal year

for First Rail with the award of

the London Overground contract

and growth in our open access

operations.”

Steve Montgomery

Managing Director, First Rail

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

An attractive open access proposition

bolstered by additional capacity

FY 2026 has been a pivotal year for our two highly

successful open access operations, where we bear

all revenue and cost risk and opportunity. We have

seen continued growth in passenger journeys and

the introduction of additional capacity and the

mobilisation of our new Lumo service on the West

Coast Mainline.

Passenger journeys grew from 2.9 million to

3.1 million in FY 2026 resulting in modest revenue

growth, aided by increased capacity following the

extension of Lumo to Glasgow and extra paths on

both Hull Trains and Lumo. Following the December

2025 timetable change on the East Coast Mainline,

we have seen some impact on yield from increased

LNER capacity and price competition as well as a

reduction in leisure travel demand. Looking ahead,

our attractive proposition remains clear, and we are

confident we will remain competitive and continue

to attract demand.

Seat capacity utilisation of 65% remains well

above the estimated industry average of c.48%

and both operators continue to score highly in

customer satisfaction surveys. Hull Trains was

also named Operator of the Year at the 2026

Spotlight Rail Awards.

We were very pleased to have been awarded

additional paths on both Hull Trains and Lumo and

the extension of some of Lumo’s services to Glasgow

by the ORR in July 2025. Communities in Glasgow

now have increased choice, with a new, reliable and

affordable service linking Glasgow directly with

Falkirk, Edinburgh, the North East and London.

Looking ahead, this additional capacity will offset

lower yields on shorter journeys as we can now

add capacity at peak demand.

Another significant milestone for Lumo has been

the successful mobilisation and launch of our new

service between Stirling and London Euston. We

opened a new headquarters in Preston in March

creating 95 local jobs, including 16 apprentice

drivers and the service is on course to be fully

operational in July 2026.

Further open access capacity

growth ahead

Expanding our open access capacity is a key

strategic priority for the Group, and, in addition to

the extra capacity we have introduced in FY 2026,

we will see a further step up in FY 2029 with the

introduction of our Carmarthen service and ten-car

operations on Lumo. This growth is underpinned by

our c.£500m lease agreement with Hitachi for

fourteen new electric, battery or bi-mode trains.

Our new South Wales service incorporates five

services a day between London Paddington and

Carmarthen, calling at intermediate stations

including Bristol Parkway, Newport, Severn Tunnel

Junction, Cardiff Central, Gowerton and Llanelli.

The service will create around 100 direct jobs,

provide more customer choice and much-needed

additional capacity on the route including the first

direct service to London from Severn Tunnel Junction

and Gowerton, and a vastly improved connection

from Llanelli.

We continue to identify and apply for new open

access routes where we believe there is sufficient

capacity and demand. We have submitted

applications to the ORR for new services

representing c.1 billion seat miles. These include an

extension of our existing Carmarthen track access

rights, from Paignton to London and Hereford to

London, an extension of our current track access

rights for the Stirling service to December 2038

with the addition of five new, battery electric trains

from December 2028, a revised application to run

services between London Euston and Rochdale

from December 2028 to December 2038, and for a

new route between Cardiff and York via Birmingham,

Derby and Sheffield from December 2028 to

December 2033. Discussions on these applications

continue with the ORR and Network Rail, supported

by detailed business case and performance

modelling conducted by our internal teams

and third party experts.

Business review

continued

Case Study

Using our expertise

and capabilities in

rail to win the London

Overground contract

We were delighted to be awarded the contract

to operate the London Overground suburban rail

network earlier this year and are proud of the

work we have done to successfully mobilise the

operation on 3 May.

Thanks to our in-house expertise, we were able to

use our First Rail Consulting team to develop our

winning bid. The team drew upon our extensive

experience of successfully operating large-scale

heavy rail services across the UK, on behalf of

a range of clients including the DfT and TfL.

We were then able to establish a cross-functional

team to deliver the intensive, four-month

mobilisation programme, ensuring a seamless

continuation of services on the network that

serves over 4 million customers a week. This

included Human Resources, Sustainability, Safety,

IT, Legal, Finance, Procurement, and Operations –

all coordinated by a central Programme

Management Office. The majority of these

resources were drawn from our in-house

capability, demonstrating the scale of expertise

available to us.

The mobilisation programme itself encompassed

a wide range of workstreams including the

transfer of c.1,500 new colleagues into the newly

established First Rail London Limited, setting up

over 160 supply contracts and establishing a new

headquarters in Stratford for the operation.

Having commenced operations, we look forward

to delivering a wide range of enhancements to

the London Overground, working on behalf of TfL,

focusing on capacity, reliability, safety,

accessibility and sustainability. Passengers can

expect improved service frequency, modernised

infrastructure and better real-time information.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Business review

continued

London Overground contract award

transforms our portfolio

We were delighted to have been awarded the

contract to run the London Overground contract,

recognising our deep sector expertise and building

on our relationship with TfL having operated London

Trams since 2000 and the London Cable Car since

2024. The contract will contribute revenues c.£3bn

over the eight-year contract and two-year optional

extension period.

We were able to make use of our in-house

Consultancy team for both the bid and mobilisation

process and we have a new First Rail London team in

place with appointments from First Rail and senior

management from the previous concession. We

successfully took over the operation on 3 May 2026

and are very pleased to welcome the employees

who have now joined the Group.

The suburban rail network spans six routes, 100 miles

of railway, 113 stations and 111 electric trains. TfL

retains all revenue risk and will specify the service

levels, with First Rail London responsible for the

delivery of train services and management of

stations. The London Overground network has

greatly improved connectivity in London, with

around 4 million passengers now using the service

every week. We look forward to working on behalf

of TfL to deliver a range of benefits for everyone

who uses the network.

Focus on execution in the DfT TOCs

We continue to work collaboratively with the DfT

and our industry partners to deliver on our contracts,

enhance our service offering and create innovative

solutions for the rail industry.

In our DfT TOCs, GWR introduced the UK’s first

fast-charge battery powered train into passenger

service following a successful trial on the Greenford

branch line. This included setting a new World

Record for the furthest distance travelled by a

battery train on a single charge, registering

200.5 miles. The use of fast-charge battery

technology could help to transform the UK’s

railway, providing a realistic and cost-effective

alternative to diesel trains, and we are proud to

have delivered this project.

operators are also supporting the delivery of a

critically significant route upgrade. Beyond rail,

the team has continued its work supporting the

Surface Access Strategy for a major UK airport.

We believe that as the UK rail industry evolves the

services our businesses provide are well placed

to bring experience, expertise and benefits to the

sector that will continue to be vital to the success

of the industry and we are working with the DfT

to determine how we can continue to provide

support under GBR.

Shaping the future of UK rail

With decades of experience operating all types of

passenger rail services in the UK we are uniquely

positioned to support the transformation of the UK

rail industry as the National Rail Contracts are

transferred to public ownership and GBR takes

shape over the next few years.

We have demonstrated how operators like First Rail

can bring innovation, enhanced service delivery,

comprehensive safety management, private

investment and effective cost control. We have

saved more than £400m for the DfT TOCs’ annual

business plans over the last five years, and Hull

Trains and Lumo have demonstrated the benefits

open access can bring to the rail industry and

passengers, as well as the UK taxpayer.

Open access operators like Lumo and Hull Trains

make use of spare timetable capacity to operate

additional services to connect under-served

communities, support modal shift and enhance

environmental outcomes. Their services encourage

competition, increase the productivity of the railway,

and support government’s objectives for economic

benefits by creating jobs and connecting the

communities they serve. Open access operators

receive no government funding, take on full risk and

generate their own revenue. Although representing

just 1% of services, open access has accounted for

nearly 20% of new train orders in recent years, and

Hull Trains and Lumo are on track to deliver £1.4bn in

economic benefits by the end of their current track

access agreements, and this will grow further

following the introduction of our new Stirling and

Carmarthen services.

In February 2026, Avanti West Coast began trialling a

pioneering new tool to boost train service reliability

during unplanned disruption. Working with the

Centre for Modelling and Simulation, it adopted a

timetable optimisation programme to support its

response to unplanned disruption at the click of

a button. The technology is designed to support

decision making, which should reduce delays and

cancellations, as well as enable more reliable

information to be shared sooner with customers

whose journeys are impacted. Each scenario

entered is saved on the system and can be used

as a precedent for similar situations in the future,

allowing operators to be better prepared for

unplanned disruption.

Leveraging our expertise in Rail Services

Our Rail Services businesses – FCC, Mistral Data and

First Rail Consultancy continued to secure contract

extensions and build their external customer

bases during FY 2026.

FCC have continued to provide a comprehensive

suite of customer relations, passenger assistance

and Delay Repay services to a number of train

operating companies, including TransPennine

Express and South Western Railway. The implementation

of artificial intelligence tools during the year has also

improved efficiency and strengthened service quality.

Mistral Data has continued the expansion of its

operations solutions, a key strategic growth area,

driven by new contract wins, product enhancements

and delivery against key deployment milestones.

We are also seeing strong engagement across

industry bodies and the wider market, reflecting

growing demand for our best-in-class solutions.

New business in FY 2026 has included Hull Trains

and Lumo which will be deploying our full operations

suite across their businesses during FY 2027 and

further consulting work for Network Rail.

First Rail Consultancy continues to build its external

client base in passenger rail, extending its portfolio

to the nationalised railway and light rail. During the

year, the business has diversified further and

is now supporting a strategically important

freight programme for Network Rail. Working

collaboratively with the infrastructure provider,

First Rail Consultancy and a range of passenger

Enhancing rail connections is critical to boosting UK

economic growth and delivered effectively, reform

will ensure the industry can grow passenger

numbers, generate greater revenues and develop

the value of rail in a customer-focused, dynamic

and efficient environment. We firmly believe there

is a continued role for private sector operators in the

future railway, with competition on a level playing

field bringing significant benefits to passengers in

terms of affordable fares, greater choice and

investment in new, environmentally friendly fleets.

Looking ahead

In open access we anticipate revenue of c.£130-

150m in FY 2027, with adjusted operating profit

margin to progress to mid-teens following a c.2-year

mobilisation and ramp up period for our new Stirling

and Carmarthen operations. London Overground will

add anticipated revenue of c.£300m in FY 2027 and

earnings in the DfT TOCs will reflect the transfer of

GWR on 13 December 2026, a c.£15m adjusted

operating profit and c.£9m earnings reduction.

We anticipate that the West Coast Partnership will

transfer around the end of our FY 2027 financial year.

As the contracts transition, we anticipate a cash

inflow of c.£90m from the DfT TOCs, after any further

reorganisation cash costs the Group may incur,

over a three-year period from April 2026 with

cash received from the management fees a year

in arrears. This cash receipt includes the earnings

from the division’s Rail Services businesses which

are expected to continue supporting the DfT TOCs

for at least a year or more after the National Rail

Contracts end.

Following an anticipated two-year ramp up period,

our new London to Stirling service is expected to

deliver annual revenues of c.£50m with a mid-teen

adjusted operating profit margin. Our London to

Carmarthen service is expected to begin operations

from December 2027 and following a two-year

ramp up period, we anticipate annual revenues of

c.£50m, again with a mid-teen adjusted operating

profit margin.

As the UK rail industry evolves, we are focused on

growth in open access and identifying adjacent

opportunities in the UK.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Financial review

Adjusted operating performance by division is as follows:

52 weeks to 28 March 2026

52 weeks to 29 March 2025

Adjusted

revenue

£m

Adjusted

operating

profit

£m

Adjusted

operating

margin

Adjusted

revenue

£m

Adjusted

operating

profit

£m

Adjusted

operating

margin

First Bus

1,443.6

102.8

7.1

1,081.5

96.0

8.9

First Rail

272.4

129.9

47.7

288.8

148.8

51.5

Group items/

eliminations

(0.3)

(13.3)

(0.3)

(22.0)

Continuing

operations

1,715.7

219.4

12.8

1,370.0

222.8

16.3

Discontinued

operations

–

2.1

–

(0.6)

Total

1,715.7

221.5

12.9

1,370.0

222.2

16.2

Statutory operating performance by division is as follows:

52 weeks to 28 March 2026

52 weeks to 29 March 2025

Revenue

£m

Operating

profit

£m

Operating

margin

Revenue

(restated)

£m

Operating

profit/(loss)

£m

Operating

margin

First Bus

1,443.6

102.8

7.1

1,081.5

96.0

8.9

First Rail

3,327.6

129.9

3.9

4,180.7

148.8

3.6

Group items/

eliminations

(19.3)

(13.3)

(28.3)

(22.2)

Continuing

operations

4,751.9

219.4

4.6

5,233.9

222.6

4.3

Discontinued

operations

–

2.1

–

4.9

Total

4,751.9

221.5

4.7

5,233.9

227.5

4.3

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations,

where the Group takes substantially no revenue risk.

‘Adjusted’ profit measures throughout this document are before adjusting items as set out in note 4

to the financial statements. The statutory operating profit including discontinued operations for the

year was £221.5m (FY 2025: £227.5m) as set out in note 5.

Includes elimination of intra-group trading between Bus and Rail divisions, central management

and other items.

Discontinued operations relates to the Group’s residual Greyhound US activities.

The Group has identified certain funding mechanisms with the DfT where amounts due to the DfT

have previously been treated as deductions from revenue. Upon further review, the Group has

judged that these amounts should instead be recognised as an expense in the income statement.

The prior year income statement comparative information has been re-presented accordingly.

The re-presentation is within the income statement and has no impact on profit measures or the

other primary statements.

Capital allocation framework

Maintain a strong balance sheet

Deliver progressive returns

Return surplus cash to shareholders

Invest in future growth

The Group has a disciplined capital allocation

framework to drive further growth and returns:



Leverage policy: less than 2.0x adjusted net debt: Rail adjusted EBITDA



First Bus: a younger fleet and greater reliability and availability of electric

buses will drive cost efficiencies and mean fewer buses are required



First Rail: anticipated cash inflow of c.£90m over three years from April 2026

as DfT TOCs transition; includes Rail Services profit



Progressive dividend policy: c.3x cover of Group adjusted earnings; moving

towards 2.5x cover over time; paid around one third interim and two thirds

final dividend



FY 2026 full year dividend of 7.2p per share proposed; dividends paid in FY

2026 total £39m



£50m returned to shareholders via buyback programme in FY 2026; further

£100m programme announced and expected to be completed in the next

12 months



c.£65m held in escrow for Group’s pension schemes until completion of

2030 valuation



The Board remains committed to returning surplus cash to shareholders



Strong pipeline of value accretive organic and inorganic growth

opportunities



Acquisitions must exceed the Group’s post-tax weighted average cost

of capital (WACC) (8-9%)



Strong cash conversion in First Bus enables accelerated decarbonisation

investment supported by government co-funding: c.£140m net cash

capital expenditure for FY 2027, mostly on electrification



First Rail: continues to be cash capital-light, with any capital expenditure

required by the DfT TOCs fully funded under the National Rail Contracts

and open access rolling stock operating leases in line with the track

access arrangements



The Group has a ROIC target well in excess of its WACC

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

We have maintained our

robust balance sheet and our

disciplined capital allocation

policy remains unchanged,

incorporating investment in

future growth, progressive

shareholder dividends and a

commitment to return surplus

cash to shareholders.”

Ryan Mangold

Chief Financial Officer

Financial review

continued

Revenue

Adjusted revenue increased to £1,715.7m (FY 2025: £1,370.0m). In First Bus, revenue growth was delivered by

yield and operational efficiencies in Regional Bus, revenue of £310m from First Bus London, contract wins and

extensions and the contribution of our recent acquisitions in Business and Coach. In First Rail, revenue growth

in open access was offset by the transfer of SWR to the DfTO in May 2025 and a normalised level of variable

fees in the DfT TOCs following higher revenue incentives in the prior year. Revenue from continuing operations

decreased to £4,751.9m (FY 2025: £5,233.9m), mainly due to the transfer of SWR to the DfTO in May 2025,

partially offset by the growth in First Bus.

Adjusted operating performance

Adjusted operating profit from continuing operations was £219.4m (FY 2025: £222.8m). First Bus adjusted

operating profit grew by 7% to £102.8m aided by further efficiencies, yield, portfolio and network optimisation

and the impact of the first full year of ownership of First Bus London, which offset the impact of reduced fare

funding, weaker passenger volumes and the impact of increased employer National Insurance contributions.

In First Rail, earnings growth in open access and Rail Services was offset by Stirling mobilisation costs, the

impact of the transfer of SWR to the DfTO and normalised DfT TOC variable fees.

Central costs were £(13.3)m (FY 2025: £(22.0)m), with the reduction mainly a result of the business

restructuring. The net impact to operating profit of IFRS 16 in the year was £45.6m (FY 2025: £49.4m),

with the reduction due mainly to the SWR transition in May 2025.

Adjusted earnings from continuing operations were £112.6m (FY 2025: £115.8m), primarily driven by adjusted

operating profit being marginally lower than the prior year, and higher interest costs, partially offset by a

lower effective tax rate.

52 weeks to

28 March

2026

Adjusted

earnings

£m

52 weeks to

29 March

2025

Adjusted

earnings

£m

First Bus adjusted operating profit

102.8

96.0

First Rail adjusted operating profit

129.9

148.8

Group central costs (operating profit basis)

(13.3)

(22.0)

Group adjusted operating profit

219.4

222.8

Interest

(62.7)

(57.7)

Profit before tax

156.7

165.1

IFRS 16 DfT contracted TOCs adjustment

(2.8)

(1.1)

Taxation

(37.3)

(41.1)

Non-controlling interest

(4.0)

(7.1)

Group adjusted earnings

112.6

115.8

The Group’s definition of adjusted earnings excludes the impact of IFRS 16 depreciation and interest charges in relation to its First Rail–DfT

contracted TOCs operations, given the Group takes no cost risk on these rolling stock leases.

Case Study

Unlocking future value

through investment

in innovation and

strategic partnerships

Thanks to the significant investment we have

made in the electrification of our bus fleet and

infrastructure, alongside available co-funding,

we now operate one of the largest zero emission

commercial bus fleets in the UK, along with a

growing network of electric depots. This is already

delivering operational and cost efficiencies and

allowing us to unlock further value from our assets

such as third party charging. We also see real

potential for material additional revenue streams

over time.

To help us unlock this future value, we are investing

in innovative technology and strategic partnerships.

In FY 2026 this included our investment in a minority

stake in Palmer Energy Technology (PETL), which

designs and manufactures battery energy

storage systems and was founded by former

Aston Martin Chief Executive and Nissan Chief

Operating Officer, Dr Andy Palmer.

A bus battery typically lasts for between 10 and 15

years in service and can then be repurposed for

a ‘second life’ as static energy storage, as it still

retains much of its capacity. This will extend the

battery’s commercial life by several more years,

before it reaches end of life and is recycled. The

addition of battery storage units could also lower

depot infrastructure costs as they allow for slightly

smaller grid connections.

In August 2025, we installed a one-megawatt

PETL battery storage unit at our Hoeford depot in

Hampshire. Designed to house three bus batteries,

the unit will be used to participate in grid-based

revenue streams by distributing power back into

the grid at peak times. We are planning to open

a second storage unit in Aberdeen in the coming

months, and will look to expand the initiative

across other sites to drive further cost efficiencies

and create a scalable platform for value accretive,

second-life battery use.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Financial review

continued

Group statutory operating profit

Statutory operating profit from continuing operations was £219.4m (FY 2025: £222.6m).

Finance costs and investment income

Net finance costs from continuing operations were £62.7m (FY 2025: £57.7m) with the increase principally

due to higher adjusted net debt during the year, following growth in returns of capital, offset by lower IFRS 16

interest charges as the DfT TOCs transition.

Profit before tax

Statutory profit before tax was £156.7m (FY 2025: £164.9)m. Adjusted profit before tax as set out in note 4

to the financial statements was £158.8m (FY 2025: £164.3m) including discontinued operations.

Tax

The tax charge, on adjusted profit before tax on continuing operations for the year was £37.3m (FY

2025: £41.1m), representing an effective tax rate of 23.8% (FY 2025: 24.9%). In the prior year, there was a

non-recurring historical tax refund of £3.0m and a deferred credit on recognising deferred tax on losses

of £6.8m. The total tax charge, including tax on discontinued operations, was £37.3m (FY 2025: £31.3m).

The actual tax paid during the year was £0.9m (FY 2025: £6.0m).

The Group’s ongoing effective tax rate is expected to be broadly in line with UK corporation tax levels being

25%. In the short to medium term cash taxes are expected to be capped at 10% due to 100% tax relief for

ongoing capital expenditure reducing taxable profits, of which 50% can be sheltered by the tax losses,

which are in excess of £100m.

The Group’s adjusted EBITDA, that recognises only the net fees for First Rail DfT TOCs, increased year-on-year

and is calculated as follows:

52 weeks to

28 March

2026

£m

52 weeks to

29 March

2025

£m

First Bus EBITDA

164.7

144.0

Attributable net income from First Rail DfT contracted TOCs

29.3

39.0

First Rail – open access, contracted rail and Rail Services EBITDA

51.2

40.8

Group central costs (EBITDA basis

)

(13.3)

(21.4)

Group EBITDA adjusted for First Rail DfT contracted TOCs’ management fees

231.9

202.4

Pre-IFRS 16 basis.

A reconciliation to the segmental disclosures is set out in note 4.

Reconciliation to non-GAAP measures and performance

Note 4 to the financial statements sets out the reconciliations of operating profit/(loss) and profit/(loss)

before tax to their adjusted equivalents.

There were no adjusting items in FY 2026.

The principal adjusting items in FY 2025 were as follows:

Greyhound Canada

A net £(0.2)m charge was incurred in the prior year relating to the continued winding down of Greyhound

Canada operations.

The principal adjusting items in relation to the operating profit adjustments – discontinued operations in

the prior year were as follows:

CARES receipt

A credit of £0.4m was recognised on receipt of CARES funding in relation to the discontinued North

American operations.

Legacy US pensions scheme buy-out

On 16 July 2024, the Group agreed terms with an insurance company to buy out the remaining liabilities

of the legacy Greyhound US pension plan, with the plan being terminated thereafter. Following a Group

contribution of $6m, gross liabilities valued at $155m (£123m) at the FY 2024 year-end were removed from

the Group’s balance sheet and the Group recognised a net settlement gain after related costs of £5.1m in

the income statement as an adjusting item.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Financial review

continued

Cash flow

The Group’s adjusted cash flow of £(124.0)m (FY 2025: £(18.8)m) in the year reflects positive cash flow from

operations of £681.5m (FY 2025: £828.2m) including working capital inflows of £14.6m. This is offset by net

capital invested in the business, mainly in decarbonisation in First Bus and £(35.3)m (FY 2025: £(86.5)m)

on acquisitions completed during the year, as well as the repayment of lease liabilities, primarily at the

DfT TOCs, dividends paid and purchases of shares under the share buyback programme. The movement

in net debt is set out below:

52 weeks to

28 March

2026

£m

52 weeks to

29 March

2025

£m

Adjusted EBITDA

702.9

779.8

Other non cash income statement charges

0.1

10.3

Working capital

14.6

75.7

Movement in other provisions

(47.7)

(27.9)

Decrease/(increase) in financial assets

35.0

(1.0)

Defined benefit pension payments greater than income statement charge

(23.4)

(8.7)

Cash generated by operations

681.5

828.2

Capital expenditure

(253.0)

(156.4)

Acquisitions

(35.3)

(86.5)

Proceeds from disposal of property, plant and equipment

45.7

17.9

Proceeds from capital grant funding

51.5

66.4

Interest and tax

(61.0)

(66.3)

Shares purchased for Employee Benefit Trust

(24.3)

(16.1)

Share repurchases from buyback programme including costs

(50.4)

(91.8)

External dividends paid

(38.9)

(34.2)

Dividends paid to non controlling shareholders

(6.7)

(3.4)

Fees for finance facilities

(0.6)

–

Lease/asset backed financial liabilities payments now in debt

(432.5)

(476.6)

Adjusted cash flow

(124.0)

(18.8)

Foreign exchange movements

(0.1)

0.2

Net (inception) and termination/reassessment of leases

(47.5)

(298.8)

Lease payments now in debt

432.5

476.6

Other non cash movements

(0.6)

–

Movement in net debt in the period

260.3

159.2

Reconciliation to movement in adjusted net debt

Ring-fenced cash

53.3

(66.1)

IFRS 16 lease liabilities

(364.4)

(244.1)

Movement in adjusted net debt

(50.8)

(151.0)

Reconciliation to free cash flow

Add back: Acquisitions and strategic growth

35.3

138.5

Add back: Dividends

38.9

34.2

Add back: Share buyback

50.4

91.8

Free cash flow

73.8

113.5

Free cash flow for the 52 weeks ended 28 March 2026 is as follows:

Open access

and

Contracted

rail

£m

DfT

TOCs and Rail

Services

£m

First

Bus

£m

Group

items

£m

Total

Group

£m

EBITDA

27.9

23.3

164.7

(11.1)

204.8

DfT TOC management fees

–

45.4

–

45.4

Working capital

5.2

(3.3)

19.0

(4.9)

16.0

Cash flow from operations

33.1

65.4

183.7

(16.0)

266.2

Capital expenditure

(0.8)

(0.9)

(188.2)

–

(189.9)

Disposal proceeds

–

1.2

20.0

–

21.2

Defined benefit pension higher than

Income statement

(1.0)

–

16.1

15.1

Interest and tax

–

(12.9)

Other movements

0.9

1.8

(5.0)

(23.6)

(25.9)

Free cash flow

32.2

67.5

10.5

(36.4)

73.8

Free cash flow for the 52 weeks ended 29 March 2025 was as follows:

Open access

and

Contracted

Rail

£m

DfT

TOCs and Rail

Services

£m

First

Bus

£m

Group

items

£m

Total

Group

£m

EBITDA

37.0

3.8

144.0

(21.4)

163.4

DfT TOC management fees

–

37.9

–

37.9

Working capital

(2.5)

17.4

(10.6)

7.5

11.8

Cash flow from operations

34.5

59.1

133.4

(13.9)

213.1

Capital expenditure

(0.8)

(3.2)

(88.2)

(0.5)

(92.7)

Disposal proceeds

0.5

0.2

16.2

0.2

17.1

Defined benefit pension higher than

Income statement

(3.0)

–

(2.0)

(3.7)

(8.7)

Interest and tax

–

(9.5)

Other movements

0.9

3.4

3.2

(13.3)

(5.8)

Free cash flow

32.1

59.5

62.6

(40.7)

113.5

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Financial review

continued

EPS

Total adjusted EPS from continuing operations was 20.3p (FY 2025: 19.4p) as the impact of the marginally

lower adjusted earnings was offset by the reduced number of shares in issue following the share buyback

programme completed in the year. Basic EPS was 21.4p (FY 2025: 21.3p).

Shares in issue

As at 28 March 2026, there were 542.6 million shares in issue (FY 2025: 565.6 million), excluding treasury

shares and own shares held in trust for employees of 28.1 million (FY 2025: 185.1 million). The weighted average

number of shares in issue for the purpose of basic EPS calculations (excluding treasury shares and own

shares held in trust for employees) in the year was 553.4 million (FY 2025: 597.7 million).

Dividend

The Board is proposing that a final dividend of 5.0p per share, resulting in a total dividend payment of

c.£27m, be paid on 7 August 2026 to shareholders on the register at 3 July 2026, subject to approval by

shareholders at the 2026 AGM.

Capital expenditure

Non-First Rail gross capital expenditure before government grant funding was £206.8m (FY 2025: £240.1m,

including assets from acquisitions), all of which arose in First Bus (FY 2025: all in First Bus). In the year, the First

Bus average fleet age was 8.8 years (FY 2025: 8.9 years) reflecting continued investment in the fleet, mainly

on electric vehicles and related infrastructure. First Rail capital expenditure was £52.6m (FY 2025: £47.0m)

and is typically matched by receipts from the DfT under current contractual arrangements or other funding.

During the year asset-backed financial liabilities were entered into in First Bus of £57.4m (FY 2025: £80.1m,

including £43.3m from the acquisition of First Bus London). Through the investment in the strategic joint

venture with Hitachi Zero Carbon, £11.2m of battery leases have been recognised through the sale and

leaseback arrangements for 265 batteries (FY 2025: £9.8m for 173 batteries).

In addition, during the year the Group entered into leases with a right of use value of £48.6m comprising First

Rail £11.8m, First Bus £35.7m and Group items £1.1m (FY 2025: £50.8m, comprising First Rail £27.8m, First Bus

£22.0m and Group items £1.0m). In the prior year, a further £83.6m of leases were entered into as a result of

the First Bus London acquisition (£80.7m) and other First Bus acquisitions (£2.9m).

Gross capital investment (fixed asset and software additions plus right of use asset additions) was £303.1m

(FY 2025: £392.6m including assets from acquisitions) and comprised First Bus £233.0m, First Rail £69.0m and

Group items £1.1m (FY 2025: First Bus £335.1m, First Rail £56.5m and Group items £1.0m). The balance between

cash capital expenditure and gross capital investment represents new leases, creditor movements and the

recognition of additional right of use assets in the year.

Net cash/(debt)

The Group’s adjusted net debt as at 28 March 2026, which excludes IFRS 16 lease liabilities and ring-fenced

cash, was £(137.7)m (FY 2025: £(86.9)m).

Reported net debt was £(725.3)m (FY 2025: reported net debt of £(985.6)m) after IFRS 16 and including

ring-fenced cash of £262.4m (FY 2025: £315.7m), as follows:

28 March

2026

29 March

2025

(restated)

Analysis of net (cash)/debt

Total Group

£m

Total Group

£m

Bank loans and overdrafts

25.5

56.4

Lease liabilities

850.0

1,214.4

Asset backed financial liabilities

152.3

115.3

Bank loans

102.1

66.7

NextGen (Hitachi JV) facility

27.4

19.9

Gross debt excluding accrued interest

1,157.3

1,472.7

Cash

(169.6)

(171.4)

First Rail ring-fenced cash and deposits

(260.8)

(308.8)

Other ring-fenced cash and deposits

(1.6)

(6.9)

Net debt excluding accrued interest

725.3

985.6

IFRS 16 lease liabilities – rail

702.3

1,074.4

IFRS 16 lease liabilities – non-rail

147.7

140.0

IFRS 16 lease liabilities – total

850.0

1,214.4

Net cash excluding accrued interest (pre-IFRS 16)

(124.7)

(228.8)

Adjusted net debt (pre-IFRS 16 and excluding ring-fenced cash)

137.7

86.9

First Bus London

On 28 February 2025, the Group completed its acquisition of London bus operator RATP Dev Transit London

Limited and its subsidiaries (First Bus London) for cash consideration of £47.3m. During FY 2026, the Group

has completed the purchase price allocation exercise for First Bus London.

Note 28 to the financial statements provides a reconciliation from the previously reported provisional

purchase price adjustments and fair values to the final adjustments.

Funding

As at the year end, the Group had £295.0m (FY 2025: £295.0m) of undrawn committed borrowing available

under its revolving credit facility (RCF). In addition, there was £43.0m (FY 2025: £92.4m) of committed headroom

available under the Husk Finance Facility, and £26.1m (FY 2025: £40.9m) available under the NextGen Battery

facility. Total undrawn committed headroom under all facilities at year end stood at £364.1m (FY

2025: £513.3m). The average debt maturity is 4.1 years (FY 2025: 4.1 years).

Under the terms of the First Rail contractual agreements with the DfT, cash can only be distributed by the DfT

TOCs either up to the lower amount of their retained profits or the amount determined by prescribed liquidity

ratios. £45.4m (FY 2025: £37.9m) has been received in dividends from the DfT TOCs after finalisation of their FY

2025 statutory accounts to the Group during the year. The ring-fenced cash represents that which is not

available for distribution, or the amount required to satisfy the liquidity ratio at the balance sheet date.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Financial review

continued

Interest rate risk

Exposure to floating interest rates is managed to ensure that at least 50% of the Group’s pre-IFRS 16 gross

debt is fixed rate for the medium term.

Based on the current adjusted net debt profile, the variable rate RCF is largely undrawn with only finance

leases and hire purchase debt and the term loan outstanding.

Fuel and electricity price risk

We use a progressive forward hedging programme to manage commodity risk. As at June 2026, 88% of our

‘at risk’ UK diesel requirement for FY 2027 (87.1 million litres) was hedged at an average rate of 43p per litre,

and 54% of our requirements for the year to the end of March 2028 at 41p per litre. We also have an electricity

hedge programme in place, with 77% of our consumption (based on current ‘at risk’ consumption forecasts)

hedged for FY 2027 at £74/MWh and 72% for FY 2028 at £73/MWh.

Foreign currency risk

‘Certain’ and ‘highly probable’ foreign currency transaction exposures (including fuel purchases for the UK

divisions) may be hedged at the time the exposure arises for up to two years at specified levels, or longer if

there is a very high degree of certainty. The Group does not hedge the translation of earnings into the Group

reporting currency (pounds sterling) but accepts that reported Group earnings will fluctuate as exchange

rates against pounds sterling fluctuate for the currencies in which the Group does business, although this

exposure is materially reduced following the sales of the North American divisions. During the year, the net

cash generated in each currency may be converted by Group Treasury into pounds sterling by way of spot

transactions in order to keep the currency composition of net debt broadly constant.

Foreign exchange

The most significant exchange rates to pounds sterling for the Group are as follows:

28 March 2026

29 March 2025

Closing

rate

Effective

rate

Closing

rate

Effective

rate

US dollar

1.33

1.35

1.29

1.25

Canadian dollar

1.84

1.85

1.93

Euro

1.15

1.16

1.20

1.19

Pensions

We have updated our pension assumptions as at 28 March 2026 for the defined benefit schemes in the UK

and North America. The net pension surplus of £22.8m at the beginning of the year moved to a net surplus

of £19.9m at the end of the year.

The main factors that influence the balance sheet liabilities for pensions and the principal sensitivities to

their movement (excluding rail contracts and insurance liabilities) at 28 March 2026 are set out below:

Movement

Impact

Discount rate

+1.0%

Decrease liabilities by £10m

Inflation

+1.0%

Increase liabilities by £6m

Life expectancy

+1 year

Increase liabilities by £29m

The Group Scheme triennial funding valuation as at 5 April 2024 (now comprising legacy Group and Bus

pension obligations) was finalised in FY 2026. The valuation outcome resulted in £20m being returned to

each of the Scheme and Company of the £80m held in the Bus Scheme Limited Partnership at FY 2025, with

the balance retained in the Limited Partnership. There is a further £22m relating to the Group scheme in the

Group Scheme Limited Partnership with its usage to be determined based on the 2030 triennial valuation.

During FY 2025, the Group agreed terms with an insurance company to buy out the remaining liabilities

of the legacy Greyhound US pension plan, with the plan being terminated thereafter. Following a Group

contribution of $6m, gross liabilities of $155m (£123m) at the FY 2024 year-end were removed from the

Group’s balance sheet and the Group recognised a net settlement gain after related costs of £5.1m in the

Group’s FY 2025 income statement as an adjusting item. Also during FY 2025, the merger of the First Bus

and FirstGroup pension schemes was completed to drive further efficiencies.

Balance sheet

Net assets have increased by £7.0m since 29 March 2025. The principal reasons are the impact of the profit

for the year, offset by the share buyback programme and dividends paid.

Balance sheets – Net assets/(liabilities)

As at

28 March

2026

£m

As at

29 March

2025

(restated)

£m

First Bus

956.7

824.8

First Rail

450.7

798.4

Greyhound

(4.3)

(10.5)

Divisional net assets

1,403.1

1,612.7

Group items

74.1

91.1

Net debt

(725.3)

(985.6)

Taxation

(32.4)

(5.7)

Total

719.5

712.5

Post-balance sheet events

On 2 April 2026, the Group announced its acquisition of Eagle Coaches, a coaching business based in Bristol

with a fleet of 19 vehicles, operating private hire, school transport and group travel services.

On 10 April 2026, the Group announced its acquisition of Wilfreda Luxury Coaches Limited (Wilfreda Beehive),

a Doncaster-based coaching business operating a fleet of 45 vehicles to provide private hire, school

contracts, contracted workplace shuttle services, and holiday programmes.

On 3 May 2026, the Group’s First Rail London Limited (FRL) subsidiary commenced the operation of the

London Overground rail contract on behalf of Transport for London (TfL). FRL’s contract is for an initial

eight-year period, with an option to extend for a further two years at TfL’s discretion. Under the terms of the

contract, TfL retains all revenue risk and will specify the service levels, with FRL responsible for the delivery

of train services, management of stations and customer service.

On 7 May 2026, First Greater Western Railway Ltd received notice from the Department for Transport that its

National Rail Contract would expire on 13 December 2026, at which point GWR will hand over to the DfT Operator.

On 25 May 2026, the Group’s new Lumo West Coast open access rail operator commenced services between

London Euston and Stirling.

Ryan Mangold

Chief Financial Officer

17 June 2026

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

Our approach

Our ambition is to be the partner of choice for sustainable transport,

accelerating the transition toward net zero emissions.

We prioritise our most material environmental, social and governance (ESG)

impacts, risks and opportunities, including decarbonisation, supporting our

people, community investment, safety and business ethics. We are leading

the way by decarbonising our fleet, reducing emissions, improving air quality

and protecting the environment, alongside investing in our people and

shaping a fit-for-the-future workforce that reflects the communities we serve.

Reporting suite

This report provides a detailed overview of the

policies, targets and metrics that govern our

approach to ESG impacts, risks and opportunities,

and our progress in these areas. Alongside this

report, our Climate Transition Plan (CTP), which can

be found in the sustainability section of our website,

details how we are reducing GHG emissions,

managing climate-related risks and contributing

to an economy-wide transition. The CTP also

includes our targets, actions and dependencies

across all FirstGroup operations.

Our separate Sustainability Report, which can be

found in the reporting centre section of our website,

provides a wider overview of our key sustainability

initiatives and ambitions for our business and the

sector as a whole.

In accordance with Sections 414CA and 414CB of the

Companies Act 2006, our non-financial information

and sustainability can be found on the following

pages of this Annual Report: relating to environment

matters, from page 34; climate-related financial

disclosures, from page 47; employees, pages 43 to

46; community, pages 40 to 42; human rights, page

33; and anti-corruption and anti-bribery, page 32.

Sustainability is central to how

FirstGroup invests for the future,

shaping our decisions as we scale

low carbon fleets, modernise

infrastructure and accelerate the

transition to cleaner transport.

These investments are already

delivering measurable progress,

and they position us as a

trusted partner for government,

customers and industry alike. We

see our role not only as a leader

in sustainable transport, but as

a driving force helping the wider

sector move further and faster.”

Graham Sutherland,

Chief Executive Officer

Our commitment to responsible

business runs through every part

of our operations. We are focused

on delivering safe, reliable and

inclusive services, while fostering

workplaces that support our

colleagues and reflect the

communities we serve. Through

this approach, we aim to create

long-term social value and

ensure our operations contribute

positively to people and places.”

Claire Hawkings,

Chair, Responsible Business Committee

Included in Corporate

Knights’ 2026 Clean200,

the top publicly listed

companies by clean

revenue

Included in S&P

2025 Sustainability

Yearbook for the fourth

consecutive year

‘AAA’ MSCI ESG rating

B score in CDP

Member of the UN

Global Compact

Network UK

‘Prime’ status on

the ISS ESG Index

and ranked in the top

decile in our sector

Re-awarded the

Green Economy Mark

on the London Stock

Exchange

Included in the

FTSE4Good Index

ESG Risk Management

rated as ‘Strong’ by

Sustainalytics

Third party recognition

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

FY 2026 highlights

Decarbonising bus and rail travel

We continue to make meaningful progress towards

decarbonising our operations and the UK transport

sector. We have decreased our Group-wide Scope 1

and 2 emissions by 30% compared to our FY 2020

baseline, driven by continued fleet decarbonisation.

Over the same period, we achieved an 18% reduction

in Scope 3 fuel and energy related activities (FERA)

emissions, reflecting steady progress towards our

science-based emissions reduction targets.

We added 316 electric buses to the First Bus fleet in

FY 2026, maintaining strong momentum toward our

ambition of a zero-emission commercial bus fleet

by 2035. This rapid pace of electrification is

supported by continued investment in depot

infrastructure; in FY 2026 we electrified more depots,

and now have four fully and seventeen partially

electrified depots. We launched First Charge, a new

commercial charging proposition designed to help

other operators access dependable, high-capacity

charging at selected First Bus depots and accelerate

broader industry transition.

Supporting safe travel

for women and girls

This year we accelerated our leadership in

creating safer, more inclusive public transport.

First Bus announced the rollout of a new

nationwide specialist driver training programme

focused on preventing violence against women

and girls (VAWG). Developed in partnership

with the Confederation of Passenger Transport,

the training will help drivers throughout the UK

recognise and challenge harmful behaviours

on board, equipping them to better support

passengers and reinforce safety across

our network.

First Bus also continues to collaborate with

Strut Safe, the UK-wide support line for people

travelling alone at night. We promote the

service across our network and funded an

extension to its operating days, helping ensure

more people can access reassurance and

real-time support when they need it most.

First Bus, GWR, Avanti, Hull Trains and

Lumo have all maintained their status as

White Ribbon accredited organisations,

standing alongside a national movement

dedicated to ending gender-based violence.

Together, these initiatives represent an

important step forward in making public

transport safer and more inclusive.

In First Rail, GWR introduced the UK’s first rapid

charging battery train into passenger service on

the Greenford branch line in west London. Operating

entirely on battery power, the train demonstrates

how short branch lines can transition from diesel

while making efficient use of existing rail infrastructure,

offering a scalable model for cleaner rail operations.

Avanti concluded the full deployment of the new

bi-mode Evero fleet and no longer operates any

diesel-only trains.

These actions underscore our continued momentum

in reducing emissions and transforming our operations.

Through measurable emissions reductions, accelerated

electrification and innovation, we are making tangible

progress against our science-based targets while

supporting the wider transport sector’s transition to

a lower carbon future.

Creating opportunities

for careers in transport

Across FirstGroup, apprenticeship pathways

continue to play a crucial role in building the

skilled, diverse workforce our sector needs for

the future. This year GWR set a new benchmark

for excellence, becoming the first UK train

operator to achieve a platinum accreditation

from Investors in People in recognition of the

outstanding quality and impact of its long-

standing apprenticeship programme.

This accolade reflects more than a decade

of continuous development, from GWR’s first

apprenticeships in 2011 to its vocational and

Quest programmes, which now support more

than 300 apprentices each year.

Apprenticeships are an important part of

our talent pipeline. Including those enrolled in

GWR’s programmes, more than 500 apprentices

are currently training in engineering, customer

service, HR, business administration and

specialist disciplines within the Group. In

Lumo, apprenticeships form the backbone

of the organisation – to date 90% of colleagues

have joined through apprenticeship routes.

Case Study

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Governance

Employees who breach our policies face disciplinary

actions, with potential dismissal for the most serious

breaches.

Policy governance, training

and implementation

We centrally mandate a set of minimum

requirements for training, testing and policy

attestation across a range of ethical and

compliance topics, including anti-bribery and

corruption, human rights and modern slavery.

All non-frontline staff must complete annual

attestations confirming that they understand

and comply with each policy. Frontline staff receive

appropriate training in line with their role. In addition,

senior managers and those in higher-risk roles are

required to complete training and pass tests

annually on topics including anti-bribery and

anti-corruption, fraud, insider dealing, human rights,

modern slavery and more. Compliance rates for

mandatory training and attestation requirements

are reported monthly to senior management teams

and to the Board on a periodic basis. Minimum

requirements are reviewed and updated as

appropriate to address new or evolving risks.

Divisional management teams are responsible for

ensuring that core requirements are implemented

and adhered to within their respective businesses.

They are also responsible for assessing whether

stricter or additional requirements are appropriate

for specific ethical/legal compliance risks faced by

their respective businesses and implementing such

further measures as are deemed necessary to

mitigate those risks.

Governance of ESG topics

Group-wide oversight of ESG topics is provided by

the Responsible Business Committee of the Board.

The Committee has oversight of safety, the people

strategy, the environmental impact of Group activities

and sustainability. The Committee ensures responsible

business activities are supported by robust plans

and performance metrics. Performance reports are

shared with the Committee at each meeting and

provide an essential mechanism for understanding

progress and taking action. The Committee meets

regularly throughout the year.

Our policy framework

Our Group-wide policies are available on our

website and cover the whole Group to ensure

that all our businesses perform to the highest

ethical standards and are accountable for

their performance.

These include our Code of Ethics and Supplier

Code of Conduct. These Group-wide policies

must be attested to by employees and suppliers

respectively on an annual basis. Both policies

cover topics including anti-bribery and corruption,

modern slavery, health and safety, environment

and other areas of legal and ethical compliance.

The Code of Ethics and Supplier Code of Conduct

are supported by detailed Group-wide policies

and procedures, including an Anti-Bribery Policy,

Anti-Fraud Policy, Gifts and Hospitality Policy,

Procurement Policy and a Modern Slavery Statement.

There is also a Share Dealing Code for certain

individuals that prohibits share dealing during

closed periods and requires clearance to deal

to be obtained at other times.

These policies are implemented and managed

by the senior management team in each of our

divisions. Our Code of Ethics and other policies

describe the mechanisms employees can use to

report and investigate concerns about unlawful

behaviour or behaviour contrary to our respective

policies. Further details can be found in the

whistleblowing section on page 33.

Anti-bribery, fraud and corruption

We have a zero tolerance approach to bribery,

fraud and corruption, and are committed to acting

professionally, fairly and with integrity in all our

business dealings. We never offer or accept any

form of payment or incentive intended to improperly

influence a business decision, including any political

contributions, donations or payments, as outlined

under our Group-wide Anti-Bribery and Corruption

Policy, Fraud Policy and Code of Ethics. Our policies

are consistent with our commitments to the UN

Global Compact and national commitments

to the United Nations Convention against

Corruption. Our Anti-Bribery and Corruption Policy

is communicated to employees annually as part

of annual training, which comprehensively covers

anti-corruption, with an overview of the types

of corruption including bribery.

Our internal control systems and procedures are

reviewed and tested to ensure they are likely to be

effective in countering bribery and corruption.

We expect our suppliers to undertake their work

with a similar zero-tolerance approach. This is

outlined in the Supplier Code of Conduct that

all suppliers must sign. This Code outlines the

expectation that suppliers must adhere to all laws,

implement and enforce effective systems, and not

accept bribes. This year we enhanced the anti-

bribery and corruption screening criteria in our

supplier onboarding platform, further information

on which can be found on page 33.

We are committed

to conducting all

our operations and

interactions with our

stakeholders with

integrity, high ethical

and moral standards

and professionalism.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Whistleblowing

Our Whistleblowing Policy covers all full-time

and part-time employees, officers, consultants,

contractors, casual workers and agency workers in all

FirstGroup companies. It also covers whistleblowing

allegations raised by external agencies, including

suppliers and customers. The Policy outlines the

measures, safeguards and protections put in place to

allow an individual to report suspected wrongdoing,

irregularities or dangers at work in a confidential and

independent manner, along with the process, protection

and support they will receive. The policies and

procedures include processes to avoid retaliation,

respect rights of privacy, data and other protections

for anyone whistleblowing.

We have an independent and externally managed

whistleblowing service available 24/7, 365-days-a-

year across the Group with an international,

multi-language helpline (online and phone-based),

email and web portal, for anonymous reporting

of suspected wrongdoing or dangers at work.

The service is available to anyone including

colleagues, contractors, customers, suppliers

and other third parties. The hotline is actively

communicated to all stakeholder groups via

several digital and physical channels, as well as

being available via the Code of Ethics, Supplier

Code of Conduct and other policy and training

materials. Whistleblowing events are logged by

the third party, and an independent person is

nominated to investigate the matter. Depending

on the nature of the matter, the investigator will be

an independent manager or someone from our

Internal Audit function or HR team. We aim to

complete the investigation within 30 days and

provide feedback to the individual who has made

the report throughout the process. The Board

receives reports on the operation of the

whistleblowing hotline and whether reports

lodged have been upheld and, if so, how they

have been dealt with.

See our Whistleblowing Policy Statement

on our website.

Human rights

We recognise our responsibility to ensure that

FirstGroup operates in a manner that respects,

protects and promotes the human rights of all

individuals who interact with our operations.

We have several Group-wide policies that

govern our Human Rights and Modern Slavery

commitments to employees, customers, suppliers,

contractors and any other stakeholders who

interact with our business. The Board has ultimate

responsibility for these policies, and they are made

in line with the International Bill of Human Rights,

the UN Guiding Principles on Business and Human

Rights, the United Nations Universal Declaration

of Human Rights and the Children’s Rights and

Business Principles. They cover fundamental

human rights, including human trafficking,

forced and child labour, freedom of association,

right to collective bargaining, fair and equal

remuneration, discrimination and harassment,

and safe workplaces.

Our annual Modern Slavery and Human Trafficking

Statement outlines our policies and the steps we

take to address modern slavery risks in our business

and supply chains. You can find this statement on

our website. In alignment with our commitment to

continuous improvement, we apply this statement

to all our businesses, regardless of size, location or

turnover, even those not legally required to make

such a statement under the Modern Slavery Act or

equivalent legislation. Our Modern Slavery Working

Group discusses and reviews the actions and proposed

actions being taken by the Group to detect and

remedy modern slavery and human rights concerns

within our own organisation and our supply chain.

We conduct assessments of our human rights and

modern slavery risks.

Supply chain due diligence

We spend around £2.8bn each year on goods

and services. Collaboration with suppliers helps

us understand and respond to customer and

stakeholder needs to deliver increased value.

Policies

The Supplier Code of Conduct aligns to our Code of

Ethics and sets out the standards our suppliers must

adopt in relation to health and safety, business

ethics, legal requirements, human rights, labour

practices, the environment and reporting concerns.

It applies to all suppliers and partners, including

subcontractors, service providers, consultants,

intermediaries and agents, who supply products

or services to FirstGroup and its subsidiaries. All

suppliers and employees must also adhere to the

Group Procurement Policy, which includes elements

relating to environmental and social sustainability.

Supplier screening

Our supplier onboarding process assesses supplier

suitability, financial stability and broader risk profile.

Depending on their initial risk assessment, suppliers

are invited to join our supplier assurance platform

where additional information is captured relevant to

their identified risk level.

We currently have 4,158 unique suppliers, of which

812 have been registered on our supplier assurance

platform. Approximately 60% of registered suppliers

have been onboarded at a higher-tier membership

level which provides detailed assurance information

as determined by our risk-based screening process.

This approach provides a detailed view of supply

chain ESG risks, as well as other risk indicators, which

enables us to establish collaborative action plans in

partnership with our suppliers and internal stakeholders

where relevant and appropriate. We have a regular

procurement risk committee meeting, where we

review high-risk suppliers as well as our internal risk

processes accordingly. 268 of our suppliers are

considered to have high risk of negative ESG impacts

based on our category and country ESG heat risk

mapping assessment.

ISO 44001 provides a structured framework for

building effective, transparent and collaborative

supplier relationships, and its principles can be

applied to facilitate more constructive ESG-focused

engagement by encouraging shared objectives,

clear communication and robust partnership

governance. Our First-44 initiatives offer a similar,

though lighter-touch, approach, tailored for supplier

relationships that do not require the full, more

administratively intensive, ISO 44001 process. We are

currently engaging 11 suppliers in either ISO44001 or

First-44 programmes.

Supplier audits

Our supplier assurance partner and platform

facilitates supplier audits for different criteria,

including ESG (e.g. dedicated ethical business audits

including desktop reviews of hiring practices and

on-site worker interviews). The platform provides

audit documentation, outcomes and details of any

non-conformances. Audit results are shared within

the Group and with other clients on the platform

where appropriate, enabling transparency and

collective action. 109 suppliers have been assessed

via desktop or on-site audit within the last 12 months,

eight of which have corrective action plans in place

and tracked within the platform.

Industry engagement

Transport plays a prominent role in public discourse

and political discussions. Our work involves extensive

interactions with government entities at local,

regional and national levels. We promote innovation

and sustainable investment in mobility, and advocate

for transport infrastructure choices that alleviate

congestion, improve customer satisfaction and

reduce travel times. We support the UK Government’s

ambition to reduce its emissions in line with the

Paris Agreement.

We collaborate with a diverse array of business

advocacy organisations, sustainability lobby groups

and public transport campaigns. Our strategic

alliances amplify our influence on policy decisions.

In the instance that trade associations or other

advocacy organisations that we collaborate with

misalign with our views on climate change, we seek

to change their position or pursue our own lobbying

in parallel to ensure our position is clear.

All lobbying activities are managed by the Director

of Public Affairs and Relations, with oversight

provided by the Executive Committee and the Board.

In FY 2026 we contributed £599,262 in membership

fees to industry associations and other advocacy

groups, including Campaign for Better Transport,

Zemo Partnership, Confederation of Passenger

Transport, BusinessLDN, European Passenger

Transport Operators association and AllRail.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Climate

FirstGroup is aligned to the UK Government’s

Net Zero Strategy and is committed to reducing

greenhouse gas (GHG) emissions to meet the Paris

Agreement to limit climate warming to 1.5°C by 2050.

By encouraging people to switch from private cars

and air travel to bus, coach and rail, we can also

significantly reduce the carbon footprint of the

transport sector.

Climate Transition Plan

In 2025 we published our first Climate Transition Plan,

setting out a comprehensive strategy for achieving

our climate transition goals. In it we detail our

approach to reducing GHG emissions, managing

climate-related risks, and contributing to an

economy-wide transition through encouraging

more people to switch to lower-impact forms

of transportation. It also covers our targets,

actions and dependencies across all

FirstGroup’s operations.

Climate ambitions and targets

We have set three near-term science-based

targets (SBTs) covering Scope 1, 2 and 3 emissions.

These have been validated by the Science Based

Targets initiative (SBTi) and are set out in the table

below. We are also committed to reaching net zero

emissions by 2050.

Our First Bus division and our First Rail open access

train operations and DfT TOCs are all in the scope

of the FirstGroup SBTs. First Bus is committed to

operating a 100% zero emission commercial bus

fleet by 2035. First Rail supports the UK Government’s

target to remove all diesel-only trains from service

by 2040 and to deliver a net-zero railway network by

2050. West Coast Partnership (Avanti) has also set

SBTs, which have been validated by the SBTi. GWR

is working to set targets that are aligned to the

science-based approach.

Environment

We are taking action

to combat climate

change and reduce

our environmental

impact through

low-emission

mobility solutions

and sustainable

operations.

Progress against climate targets

FirstGroup performance on science-based targets

SBT

Progress against our base year

Comments

63% reduction in

Scope 1 and 2

location-based

emissions (tCO

by FY 2035

2020

baseline

863,885 tCO

2035

target

We are here

Total for 2026:

601,308 tCO

We have seen a 30%

decrease in our Scope 1 and

2 location-based emissions

since our baseline year in

FY 2020

20% reduction in

absolute Scope 3

FERA emissions

(tCO

e) by FY 2028

2020

baseline

212,344 tCO

2028

target

We are here

Total for 2026:

174,599 tCO

We achieved an 18%

decrease in FERA emissions

this year compared with our

baseline year in FY 2020

75% of suppliers with

SBTs by emissions

covering purchased

goods and services

and capital goods

by FY 2028

48%

We are

here

2020

Baseline

2028

target

75%

48% of our suppliers

by emissions have

science-based emissions

reduction targets

Emissions data and performance

against targets

Our greenhouse gas emissions

As FirstGroup is a major provider of public transport,

we use significant volumes of fuel and electricity to

power our extensive road and rail fleet. As a result,

our Scope 1 and 2 location-based emissions

contribute to 39% of our total emissions footprint.

Our Scope 3 emissions comprise 61% of our overall

footprint. The most significant Scope 3 categories

are purchased goods and services, capital goods

and fuel and energy-related activities, where

most of our reduction efforts are focused.

30%

63%

18%

20%

In FY 2026 we recalculated our FY 2020 base year to reflect

changes to the business in the reporting year and in previous

years. This included removing emissions from SWR and adding

in historic emissions from the operations now owned under First

Bus London, Ensignbus, York Pullman, Lakeside Group, Anderson

Travel, Matthews Coach Hire, and Tetley’s Coaches. For more

detail on these recalculations, please refer to the methodology

on page. For originally reported figures, please refer to the Annual

Report and Accounts 2025 which can be found in the investor

section of our website.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Scope 1 & 2

Our strategy to reduce Scope 1 and 2 emissions

is based on investing in low and zero emission

vehicles, as well as utilising renewable energy and

implementing energy efficiency initiatives in our

depots, stations and office buildings. Our Scope 1

and 2 location-based emissions have decreased

30% since our baseline year in FY 2020.

The Group’s overall Scope 1 and Scope 2 location-

based carbon emissions decreased by 7% from FY

2025 to FY 2026

. Key factors for this reduction

included continued investment in our electric bus

fleet and the full deployment of the new bi-mode

Evero fleet in Avanti, a lower DESNEZ emissions factor

due to a further reduction in grid carbon intensity,

and a reduction in gas consumption due to efficiency

measures such as improved heating controls

and conversion to electric heating in buildings.

Our carbon intensity, calculated using Scope 1,

Scope 2 location-based and selected Scope 3

emissions per £m revenue, has decreased by 5%

compared to FY 2025.

Whilst our decarbonisation pathway in the short to

medium term will be impacted by the DfT TOCs

returning to public ownership, as well as future

acquisitions and divestments, we remain committed

to achieving our target of a 63% decrease in Scope 1

and 2 emissions by 2035. Full details of this can be

found in our Transition Plan.

Scope 3

Our Scope 3 emissions targets cover FERA emissions

and emissions from suppliers of purchased goods

and services and capital goods. We achieved a 3%

decrease in FERA emissions this year compared with

FY 2025. Our FERA emissions are now 18% lower than

in FY 2020, reflecting significant progress towards

our target of a 20% reduction by FY 2028.

As a part of our SBTs, we committed that 75% of our

suppliers by emissions covering purchased goods

and services and capital goods will have science-

based targets by FY 2028. Our performance against

this target has been impacted in part by the DfT

TOCs’ return to public ownership, as this is driving a

change in our supplier profile, which will continue

over the next several years. This year, 48% of our

suppliers by emissions covering purchased goods

and services and capital goods have SBTs. We will

be reviewing our new supplier base to assess how

best to drive progress towards this target in FY 2027.

Purchased goods and services

529,822

Capital goods

162,425

Fuel and energy related activities

174,599

Upstream transportation and distribution

limited to First Travel Solutions

7,538

Waste generated in operations

231

Business travel

733

Employee commuting

35,396

Use of sold products

12,901

End-of-life treatment of sold products

Rail vehicle electricity

127,033

Facilities electricity

15,522

Road vehicle electricity

8,925

Road vehicle fuel

242,412

Rail vehicle fuel

197,924

Heating fuel and other

9,492

449,828

151,480

Total: 1,524,967

All emissions scopes in FY 2026

(tCO

Scope

Indirect emissions

(location-based)

10%

total footprint

Scope

Direct emissions

29%

total footprint

Scope

Other indirect emissions

61%

total footprint

923,659

Zero emission buses

As part of First Bus’s commitment to achieving a

fully zero emission commercial bus fleet by 2035,

significant investment has been made across the UK

to expand the number of electric buses in operation

and modernise supporting infrastructure.

At the end of FY 2026, we now have 1,414 zero

emission vehicles, making up 25.9% of our bus fleet.

In addition to buying new electric buses, First Bus is

converting mid-life diesel buses into zero emission

electric vehicles. This process costs less than half

the price of buying a new electric bus and avoids the

embodied carbon of manufacturing a new vehicle.

In FY 2026 we invested £11.1m in charging infrastructure

for our depots, and we now have four fully and

seventeen partially electrified depots.

In addition to our bus decarbonisation progress, our

rail vehicles are now 55% electric and 30% bi-mode.

Bus fleet performance

indicators

FY 2026

FY 2025

FY 2024

Zero emission buses

(electric or hydrogen powered)

25.9%

†

20.5%

13%

Total bus fleet (excluding

coaches)

5,464

5,450

4,425

Carbon emission per vehicle

distance (gCO

e/vkm)

(Scope 1, 2 location-based

and Out of scope)

819

†

869

897

†

Metrics subject to limited assurance by Grant Thornton UK LLP

are highlighted with a † symbol.

In FY 2026 we recalculated our FY 2020 base year to reflect

changes to the business in the reporting year and in previous

years. This included removing emissions from SWR and adding

in historic emissions from the operations now owned under First

Bus London, Ensignbus, York Pullman, Lakeside Group, Anderson

Travel, Matthews Coach Hire and Tetley’s Coaches. For more

detail on these recalculations, please refer to the methodology

on page 37. For originally reported figures, please refer to the

Annual Report and Accounts FY 2025.

In FY 2026 we recalculated our FY 2025 emissions to remove

emissions from entities no longer owned by the business and

add in emissions for businesses acquired in the second half of

the FY 2025 financial year and not included in the footprint at the

time of reporting, as well as businesses acquired in the first half of

the FY 2026 financial year. This included removing emissions from

SWR and adding in historic emissions from the operations now

owned under First Bus London as well as historic emissions from

Lakeside Group, Anderson Travel, Matthews Coach Hire, and

Tetley’s Coaches.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Absolute emissions

Tonnes of carbon dioxide equivalent (tCO

e) for operations:

FY 2026

FY 2025

FY 2024

Scope 1

449,828

477,237*

478,705

Scope 2 (location based)

151,480

168,132*

216,508

Scope 2 (market based)

170,111

133,315

290

Total Scope 1 and Scope 2 (location based)

601,308

645,369*

695,213

Total Scope 1 and Scope 2 (market based)

619,939

599,462

‡

478,995

Scope 3: Purchased goods and services

529,822

362,794

Scope 3: Capital goods

162,425

423,024

Scope 3: FERA

174,599

179,607*

196,753

Scope 3: Upstream transportation and distribution limited to First

Travel Solutions

7,538

8,084

Scope 3: Waste generated in operations

231

248

Scope 3: Business travel

733

1,440

Scope 3: Employee commuting

35,396

40,860

Scope 3: Use of sold products

12,901

1,962

Scope 3: End-of-life treatment of sold products

335

Total Scope 3

923,659

1,046,933

‡

Total Scope 1, Scope 2 and selected Scope 3 emissions (location)

784,608

†

922,721

901,730

Total Scope 1, Scope 2 and selected Scope 3 emissions (market)

803,239

†

817,528

685,513

Out of scope (combustion of biofuels)

33,903

33,834

34,895

Emissions intensity

FY 2026

FY 2025

FY 2024

Total Scope 1 and Scope 2 location based emissions per £m

revenue (tCO

e per £m revenue)

132

140

149

Total Scope 1 and Scope 2 location-based emissions and selected

Scope 3 emissions² plus Out of scope emissions

per £m revenue

(tCO

e per £m revenue)

142

†

149

159

Scope 1 and Scope 2 location-based and Out of scope emissions

per vehicle km (gCO

e/vkm) – First Bus road transportation

819

†

869

897

Scope 1 and Scope 2 location-based and Out of scope emissions

per vehicle km (gCO

e/vkm) – First Rail rail transportation

566

†

578

595

Scope 1 and Scope 2 location-based and Out of scope per

passenger km (gCO

e/pkm) – First Bus

†

Scope 1 and Scope 2 location-based and Out of scope per

passenger km (gCO

e/pkm) – First Rail

†

Supplier engagement

Suppliers by emissions covering purchased and capital goods with

a science-based climate target (%)

48%

50%

45%

Emissions data

The table reflects the carbon emissions associated

with our global operations and aligns with the UK’s

Streamlined Energy and Carbon Reporting (SECR)

requirements. Our UK operations represent 99% of

both our global GHG emissions and our global

energy use reported in the table below.

Outside of the UK our Aircoach and Matthews Coach

Hire operations in the Republic of Ireland account for

1.4% of our total emissions. Scope 1 and 2 emissions

for these operations amounted to 8,223 tCO

(5,961 tCO

e in FY 2025). The energy consumption

used to calculate these emissions is 33,681MWh

(25,012 MWh in FY 2025).

Methodologies and calculations

a. Reporting year and time horizons

FirstGroup’s financial year is for the 52 weeks to

28 March 2026, incorporating the First Rail reporting

year, which ends on 31 March 2026. FirstGroup uses

a fixed ‘base year’ (FY 2020) and the prior reporting

year (FY 2025) to benchmark trends and change

over time. In each report, we provide three years of

continuous data, where available. Where possible,

new metrics are reported with at least one prior year

for comparison.

In FY 2026, we recalculated portions of our FY 2020

and FY 2025 emissions to ensure that historical

data reflects our current business operations.

Recalculations were made for Scope 1, Scope 2

location-based and Scope 3 FERA emissions that we

use to report against our SBTi emissions reduction

targets. The recalculations considered activity

sources that were found to be material under our

exclusion threshold of 2%.

FY 2020 recalculations

This included removing emissions from entities

no longer owned by the business and adding in

historic emissions for recently acquired businesses.

Removals and additions are summarised below.

Removals: South Western Rail

Additions: First Bus London, Ensignbus, York Pullman,

Lakeside Group, Anderson Travel, Matthews Coach

Hire and Tetley’s Coaches.

FY 2025 recalculations

This included removing emissions from entities

no longer owned by the business and adding in

emissions for businesses acquired in the second

half of the FY 2025 financial year and not included

in the footprint at the time of reporting, as well as

businesses acquired in the first half of the FY 2026

financial year.

Removals: South Western Rail

Additions: First Bus London, Lakeside Group,

Anderson Travel, Matthews Coach Hire and

Tetley’s Coaches.

For both years, in the case of removals, all previously

calculated emissions were removed. In the case of

additions, Scope 1 and Scope 3 FERA emissions from

vehicle fuel usage for all companies were added, in

addition to Scope 2 and Scope 3 FERA emissions

associated with electricity for First Bus London.

In FY 2026 we recalculated selected FY 2025 emissions to reflect

changes to the business since emissions were reported. This

included removing emissions from SWR and adding in historic

emissions from the operations now owned under First Bus

London, Lakeside Group, Anderson Travel, Matthews Coach Hire,

and Tetley’s Coaches. Emissions categories were selected for

recalculation based on their relevance to our SBTi targets, to

allow year-on-year reporting in these categories. Other

categories were not recalculated due to data limitations.

Recalculated emissions are highlighted with a * symbol. For more

detail on these recalculations, please refer to the methodology

on page 37. For originally reported figures, please refer to the

Annual Report and Accounts FY 2025.

†

Metrics subject to limited assurance by Grant Thornton UK LLP

are highlighted with a † symbol.

‡

Indicates historic emissions totals which cannot be calculated

from the figures in this table, as they are based on reported

figures prior to recalculations. For the constituent data making

up these historically reported totals, please refer to the Annual

Report and Accounts FY 2025.

NR Indicates historic metrics that were not previously reported.

This includes the aggregated total of Scope 1, Scope 2

(location- or market-based respectively) and selected Scope 3

(limited to emissions from business travel, waste disposal, water

supply and treatment, FERA and upstream transportation and

distribution amounts limited to First Travel Solutions).

This includes the aggregated total of Scope 1, Scope 2

location-based and selected Scope 3 (limited to emissions from

Business travel, Waste disposal, Water supply, Water treatment,

and Upstream transportation and distribution amounts limited

to First Travel Solutions emissions).

Out of scope relates to the emissions associated with the

combustion of biofuels.

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

c. Emissions sources

Our GHG inventory is reported in four categories or

‘Scopes’, listing our direct and indirect emissions in

accordance with the GHG Protocol:



Scope 1:

Direct emissions from road and rail

vehicle fuel, heating fuel and fugitive refrigerant

gas emissions



Scope 2:

Indirect emissions from the generation

of electricity purchased for buildings and to

power electric road or rail vehicles



Scope 3:

Other indirect emissions that occur

in the value chain



Out of Scope:

Relating to the combustion

of biofuels

The term ‘carbon emissions’ in this report refers to

GHG emissions as required for a GHG inventory.

This includes carbon dioxide alongside six other

greenhouse gases calculated in mass of carbon

equivalent (CO

e).

d. Energy conversion factors

We report underlying energy use for Scope 1 and 2.

Some liquid and gaseous fuels were converted from

a volume (e.g. litres) or weight (e.g. kilograms) into

kilowatt hours (kWh) of energy at a gross calorific

value. We used UK Government GHG Reporting:

Conversion Factors 2025 from Department for Energy

Security and Net Zero to calculate such conversions

in this report.

e. Emissions factor selection

Our primary sources for calculating carbon

emissions are: UK Government GHG Reporting:

Conversion Factors 2025 from the Department for

Energy Security and Net Zero. Market-based

emissions factors for electricity purchased are

provided directly from energy suppliers, with

evidence such as an assurance certification

or renewable backed certifications (e.g. REGO).

In the case of traction electricity, we use a market-

based emissions factor for non-renewable

electricity provided via the supplier’s website.

When supplier-specific factors are unavailable,

we use the UK fuel residual mix.

We are reporting on all our material Scope 3

emissions. The assurance of our Scope 3 emissions

is limited to categories (Waste, Water, Business

Travel, FERA and Upstream transportation and

distribution amounts limited to First Travel Solutions

emissions) for which we are currently able to gather

actual source data from along our value chain and

b. Methodology and boundary

Our carbon and energy reporting is prepared

in accordance with the following standards

and guidelines:



Greenhouse Gas Protocol (GHG Protocol) for

Corporate Accounting and Reporting Standard



UK Government Environmental reporting

guidelines: including Streamlined Energy and

Carbon Reporting requirements

For our zero emission buses target, we define zero

emission buses according to the UK Government

Zero Emission Bus (ZEB) Accreditation Scheme. We

include vehicles in preparation and exclude

coaches, training buses and end-of-life vehicles

from the total bus fleet owned or leased by the

Group in the UK and the Republic of Ireland. In our

year-end reported figure, we include vehicles owned

by all entities acquired during the financial year.

FirstGroup uses an operational control boundary

covering 100% of its business activities, with an

exclusion threshold of 2%. A small amount of data is

estimated where actual data is unavailable, based

on historic data.

For FY 2026, our reporting boundary includes

Lakeside Group, Anderson Travel and First Bus

London, all of which were acquired in the second half

of the FY 2025 financial year. It additionally includes

Matthews Coach Hire and Tetley’s Coaches, which

were acquired in the first half of the FY 2026 financial

year, and J&B Travel Limited, which was acquired in

the second half of the financial year. We are in the

process of collecting and consolidating energy and

carbon data for additional entities acquired during

the second half of the financial year. As per our

internal reporting guidance, this data will be

included in the next year’s reporting, with historical

data updated in line with our re-baselining and

restatement threshold.

To ensure our boundary remains relevant and

complete, annual reviews are undertaken to identify

and indicate the scale and the significance of any

change. We conduct:



legal entity reviews to ensure we continue to

report a clear scope and coverage regarding

revenue and activity



new or renewed materiality assessments for

our operating subsidiaries that were previously

excluded and fell below the 2% emissions

exclusion threshold

apply relevant emissions factors. For other Scope 3

categories in this report we have relied upon a

spend-based method to calculate emissions

and we will work towards gathering actual

emissions data from external partners in our

value chain over time.

f. Data methodologies and processes

FirstGroup ensures all divisions align their reporting

processes for consistent and comparable data

in accordance with good practice. The following

methodologies are detailed to provide transparency

where complex calculation or reporting systems exist.

Traction electricity categorisation

Traction electricity (EC4T) is provided to trains via

a third rail or overhead line distribution system owned

and operated by Network Rail. When on-train

metering is installed, traction consumption is based

on actual metered usage. Otherwise, Network Rail

models consumption based on estimations. After the

reporting cycle, Network Rail sends us the charge for

unbilled energy used on the system, known as

washup, and this is included in our Scope 2 emissions.

In the current financial year no washups from the

previous financial year were applicable. Washups

from this year will be included in next year’s report.

Trains can also generate energy from braking

and are able to provide this back into overhead

line distribution systems or use it to reduce train

energy demand. This energy is known as

regenerative braking. The energy recovered from

regenerative braking has been deducted from total

energy use. As per our operating agreements, First

Rail is billed for a proportional amount of line loss on

these distribution systems in addition to the energy

metered into the train. This reflects the losses of

transporting the electricity through the distribution

system. Emissions associated with line loss are

included in Scope 3 emissions.

Carbon and energy intensities

Carbon emissions (Scope 1, Scope 2 location-based,

Scope 3 limited to emissions from business travel,

waste disposal, water supply and treatment,

upstream transportation and distribution limited to

FTS emissions, and Out of scope) are normalised

against revenue to derive tonnes of carbon by £m

revenue. The underlying energy use comprising these

emissions is normalised against revenue in the same

way. Revenue used in these calculations only reflects

those entities with associated direct emissions

included in the FY 2026 reported emissions.

Carbon emissions relating only to passenger vehicle

fuels and electricity (Scope 1, Scope 2 and Out of

scope) are normalised by vehicle kilometre (vkm)

or passenger kilometre (pkm). Passenger kilometre

data is not available for all First Bus operations, so

emissions used for these calculations only reflect

emissions from those entities with associated

passenger kilometre data.

Due to its relatively low carbon impact and unique

operational nature, First London Cableway was

excluded from both pkm and vkm metrics.

Passenger kilometres

First Bus

– calculated using total passenger

journeys multiplied by the average journey

length for a non-London metropolitan bus

(National Travel Survey Average Bus Journey

length – NTS0303 (2024)).

First Rail

– calculated using the ORR statistical

methodology for passenger kilometres. This

information is provided from a national rail

system called LENNON.

Fuel used – biodiesel content

The FAME (Fatty Acid Methyl Ester) percentage

for fuel used in our train fleet is based on data

provided by our fuel suppliers. Where such data

is unavailable, a figure of 7% was used in line with

BSI standards.

Fuel and energy-related emissions (FERA)

Our FERA emissions include upstream emissions

from purchased bus and rail fuels, fuel purchased

using fuel cards, and purchased electricity, as well

as transmission and distribution losses from

purchased electricity.

Supplier engagement target

To calculate the supplier engagement target, we

identify all our suppliers covering Scope 3 category 1

– purchased goods and services – and category 2

– capital goods. We use a spend-based

methodology approach to determine their

emissions. The top 75% of suppliers by emissions are

then reviewed to understand whether or not they

have targets in place aligned with the science-

based approach. The results of this process allow

us to understand what percentage of our suppliers

have a science-based target and inform our

progress towards our supplier engagement target.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

opportunities and drive progress towards our

science-based targets. Energy use is monitored

through smart meters and periodic energy audits,

with performance data and project updates

reported to senior management on a monthly basis.

Employees across the business also receive training

to identify ways to save energy as part of their roles.

Across the Group, we continue to procure renewable

electricity, with the majority of our owned facilities

and all electric vehicles powered by Renewable

Energy Guarantees of Origin (REGO) backed

electricity. This year the proportion of renewable

energy we used was 8%, reflecting an increase in

100% renewable electricity used to power our buses.

In First Bus, we have completed low-energy lighting

installations and upgrades to bus wash systems,

air compressors and building control systems

to manage energy consumption. We have also

installed 25 solar photovoltaic (PV) systems as

part of our net zero emissions strategy. First Bus

is also expanding direct current fast-charging

infrastructure across depots to support the

transition to a low-carbon fleet. New depots are

being designed in line with our science-based

energy reduction trajectories. In First Rail, sub-

metering and smart energy systems are providing

enhanced visibility of energy consumption across

stations and depots. Building Management Systems

are in place at all Avanti and GWR stations, enabling

precise control of electricity consumption, while LED

lighting, sensors and wider efficiency improvements

continue to be implemented across

rail environments.

Environmental management

Our Group Environment Policy governs our

approach to the environment and is applicable to

all FirstGroup operations. In addition, our various

divisions also have their own environmental policies

that are bespoke to their operations, and we also

include environmental commitments in our Code

of Ethics and Supplier Code of Conduct.

Environmental management

systems (EMS)

We have implemented robust EMS in each of our

businesses, guiding our actions from the early

planning stages to ongoing monitoring across a

wide range of environmental matters including

biodiversity, energy, carbon, water, waste, circular

economy, supply chain and community

g. Accounting for estimation,

error and structural change

Exclusion threshold

We allow up to 2% of our emissions to be excluded

from our reporting each year.

Restatement threshold

To ensure our materiality thresholds have been met,

we apply actual data where it becomes available in

the subsequent reporting year and validate our prior

year’s reported data to ensure the total variance has

not affected our total carbon footprint by more than

2%. Where a material change is identified (over 2%),

the prior year’s data is restated.

Re-baselining

Re-baselining occurs where new acquisitions,

divestment, reorganisation or similar business

changes give rise to an absolute change of 5%

total carbon in the reporting year. Re-baselining

calculations are undertaken in accordance with

Appendix E of the GHG Protocol Corporate

Accounting and Reporting Standards.

Limited independent assurance

Grant Thornton UK LLP was engaged to provide

independent limited assurance in accordance with

International Standards on Assurance Engagements

3000 (Revised), “Assurance Engagements other than

Audits or Reviews of Historical Financial Information”

(“ISAE 3000 (Revised)”), and in accordance with

International Standard on Assurance Engagements

3410 – “Assurance Engagements on Greenhouse Gas

Statements” (“ISAE 3410”), issued by the International

Auditing and Assurance Standards Board (IAASB).

All externally assured metrics are highlighted

with a † symbol.

Grant Thornton UK LLP issued an unqualified

assurance report over the selected metrics

and its full report can be found on our website.

Energy

FirstGroup is committed to reducing energy

consumption and improving efficiency across

our bus and rail operations through energy

management systems, targeted infrastructure

upgrades, and switching to low- and zero-carbon

energy choices. Energy management is embedded

within our Environmental Management System

(EMS), with 64% of the business (by revenue) formally

certified to ISO 50001. Across our networks, we

conduct regular energy audits to identify efficiency

Energy performance indicators

FY 2026

FY 2025

FY 2024

Total energy use by source (MWh)

Non-renewable fuels

1,812,941

1,887,354

1,910,253

Non-renewable electricity

724,561

1,045,617

957,370

Total non-renewable sources

2,537,502

2,932,971

2,867,623

Renewable fuels

94,385

95,060

104,589

Renewable electricity

132,729

107,471

88,564

Total renewable sources

227,114

†

202,531

193,153

Total all

2,764,616

†

3,135,502

3,060,776

% change (year-on-year)

11.8%

-1%

Total % of energy from renewable sources

MWh per £m revenue (MWh/£m)

609

623

656

†

Metrics subject to limited assurance by Grant Thornton UK LLP are highlighted with a † symbol.

Figures reported for FY 2025 reflect the composition of the group as at FY 2025 year-end. While we have recalculated our energy-based FY

2025 carbon emissions to reflect changes to the business in FY 2026, we have not recalculated the underpinning energy totals for FY 2025

due to data constraints. Refer to the Climate section of this chapter for a description of the business changes and to see the recalculated

carbon emissions.

engagement. We operate in accordance with BS EN

ISO 14001 environmental management systems

across 89% of our Group operations by revenue. This

internationally recognised standard ensures that

we systematically address environmental concerns

and continuously improve our practices.

Each business identifies and reviews environmental

risks, including risks associated with environmental

emergencies, via enterprise risk registers which are

reviewed by senior leadership. Environmental

emergency response planning is managed by

individual divisions.

Culture and engagement

Throughout our business, we have dedicated

individuals who are trained to own and manage

our EMS, environmental reporting, and carbon

reduction and other environmental projects. These

individuals use their expertise to work with stakeholders

throughout the business to implement improvements

and report environmental performance to senior

management. Volunteer Green Champions across

the Group also engage local colleagues, promote

environmental initiatives, and drive measurable

improvements in energy efficiency, recycling and

overall environmental performance through

awareness campaigns and performance incentives.

Recognising that each division has unique needs,

we adopt a localised approach to developing

and implementing EMS. This flexibility allows our

business divisions to tailor EMS processes to their

specific requirements.

We had no environmental violations, fines or

penalties in FY 2026.

Environmental training

As part of our EMS in each division, we have

role-specific environmental training programmes,

ensuring that each member of our team

understands the environmental impact of their

work and how they can contribute to our collective

environmental goals. Our training modules are

regularly updated to reflect the latest environmental

regulations and best practices. We also encourage

our employees to seek out additional learning

opportunities to further their understanding and

expertise in environmental matters.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Water

We use water for vehicle washing and cleaning,

sanitation and drinking water supply usage. Whilst

our networks operate in the UK and Ireland, typically

in areas of limited water stress, we acknowledge

that water is an important resource and have put

in place various measures to reduce our usage.

We have water management programmes in place

across our networks to raise awareness, train

employees, conduct assessments, reduce our usage

and optimise the use of rainwater where possible.

We are taking various actions to reduce our usage

and impact. First Bus has upgraded drainage

systems to improve water management and has

introduced advanced bus wash technology at a

number of our bus depots, reclaiming around 95% of

water used in each wash cycle. First Rail is reducing

water use in carriage washers, using recycled grey

water for toilet flushing onboard trains, increasing

water refill points and engaging customers in water

conservation awareness. At many depots and

stations we have smart water meters installed,

enabling accurate monitoring, leak detection and

reduction measures, and rainwater harvesting to

reduce water withdrawals.

Water

performance

indicators

FY 2026

FY 2025

FY 2024

Total water

consumption (m

)

588,533

705,424

660,503

Air quality

We recognise that air quality has a significant

impact on the health and wellbeing of the

communities we serve and are committed to

reducing air pollutants arising from our operations.

The principal pollutants relevant to our activities are

primarily associated with diesel-powered vehicles

and rail traction, and include nitrogen oxides (NOx),

nitrogen dioxide (NO

) and particulate matter (PM).

Our approach to reducing these emissions centres

on fleet decarbonisation, including the transition

from diesel vehicles to zero emission electric and

hydrogen buses and trains, which helps to reduce

air pollution.

Waste

As stated in our First Bus Environmental Policy, we

are committed to environmental protection and

compliance in delivery of our services, including

minimising the production of waste, inclusive of

hazardous wastes and wastewater. First Bus

prioritises the waste hierarchy, preventing excess

resource use and reusing, recycling and disposing

of resources appropriately.

In First Rail, our divisions have waste management

targets, policies and practices that are bespoke to

their operations. Avanti manages rail-generated

waste in line with Simpler Recycling guidelines,

working with waste contractors to handle both

hazardous and non-hazardous waste streams. All

station sites have general, mixed, food and glass

bins for non-hazardous waste, and provide battery

recycling boxes for hazardous household batteries.

Across our networks at stations, depots, offices and

onboard, we train staff on waste management

practices tailored to their job roles. We have waste

managers to monitor waste, manage audits,

engage stakeholders and implement reduction

and circular economy projects. We also have waste

segregation officers who improve recycling rates

and prevent unnecessary landfill, as well as many

customer-focused waste reduction initiatives.

First Bus works actively with its supply chain to

reduce waste and increase diversion from landfill

by identifying take-back opportunities and

reducing packaging.

In FY 2026 we saw a slight increase in landfilled

waste from GWR. We will perform an internal review

to understand the drivers behind this.

Waste

performance

indicators

FY 2026

FY 2025

FY 2024

Waste by disposal

route (t)

Recycled

11,531

13,870

13,040

Energy from waste

1,523

3,882

3,384

Composted/anaerobic

digestion

239

379

357

Landfilled

Total

13,301

18,131

16,782

We monitor non-GHG air emissions through

station-based monitoring networks, fixed-location

assessments across bus routes, onboard ventilation

system performance data and publicly reported

air quality information from our train operating

companies. In our rail operations, we chair the Rail

Safety and Standards Board’s Air Quality Working

Group and contribute to a national air quality

monitoring network spanning 105 stations across

England and Wales. We have installed diffusion

tubes and other monitoring equipment to measure

NOx, NO

and PM, using this data to inform targeted

air quality improvement plans. Across our bus

operations, we have been mapping air quality

levels in selected areas where we operate, to

identify where the provision of zero emission buses

might be prioritised to help further address poor air

quality in specific locations.

While we have not yet established specific

quantitative reduction targets or defined standalone

deadlines for non-GHG air emissions, our ongoing

fleet transition and investment in zero emission

technologies are expected to eliminate emissions

over time. We continue to review the feasibility of

introducing measurable, time-bound non-GHG

air emission reduction targets in alignment

with regulatory requirements and emerging

best practice.

Noise

We work in consultation with various stakeholders

across our networks to monitor, manage and

reduce noise pollution. Across our divisions, bespoke

noise reduction strategies have been introduced to

take a proportional approach to managing noise

impacts. These strategies include publishing

internal noise policies where applicable, monitoring

implementation of idling policies, reviewing

governance around noise management, defining

budgets for noise management, maintaining

policies and practices for noise-related complaints,

regularly monitoring noise and identifying high risk

areas, such as dense urban areas, and finding

appropriate mitigations.

When procuring and introducing new vehicles,

we consider their noise impacts and seek to

ensure that they are compliant with noise reduction

specifications. An example of this can be seen

with the introduction of class 805 and 807 trains at

Avanti from 2023 which significantly reduce noise.

Biodiversity

FirstGroup is committed to reducing its impact

on the environment to preserve biodiversity

and prevent deforestation. We are committed to

working with our divisions and other industry

partners to protect, monitor and enhance

biodiversity across our networks. For example, Avanti

undertook comprehensive Biodiversity Net Gain

(BNG) surveys across all 16 Avanti stations. This work

established robust baseline biodiversity values and

informed the development of tailored Biodiversity

Action Plans for each site, forming the foundation of

Avanti’s overarching BNG Strategy. We also work

in partnership with third party stakeholders and

infrastructure providers across our networks to

protect and enhance biodiversity, such as through

the creation of wildlife corridors with Network Rail.

We also aim to engage our customers and local

communities with biodiversity and nature through

awareness-raising campaigns and events. In First

Rail, the Community Rail Network (CRN), an umbrella

body of community groups, partnerships and station

adopters, works closely with our TOCs and industry

partners to enhance stations and promote wildlife

with community gardens.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Passenger safety

We take seriously our duty of care to ensure that

our passengers can safely use our services. For

a description of our Group safety management

systems, which also govern passenger safety, please

refer to the Operational safety section on page 45.

We continue to collaborate with specialist charities

to deepen driver understanding of vulnerable

passenger needs, ensuring that safety

considerations are embedded in training

and day to day operations.

Service accessibility

We are committed to making our services

accessible and continue to support disabled

passengers and passengers who are mobility

impaired through innovative and inclusive initiatives.

We publish accessible travel policies and guidance

documents on our websites, in a variety of formats

including Braille, audio, large print and easy read

upon request.

Accessible by design

Across our networks, we work with industry partners

to introduce improvements such as accessible

boarding facilities, changing places toilets, lowered

service counters, tactile surfaces and sensory-

friendly features. Our bus and rail vehicles include

spaces for wheelchairs, mobility aids and mobility

scooters, which comply with legislative requirements

and industry guidelines. Our new electric buses

include a second ‘shared space’ that can be used

by a passenger who uses a wheelchair.

This year, GWR worked with Network Rail to complete

four Access for All schemes at locations across the

GWR network, giving passenger step-free access to

these stations for the first time. GWR also began an

assisted boarding points trial in Devon to improve

access to boarding train services at unstaffed

stations. Avanti has installed live British Sign

Language departure information on station totems

and help points. By October 2026 all our buses will

include next stop audiovisual information, in

accordance with legislative requirements.

Passenger assistance

We continue to improve rail operations accessibility

through training, technology and industry

collaboration. Colleagues are trained to support

passengers with a wide range of disabilities,

including sensory needs, autism, hearing loss, vision

impairments and non-visible disabilities. Passengers

can request assistance at many stations via help

points or passenger assistance teams, while

onboard staff can provide support and coordinate

with drivers and destination stations. Digital tools

are improving accessibility, including Lumo’s

360-degree virtual fleet tour and Avanti’s digital

wayfinding service. Goodmaps offers audio and

augmented reality guidance to help passengers

navigate Avanti and Network Rail stations. In First

Bus, all bus drivers receive passenger service and

disability awareness training, including information

on a wide range of disabilities and how to provide

practical assistance to passengers.

Demand for passenger assistance continues to

grow. GWR uses resource modelling to ensure

appropriate staffing and has established a

Passenger Assistance Forum to share best practice

and address operational challenges. Avanti has

also prioritised staffing at key stations including

Crewe, Preston, Carlisle and Stafford, and invested

in equipment such as wheeled ramps and

motorised wheelchairs to support safer and more

efficient assistance. Governance arrangements

at Avanti, including internal steering groups and

collaboration with Network Rail and the regulator,

help ensure continuous improvement in the

reliability and quality of assistance services.

Both GWR and Avanti are working with industry

partners to improve accessibility training.

Empowering new passengers

Our companies offer engagement days to

community groups, empowering individuals with

specific needs to feel confident using transport

services. We regularly run Try the Train events with

charity partners to support blind and partially

sighted people. These sessions are held in a quiet

disused carriage to help participants explore train

layout, build confidence and ask questions of

sighted guides. The events remove barriers and

empower independent travel. In Bus we have

continued our programme of the popular ‘swap

with me’ events providing groups representing

passengers with disabilities (in particular, sight

impairment) to swap roles with drivers to help each

group understand the challenges faced by the other.

In FY 2026 GWR was awarded the Autism Friendly

award across the whole of the network by the

National Autistic Society, recognising work

undertaken to support autistic travellers, including

tools to enable travel and training provided to

frontline colleagues.

Customers and society

We are focused

on providing safe,

accessible and

convenient services

and giving back to

the communities

we serve.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

First Bus issues a customer satisfaction survey to the

database of customers who have an account with

us. An average of 12,000 customers complete the

survey each quarter, scoring satisfaction on a scale

of 0 – 10 where 0 is completely dissatisfied and 10 is

completely satisfied. The average score across FY

2026 was 7.63. Our rail divisions report on customer

satisfaction on their individual websites.

Data privacy

Oversight of data protection risk is maintained at

Board level through the Audit Committee, which

receives compliance reporting, as well as privacy

risks identified through Group Internal Audit’s work.

All employees commit to complying with the law

and our policies. For data protection, relevant

employees must annually declare that they have

read and understood the FirstGroup Data Protection

Policy and ensure they complete mandatory data

protection training each year. In FY 2026 the training

was fully updated and the new version successfully

rolled out. In addition to mandatory training,

we provide enhanced training for functions

handling high risk personal data and run ongoing

awareness campaigns to reinforce a privacy culture

across the Group.

Our FirstGroup Data Protection Policy sets a

minimum standard and provides clear guidance to

employees on how personal data must be treated

to comply with legal obligations. It also explains key

legislative concepts and provides employees with

points of escalation when further advice or action

is required. The Policy applies to all employees

of companies that are either wholly or majority-

owned by FirstGroup plc. It also applies to

consultants, secondees, contractors and agency

staff in relation to their work for the Group.

Service affordability

We offer a range of ticket options, discounts, offers,

rewards and ways to pay. Customers can benefit

from regular discounts and railcards across our

services, including for commuters, students, families,

groups, disabled persons, veterans, jobseekers and

for different ages and locations.

First Bus continues to support multiple affordable

fare schemes throughout the UK, including free or

discounted travel for children, young people and job

seekers in specific regions during certain periods.

This includes the DfT fare cap scheme, which aims

to help the sector support customers while the cost

of living has increased, and at the same time

seeking to encourage greater bus use. The £2 fare

cap in England was raised to a £3 fare cap in

January 2025 and extended until 31 March 2027.

All our rail operators take part in the annual Great

British Rail Sale, offering up to 50% ticket discounts.

Discounts are complemented by offers and rewards,

including the Club Avanti loyalty scheme and GWR

Rewards, which together have attracted over a

million customers since their launch.

We offer customers bespoke mobile apps to help

them find journeys and tickets. The apps save

booking fees, offer rewards and discounts, and in

First Rail, provide automated Delay Repay payments.

1.8 million customers actively use the First Bus app.

Customer satisfaction

We ask our customers for their views on topics that

matter to them, including service performance,

safety and value for money. Our customer and

passenger satisfaction surveys allow us to measure

this, identifying what we do well and where we can

improve. We use regular survey results, and dialogue

with our customers and our people to help shape

our services.

Employees must also comply with the FirstGroup

Acceptable Use Policy which sets rules on

appropriate and safe use of FirstGroup

systems and/or devices.

We have a Group Data Protection Officer in

place who is appropriately skilled, operates with

independence and is granted necessary authority

in the performance of their tasks. They are supported

by the Group Legal team and long-standing external

legal partners. The established network of Data

Compliance Officers embedded across our business

are responsible for day-to-day compliance.

Privacy notices are published to ensure that

FirstGroup satisfies its obligation to provide certain

information to individuals when personal data is

collected. Each FirstGroup business is required to

have a public-facing privacy notice and an

employee privacy notice.

Our Supplier Code of Conduct requires any supplier,

service provider or other third party that processes

personal data on our behalf to enter into a contract

which includes appropriate data protection

provisions. Where appropriate, and prior to entering

into a contract, due diligence is conducted.

Our Information Security team ensures we have

appropriate technical controls in place to safeguard

the integrity and confidentiality of the personal data

we process. They are responsible for monitoring and

assessing threats and responding to attempted

attacks on our systems. We have procedures in

place to manage data security incidents

appropriately, including making appropriate

notifications to regulators and other stakeholders,

as well as informing the affected individual(s) where

required. We regularly conduct data security breach

exercises across our businesses and develop our

incident response based on lessons learnt from

those exercises, as well as from live incidents and

from incidents experienced by other organisations.

All colleagues must comply with the relevant

policies and any failure to do so will be treated

seriously and may result in disciplinary action.

We monitor compliance using a range of

measures including:



Group Internal Audit engagements



Complaints received from individuals



Correspondence from regulators



Training completion statistics



Data Protection Impact Assessment reviews



Queries received from the businesses

Cybersecurity

The Group’s cybersecurity strategy is led by the

Chief Information Security Officer (CISO), reporting

directly to the Executive management team,

ensuring cyber risk is governed as an enterprise

risk and integrated into operational resilience

planning. In addition to internal leadership

responsibilities, the CISO actively participates in

sector and national risk forums aligned with UK rail

and bus operations, including engagement with the

DfT, Network Rail cyber forums and collaboration

with the National Cyber Security Centre (NCSC) and

the British Transport Police (BTP) Cyber Team. These

partnerships strengthen our situational awareness

and support coordinated response and recovery

arrangements in the event of a significant incident,

an increasingly important capability as the NCSC

reports rising nationally significant incidents

year-on-year.

The Group maintains a comprehensive

cybersecurity governance framework, underpinned

by policies and standards covering information

security, privacy, data protection and cyber incident

management. These include a commitment to

continuously monitor and respond to threats and

establish responsibilities for information security

across our workforce and supply chain.

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

national and sector partners, independently

verified security standards (ISO/IEC 27001 and

Cyber Essentials), and a commitment to continuous

improvement, the Group remains well positioned

to manage cyber risks, protect critical digital and

operational services and support the secure,

resilient delivery of rail and bus transport for

customers and communities.

Charitable giving and

community investment

Our bus and rail networks help amplify charitable

efforts. We offer employee matched funding,

empowering staff to support causes they care

about, and in FY 2026, 165 employees took part in

our matched funding scheme, raising £24,700 for

charities. Employees can also donate directly to

a charity of their choice using our payroll giving

scheme, which raised over £109,000 in FY 2026.

Our charity partners, Macmillan (First Bus),

Samaritans and Railway Children (First Rail),

were chosen by employees and align with our

business values. To support our partners, we run

various schemes, including gift-in-kind donations

for advertising space, customer and employee

donations from fundraising initiatives, and

provide spaces to run events and awareness

raising across our networks. Overall, our total

charitable contributions across the Group came

to over £750,000.

Our DfT TOCs also support communities through

the DfT’s Customer and Community Improvement

Fund (CCIF), funding small and medium-sized

rail-related projects on our networks, including

accessibility schemes, educational projects and

heritage schemes.

Community Rail Partnerships (CRPs) are not-for-

profit organisations that connect railways with

local communities, promoting social inclusion,

sustainable travel and economic development.

With over 70 partnerships and numerous station

adopters, CRPs deliver a range of activities that

benefit local communities. Our DfT TOCs fund their

membership in the Community Rail Network,

providing access to grants, training, advice and

resources. Station adopters, including community

groups, charities and businesses, play a vital role

in local social, cultural and economic development.

To support the evolving threat landscape,

particularly the near-term uplift that artificial

intelligence (AI) is expected to bring to adversary

capability, we have enhanced our governance

further by implementing a dedicated AI Policy

and associated assurance and technical control

measures for AI adoption and use. The policy sets

out clear principles for the responsible use and

development of AI. It recognises the importance of

data privacy, cybersecurity and the avoidance of

potential bias in the use and development of AI and

highlights their relevance as key considerations. The

Policy requires that appropriate human review is

applied to critical decisions, with clear mechanisms

for human oversight and intervention where

necessary. It also promotes transparency by

requiring that AI systems and their outputs are

explainable and understandable. Clear

accountability is established for outcomes

produced by AI models and tools, and explicit

boundaries are defined to specify what AI systems

can and cannot do. The Policy is endorsed by

executive management and our control

environment is independently verified

and continuously improved.

The Group operates an ISO/IEC 27001 certified

Information Security Management System (ISMS),

providing a structured, risk-based approach to

establishing, implementing, maintaining and

continually improving information security controls

across people, process and technology. We

complete weekly vulnerability assessments and

regular internal reviews of the effectiveness of the

ISMS. In addition, we have achieved Cyber Essentials

certification across our businesses, providing a

Government-backed baseline of technical controls

designed to defend against the most common

internet-based attacks and to strengthen supply

chain assurance.

A strong security culture is promoted across the

organisation through mandatory training, role-

based learning and regular phishing simulations,

reinforced by clear reporting and escalation

pathways to enable swift response to suspicious

activity. This supports the NCSC’s consistent

message that cyber resilience depends not only

on tools, but on leadership, preparedness and

organisation-wide engagement. Through strong

executive oversight, active collaboration with

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Diversity and inclusion

Supporting a diverse workforce requires an inclusive

culture in which everyone feels valued, respected

and able to contribute their best, regardless of

gender, ethnicity, disability, background or any

other characteristic. We continue to invest in the

awareness, skills and leadership needed to embed

equity, diversity and inclusion throughout all parts

of our business.

Our Responsible Business Committee

reviews people initiatives and performance as

well as progress towards meeting Group goals

and objectives with regard to equality, diversity

and inclusion (ED&I), including the Parker Review

and the FTSE Women Leaders: Hampton-Alexander

Review. We have set targets to be achieved by

2028 for our senior leadership population, where

we aim to have 40% of roles filled by women, and

to have 11% of roles filled by colleagues who are

ethnically diverse.

In First Bus, all drivers complete ED&I training

as part of Driver CPC (Certificate of Professional

Competence) requirements, with updated content

being introduced to better support vulnerable

passengers, promote accessibility and address

safety issues such as violence and intimidation.

We also provide inclusive-leadership and awareness

training for managers and support teams, focusing

on behaviours, cultural understanding, wellbeing

and creating psychologically safe working

environments. We are also working with external

partners to develop further specialist content and

are exploring ways to make core ED&I learning

accessible to all colleagues across the bus division.

Across our rail businesses, colleagues receive

consistent, structured development from the point

of induction. All new starters complete training on

accessibility, ED&I, sustainability and role-specific

requirements, alongside mandatory eLearning

modules such as Disability Awareness, Harassment

and Sexual Harassment Prevention, and

Safeguarding. Frontline colleagues receive

additional safety and ED&I content tailored to

customer-facing roles, while managers complete

enhanced modules including reasonable

adjustments, sickness management, disciplinary

processes and inclusive leadership. Ongoing

development opportunities include unconscious

bias training, inclusive hiring and disability

awareness refreshers. Wellbeing support is further

strengthened by 50 trained Mental Health First

Aiders across our rail operations.

As of 31 March 2026, women occupied 20.9% of all

roles across the Group and 31.6% of senior leadership

roles

. Ethnically diverse colleagues occupied 18%

of all roles and 6.3% of senior leadership roles

Over the last 12 months, 16.7% of hires were women

and 32.1% from a minority ethnic group.

In collecting this sensitive data, 70% of our

colleagues chose to share their ethnicity, over 40%

shared their ability status and 49% shared their

sexual orientation. We continue to commit to

increasing disclosure of colleague protected

characteristics to better understand our workforce.

We are working with newly acquired bus and coach

businesses to capture and report on sensitive data.

Diversity performance

indicators

FY 2026

FY 2025

Employees by ethnicity

White

52%

54%

Ethnic minority group

18%

13%

Unknown

30%

33%

Employees by

disability status

Not disabled

45%

39%

Disabled

Unknown

51%

57%

Employees by

sexual orientation

Heterosexual

44%

42%

LGBT

Unknown

51%

54%

Workforce

We employ over

30,000 people in

depots, stations and

offices. Our people

are at the heart of

our business and we

are committed to

supporting them.

Gender performance

indicators

FY 2026

FY 2025

FY 2024

Women

Men

Total

Women

Men

Total

Women

Men

Total

No.

Total population

6,365

20.9

24,148

79.1

30,513

7,260

20.3

28,457

79.7

35,717

6,442

20.8

24,553

79.2

30,995

Senior management

31.7

68.3

32.7

67.3

32.8

67.2

Board

62.5

37.5

56.6

44.4

55.6

The above ‘senior leadership’ population is an expanded population from the reported Hampton-Alexander population which allows us to evaluate the success of our development programmes and track our

progress against targets.

Hampton-Alexander definition.

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Within First Bus, our approach is brought to life

through strategic partnerships with organisations

such as Imployable, where we support school-age

students with work experience and interview

preparation, helping to build confidence, skills and

employability. We also collaborate with Help for

Heroes to support veterans, reservists and their

families as they transition into civilian careers,

ensuring they are equipped to succeed beyond

military service.

We are particularly proud to be the only transport

operator in the UK to hold a Bronze Chartermark with

the Social Recruitment Advocacy Group. Through

this partnership, we actively champion inclusive

hiring by creating pathways into employment for

underrepresented groups, including individuals

from deprived communities, disabled people,

young people, ex-offenders and unpaid carers.

Attraction and recruitment

performance indicators

FY 2026

New hires

White

5,314

Ethnic minority group

2,578

Unknown

145

Male

6,565

Female

1,342

Other or unknown

130

Total new hires

8,037

Benefits and workplace measures

Across the Group we offer a range of parental

support measures. In First Bus, new and expectant

mother risk assessments and guidance for

managers supporting breastfeeding colleagues

are being introduced, alongside paid leave for

colleagues undergoing IVF treatment and their

partners. In First Rail, colleagues receive up to 52

weeks of maternity or adoption leave with enhanced

pay for part of the period, alongside paternity,

shared parental, adoption and bereavement leave.

Across rail businesses, new and expectant mother

risk assessments, private breastfeeding facilities,

flexible working options and dedicated carers’

leave help colleagues balance work and

family commitments.

Diversity and inclusion

development programmes

We run several personal leadership development

programmes aimed at women and ethnically

diverse colleagues. Our ascent UP, ascent

FORWARD and ascent ACCELERATE programmes

are designed for colleagues who belong to groups

underrepresented in management and leadership

roles – specifically women, ethnically diverse men

and women, those who identify as LGBTQIA+, and

those who identify as neurodiverse or living with

a disability. The programmes provide tiered

development support that builds confidence and

capability at key career stages, from preparing

for a first people-management role through

to progressing into mid-level leadership and

ultimately senior or executive positions. Together,

they create a structured pathway that strengthens

representation and supports progression across

all levels of leadership. In FY 2026, 160 colleagues

participated in ascent programmes.

The alumni network ‘First Connections’ includes

nearly 500 colleagues from underrepresented

groups who have completed one of our personal

leadership development programmes. The network

creates a self-supporting, diverse community of

talent to support each other in their careers.

Attraction and recruitment

We have an external careers website which

showcases opportunities at every level and

highlights colleagues from underrepresented

groups, helping potential applicants see themselves

represented in our workforce. Internally, colleagues

can explore roles, secondments and project

opportunities across the Group, supporting

progression for all. To broaden access to diverse

talent, we work with specialist recruitment partners

such as Routes into Rail, VERCIDA and Diversifying

Group, and run outreach activities aimed at

attracting candidates from groups traditionally

underrepresented in the transport sector.

Across our rail businesses, we practise inclusive

hiring by reviewing job adverts for bias, using

inclusive job boards and implementing objective

processes supported by diverse interview panels,

blind screening and accessibility adjustments.

Recruitment training is being enhanced to cover

unconscious bias, cultural awareness and inclusive

interviewing, informed by lived experience from ED&I

teams and Employee Networks.

We are also a period positive workplace, offering

free period products across our sites to support

colleagues’ wellbeing and open up conversations

about menstrual health. In First Bus we have

introduced neurodiversity toolkits for trainers

and introduced a new driver uniform which was

designed with inclusion in mind.

Training and development

Across the Group, we provide a wide range of

training and development opportunities including

eLearning, operational driver and Driver CPC

training, engineering skills and apprenticeships,

ensuring colleagues have the knowledge and

capabilities needed for their roles now and as the

industry evolves.

Alongside technical training, we are building

leadership capability to support colleagues

progressing into management roles. First Bus

launched Drive, a quarterly programme that equips

newly appointed managers with the essential skills

to lead themselves and their teams effectively.

Training and development

performance indicators

FY 2026

Total training hours

914,356

Average training hours per employee

30.0

Fair pay

To attract and retain the skills we need, we offer

a competitive wage reflecting local market

demands and conditions. First Rail, Avanti and

Tram Operations Ltd are accredited Living Wage

Employers and pay the Real Living Wage (RLW) to

colleagues and to third party contractors working

directly for the Group, in accordance with the Living

Wage Foundation rates of pay. GWR pays RLW to

directly employed colleagues. First Bus became

an accredited Living Wage Employer in 2024,

along with a commitment (outside of accreditation

requirements) to include all First Bus apprentices.

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statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business

continued

Supplier Code of Conduct, Health and

Safety Policy and Group Procurement Policy.

Value chain considerations are also covered

by our management systems and governance

processes to ensure that all stakeholders can

work in a safe environment.

Safety management systems

In First Rail, our rail businesses maintain a

comprehensive safety management system

focused on understanding the safety risk profile

of the operating company and ensuring suitable

risk mitigations are in place. Each company reviews

and updates their risk profile to reflect new and

updated legislation, changes within business

operations, such as new fleet introductions, audits,

recommendations from accidents and incidents

and horizon scanning. Some functions within the

businesses have ISOs such 9001, 18001 and 45001

to underpin continuous improvement.

In First Bus, the safety management system is built

around proactively identifying and understanding

operational risks to ensure appropriate controls are

in place. Risk identification is continuous, systematic

and embedded across day-to-day and non-routine

activities, with particular focus on new equipment,

processes and environments where emerging risks

may arise. Colleagues play a central role in this

process through safety meetings, toolbox talks and

hazard reporting, contributing crucial frontline

insight. Multiple information sources – including

incident and near-miss data, workplace inspections,

audits, employee observations, manufacturer

guidance and regulatory requirements – inform the

ongoing assessment of hazards, each evaluated for

potential harm, affected groups and the operational

conditions under which exposure may occur.

Operational safety

Safety governance

Our safety governance is how we keep our people

and passengers safe. We maintain robust safety

management systems throughout the Group,

ensuring compliance with legislation, policies and

procedures. Our Responsible Business Committee,

involving the Chief Executive Officer and members

of the Group Executive Committee, together with

First Bus and First Rail senior leadership teams,

oversee the Group safety strategy and

performance, procedures and practices

across all operating companies.

The Executive Committee oversees material safety

matters and risks across the Group and reviews

targets in respect of safety performance.

The Committee takes a proactive approach to

improving safety performance and undertakes

‘deep dives’ on specific high-risk areas to

understand root causes and inform safety

interventions. It is the responsibility of the

Committee to promote a positive safety culture

throughout the businesses and report back to

the Board on safety trends, actions and other

deliberations. Within our operating companies,

management teams have primary responsibility

for the design and implementation of effective

safety management systems, and accountability

for safety performance. The safety function provides

advice directly and through a series of networks

across the Group.

In the same way that we focus on providing safer

conditions for our colleagues and passengers,

we are equally committed to providing safer

environments within our supply chain and for

contractors on our sites. Over the years we

have strengthened value chain initiatives with

requirements outlined in our policies such as our

All identified risks are formally recorded in the

organisation’s risk register, ensuring transparency,

accountability and consistency in how hazards,

consequences, control measures and affected

parties are documented. Risk identification and

assessment are regularly reviewed to reflect

operational changes, lessons from incidents and

evolving business needs, supporting continuous

improvement within the safety management

system. Oversight is maintained at Board level,

where safety is treated as a core strategic priority.

The Board sets safety policies and risk appetite,

monitors performance and provides challenge and

scrutiny to ensure actions progress appropriately

and the system remains effective. The effectiveness

of safety management is evaluated using a range

of mechanisms, including key performance

indicators, internal audits and independent

assurance, where appropriate.

Safety training

In First Bus we focus on competence, compliance

and engagement which ensures we maintain a

strong safety culture. Our bespoke health and safety

training programme, certified by the Institute of

Occupational Safety and Health (IOSH) ensures

frontline colleagues are well equipped to

understand and adhere to safety management

protocols. The qualification is unique, relevant to the

road passenger transport sector, designed to ensure

better applicability to situations our colleagues face,

and is in the form of interactive learning through

bite-size content.

In First Rail a dedication to employee health and

safety is shared through induction, training,

communication, briefings, line management, peer

review and sharing of best practice. We maintain an

internal openness and accountability for identifying

health and safety issues, which includes partnership

working between employees and trade unions to

ensure a safe workplace. We also work closely with

rail industry partners to ensure we are aware of best

practice and lessons learned.

Safety performance indicators

FY 2026

FY 2025

FY 2024

Lost time injury rate (per 1,000 employees)

9.87

9.85

10.63

Passenger injury rate (per million miles)

14.74

13.73

13.53

Passenger injury rate (per million journeys)

5.47

5.53

5.34

Employee fatalities

Passenger injury rate figures per million journeys exclude data from First Bus London, as passenger journey numbers are not available for

this business.

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statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Case Study

Responsible Business

continued

several managers in trauma risk management

to support colleagues following traumatic or

potentially traumatic events. Rail businesses have

taken steps to protect dignity and safety at work

through zero-tolerance abuse charters and

strengthened welfare conversations.

Mental health awareness is reinforced

throughout the year through consistent and

visible communications, with national awareness

moments such as World Mental Health Day,

Mental Health Awareness Week and Time to Talk Day

providing focal points for colleague engagement.

Campaigns are supported by partnership activity,

including collaboration with Andy’s Man Club, and

updated wellbeing materials are distributed across

depots and offices to reinforce key messages and

improve accessibility.

Our approach continues to evolve in response to

colleague feedback. Employee survey insights have

informed the expansion of Mental Health First Aiders,

strengthened manager capability and

improvements to the EAP. We have also introduced

dedicated wellbeing resources across sites and

enhanced external partnerships to broaden access

to specialist support.

Engagement and culture

All our businesses carry out regular surveys, giving

colleagues the opportunity to share their views on

how they are managed, and how likely they are to

recommend FirstGroup as an employer.

Surveys are anonymous and managed by an

external company to encourage candid feedback.

The most recent colleague engagement survey

conducted by First Bus showed a further increase in

Engagement Index of 2 points from FY 2025 to 66%.

The survey measures job satisfaction, purpose and

stress, among other metrics. For rail operating

companies that conducted a survey in FY 2026,

engagement levels were 71%.

Survey results are not simply measured but acted

upon. They inform strategic priorities, are used to

strengthen connections between leaders and

frontline colleagues and have driven focused efforts

to embed everyday recognition. Local leaders also

use their insights to take tangible steps that improve

the daily experience of colleagues, turning feedback

into meaningful change.

Mental health and wellbeing

Wellbeing in FirstGroup is defined broadly, covering

physical, mental, financial and social wellbeing.

Across the Group, all colleagues can access a digital

Wellbeing Hub with physical wellbeing resources,

including signposting to activity programmes,

exercises, healthy eating and balanced routines.

Employees can also make use of fitness discounts

and cycle to work schemes to support active travel.

FirstGroup executive leadership and management

are committed to actively encouraging a culture of

openness on mental health, and to creating a

working environment where colleagues feel

supported, healthy and safe. Our approach

combines Group-wide resources with locally

tailored initiatives across bus and rail operations

supported by year round mental health awareness

and consistent Group-wide communications.

The Wellbeing Hub provides mental health

information, signposting and confidential support.

Our third party Employee Assistance Programme

(EAP) is available 24/7, 365 days a year, providing

phone counselling and practical support for work

or personal issues. Further specialist support is

available in partnership with Able Futures who

provide confidential advice and guidance from

a mental health specialist and access to therapy.

We have more than 650 trained Mental Health

First Aiders across our operations, providing

direct support for colleagues at times of stress

or challenge. In First Rail, this includes coverage

across all rail companies. In First Bus, 80% of line

managers have attended Mental Health Champions

training or are Mental Health First Aiders.

First Bus complements this through targeted

initiatives, including Money First Aid training to

help colleagues experiencing financial difficulties.

Voluntary health checks and wellbeing data help

inform future priorities, while vaccination

programmes and food education sessions further

support day-to-day health. Additional resources,

such as neurodiversity toolkits and inclusive uniform

design, help ensure all colleagues can work safely

and comfortably. Rail businesses offer a wide range

of wellbeing support, including dedicated wellbeing

leads, peer support networks, flexible working

arrangements and structured wellbeing

programmes. In First Rail we have also trained

Employee engagement performance indicators

FY 2026

FY 2025

Engagement Index survey results

First Bus

66%

64%

Rail operating companies

71%

NR Indicates historic metrics that were not previously reported.

Employee voice at Board level

In FY 2026 FirstGroup established a Colleague Advisory Panel to ensure that employee voices are heard

directly at Board level. The panel comprises 19 employees representing a broad range of businesses

and roles. The panel will meet twice yearly to share what is working well and what could be better,

directly speaking with Board members and supporting the Board’s decisions to enhance both employee

and customer experiences.

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

Our commitments, actions and

focus areas

We were the first UK public transport operator to

support the Task Force on Climate-related Financial

Disclosures (TCFD), and this will be our sixth year of

reporting against the framework in our Annual

Report. Our business strategy was updated in 2024

to reflect our progress and ambition, with driving

modal shift and leading in environmental and social

sustainability at the heart of this new strategy. This

strategy was built upon in 2025 with the release of

our first ever Climate Transition Plan (CTP) in line

with the Transition Plan Taskforce (TPT) framework,

detailing our approach to reducing GHG emissions,

managing climate-related risks, and contributing to

an economy-wide transition through modal shift

and encouraging more people to switch to lower-

impact forms of transportation. This plan sets out

a comprehensive strategy for achieving our climate

transition goals, describing our governance,

dependencies, financial planning and risk

management approach. It also outlines our

ambitious goals and targets along with our progress

and future trajectories. These include our science-

based targets outlined on page 34 and progress

reported on pages 34 and 35.

To ensure the success of our business for the long

term, we are focused on climate change adaptation

and resilience – understanding the short-, medium-

and long-term physical and transition impacts

climate change can have on our business, and

taking action to mitigate risks and capture the

opportunities. Climate change is managed and

reported as one of our principal risks and has been

integral to our risk management framework for

many years.

Following a qualitative review of climate-related

risks and opportunities in FY 2021, and a quantitative

scenario analysis and financial impact assessment

in FY 2022, we have worked with key internal

functions for the past four years to build further

understanding of climate risks and opportunities

and understand how they are being addressed.

Last year the publication of our Group-wide CTP

took this a step further by clearly outlining

trajectories and plans over the short, medium

and long term to 2050. This year, we further

strengthened our understanding of physical

climate risks and opportunities through a

dedicated financial impact assessment.

This TCFD update therefore provides a summary

of the key climate-related risks and opportunities

already reported for the first time in our Annual

Report 2022 (pages 61 to 66) as well as those

physical risks and opportunities identified this year,

and an overview of what we are doing to continue

to reduce our carbon footprint and build climate

resilience. We report against the four pillars of

TCFD – Governance, Strategy, Risk Management and

Metrics & Targets – and the individual requirements

of each (see the table on page 48 for the location of

relevant disclosures). In line with the UK Listing Rules,

we confirm that disclosures are consistent with the

TCFD recommendations. Under the Metrics and

Targets section, we explain how Scope 3 emissions

are included in the Annual Report, including

emissions calculated using actual source data from

our supply chain as well as emissions calculated

using a spend-based method.

In preparing these disclosures, we considered

the 2021 TCFD guidance ‘Implementing the

Recommendations of the Task Force on Climate-

related Financial Disclosures’, including the

supplementary guidance for the Transportation

group. However, we recognise that climate-related

risk assessments are subject to data availability,

trend projections and underlying business

assumptions. It is therefore important to continue

to monitor climate-related risks and how they

evolve over time. Following our initial climate risk

assessment in 2022, we completed a supplementary

assessment in 2026 to upgrade our understanding

of physical climate risks. We will complete an

additional assessment in 2027 to upgrade our

understanding of transition risks.

Finally, we look at our TCFD work not just as a vital

mechanism to build long-term business resilience,

but also as an important step towards increased

transparency around climate as well as broader

sustainability-related risks and opportunities, in

line with recommendations by the International

Sustainability Standards Board (ISSB). We will

continue to monitor developments in reporting

standards, including the UK’s Sustainability

Reporting Standards, and ensure that we are

ready to report in a compliant manner as the

requirements are introduced.

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statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

TCFD recommendations

Subheading

Page

Governance

a) Describe the Board’s oversight of climate-related risks and opportunities.

Board oversight

Read more on page 55

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Governance

TCFD recommendation:

Disclose the organisation’s governance around climate-related risks and opportunities.

Management of climate-related risks is aligned with

the robust corporate governance frameworks and

processes in place throughout the Group. The Board,

Executive Committee and our individual Bus and Rail

divisions regularly review climate-related risks in

accordance with the Group’s risk management

framework and consider broader sustainability

matters in line with duties included in the Corporate

Governance Code and Section 172 (see page 59).

Board oversight

The Board is responsible for promoting the

Company’s long-term sustainable success for the

benefit of its shareholders. This aim extends to the

setting of our approach to climate-related risks and

opportunities and our decarbonisation ambitions,

which now form a key part of our broader business

strategy. Driving modal shift and leading in

environmental and social sustainability are both

placed at the heart of this strategy, forming two of

the four strategic pillars.

Our Responsible Business Committee of the Board

meets four times a year to review the practices and

performance of FirstGroup, its companies and joint

ventures, with respect to health and safety, our

people and communities, the environment and our

decarbonisation transition. The Chair of the Board

has overall responsibility for the Committee, which

comprises several Board members with specific

climate-related and energy transition expertise,

described in more detail on pages 75 to 77.

At each meeting, the Committee receives a detailed

performance update from First Bus and First Rail

against specific commitments and targets and

discusses strategic priorities going forward. Over the

last year, the Committee reviewed and guided, for

example, an updated physical climate risk

assessment, work to understand how future

business changes will influence carbon emissions

and our annual performance against our science-

based targets. The Committee also advises the

Remuneration Committee of the Board on the

climate-related KPIs embedded in our variable

incentive schemes.

In addition, the Audit Committee supports the Board

in risk management, including climate-related risks,

and is responsible for reviewing the effectiveness of

risk management and internal control processes.

The Audit Committee reviews climate-related risks

as relevant in relation to going concern, Viability

statement and the assessment of impairment.

See page 73 for more information on Board

Committees and how our Board operates,

and pages 60 to 62 for more details on how

risks are reviewed and considered in strategic

business decisions.

Management’s role

The Executive Committee provides leadership and

direction for the Group on sustainability matters,

including climate change, with sustainability topics

presented by the Group Corporate Responsibility

and Finance teams for discussion and decision

making as they arise. The Executive Committee also

integrates decarbonisation commitments into

strategic decisions, major transactions and risk

management, carefully considering any trade-offs.

Executive responsibility for sustainability matters

is held by the CEO. Executive responsibility for

climate-related financial risks and opportunities

is held by the CFO, who represents these matters

at Board level.

First Bus and First Rail have executive management

individuals responsible for driving environmental

sustainability across the divisions, leading

on the development and implementation of

decarbonisation strategies and risk mitigation

actions. In First Bus, the Chief Sustainability

and Compliance Officer sits on its Executive

Committee to oversee this agenda and

participates in a cross-functional decarbonisation

forum that meets monthly to set policy, drive action

and review progress. First Rail holds a quarterly

Sustainability Leadership Group, involving senior

leaders from across multiple directorates,

including Procurement, Finance, Property and HR.

Representatives from each TOC, open access

operations and other Rail Services businesses

are also included. The standard agenda includes

existing and emerging business environmental

risks, including climate change and opportunities to

improve our range of services in a more sustainable

manner. The Sustainability Leadership Group reports

directly to the Responsible Business Committee.

To strengthen ownership and accountability,

climate-related KPIs are embedded into our variable

remuneration practices. For example, our Long-Term

Incentive Plan (LTIP) awards, made to the CEO, CFO

and other senior leaders, include two measures –

one related to the number of zero emission vehicles

in our bus fleet, and one linked to a reduction in our

absolute Scope 1 and 2 emissions (see page 99 for

more details). Performance against these targets is

reviewed half yearly by the Remuneration

Committee of the Board.

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statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Strategy

TCFD recommendation:

Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy

and financial planning where such information is material.

Climate change is managed as a principal risk

and is a core consideration in business strategy

and decision making. Physical risks include more

frequent and intense precipitation and extreme

temperatures, whilst transition risks include changes

in policy, technology, customer and investor

expectations. Simultaneously, we view a shift in

customer preferences towards lower-carbon

alternatives and strong governmental and

regulatory support for transport decarbonisation

and modal shift as key business opportunities.

Climate-related risks and

opportunities and scenario analysis

In FY 2022 we worked with a specialist consultancy

to model potential physical and transition risks and

opportunities over the short, medium and long term,

and to estimate cumulative Enterprise Value at Risk

over a five-year period (2022-2027). In FY 2026, we

updated our awareness of physical risks with an

additional assessment of short-, medium-, and

long-term physical climate risks to estimate

cumulative Enterprise Value at Risk over a five-year

period (2026-2031) and ten-year period (2026-2036).

This TCFD update provides a summary of the results

of these two assessments and an overview of

what we are doing to continue to reduce our

carbon footprint and build climate resilience

across our operations.

2022 scenario analysis

With no significant change to underlying

assumptions since our 2022 assessment, this TCFD

update provides a summary of the transition risks

identified in our scenario analysis reported in 2022.

We modelled impacts across five different climate

scenarios, from which we selected the two most

extreme scenarios and the ‘Stated Policy’ scenario,

to consolidate the findings, while still illustrating the

full range of estimated impacts. The details of the

selected scenarios are shown in Table 2. Across

these scenarios, we looked at potential transition

and physical impacts to our business from 2022

until 2027 (short term), 2035 (medium term) and

2050 (long term). The medium- to long-term

scenarios align with First Bus’s target of a zero

emission commercial bus fleet by 2035 and

the UK’s net-zero goal by 2050. Refer to our

2022 Annual Report (at pages 61 to 63) for

more details on individual scenarios.

2026 scenario analysis

Using a digital twin of FirstGroup, we assessed

89 principal sites within our control for their

vulnerability to extreme weather events in

different future climate scenarios. The digital twin

considered operational sites related to our bus and

open access rail operations and reflected both the

value of these sites and their contents as well as

their contribution to business revenue.

The assessment considered four Emissions

Pathways, informed by the Intergovernmental Panel

on Climate Change’s Shared Socioeconomic

Pathways (SSPs) and the Network for Greening the

Financial System (NGFS) pathways. These pathways

range from an optimistic scenario (SSP1-2.6) to a

highly damaging, ‘worst-case’ scenario (SSP5-8.5).

These scenarios were chosen to assess the

sensitivity of the business’s financial risk and

resilience to a diverse and representative range of

climatic outcomes.

To assess the likelihood of climate-related extreme

events, including heatwave, freeze, drought, flooding

and windstorms under these scenarios, we relied on

the Climate Hazard Atlas developed by Risilience in

partnership with the Cambridge Centre for Risk

Studies at the Judge Business School in the

University of Cambridge. We considered risks in the

near term (2031), medium term (2036) and long term

(2040). The medium-term scenario aligns with First

Bus’s emissions reduction target and 2035 zero

emission commercial bus fleet target.

Table 1: Climate scenarios considered in 2026 scenario analysis

NGFS and SSP Scenarios

Current

policies

Nationally

determined

contributions

Delayed

transition

Below

2°C

Net Zero

2050

Global temperature increase by 2100

(°C) – NGFS

3.0°C

2.3°C

1.7°C

1.8°C

1.4°C

Global temperature increase by 2100

(°C) – SSP

3.6%

2.7%

1.8%

Transition risks and opportunities

Our analysis of transition risks considered potential

impacts on our business from changes in policy

(such as carbon pricing), technology (additional

capital expenditure required to deliver a zero

emission fleet), brand reputation (customer

expectations, and FirstGroup’s environmental

credentials and ability to meet carbon-reduction

goals), and capital markets (investor expectations

and impact on funding access/costs).

Given our industry, we also expect growing

opportunities over the coming years to counteract

some of these risks, mainly linked to a more rapid

modal shift supported by customers’ increasing

climate consciousness and more stringent climate

policy and market incentives. We are working with

our bus and rail divisions to understand how the

pace at which we electrify our fleet and progress

towards our net-zero goals could affect our ability to

capture these opportunities.

Our modelling work identified impacts from policy,

technology, investor and customer behaviour as the

most material to our business, as outlined in Table 2.

There is also a detailed description of the impact of

each risk or opportunity on our business within the

Risk Management section. Risks or opportunities

were considered material if they had at least a

‘medium’ impact under at least one scenario in

Table 2. It is important to note that these potential

impacts focus on direct risks to FirstGroup,

recognising that under the current NRCs some of the

wider risks and opportunities for our Rail operations

would be shared with or transferred to third parties.

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Financial

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Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Strategy continued

Table 2: Transition risks – potential Enterprise Value at Risk, cumulative over five-year period (2022–2027), assessed against different emissions pathways scenarios

Transition risks/opportunities

No Policy

Stated Policy

Paris Aspiration

How we are responding

No global emissions reduction target

leading to a global temperature increase

of >4°C

A global emissions reduction target of 75%

by 2100 leading to a global temperature

increase of 2.5°C

A global emissions reduction target

of net zero by 2050 leading to a global

temperature increase of 1.5°C

Policy

Action by central

government/

regulators, including

carbon pricing

Low impact



Expected carbon price of ~£2 per

tonne by 2025 in some regions



Low emission zones leading to some

route constraints

Medium impact



Expected carbon price of ~£30 per

tonne by 2025 across the UK



Zero emission zones leading to

further route constraints and

potential loss of licence to operate

Medium impact



Expected carbon price of ~£65 per

tonne by 2025 across the UK



Zero emission zones leading to significant

route constraints and potential loss of

licence to operate

Please see pages 14, 33, 42 and

48 of our CTP which describe our

approach to public sector

engagement

Technology

Cost and availability

of new technology to

support a lower

carbon economy

Low impact



Potential impairment of carbon

intensive vehicles



Ongoing investment in zero emission

fleet to meet current commitments

Medium impact



Increasing impairment of carbon

intensive vehicles



Some investment in zero emission

fleet ahead of current schedule



Some increase in cost of zero-carbon

vehicles and green electricity

High impact



Significant investment in zero emission

fleet ahead of schedule



Substantial increase in cost of zero-

carbon vehicles and green electricity, due

to demand outstripping supply

Please see pages 27 to 30 and

37 to 39 of our CTP which

describe our decarbonisation

actions

Investors

Financing influenced

by environmental

credentials

Low impact



Low focus from investors on green

credentials

Medium impact



Moderate focus by investors



More favourable interest rates for

green companies

High impact



Significant focus by investors



Expected green covenants in financing

Please see page 18 of our CTP

which describes our approach

to financial planning

Customers

Demand driven by

sustainability of

products and

services, leading to

increased modal shift

towards public

transport

Limited opportunity



Small shift to public transport, due

to increasing environmental impacts

and customers’ climate awareness



No transport policy to encourage

modal shift to public transport

Medium opportunity



Increasing shift to public transport due

to customers’ growing climate

consciousness



Some transport policy to encourage

modal shift to public transport

High opportunity



Substantial shift to public transport due

to customers’ high climate consciousness



Substantial transport policy to encourage

modal shift

Please see pages 14, 17, 31 to 32,

40 to 42 and 48 of our CTP which

describe our approach to

driving modal shift

Low impact

<£20m

Medium impact

£20m–£50m

High impact

>£50m

Limited opportunity

<£20m

Medium opportunity

£20m–£50m

High opportunity

>£50m

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Strategy continued

Physical risks

When looking at physical risks, we considered the

potential impacts of coastal, riverine and flash

flooding, drought, heatwaves, extreme cold,

windstorms and wildfires. Sites considered included

bus and coach depots, bus parking locations, bus

stops, and rail stabling locations for our open-

access companies. Financial impacts from these

events were evaluated based on both physical asset

damage and operational disruption due to the

reduction in operational capacity. To mitigate

uncertainty, results reflect a mean average result

derived from multiple climate models.

The model showed that the majority of FirstGroup

sites have low risk of physical climate hazards

occurring. In the current policy scenario

(3.6°C world), five sites have a medium or higher

probability of riverine flooding, and 16 sites have a

medium or higher risk of temperate windstorm.

The model found that in all climate scenarios, the

total disruption to facilities is likely to be less than

the historical disruptions experienced, primarily

due to a reduction in flood events from major river

systems. Reductions in large-scale riverine flooding

under current policies are mainly driven by climate

induced drying and higher evapotranspiration,

which lower soil moisture and baseline river flows,

making the prolonged, saturated conditions needed

for major floods less likely despite more intense

short-term rainfall. As a result, the estimated

potential annual financial impact is negligible

in the near term (2031), medium term (2036) and

long term (2040) compared to a FY 2025 baseline.

This assumes that a lesser degree of business

disruption and expenditure on mitigating activities

will occur in the future, as physical disruptions are

reduced due to climate change. These results

represent a mean average result derived from

multiple climate models in order to mitigate

uncertainty to the greatest possible extent.

Our assessment focused on potential impacts to

assets that we own, lease or manage, but our

exposure to climate risks critically also depends on

assets that are owned and managed by third

parties, such as rail tracks owned and managed by

Network Rail. We continue to work closely with key

stakeholders across the rail industry on this agenda

as part of a forum on climate change adaptation

convened by the DfT, sharing our approach to

climate risks and facilitating closer collaboration

on risk mitigation and climate adaptation.

Impact on strategy, investment

decisions and financial planning

We set out the four pillars of our business strategy

on pages 13 to 14. Our First Bus and First Rail divisions

have aligned around these strategic drivers with

clear priorities now in place.

In First Bus we have identified a clear plan to

navigate the market transition, to grow and

diversify our portfolio and steadily grow our

earnings. To do this, we intend to win our fair share

of the franchise market across the UK, develop our

existing Regional Bus business, grow our Business

and Coach services earnings and market share,

and continue to actively evaluate a pipeline of

inorganic growth opportunities in existing and

new areas across the UK. Coupled with this,

we will make use of our property portfolio and

decarbonisation credentials to drive innovation,

leverage electrification efficiencies and generate

new revenue streams in the energy sector.

Transitioning to a 100% zero emission bus fleet

involves significant capital expenditure and

potential impairment costs, which are both factored

into long-term business strategy and financial

planning cycles of the Group. Our decisions on

capital allocation for new zero emission buses are

driven by considering a total cost of ownership (TCO)

model. This considers both the upfront purchasing

costs and the ongoing operational costs over the

typical lifecycle of a vehicle. Our operational teams,

vehicle manufacturers and infrastructure partners

are working collaboratively to reduce the TCO for

electric buses as compared with diesel alternatives,

particularly in high-capacity city operations.

Investment focuses on depots and routes most

suitable for deployment of electric buses and

associated infrastructure, facilitating further

emission reductions through cascades across our

wider depots of newer Euro VI diesel buses to replace

older models. Financing the bus transition involves

generating cash from operations, requiring higher

operating margins to support the necessary capital

expenditure. We expect this to be achieved through

passenger revenue growth, efficiencies from

transitioning to an electric fleet, route and fare

optimisation, and maximising use of

decarbonisation infrastructure. Please see page 18

of our CTP for more details.

In addition, our earlier TCFD work highlighted a

potential increase in future costs from, for example,

new environmental regulatory requirements (such

as carbon pricing) or technology and supply chain

challenges (such as an increase in the cost of zero

emission vehicles and green electricity if demand

outstrips supply). These factors are considered in our

Viability and going concern statement (see pages

70 and 71).

In First Rail, we are focused on growing our

successful open access business and identifying

adjacent opportunities where we can apply our

deep sector expertise.

With rail tracks and infrastructure owned and

managed by Network Rail, any exposure to climate-

related physical risks is shared with them. Any

approach to mitigation actions therefore requires

close industry collaboration.

Strategy resilience

Our business strategy pillar leading in

environmental and social sustainability sets out

clear decarbonisation goals, including running

a 100% zero emission bus fleet by 2035 and reducing

our overall Scope 1 and 2 emissions from bus and rail

by 63% by the same year (from a 2020 base year and

in line with a 1.5°C science-based carbon reduction

pathway). Our modal shift pillar includes goals to

add capacity to our First Rail open access business

and to reposition the First Bus customer proposition

to expand First Bus services where the car is

becoming less attractive.

Further detail on the steps we are taking to deliver

our climate ambitions and build resilience into

our overall business strategy is set out in our CTP.

This document includes a description of the

specific actions being taken, accountability for

these actions and the dependencies we are

addressing. The plan also outlines the policy

support we feel is required and engagement we

undertake with industry bodies and public sector

stakeholders to bring it about.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Risk management

TCFD recommendation:

Disclose how the organisation identifies, assesses and manages climate-related risks.

Approach to risk management

We take a holistic approach to risk management, building a picture of the principal risks at divisional level, and consolidating these alongside Group-level risks into a Group-wide view (see page 60). The Board assesses

the effectiveness of the Group’s risk management system and receives reports on principal risks, including climate change. It also reviews the external risk environment, scrutinises assessment of key risks and determines

strategic action points.

The Group’s Sustainability teams provide regular ESG updates and insights on market developments to relevant stakeholders and functions across the Group. Climate change is managed as a principal risk, with the

aspects below identified as most material. We have summarised our mitigation actions below, but these are set out in more detail against clear timelines in our recently launched Group-wide CTP.

Policy

risks

More stringent climate policy could result in increased

carbon taxes, road pricing in low-emission zones,

policy-driven compliance costs and enhanced

emissions reporting requirements. An increase in carbon

pricing is expected to drive increases in energy, facility

and material costs. This would be exacerbated by

increasing mandates on the carbon intensity of our fleet

and a diminishing secondary market for legacy diesel

vehicles. At the same time, transport policies such as

road pricing could support an accelerated modal shift

from private cars to public transport and create key

opportunities for our business.

Risk mitigation actions and business opportunities

We have set ambitious decarbonisation goals, including achieving a zero emission bus fleet and a 1.5°C aligned science-based carbon

reduction target for FirstGroup as a whole, with clear progress reported year-on-year. We consider the impact of any business acquisitions

on these targets. See pages 34 to 38 for more details.

We continue to work closely with governments, industry bodies and other stakeholder groups to monitor regulatory developments, affect and

foresee policy changes, and proactively respond to evolving conditions. In summer 2024, First Bus launched a new white paper ‘Let’s inspire

the nation to love and use the bus’ which can be found on the First Bus website. Its key headline was that buses are key to unlocking

economic, social and environmental benefits – as they can deliver quickly and effectively across many different challenges, including

congestion, carbon and air quality. It sets out several fundamental issues with direct relevance to our climate transition, with clear asks

of government on a policy framework, and describes how bus operators can play their part. See page 33 of our CTP for more details.

First Rail is strongly represented on the Sustainable Rail Executive, convened by the RSSB, and also chairs its Sustainable Rail Leadership

Group. This has enabled us to be heavily involved in the development of the industry-wide Sustainable Rail Blueprint, the first industry-wide

sustainability plan, co-created and facilitated by RSSB with industry and overseen by DfT. The Blueprint provides a framework for aligning

strategies and commitments across the industry to establish rail as the backbone of a cleaner future transport system. We are also active

members of the industry-wide Climate Change Adaptation Working Group, which leads and defines a collaborative industry approach to

weather resilience and climate change.

Technology

risks

As we move towards a ‘Paris Aspiration’ scenario

(in which policies are put in place to limit global

temperature increase to 1.5°C above pre-industrial

levels), the transformation to net-zero operations would

have to be significantly accelerated, leading to potential

write-offs, asset impairments and/or early retirement

of existing fossil fuel-related infrastructure and vehicle

assets. There could also be additional supply chain

challenges and costs if the transport sector starts

competing for the same technology and specialist

resources and demand outstrips supply. On the other

hand, prices of battery packs are expected to fall due

to continuous innovation and increasing economies

of scale. In addition, with an increasing number of

businesses looking to decarbonise their operations,

our investments in electric vehicles and charging

infrastructure create significant B2B opportunities.

Risk mitigation actions and business opportunities

In First Bus, careful planning is taking place to ensure an efficient and effective conversion of our existing infrastructure to one powered by

electricity. To help guide our investment decisions, we have constructed a total cost of ownership model that compares an electric bus and

infrastructure with the diesel equivalent over its full lifecycle.

The TCO over the life of the electric vehicle, for now, is a little more expensive than diesel. We are aiming to bring this TCO down for our electric

buses through several initiatives, including: i) a joint venture with Hitachi to support the purchase of up to 1,000 electric bus batteries; ii) smart

charging software; iii) optimisation of ‘in day operated’ mileage; iv) making our chargers available for use by other businesses and the

general public; and v) standardising our fleet. Please see page 28 of our CTP for more details.

Within First Rail, a key focus is upgrading our rolling stock to electric or bi-mode trains wherever possible. As of FY 2026, Avanti West Coast no

longer operates any diesel-only trains, having replaced diesel-powered Voyagers with bi-mode trains capable of switching between electric

and diesel. This year, GWR introduced the UK’s first rapid-charging battery train into service in west London.

We have also acquired track access rights to run new open access rail services from London Euston to Stirling and London Paddington to

Carmarthen. As part of this, we have entered into a contract with Angel Trains and Hitachi Rail for the lease and maintenance of 14 new

five-car electric, battery electric or bi-mode trains at a cost of around £500m over a ten-year lease period.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Risk management continued

Customer

and

investor

risks

Growing awareness of climate change amongst the

public is expected to drive demand for more sustainable

travel options, whilst climate-related risks and

opportunities may increasingly affect investors’

priorities and access to capital funds. For our industry,

this creates key opportunities to grow our customer base

as well as the volume of transport services delivered to

our existing customers, subject to the pace of our fleet

electrification and the perception of the sustainability

of our brand and services in relation to other operators

and transport alternatives.

Risk mitigation actions and business opportunities

Driving modal shift by encouraging a step change from car and air travel to bus and train is a key pillar in our new business strategy. First Rail

is focused on growing our open access business by adding capacity, enhancing timetables and applying for new and complementary routes

where there is proven demand. Since its launch, Lumo has carried more than four million passengers and Hull Trains has had a faster

post-pandemic passenger recovery than any other operator.

First Bus is focused on driving modal shift by repositioning its core customer proposition and aligning with changing travel patterns. Regional

bus passenger volumes decreased by c.3% in FY 2026 mainly due to the impact from the transition of the fare cap in England from £2 to £3

and lower consumer confidence. Our teams worked to manage yield within the constraints of the £3 fare cap to offset some of the decline

and continue to promote the bus as reliable, affordable, digitalised and accessible, such that people will choose it over cars to make

journeys. Please read pages 31 to 32 of our CTP for more details.

We anticipate that, with the continuing decarbonisation of our bus and rail operations, and the critical role we play in helping to reduce

carbon emissions through modal shift to public transport, our business will be considered an increasingly attractive option for ‘green’

investment and will be well positioned to access green financing. Our CTP is an important tool for engaging with investors on climate-related

risks and opportunities.

Physical

risks

Acute and chronic weather events can affect our

infrastructure and operations. More frequent extreme

weather events could increase disruption to our services,

affecting customer satisfaction and potentially

longer-term customer inclination to use bus or rail

services. Potential costs include loss of revenue,

compensation for disrupted services, increased asset

repair and maintenance costs as well as insurance

costs for infrastructure and vehicles. Severe weather

events could also pose risks to the health, safety and

wellbeing of our colleagues and customers.

Risk mitigation actions and business opportunities

Robust business continuity plans are in place across the Group to manage the risks from severe weather conditions,

including frost and flooding.

In First Bus, while physical risks to assets might be limited and buses can be rerouted to avoid road blockages, extreme weather conditions

can significantly increase driver absences due to sickness or inability to reach depots. Our weather preparedness plans therefore include

both operational as well as behavioural guidance to help colleagues stay safe and cope with extreme weather events.

In First Rail, severe weather events such as storms and heatwaves can impact the tracks and overhead lines and cause significant service

disruption. We work closely with Network Rail, which owns and manages the tracks, to resolve disruptions as effectively as possible. This year,

Avanti West Coast and GWR produced Weather Resilience and Climate Change Adaptations plans, which will set out a three-year strategy

for adapting and becoming resilient to future climate changes.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Climate-related financial disclosures

continued

Metrics and targets

TCFD recommendation:

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information

is material.

When looking at the results of our 2022 and 2026

financial impact assessments of climate-related

risks and opportunities, the key metric used was

Enterprise Value at Risk (EVR), as the measure of the

total estimated financial impact of a given scenario

over a five-year period. This, in turn, was affected by

other metrics such as our GHG emissions, used to

assess our potential exposure to carbon pricing in

the 2022 assessment, and our cost of capital, used

to assess the cost of business disruption in our

2026 assessment.

We have been measuring and reporting our

energy and carbon performance for many years.

Please see details of these metrics on pages 34

to 36, including:



Our absolute carbon footprint and carbon

intensity (tCO

e per £m revenue)



Our energy consumption and the proportion

of renewables in our energy mix



Our progress against our target of operating

a zero emission commercial bus fleet by 2035

The above KPIs give an indication of our exposure

to policy risks such as carbon taxes, as well as

technology risks related to electric vehicles. They

also strengthen our sustainability credentials with

customers and investors, enabling us to capture

opportunities from modal shift and green financing.

To strengthen ownership and accountability,

climate-related KPIs are embedded into our variable

remuneration practices. For example, our LTIP

awards, made to the CEO, CFO, and other senior

leaders, include targets linked to the number of zero

emission vehicles in our commercial bus fleet and

the reduction in our absolute Scope 1 and 2

emissions. See more details on page 99.

We have set a near-term science-based emissions

reduction target aligned with a 1.5°C ambition and

approved by the SBTi. Our target is to reduce Scope 1

and 2 GHG emissions by 63% by FY 2035 from a FY

2020 base year. We also commit to reduce absolute

Scope 3 GHG emissions from FERA by 20% by FY 2028,

from a FY 2020 base year, and that 75% of our

suppliers by emissions, covering purchased goods

and services and capital goods, will have

science-based targets by FY 2028.

The reporting on our annual performance against all

of these targets can be found on pages 34 to 36.

Assurance and verification

Our Scope 1, Scope 2 and Scope 3 GHG emissions are

reported in line with the GHG Protocol methodology

(see page 36). These metrics have also been subject

to independent limited assurance by Grant

Thornton. The assurance of our Scope 3 emissions is

limited to categories (Waste, Water, Business Travel,

FERA and Upstream transportation and distribution

amounts limited to First Travel Solutions emissions)

for which we are currently able to gather actual

source data from along our value chain and apply

relevant emissions factors. Other reported Scope 3

categories rely upon assumption-based

methodologies, including spend-based

calculations. We continue to work towards gathering

actual emissions data from external partners in our

value chain over time.

Please see pages 34 to 39 for a more detailed

update on our key environmental metrics,

performance trends and progress against targets.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Our stakeholders

We interact with a huge range of stakeholders every single day. Building strong

relationships with them involves listening and working in partnership.

Customers

Delivering for our customers is at the heart of what we do.

Their needs are unique to each journey and their requirements

constantly evolve. Listening, identifying future needs and

being able to respond quickly is critical. Our teams use a variety

of channels and approaches to engage with customers and

passengers, assessing satisfaction and gathering feedback.

Read more about customers on page 40

Why we engage with them

We engage with our customers in order to

respond to feedback and improve customer

experience and satisfaction. Longer term, this

enables us to continuously be aware of, and

adapt to, changing customer needs and build

long-lasting and trusted relationships.

How we engage with them



We conduct regular satisfaction surveys,

including a monthly Customer Experience

Pulse, to track Net Promoter Score (NPS),

satisfaction, key pain points and customer

feedback across our business



We gather continuous, real-time customer

feedback through Tell First Bus, our National

Contact Centre and our mobile app



We undertake bespoke research to deepen our

understanding of customer needs, including

recent work focused on young travellers

in Scotland



We engage customers through our community

panel, using discussion groups and polls to

gather insight on topics such as safety

and travel behaviours



We maintain ongoing dialogue with customer

representative groups and frontline colleagues

to share insights and improve the customer

experience

Our response to matters raised and

key activities



Introduced new customer loyalty schemes,

discounts and live train tracking initiatives at

our rail operators



Implemented initiatives to increase

accessibility on our networks



First Bus introduced a new customer mobile

app to bring new features to market more

quickly and improve the overall customer

digital experience



First Bus works closely with partners to support

travel connectivity for major events, including

Glastonbury and the British Grand Prix



Lumo and Hull Trains are members of the Rail

Access and Inclusion Forum for the North where

disability experts and industry members

discuss current topics of concern in order to

improve practices and influence disabled

rail policy



Hull Trains and Lumo support and promote the

Passenger Assist system for disabled

and elderly customers



Lumo partnered with the Purple Tuesday

campaign to highlight our services and provide

resources such as our Autism route guide

Investors

We welcome open, meaningful discussion with shareholders on

all matters. Being fully aware of the range of our shareholders’

views is a key aspect of good corporate governance and

supports our commitment to ensuring that we promote the

success of the Group for the long-term benefit of our members

as a whole. We proactively engage throughout the year with

institutional, private and employee shareholders on a range

of matters.

Why we engage with them

We keep investors informed of key business

activities and decisions and we listen and respond

to questions and concerns in order to support the

long-term success of the Group.

How we engage with them



Presentations from Executive Directors



Annual Report, Sustainability Report, Group

website and regulatory statements



Ongoing dialogue and individual engagement

with shareholders by the Directors, including

the Chair



Engagement via the Investor Relations function

with current and potential investors and other

market participants



Attendance at investor and

industry conferences



Annual General Meeting (AGM)

Our response to matters raised and

key activities



Declaration and payment of FY 2026 full year

and FY 2026 half year dividends



Approved and launched additional share

buyback programme



Regulatory announcements and management

calls following publication of Full Year and Half

Year Results and acquisitions completed during

the year



Meetings with current and potential investors

throughout the year



Attendance at a number of investor and

industry conferences

Engaging with our stakeholders

See page 59 for our Section 172 statement

and key decisions taken by the Board during

the year.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Our stakeholders

continued

Government

Strong engagement with governments at all levels is essential to

our business model, advocating for policy solutions which ensure

optimal operation of public transport by private operators. At

both Group and operational level, we have long-established

relationships with local and national government officials.

Read more about Government on page 33

Why we engage with them

We are focused on achieving policy

solutions that support sustainable economic

growth, social mobility, modal shift and

environmental performance.

Engaging with governments ensures clear

communication, helps to inform policy, and

enables an understanding of the impact

of policy decisions.

How we engage with them



Direct engagement with policymakers,

including in national, devolved, regional

and local governments



Membership of sector trade bodies who, in

turn, engage with governments and regulators

to promote a positive policy environment for

private sector public transport

Our response to matters raised and

key activities



Engaged with business advocacy

organisations, lobby groups including the

Confederation of Passenger Transport,

AllRail, Campaign for Better Transport

and Business London



Welcomed senior UK Government and

opposition politicians to view our operations,

including the Prime Minister, Chancellor Rachel

Reeves, Secretary of State for Transport Heidi

Alexander, and Buses Minister Simon Lightwood



Secured ZEBRA funding for electric buses in

several areas including Taunton, Weston-

super-Mare and Bristol

Employees

Many thousands of FirstGroup employees work in depots,

stations and offices. They are the face of FirstGroup, delivering

great service to our millions of passengers. We have a broad

range of mechanisms through which our employees have the

opportunity to make their voices heard and inform the direction

and governance of our business.

Read more about our people on page 43

Why we engage with them

We will achieve success by maximising the

benefits of the expertise and experience of our

employees in delivering services and improving

customer experience and satisfaction.

We engage to ensure our people have the skills

and knowledge needed to deliver our services

now and in the future; to create a safe and

inclusive working environment for all of our

employees; and to increase participation

and equal opportunities.

How we engage with them



Regular ‘Your Voice’ employee

engagement surveys



Dialogue with employee representatives,

including trade unions



Inductions, onboarding sessions and

employee handbooks



Multiple internal communications channels,

including our intranet, briefings, newsletters

and our employee mobile apps



Individual performance reviews and

development discussions



Board and Executive Committee visits

to operational sites, and opportunities

for direct discussions with employees



Through the Colleague Advisory Panel

(see pages 46 and 78 for more information)

Our response to matters raised and

key activities



Third year of delivery under our strategic pillar:

Lead in environmental and social sustainability.

See page 14 for more information



Since April 2024, we are now paying all First Bus

directly employed staff and apprentices at or

above the Real Living Wage – the largest bus

operator to do so



Embedded our new careers website which

collates all live job opportunities across

FirstGroup and facilitates contact with current

employees to share career opportunities



Increased collection of diversity data from

colleagues: ethnicity, disability status and

sexual orientation



Launched Holiday ‘buy and sell’ scheme across

First Bus and FirstGroup colleagues

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Our stakeholders

continued

Communities

We are at the heart of our communities and we need to

understand community needs in order to improve our services.

We have well-developed mechanisms in place to help us listen

to and understand the needs of our communities, and we

incorporate their feedback into our decision making processes.

Read more about our communities on page 40

Why we engage with them

We engage with our communities to support

social inclusion and respond to local needs

for the long-term success of our business.

How we engage with them



We conduct regular surveys to help us

understand a range of views and enhance

our activities



We also commit our time, skills and resources

to help charitable causes that are important

to our communities, both locally and nationally



We support national schemes such as the

Community Rail Partnerships, not for profit

organisations that connect the railways with

local communities, and the DfT’s Customer and

Community Improvement Fund (CCIF), which

funds small and medium-sized community

projects on our networks



We commission reports and research

to understand the social and economic

impacts and value of our operations



We work with local and national groups to

understand and improve affordability and

accessibility, to empower our customers

Our response to matters raised and

key activities



Our DfT TOCs created over £655m

in social value in 2024/2025

(GWR £203m; Avanti £452m)



The Group donated over £750,000 in charitable

contributions throughout the year including

gift-in-kind, fundraising activities and

payroll giving



Our DfT TOCs supported over 70 Community Rail

Partnerships and provided funding through the

DfT’s Customer and Community Improvement

Fund for projects on our networks

Strategic partners and suppliers

We work with more than 4,000 suppliers driving innovation,

expertise and value for money from our supply chain to

provide the goods and services required to meet and

exceed the expectations of our customers and shareholders.

Our suppliers range from small, independent companies

to global corporations, and we have dedicated teams of

procurement specialists centrally, and within our divisions,

who develop and maintain strong relationships with our

supply chain to drive value and reduce risk.

Why we engage with them

Engaging with suppliers and strategic partners

builds long-term relationships and enables us to

identify, manage and mitigate risks and ensure

environmental and ethical standards in our

supply chain.

How we engage with them



Key suppliers are engaged through

collaborative relationship management

systems to provide us with clear, consistently

applied processes to track performance and

generate additional value



Regular supplier relationship meetings and

business reviews are held to strengthen

relationships and identify and manage risks



Our core principles are shared across the

entire supply chain via the FirstGroup Supplier

Code of Conduct



We use digital supplier assurance and

management tools to allow for onboarding

and due diligence



We offer support, advice and audits for

suppliers to meet our expectations

Our response to matters raised and

key activities



Zero breaches of the Supplier Code of Conduct

identified in FY 2025



Our Group Procurement Policy outlines our

expectations, processes and due diligence

for current and new suppliers including for

ESG factors



The Group has onboarded more than 800

suppliers to our new supplier management

platform to monitor ESG risks



Our supplier assurance platform is being fully

integrated into the Supplier Onboarding Process



Our supplier assurance platform allows

suppliers to be audited for different criteria,

including those relating to ESG

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Introduction

FirstGroup

Annual Report and Accounts 2026

Section 172 statement

The Directors are obliged under

Section 172 to promote the

success of the Company over

the long term for the benefit of

shareholders as a whole and

having due regard to a range

of other key stakeholders.

The Directors take their duties under Section 172

of the Companies Act very seriously, not only

because it is a legal requirement but also

because the obligations make good business

sense and are consistent with the Group’s

Values. If decisions do not adequately

take account of the views of our different

stakeholder groups, the Company is unlikely

to be successful or sustainable in the medium

to long term.

Details of engagement with key

stakeholders are set out on pages 56 to 58

The Board is mindful of the matters set out in

Section 172 of the Companies Act in all of its

discussions and decision making processes.

The table to the right sets out how the Company

complies with the Act and provides some

additional detail, together with the Board’s

oversight and monitoring of these areas.

Additionally, we provide examples of some key

decisions taken where the Board was

particularly mindful of one element of Section

172, although in reality many of the decisions

are nuanced and require the Board to balance

outcomes across a number of stakeholders.

Section 172 principles

a) Likely consequence of

any decision in the

long term

The Board realises that strategic decisions will impact

the long-term future, direction and success of the

Company and is mindful of the long-term implications

of decisions.

b) Foster business

relationships with

suppliers, customers

and others

Oversight provided through the Responsible Business

Committee and the Board. At each meeting the Board

reviews, at a high level, operational performance

throughout the Group, which is aligned to the first

strategic pillar and the service provided to customers.

c) Interest of the

Company’s employees

Janette Bell and Steve Montgomery have updated the

Board regarding the initiatives to support employee

engagement throughout the year, together with

employee engagement scores for the Bus division.

Myrtle Dawes through the Colleague Advisory Panel

helps the Board to understand views from the front line

of our workforce.

d) Impact of the

Company’s operations

on the community and

the environment

The Group delivers key services to its communities,

providing public transport and employment in the

communities in which we operate.

The environmental impact of the Group’s operations

is at the forefront of the Board’s mind.

e) The desirability of the

Company maintaining

a reputation for high

standards of business

conduct

The Board recognises the importance of maintaining

high standards of conduct. The Board has oversight of

the Company’s Values, Code of Ethics, and the training

programmes led by the Legal team covering business

ethics, anti-bribery policies, gifts and entertainment.

At least twice a year, the Board reviews matters

reported to the confidential whistleblowing hotline

together with any investigation findings and

actions taken.

f) The need to act fairly

between members of

the Company

The Executive Directors lead the Group’s engagement

with shareholders, with support from the Investor

Relations team. These meetings give investors the

opportunity to share their views on the Group’s

operations, capital allocation policies and strategies.

These views are reported to the Board so that they

understand the context for their decision making.

Additionally, the Chair has met with a number of

investors during the year. The AGM provides an

opportunity for some of the Company’s smaller

shareholders to meet the Directors and put

questions to the Board.

Key decisions

Buyback

In June 2025, the Board decided to launch an additional

buyback programme of £50m. The Board, mindful of

shareholder views, considered either a special dividend

or buyback and decided that a buyback was most

appropriate for shareholders.

ZEBRA and Scotzeb funding applications

The Board took the opportunity to apply for funding to

accelerate capital expenditure and increase the size

of our zero emission commercial bus fleet.

Review of corporate structure

In light of the transition of the DfT TOCs to public

ownership, the Board continued to review and make

changes to the Group’s corporate structure to ensure

a suitable level of resource going forward.

Acquisition of additional Coach businesses and Toot Bus

The Board considered a range of stakeholders when

deciding to purchase each of the additional coach

businesses and the Toot Bus business from RATP. From

a strategic perspective these acquisitions further grow

and diversify future earnings.

London Overground bid

The Board considered a range of stakeholders when

deliberating the bid for the Overground operations.

The successful strategy further diversifies the Group’s

earnings and deepens the relationship with Transport

for London.

Other potential acquisitions/

diversification opportunities

The Board considered a range of stakeholders when

debating the risk appetite for other potential acquisitions,

and a number of opportunities were not taken forward.

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Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

To successfully deliver on the Group’s four strategic

pillars it is essential that we effectively manage the

risks facing the business and capitalise on new

opportunities. Our risk management framework

considers the evolving transport market and related

impacts from government policy changes, together

with developments in the wider environment in

which our businesses operate. We have identified

our principal risks and regularly review the

mitigations that are in place. We aim to stay ahead

of potential risks by regular horizon-scanning for

emerging risks, investing in external expert advice,

conducting targeted risk awareness campaigns,

enhancing control procedures and equipping our

people to succeed while reviewing opportunities

that emerge as public transport models in the UK

evolve. Our principal risks and uncertainties are

listed on page 62 and detailed on pages 63 to 69.

Our risk management approach

We take a holistic approach to risk management,

first building a picture of the principal risks at the

divisional level which includes our risk and controls

teams meeting with each of the principal risk

owners, then consolidating these with Group risks

into a Group view. The Executive Committee

continues to dedicate regular meetings to monitor

the wider risk environment and review and assess

developments impacting the Group’s principal risks.

These meetings include the identification and

analysis of risks and related risk appetites, all of

which are considered and approved before being

presented to the Audit Committee and Board for

review and approval. The objective of this process

is to ensure that all key risks to the Group, including

emerging risks, are identified and reviewed regularly,

are actively monitored and are effectively mitigated

to ensure that the impact on the organisation

is managed within the risk appetite levels set

by the Board.

Responsibility

The Board has overall responsibility for

the Group’s systems of internal control

and their effectiveness.

The Audit Committee has a specific

responsibility to review and validate

the systems of risk management and

internal control.

Process

The Board reviews and confirms Group and

divisional risks and the Audit Committee

reviews the Group’s risk management process.

Responsibility

The Executive Committee acts as the Executive

Risk Committee and reviews the Group’s risk

management processes.

Internal Audit provides assurance on the key risk

mitigating controls and ensures that the audit

plan is appropriately risk-based.

Process

The Executive Committee meet quarterly to

review and challenge Group and divisional

risk submissions, including emerging risks.

Risk management framework

Responsibility

Management of the divisions and corporate

functions have responsibility for the

identification, assessment and management

of risks, developing appropriate mitigating

actions, and the maintenance of risk registers.

Process

Divisional and Group risk champions

maintain and update risk registers for their

function or division. Risks and mitigating

actions are monitored through normal

business management processes.

Board and

Audit Committee

Divisions

Executive

Committee

Internal

Audit

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Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Emerging risks

Our risk management approach and methodology

includes reviewing and identifying risks that may

develop or already exist. These risks may be difficult

to quantify and could lead to a significant impact

on the Group. Emerging risks are reported to the

Executive Committee and the Board to consider

whether to establish them as principal risks. To

identify and assess emerging risks, we conduct

risk workshops and run deep-dive sessions with

divisional and Group leadership teams, engage

specialists, perform scenario analysis and track

industry trends.

Our risk management framework

and structure

Whilst some risks, such as the financial resources

risk, are managed at a Group level, our businesses

are responsible for identifying, assessing and

managing the risks they face with appropriate

assistance, review and challenge from Group

functions. Our businesses empower frontline staff

to take ownership of risks within a framework,

supported by dedicated risk owners who oversee

key operational risks.

Our risk management processes are dynamic,

and we continually drive improvements to the

quality of risk management processes and

information generated by our divisions. The Group

has a developed risk appetite framework, which is

reviewed annually and communicates the Board’s

tolerance for certain risks, and a framework for

assessing opportunities, guiding the businesses’

risk assessment, strategic decisions and

mitigation activities.

Our risk management framework is shown in the

adjacent diagram.

Our risk management framework

Top down

Strategic risk management

Bottom up

Operational risk management

Review external environment

Robust assessment of principal and emerging risks

Set risk appetite and parameters

Determine strategic action points

Regular meeting dedicated to risk management to identify

principal and emerging risks

Direct delivery of strategic actions in line with risk appetite

and tolerance levels

Monitor key risk indicators and provide direction for risk

mitigating activities

Execute strategic actions

Report on key risk indicators

Consider completeness of identified risks and adequacy

of mitigating actions

Assess investment in risk assurance activity

Consider aggregation of risk exposure across the business

Report current and emerging risks

Identify, evaluate and mitigate operational risks recorded

in risk register

Assess effectiveness of risk management system

Report on principal and emerging risks and uncertainties

Board/Audit Committee

Executive Committee

Divisions

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Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risks associated with artificial

intelligence (AI)

Technological developments, including AI, continue

to accelerate and are impacting the workplace,

business operations and our wider environment.

The Group seeks to capitalise on commercially

appropriate technological opportunities and

adapt its responses to mitigate threats posed by

technological developments from competitors

and in the wider environment, whilst continuing

to promote the culture of innovation across

the businesses.

Our Group-wide AI Policy supports stakeholders

in the safe and effective adoption of emerging AI

technologies. The Policy provides clear guidance

on the secure and responsible use of AI, with

particular focus on Generative AI. Use of this

technology amplifies a number of risks, including

the potential for misinformation, data privacy

breaches and intellectual property concerns.

The Policy establishes guard rails for acceptable

AI use cases, and sets out compliance and risk

management requirements, promoting responsible

technology use. The AI Governance Board, a

cross-functional team of experts, oversees AI

adoption and associated risk mitigation, fosters

organisational AI competencies, and evaluates

and approves Generative AI use cases. A formal

training programme covering the Policy, AI risks and

opportunities was rolled out during the year to help

teams to deploy AI responsibly. Additionally, we have

introduced enhanced AI usage monitoring tools to

enable further improvements in controls, including

cyber and information security practices.

Principal risks and uncertainties

We detail our principal risks on page 63 onwards,

with an overview of the associated mitigation

activities and corresponding development in the

risk. The Board defines the risk appetite for each of

these principal risks. The overall risk appetite for the

Group is balanced between risk averse for safety

and regulatory compliance risks to neutral or risk

accepting for strategic areas that drive future

growth for the Group.

Over a number of years the risk associated with the

pension scheme funding has been declining. During

the year, with a further decline, we have removed

Pension scheme funding as a principal risk.

Our risk management methodology continues to

focus on identifying the principal and emerging risks

that could:



adversely impact the safety or security of the

Group’s people, customers and assets



have a material effect on the financial or

operational performance of the Group



impede achievement of the Group’s strategic

objectives and financial targets



adversely impact the Group’s reputation or

stakeholder expectations

Further information on our risk management

processes is contained in the Governance reports

on pages 72 to 91.

Principal risks

The following table provides an overview of our principal risks, their risk direction and severity at the

year end, using individually assessed impact, likelihood and velocity scores. Understanding these risk

parameters aids effective risk management and delivery of our strategy.

Key

FY 2026 risk is stable

FY 2026 risk is decreasing

FY 2026 risk is increasing

Severity: (Impact x Likelihood x Velocity)

External risks

Economic conditions

Geopolitical

Climate

Strategic risks

Growth and diversification

Operational risks

Safety

Legal and regulatory compliance

Information security, including cyber and resilience

People

Financial resources

How to use this scale:

During execution of the review and placement of the principal risks on the above table, the Executive

Committee and the Board considered financial impacts to the divisions and the Group. Specifically, the

‘High’ end of the scale represents a combination of a catastrophic annual financial impact at a level that is

expected to be difficult to mitigate being repetitive and the ‘Low’ end considers financial impacts that are

not material.

Low

High

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

External risks

Economic conditions

The Group’s success depends on adapting to economic fluctuations or

uncertainties which may negatively impact performance by increasing costs,

changing customer needs, reducing demand and/or reducing opportunities

for growth. The global economic outlook remains uncertain and is

overshadowed by conflicts and world events. In the UK, fiscal pressures persist

due to Government commitments to fund non-transport budgets. Inflationary

pressures also remain; wage expectations continue to exceed CPI and costs

to businesses are increasing. All these market developments have the potential

to impact the Group’s financial performance and available financial resources

to invest capital in innovative solutions that drive demand.

A challenging economic environment could lead to changes in passenger

behaviours in the medium term.



We actively engage with government departments and sector

bodies to ensure an appropriate level of passenger services are

delivered whilst at the same time designing and running our

operations based on current demand levels



We prioritise a customer-focused perspective and seek to provide

innovative transport solutions, by adapting to market uncertainties

and driving demand



We continue to apply our fuel and energy hedging strategy to

offset temporary economic impacts driven by inflation and

supply chain challenges



We continue to focus on developing new innovative service

offerings to our customers to diversify our earnings, such as

the open access fares model, and deliver on both organic and

acquisitive growth to further diversify our businesses to mitigate

against the impacts of changing economic conditions



We maintain strong cost discipline through procurement strategies,

organisational efficiency initiatives and financial control

frameworks to manage inflationary pressures

The macroeconomic landscape remains uncertain and

inflationary pressures continue. These, together with the

limitations of the UK Government budget, pose risks to both

domestic demand and future transport funding by the

Government. The Group continues hedging exposure to certain

foreign exchange, energy and fuel price fluctuations to

minimise material impact on costs. This has allowed for a

certain level of visibility that can be built into the Group’s

forecasting models.

The reduction in demand for bus services following the

Government’s reduction in fiscal support for fares in January

2025 has been managed through pricing and yield initiatives

through FY 2026.

Geopolitical

The Group operates in a political landscape with a Labour Government in

power since the July 2024 general election. The Government has progressed

its transport policy at pace. The Bus Services Act gained Royal Assent in

October 2025 giving local authorities the option of greater control over

bus services, including the option to establish municipalised bus services.

The Railways Bill introduced to Parliament in November 2025 once it becomes

law will establish GBR as the central ‘directing mind’ for the railways that will

ultimately manage the operation of the existing DfT TOCs which return to

government control as the existing NRCs expire. GBR is also currently proposed

to oversee the approval and allocation of track access rights for new open

access services. Bus and rail reform, as well as the uncertainty over government

funding for fares beyond January 2027, have the potential to cause instability for

the Group’s operations including the planned expansion of its open access rail

operations. Significant industry reform may result in the contraction of bus

services in certain areas and of rail contract opportunities. The ability or

otherwise of government, particularly local government, to attract, retain

and develop the necessary capacity and capability to lead reform may

result in an adverse financial impact for the Group.

Developments in international affairs, such as conflicts around the world, as

well as changes in regulations in Europe and the UK, may impact the Group’s

commitments to deliver key investments, or the Group’s supply chain, resulting

in financial loss and potential reputational damage.



The Group works bilaterally and collaborates with industry bodies

to help influence and anticipate government policy and/or funding

regime changes in order to adjust operations. The Group is an

apolitical organisation and does not have the ability to control or

substantially change government policy



Specifically, the Group has responded to the consultation on the

Railways Bill, which will enable the establishment of GBR, and will

continue to engage with the Government and industry bodies to

influence the policies and reforms included in GBR. FirstRail has

presented both to the Transport Select Committee and to the Bill

Scrutiny Committee on its views



Bus has engaged extensively with government ministers, officials

and MPs over the Bus Services Act and our Spending Review asks



We continue to actively engage with both local and national

stakeholders and partners on transport policy that delivers best

outcomes for our customers



The Group has been able to mitigate resourcing challenges by

partnering with third party consultants to support this area



Outside of the NRCs which earn fees, flexible operating models

enable the business to react quickly and mitigate the impacts from

changes in government funding and related customer demand



We deploy hedging techniques to counterbalance potential

negative impact on certain costs due to adverse developments

in international affairs



We regularly review and assess our risk environment to ensure that

we are able to adapt to any geopolitical developments including

focus on supply chain disruption

Government policy regarding Rail nationalisation is being

implemented. Further developments in the Middle

East conflict could impact the Group’s operations via a

reduction in economic growth and consumer confidence;

disruptions in supply chains or inflation; and government

funding being diverted.

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Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

External risks

continued

Climate

Businesses globally continue to experience increasing pressure and scrutiny

from all stakeholders, particularly policymakers and investors, to demonstrate

strong progress on their climate-related commitments and performance.

Inadequate attention to our climate-related risks and opportunities, as well as

emerging technologies, could negatively impact the Group’s performance,

reputation and growth.

The UK Government has set a legally binding target for net zero GHG emissions

by 2050, to which we were the first public transport operator to formally commit.

Delays in implementing our strategic plans to mitigate climate-related risks,

including transitioning our fleets to zero emissions, could result in lost business,

reduced revenue, reputational impacts and reduced opportunities from

modal shift.

Climate change poses both physical and transition risks to our business, from

weather events impacting our assets, operations, service delivery and customer

demand, to changes in policy, technology and market expectations impacting

our capital and operational costs, our reputation and access to funding.

Read more on page 47



Climate change has been an integral part of our risk management

framework for many years and is included within our strategic

framework for sustainability. Our business strategy was updated in

2023 to reflect our progress and ambition on addressing climate

change. Driving modal shift and leading in environmental and

social sustainability were both placed at the heart of this new

strategy, forming two of the four key pillars of the Group’s strategy



FirstGroup was the first bus and rail operator in the UK to formally

commit to setting ambitious science-based targets aligned with

limiting global warming to 1.5°C and reaching net zero emissions by

2050 or earlier. During FY 2023, we completed our submission of a

science-based target and had our target formally approved by the

SBTi. Avanti also successfully submitted science-based targets



We continue to embed the TCFD recommendations to assess and

mitigate impacts from climate change onto our business and build

long-term climate resilience across our operations



More details on our climate-related targets, commitments,

mitigation and actions can be found in the TCFD section of this

report from page 47

The Group recognises the continued responsibility and

opportunity to create a more sustainable world, and we

maintain our commitment to invest in new technologies

and collaborate with partners to help create a cleaner future.

Our TCFD implementation work, the climate-related

commitments we have made and the strategies we are

developing to meet them will ensure we are managing our

climate transition risks effectively and continuing to build

business resilience for the long term.

We continue to focus on opportunities from modal shift and

the vital role we play in reducing congestion on the roads,

improving air quality and facilitating the transition to a

zero-carbon world, whilst recognising the climate and

transition risks which impact us as a public transport provider

FirstGroup is the only UK Transport operator included in this

year’s S&P Sustainability Yearbook.

During March 2025, the Group published a Group-wide Climate

Transition Plan which sets out our comprehensive strategy to

meaningfully reduce emissions, manage climate-related risks,

drive modal shift and contribute to growth and prosperity in the

communities we serve. The Plan can be found on our website.

Further highlights on climate and related sustainability

initiatives during the year can be found in the Responsible

business section of this report from page 34.

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Strategic risks

Growth and diversification

The Group’s ability to grow and diversify its businesses is dependent on

identifying and converting opportunities to add to our portfolio into operational

delivery and achieve the Group’s growth and financial objectives. This includes

being able to effectively respond to customer demand, delivering operational

efficiencies, identifying and executing acquisitions and transactions in Bus and

Rail, together with the Group’s ability to secure and renew contracts on profitable

terms, and to manage and deliver these contracts effectively and in accordance

with contractual terms, avoiding termination.

Failure to identify and/or execute on these opportunities in a timely manner and

in accordance with agreed terms could result in negative impact on business

operations (contracts, employee retention, etc.), reduced revenue and

profitability, reputational impacts, and inability to deliver on the Group’s

strategic and financial objectives.

The mitigations delivered during FY 2025 and FY 2026 have established a more

balanced and diversified earnings base for the Group.



The Group actively seeks out and reviews inorganic growth

opportunities that would be beneficial to our portfolio, ensuring

existing funding facilities are sufficient



We maintain an active dialogue with our shareholders and

investors, and gather insights from our strategic advisers and

contacts within the business to evaluate potential transactions.

This is underpinned by our strong relationships with banks, which

enable us to act quickly when opportunities are identified



When necessary, we seek external advice and input (e.g., from

corporate brokers and other experts)



We have evaluation frameworks that include a disciplined and

researched approach to acquisitions



We actively participate in the wider opportunities arising from

the electrification and decarbonisation of First Bus, including the

strategic partnership with Hitachi Zero Carbon and third party

charging at our depots



First Rail’s Hull Trains and Lumo open access operations on the East

Coast Mainline have track access agreements in place to 2032 and

2033 respectively



We have the extensive operational expertise needed to meet

requirements for the contract performance incentives



In First Bus, the contracted element of the business has historically

been low, although this is likely to rise materially over the coming

years following the acquisition of our London bus business and as

franchising is introduced in more areas

The Group completed the bolt-on acquisitions of J&B Travel,

Tetley’s Coaches and Hills Coaches in FY 2026, having

acquired Matthews Coach Hire, Lakeside Group and

Anderson Travel the previous year, broadening the

First Bus Business and Coach portfolio.

The Group also completed the acquisition of RATP’s London Bus

business during February 2025, providing access to TfL’s London

contract market.

First Rail continues to leverage its operational structure and

depth of experience, and has delivered on opportunities to

diversify its portfolio with the acquisition of two track access

rights to run open access rail services between London

Paddington and Carmarthen, and London Euston and Stirling,

with the Stirling service due to be fully operational in July 2026.

The Group was also awarded the London Overground contract

which commenced in May 2026.

The Group is also awaiting the outcome of a number of further

applications to the ORR to expand open access services and

for two further routes between Rochdale and London and

Cardiff and York.

Rail will continue to participate in bids for new rail contracts.

Both First Bus and First Rail are expected to benefit from

ongoing acquisition opportunities supported by a healthy

pipeline under evaluation.

We continue to engage with shareholders on strategic direction

and growth opportunities. Any material transactions are

announced on a timely basis.

The remaining two NRC contracts with the DfT will continue to

provide consistent cash generation until their transfer to the

Government around the end of 2027.

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

Safety

The Group is strongly committed to fostering and maintaining a culture of safety.

However, public transport inherently includes safety-related risks, many of which

are out of our control. A safety incident, or a threat of such an incident, could be

caused by human error and/or mechanical failures, or malicious intent. Such

events may result in reputational damage, and an adverse financial impact

due to reduced confidence in public transport services lessening demand for

our services.

Read more on page 45



All divisions have extensive safety plans which focus on mitigating

risk across the business



Safety training is provided for our employees to ensure they are

equipped with the knowledge and skills necessary to maintain a

safe work environment



We work with industry peers to share lessons learnt and collaborate

on shared risks



Incidents are thoroughly investigated to maintain a learning

culture here we continuously improve our safety standards



Mechanical safety controls (speed monitoring, cameras, etc.)

are implemented across our fleet of vehicles and trains



We follow the regulatory regime and comply with statutory

inspections and monitoring



Whilst the Group has implemented preventative safety measures

and procedures, we recognise that certain incidents are ultimately

out of our control and do at times result in legal claims. As a result,

the Group has dedicated departments, utilising third party experts

when needed, to analyse and maintain effective insurance

structures and levels



The Responsible Business Committee not only reviews and

challenges safety performance targets but also delves into

material safety matters and risks across the Group



Across all our divisions, we implement targeted biannual assurance

reviews of our safety management systems, improvements and

performance. We use data analysis and insights to prioritise our

efforts in improving safety through both technology and behaviour

The Group continues to assess, update and implement safety

procedures across our businesses, mitigating risks to reduce

the likelihood of safety incidents from occurring, taking into

consideration any technological advancements.

Specific initiatives include the final implementation phase

of the ‘Golden Rules’ initiative in First Rail focusing on the

prevention of specific injury events and associated behaviours,

and the rollout of the IOSH accredited ‘Safety Management of

Road Passenger Transport’ training in First Bus, focusing on

competence compliance.

We continue to invest in safety management systems

(including safety audits), engagement and smarter, more

efficient safety procedures, such as using Mistral Data’s

systems for remote condition monitoring, low adhesion

and train/track interface.

Collaboration within the rail and bus sectors continues to

enhance safety by fostering industry-wide learning and

sharing innovative solutions for safety improvements.

Our safety procedures and protocols continue to be assessed

on a regular basis, including certification and accreditation

by relevant safety bodies and external expertise.

We continue to maintain our ISO 45001 accreditation for our

Safety Management System (SMS) across the businesses

which currently have it, and are working towards accreditation

in others.

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

Legal and regulatory compliance

The Group’s operations are subject to a wide range of legislation and regulation.

Failure to comply could lead to financial penalties or other sanctions,

investigation expenses, legal costs and/or reputational damage. The need to

comply with new or amended laws and regulations may increase the Group’s

operating costs.

The main legal and regulatory compliance risks specific to the Group

include compliance with data protection legislation, employment law and

regulation compliance (employee wages and other terms and conditions

of employment, including expanded rights for employees), health and safety

compliance, responding to the development of ESG regulations, and key

corporate compliance risks such as competition and anti-bribery and

corruption legislation.

The Group continues to see an increase in its digital interaction with its

employees, customers and other stakeholders, including through digital ticket

sales. These interactions necessitate the processing of personal data which

require safeguards to protect personal data and comply with applicable data

protection legislation, including the Data Protection Act 2018 and the UK and EU

General Data Protection Regulations (GDPR).



To help the Group comply with all applicable legislative and

regulatory requirements, we have an in-house Legal function

which includes dedicated subject-matter experts, who help to

ensure relevant national and international laws and regulations

are followed



Our in-house team is supported by other internal colleagues

(including the Information Security and divisional Health &

Safety functions) and external legal experts where necessary



We have a comprehensive suite of Group-wide policies and

procedures, which are implemented and managed locally.

These include data protection, modern slavery, anti-bribery

and competition law policies



To protect our data and comply with our integrity and

confidentiality obligations under data protection legislation, the

Group has implemented robust IT infrastructure controls across

the Group. Additional information about how this risk is managed

can be found on page 41



The Group administers a mandatory training and policy attestation

programme to employees across key areas of compliance risk,

communicating their roles and responsibilities in preventing and

mitigating compliance breaches



We have a named compliance officer in each division

with responsibility for ensuring the delivery of the

compliance programme



We monitor new legislation across the jurisdictions in which

we operate and adapt or introduce policies and processes

as required to help ensure compliance



We provide a confidential reporting hotline for employees and

third parties to report concerns – the hotline is hosted by an

independent third party to ensure objectivity and anonymity

Although the Group’s legislative and regulatory environment

continues to change, the Group maintains its commitment

to adapt policies and procedures to detect and prevent

non-compliance.

A comprehensive programme of work led by the HR teams is

ongoing to address the new obligations under the Employment

Rights Act as they come into force.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

Information security, including cyber and resilience

The transport sector is increasingly reliant on technology and data, which has

led to an increase in both cybersecurity risks and non-malicious IT failures. We

continue to monitor the cyber landscape at Group level, across our divisions, as

well as third party suppliers, to ensure we continually enhance our cybersecurity

defences and resilience procedures as new risks emerge.

Recent attacks on major retail chains have highlighted the growing volatile

threat landscape.

Social engineering attacks, which exploit human behaviour to bypass security

measures, have seen a significant increase. These attacks manipulate

individuals into revealing confidential information or making security mistakes.

The human factor in security is crucial, and we emphasise the importance of

social engineering resistance.

These incidents underscore the importance of robust cybersecurity measures

to protect sensitive data and maintain consumer trust.

Both malicious and non-malicious cyber and technology incidents could impact

our ability to operate services for our customers, increase costs, and have

adverse impacts across our businesses.

The safeguarding and integrity of data remains a central issue relating to the

emerging AI technologies. AI technologies could result in data leakage via usage

of unapproved AI and/or lead to security vulnerabilities, uncontrolled

autonomous actions or inappropriate use by employees or third parties.



Business continuity plans continue to evolve and are updated

as the transition to greater dependency on technology continues,

minimising the impact of both malicious cyber and non-malicious

IT failures that have the potential to impact the continuity of

our operations



We have ransomware procedures and have tested our

incident response across Group businesses in the event

of a ransomware attack



We maintain a comprehensive Information Security Policy,

standards and procedures aligned with industry best practice.

Our businesses operate robust cyber controls, including Cyber

Essentials and, where appropriate, ISO 27001 certification



We run regular cyber risk awareness training and phishing

prevention campaigns emphasising social engineering resistance



Robust due diligence is performed for new critical IT suppliers

and IT programmes, with information security obligations as a

prerequisite to be included in third party IT contracts



Our commitment to continuous improvement in our cyber

resilience is further supported by cyber insurance



Group-wide policies, procedures and technologies have been

enhanced to cater for safe AI adoption with the organisation

The risk of a cyber attack for all UK companies remains high.

The UK Government’s Cyber Security Breaches Survey 2025

reported that 74% of large businesses identified a cybersecurity

breach or attack in the last 12 months. Among those

experiencing breaches, phishing remained the most prevalent

attack type (85%), with other forms of attack continuing to

occur but at lower levels.

Among large businesses that experienced a cyber breach or

attack, 29% experienced a resulting impact. This included 10%

temporarily losing access to files or networks, 5% reporting

the loss of customers’ personal data and 4% paying money

in ransom.

The NCSC has recently issued (May 2025) a new warning

about the threat from state-sponsored cyber attackers

targeting critical national infrastructure. These attackers

use sophisticated techniques to camouflage their activity

on victims’ networks, making detection difficult.

This highlights the importance of remaining vigilant and

implementing advanced security measures to protect against

such threats. In 2024, we completed the rollout of sophisticated

network detection monitoring.

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Risk management

continued

Risk description

Mitigation

Developments in the risk profile during the year

Operational risks

continued

People

Employee costs represent the largest component of the Group’s operating costs.

These costs include expenses related to recruitment, retention and talent

development and are affected by changes in employment markets,

regulatory requirements and diversity and inclusion programmes.

A failure to effectively recruit and retain a diverse and talented workforce

could have adverse financial, operational and reputational impacts.

The employment market for drivers and engineering technicians remains

challenging under an increasing consumer travel demand and tight labour

market. Our employee turnover is also impacted by the wider economic

circumstances, particularly wage inflation and wider labour mobility.

Read more on page 43



We continue to focus on improving communication and engaging

our employees. We have focused on investing in a compelling

employee value proposition, including diversity and inclusion,

linked with market competitive wages and benefits



The wellbeing of our employees remains a key priority for

FirstGroup. Our employees have access to various wellbeing

resources, such as the Wellbeing Hub, accessed through our

intranet. First Rail has introduced webinars on neurodiversity and

stress awareness and marked Stress Awareness Month. First Bus

hosts a weekly Wellbeing Wednesday, and appointed a new

Company-wide occupational health provider in the past year

and tripled the number of Mental Health First Aiders. We continue

to offer training for colleagues who may wish to take up these

roles in the future



First Rail continues to develop its people strategy, including

effective talent management and succession planning, ongoing

commitment to apprenticeship and graduate schemes, and a

focus on diversity



First Rail continues to support efforts to resolve continued industrial

action at a national level



The First Bus people strategy has a focus on workforce

development and culture, including improving communication and

frontline management capability, with emphasis on reducing

attrition and effective absence management



We have an ongoing programme for monitoring KPIs,

including leveraging exit interview data in designing

improved recruitment activity



Employee engagement survey results are reviewed to develop

actions to address low-performing depots to further help retain

our talent

We continue to focus on our bus and train driver recruitment

and retention programmes, and on managing our multi-year

pay deals with our union partners.

We have developed new programmes to ensure effective

communications so that we improve both individual and

collective performance.

First Bus, Avanti and Tram Operations Ltd (TOL) are accredited

Living Wage Employers and pay the RLW to employees.

TOL’s commitment extends to its supply chain, ensuring third

party contractors working directly for the company are paid in

accordance with the Living Wage Foundation rates of pay as a

minimum, with the London Living Wage being paid for those in

London. Living Wage Foundation rates of pay also apply as

contracts renew for First Bus and Avanti’s third party

contractors working directly for the company.

GWR also pays the RLW to directly employed colleagues.

First London Cableway is a Living Wage Employer and pays

London Living Wage.

Financial resources

The ability of the Group to service its current debt or other financial obligations

relies on the cash generation from the business and its capability to refinance

debt as it becomes due and the capital allocation policy being applied.

The Group is investment grade credit rated by Standard & Poor’s and Fitch.

A downgrade in the Group’s credit ratings to below current investment grade

may lead to increased financing costs and other consequences and affect the

Group’s ability to obtain financing if required to invest in its operations.

The Group’s banking arrangements contain financial and other covenants

with financial covenants tested semi-annually on 30 September and 31 March.

In the event a covenant test level is breached, the Group may not be able to

negotiate sufficient debt capacity to allow it to continue to trade.



The Group monitors leverage ratios and overall liquidity

consistently to ensure we remain within our target range and

have adequate financial resources on a two- to three-year

period looking forward



As at March 2026, the Group has adjusted net debt of £137.7m

and £295m of undrawn committed borrowing available under

its revolving credit facility that matures in January 2031 together

with a further committed undrawn headroom of £43m on the Green

Hire Purchase Finance Facility that is available to draw to May 2027,

and £26m undrawn committed borrowing through a Hitachi joint

venture, debt facility for the financing of up to 1,000 EV bus batteries



We conduct a bi-annual viability assessment of the headroom

and ensure this is sufficiently resilient, including cash and

financing facilities

The Group maintains strong bank relationships, with good

awareness and understanding of debt market trends and

regular monitoring of banking covenants and headroom.

Our credit rating was affirmed by Fitch on 16 September 2025

and Standard & Poor’s on 17 September 2025 as stable ‘BBB’.

We have experience in raising material amounts of credit

facilities, ensuring we plan alternative solutions to mitigate

liquidity risk in the event of wider refinancing requirements.

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Viability and going concern

Viability

Time horizon

The Directors have assessed the viability of the

Group over a three-year period. This period reflects

the Group’s corporate planning processes and is

considered appropriate for a fast-moving

competitive environment such as passenger

transport. Beyond three years, forecasts may

be affected by changes in government transport

policy and/or major contract wins and losses.

Scenario testing

In making their assessment, the Directors have taken

into account the potential financial and operational

impacts, in severe but plausible scenarios, of the

principal and emerging risks which might threaten

the Group’s viability during the three-year period to

31 March 2029 and the likely degree of effectiveness

of current and available mitigating actions that

could be taken to avoid or reduce the impact or

occurrence of such risks (details of the risks and

mitigating actions are set out on pages 62 to 69).

The assessment of the available mitigating actions

includes the Group’s ability to manage its cost base

and capital expenditure.

The broad details of the scenarios that were

considered in the assessment are:



a protracted period of weak passenger volumes

comprising reductions of up to 8% in First Bus and

10% in open access rail



operational performance pressures in the

contracted businesses reducing operating

margins on TfL contracts services and franchised

bus services by 5% and performance fees on DfT

NRCs 50% lower than budgeted



heightened operational, policy and environmental

pressures, including increased inflation up to 3%

higher than budgeted levels and risk from

changes to governmental transport policy

(including decarbonisation) of £10m per annum,

with operating profit impact increasing to c.£40m

per annum in FY 2029



one-off safety, regulatory non-compliance,

climate or technology incidents leading to

short-term reduced revenue and/or additional

costs of up to £45m

The Group has already renewed the £300m revolving

credit facility with a maturity date of January 2031

and put into place additional financing facilities,

and considers that it will continue to have access

to debt markets to negotiate additional new credit

facilities if required. The results of this scenario

testing showed that the Group would be able to

remain viable and maintain liquidity over the

assessment period.

Climate change

The Board has also considered how climate risks

could impact the Group’s viability. More detail on

the Group’s assessment of risks and opportunities

from climate change is contained in our TCFD

disclosure on pages 47 to 55. The key conclusions

relating to the viability assessment were that, given

the Group’s geographic diversity across the UK, the

financial impact of extreme weather events over

the three-year viability period was not judged to

be material.

Transitional risks, related to changes to the

Government’s decarbonisation policy, were unlikely

to cause any material adverse impact over the

viability period given that, whilst the vast majority of

the Group’s emissions are from vehicles, the Group is

already targeting industry-leading timescales for

transitioning its vehicles to zero emissions.

Corporate planning processes

The Group’s corporate planning processes include

completion of a strategic review for the Rail and Bus

divisions, preparation of a medium-term business

plan and a quarterly reforecast of current year

business performance. The plans and projections

prepared as part of these corporate planning

processes consider the Group’s cash flows,

committed funding and liquidity positions, forecast

future funding requirements, banking covenants and

other key financial ratios, including those relevant to

maintaining the Group’s existing investment grade

status. The planning processes also consider the

ability of the Group to deploy capital. A key

assumption underpinning these corporate planning

processes is that credit and asset backed financing

markets will be sufficiently available to the Group to

put additional new facilities in place, if required.

Viability statement

Based on the results of the analysis explained above,

including scenario testing, the Directors confirm that

they have a reasonable expectation that the Group

will be able to continue in operation and meet its

liabilities as they fall due over the period to 31 March

2029 and that the likelihood of extreme scenarios

which would lead to a breach of covenant is remote.

The Board confirms that, in making this statement,

it carried out a robust assessment of the principal

and emerging risks facing the Group, including

those that would threaten its business model,

future performance, solvency and/or liquidity.

Strategic report

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Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Viability and going concern

continued

Going concern

The Board carried out a review of the Group’s

financial projections for the 18 months to

30 September 2027 and evaluated whether it was

appropriate to prepare the full year results on a

going concern basis. In doing so, the Board

considered whether any material uncertainties

exist that cast doubt on the Group’s and the

Company’s ability to continue as a going concern

over the going concern period.

Consistent with prior years, the Board’s going

concern assessment is based on a review of future

trading projections, including whether banking

covenants are likely to be met and whether there

is sufficient committed facility headroom to

accommodate future cash flows for the going

concern period.

Divisional management teams prepared detailed,

bottom-up projections for their businesses reflecting

the impact of macroeconomic considerations on

the operating environment, assumptions on

passenger volumes and government support, as

well as the impact of actions required to address

the Group’s climate-related targets and ambitions,

and having regard to the risks and uncertainties to

which the Group is exposed.

Base case scenario

The Board considered the annual budget to 31 March

2027 and medium-term plan to be the base case

scenario for the purpose of the going concern

assessment for the FY 2026 year end. These

projections were the subject of a series of executive

management reviews and were used to establish

the base case scenario that was used for the

purposes of the going concern assessment. The

base case assumes broadly flat passenger volumes

and modest yield growth in First Bus in FY 2027 and

higher than inflation revenue growth in existing open

access operations. The base case also reflects the

expiry of GWR and WCP contracts in FY 2027 and bus

franchising impacting existing operations in South

Yorkshire, West Yorkshire and Wales from FY 2028.

The macro projections in the updated base case

assume that the UK operates in a low-growth

economy. The annual budget and medium-term

plan also capture the expected financial impact

of the actions required to support the Group’s

climate-related targets and ambitions.

Downside scenario

In addition, a downside case was also modelled

which assumes a more adverse macroeconomic

recovery profile. In First Bus, the downside case

assumes a reduction in passenger volumes, cost

increases above budget and prolonged industrial

action driving a 25% reduction in EBITDA. In First Rail,

the downside case assumes TOC performance fee

awards at 50% of expected levels, and volume and

revenue reductions in Hull Trains and Lumo and

slower than budgeted uptake in passenger volumes

in the new Stirling service, and costs increases

above budget for open access and London

Overground. The downside scenario also considers

potential impacts of significant climate-related

event or unbudgeted decarbonisation costs, as

well as the risk of one-off safety, regulatory

non-compliance or technology incidents.

Mitigating actions

If the performance of the Group were to be more

adversely impacted than assumed in the base

case or downside case scenarios, the Group

would reduce and defer planned growth capital

expenditure, reduce the share buyback programme

and further reduce costs in line with a lower volume

operating environment to the extent that the

essential services we operate in First Bus are not

required to be run for the governments and

communities we support.

Going concern statement

Based on the review of the financial forecasts for

the period to September 2027 and having regard

to the risks and uncertainties to which the Group

is exposed, the Directors have a reasonable

expectation that the Group has adequate resources

to continue in operational existence for at least the

12-month period from the date on which the

financial statements were approved. Accordingly,

they continue to adopt a going concern basis of

accounting in preparing the consolidated financial

statements in this full year report.

The Strategic report was approved on behalf

of the Board on 17 June 2026.

Graham Sutherland

Chief Executive Officer

17 June 2026

395 King Street

Aberdeen

AB24 5RP

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Corporate Governance report

I am looking forward to

another year of positive

sustainable outcomes

for all our stakeholders.”

Lena Wilson CBE

Chair

Dear Shareholder,

I am writing to introduce the Corporate Governance

report for FY 2026.

This report focuses on governance and how your

Board operates and makes decisions.

In a world of constant change for UK businesses over

the last twelve months, including some headwinds

in our sector, we are pleased that performance in FY

2026 has been strong. This reflects how our team

has adapted to meet and succeed in this changed

environment, such as diversifying our earnings

particularly in the coach businesses, and continuing

to strengthen our role as a partner for Transport for

London (TfL) by being trusted to operate the London

Overground rail services. At our meeting in

September, it was great to be joined by the

management team from our London Bus operations

to hear directly from them on the key role they are

playing in keeping London moving. Overall, the

Board is very pleased with the strategic progress

and the financial results.

As we make progress in transforming our business,

the engagement and contribution of all our

employees really matters. To help us, over the last

year we have transitioned from having an employee

on the Board to a Colleague Advisory Panel, chaired

by Myrtle Dawes, the designated Non-Executive

Director (NED) for the workforce. This creates an

opportunity for colleagues across the business to

get together with our Non-Executive Directors to

discuss their ideas and feedback, and helps us to

identify successes and areas to improve together.

You can read more about the Panel on page 78.

As a result of this change, Ant Green retired at the

AGM in July 2025. I thank Ant for his contribution to

the Board and for providing valuable insight into the

views of the workforce during his time on the Board.

Our Board evaluation exercises are covered in this

report on page 82. We provide an update on the

areas of focus identified in the review conducted

last year and we report on this year’s internal review

and the areas of focus for FY 2027.

In this Corporate Governance report you will find

an introductory letter from the Chair of each of

the Board Committees followed by a report on

the Committee.

Sustainable

stakeholder

outcomes

Compliance with the

UK Corporate Governance Code

We have complied with the Provisions

of the UK Corporate Governance Code

(the Code) throughout the 52 weeks to

28 March 2026.

In this Annual Report, we have included a

commentary running throughout the Corporate

Governance report that summarises how we

have complied with the Code and helps guide

shareholders to sections of the report where we

provide more detail on our approach to

compliance with the Code. The Code Principles

are represented by letters and the Provisions by

numbers. Both the Principles and the Provisions

are paraphrased in the interests of space – a

copy of the Code can be found on the Financial

Reporting Council’s website at www.frc.org.uk.

A Led by an effective Board

The Board’s effectiveness review (details of

which are set out on page 82) indicates that

the Board has operated effectively during the

period under review.

B Purpose, values and strategy

This is covered throughout the Strategic report.

The Values are on the website and are set out

in the Culture section of this Corporate

Governance report.

I welcome your comments on our Corporate

Governance report and on the 2026 Annual Report

more generally. I have appreciated the time I spent

with shareholders and look forward to more

engagement in the coming year.

I’d like to thank my colleagues on the Board and all

the employees of FirstGroup for their contributions

and the progress made during my first year with

the Company.

Lena Wilson CBE

Chair

17 June 2026

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Governance at a glance

Board of FirstGroup PLC

Executive Committee

Chair: Lena Wilson CBE

Nomination

Committee

Audit

Committee

Responsible

Business

Committee

Remuneration

Committee

Disclosure

Committee

Chair: Lena Wilson CBE

Chair: Jane Lodge

Chair: Claire Hawkings

Chair: Sally Cabrini

The Board is responsible for the long-term success of the Company for the benefit of its shareholders and stakeholders.

The matters reserved to the Board are set out in writing. They were reviewed in March 2026 and cover the most important decisions that will be taken within the Group.

These include strategy, capital structure, capital allocation, financial reporting and controls, risk appetite and risk management, stakeholder engagement, Board membership,

remuneration, corporate governance and key policies. The Board Committees assist by reviewing certain matters before recommendations are put to the Board for approval.

The matters not reserved to the Board are delegated to the Chief Executive Officer, with the Board retaining responsibility for oversight and holding management to account.

The Chief Executive Officer has formed an Executive Committee, which is not a Board Committee, to assist him in the day-to-day running of the Company. The Executive

Committee meets monthly and its main responsibilities include: developing, implementing and monitoring operational plans; reviewing financial performance, forecasts and

targets; prioritising initiatives and allocating resources; developing strategy for submission to the Board; overseeing risk management, including identifying risks and developing

risk mitigation strategies; developing and monitoring the internal control strategies; and leading the Group’s culture and safety programmes.

The split of responsibilities between the Chair and Chief Executive Officer is set out in writing.

Board and Committee

membership

Talent and succession

Financial

disclosures

Risk management

Safety

Environment

Social value

People

Suppliers

Executive remuneration

Structure and fairness of pay

Meets periodically to

identify inside information

and to oversee the timely

and accurate disclosures

when required

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Roles and responsibilities

The Board has agreed a clear division of responsibilities between the Chair and the Chief Executive Officer, and these roles, as well as those of other Directors and the Company Secretary, are clearly defined so that no

single individual has unrestricted powers of decision. At the end of the year the Board comprised the Chair, two Executive Directors and five Non-Executive Directors.

Chair

Lena Wilson



Leads and manages the business

of the Board



Provides advice, support and

constructive challenge to the Chief

Executive Officer



Provides direction and focus and

ensures sufficient time is allocated

to promote effective debate and

sound decision making



Promotes the highest standards of

integrity and probity and ensures

effective governance



Manages Board composition,

performance and succession

planning



Maintains effective communication

with shareholders and ensures their

views are understood by the Board



Facilitates effective and

constructive relationships and

communications between Executive

and Non-Executive Directors

Chief Executive Officer

Graham

Sutherland



Provides leadership to the executive

and senior management team in

the day-to-day running of the

Group’s businesses



Develops the Group’s objectives

and strategy for consideration

and approval by the Board, taking

into account the interests of

shareholders and stakeholders



Implements the agreed strategy



Promotes a safe working

environment and a safety-focused

culture across the Group



Maintains an active dialogue with

shareholders and other

stakeholders



Responsible for implementing

effective internal controls and

ensuring risk management systems

are in place

Chief Financial Officer

Ryan Mangold



Responsible for the financial

stewardship of the Group’s

resources



Responsible for the Group’s finance,

tax, treasury, insurance, risk

management and internal

control functions



Supports the Chief Executive Officer

in providing executive leadership

and developing strategy



Supports the Chief Executive Officer

to implement the agreed strategy



Reports to the Board on operational

and financial performance of

the businesses

Senior Independent Director

Peter Lynas



Acts as an additional point of

contact for shareholders to discuss

matters of concern



Provides a sounding board for the

Chair and serves as an intermediary

for the other Directors



Leads the annual review of the

Chair’s performance taking

into account the views of the

Non-Executive Directors and

Executive Directors

Non-Executive Directors (NEDs)

Sally Cabrini

Myrtle Dawes

Claire Hawkings

Jane Lodge

Peter Lynas



Provide a strong independent

element to the Board and

collectively provide a broad range

of experience, knowledge and

individual expertise



Constructively support and

challenge management



Review management’s

performance in meeting agreed

objectives and deliverables



Review the integrity of financial

information and determine whether

internal controls and systems of

risk management are robust

General Counsel and Company Secretary

David Blizzard

(not a Board

member)



Provides advice and support

to the Board, its Committees,

the Chair and other Directors

individually as required, primarily

in relation to corporate governance

and legal matters



Responsible, with the Chair, for

setting the agenda for Board and

Committee meetings and for

high-quality and timely information

and communication between

the Board and its Committees

and the Executive Directors and

senior management

Governance at a glance

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

Appointed:

1 February 2025

Key areas of expertise:

CEO, International, Public Sector and Government, Energy,

Transport, Financial Services, Real Estate, Technology

Governance, Transformation

Skills and experience:

Lena joined the FirstGroup plc Board as Chair on 1 February 2025.

Lena is an experienced Director and Chair having held roles on listed

and private companies for more than 15 years. She has served on

the boards of Scottish Power Renewables Limited and Intertek Group

plc and chaired AGS Airports Limited and Picton Property Income

Limited. Lena was Chief Executive of Scottish Enterprise from 2009 to

2017 and, prior to that, was a Senior Investment Adviser to The World

Bank in Washington DC working in over 40 countries. She has

chaired and been a member of numerous government taskforces

and was a member of the Prime Minister’s Business Council. Lena

has advised a range of international companies on strategy,

leadership and governance and is a Visiting Professor at the

University of Strathclyde.

Other appointments:

Non-executive director, Senior Independent Director and

Remuneration Committee Chair at NatWest Group plc

Member of the Workday EMEA advisory Board

Nationality:

British

Appointed:

16 May 2022

Key areas of expertise:

Business Strategy, Performance Improvement, Government

Contracting, Engineering and Infrastructure, Digital Transformation,

Corporate Finance/M&A, Governance

Skills and experience:

Graham has a strong track record in the delivery of critical services

and in creating value for shareholders in rapidly evolving regulatory

and technological environments. Previously, he was Chief Executive

Officer of KCOM Group plc, an LSE-listed telecommunications

company. Prior to this, Graham held a number of senior executive

roles within BT Group PLC over 12 years. These included as Chief

Executive Officer of the BT Business and Public Sector division, where

he was responsible for profitable growth and led the integration of

EE’s Business unit, creating a division with £4.6bn in annual revenues

and 13,000 employees. Graham was also Chief Executive of BT

Ireland where he was responsible for all consumer, business and

network activities. Prior to that, he was Chief Executive of NTL Ireland

and has also held senior financial roles, including at Bombardier.

Graham has an established record in strategic development, as well

as delivering enhanced financial and operational performance and

engaging a diverse range of stakeholders, including consumer,

business and public sector customers.

External appointments:

Non-executive director at HICL Infrastructure PLC

Nationality:

British

Appointed:

31 May 2019

Key areas of expertise:

Corporate Finance/M&A, Turnaround, Pensions, Governance

Skills and experience:

Ryan was appointed as CFO in May 2019, having previously been

Group Finance Director of Taylor Wimpey Plc for eight years. Ryan

has a strong track record of building financial discipline in the

organisations he has worked at. During his time at Taylor Wimpey,

Ryan played a leading and integral role in strengthening the

balance sheet, driving operational improvements, rebuilding the

business post the financial crisis (to become a constituent of the

FTSE 100), the sale of the North American business and the

improvement of its pensions position. Ryan was previously at the

Anglo American group of companies, where he was Group Financial

Controller at Mondi and played a significant role in its demerger

from Anglo American in 2007. Ryan is a chartered accountant and

has recent and relevant financial experience.

External appointments:

None

Nationality:

South African/British

Lena Wilson CBE

Chair

Graham Sutherland

Chief Executive Officer

Ryan Mangold

Chief Financial Officer

Key

Audit Committee

Responsible Business Committee

Remuneration Committee

Executive Committee

Nomination Committee

Chair

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Appointed:

24 January 2020

Key areas of expertise:

Human Resources, Information Technology, Transformation

Skills and experience:

Sally brings valuable experience in UK regulated utilities, services

and manufacturing. She has expertise in delivering business

transformation programmes often including internal restructuring,

cultural and significant technological changes. As Transformation,

IT and People Director at Interserve Group Limited she had a strong

focus on effective operational delivery and led a major

transformation programme which had significant financial and

strategic challenges and prior to that she was a senior executive

at FTSE 100 constituent United Utilities with responsibilities for IT,

cybersecurity and people. She was a Non-executive Director and

Chair of Remuneration Committee at Lookers plc from 2016 to 2020

and at Appreciate Group plc from 2019 to 2023.

Sally is a Fellow of the Chartered Institute of Personnel and

Development.

External appointments:

Pro-Chancellor, Senior Independent Governor and Chair of the

Remuneration Committee at the University of Exeter

Non-executive director of Notting Hill Genesis (a housing

association) and Chair of the People Culture and Governance

Committee

Nationality:

British

Appointed:

1 April 2022

Key areas of expertise:

Engineering, Safety, Technology and Digital Transformation,

Project Management and Energy Transition

Skills and experience:

Myrtle is an established leader with extensive experience in the

energy sector both in the UK and internationally. A chartered

Chemical Engineer, she has held a number of senior safety and

engineering project management roles in the offshore Oil and

Gas industry, including for BP and BHP Petroleum. Moving to

Centrica in 2009, Myrtle performed a number of senior executive

roles encompassing engineering, project management, technology

and digital transformation, including leading the team responsible

for safety-critical, customer-facing residential assignments. She

holds a Masters in Chemical Engineering and Chemical Technology

from Imperial College. She is a Fellow of the Institution of Chemical

Engineers, the Energy Institute, the Forward Institute and Honorary

Fellow of the Association for Project Management.

External appointments:

Chief Executive Officer of the Net Zero Technology Centre

Nationality:

British

Sally Cabrini

Independent Non-Executive

Director

Myrtle Dawes

Independent Non-Executive

Director

Key

Audit Committee

Responsible Business Committee

Remuneration Committee

Executive Committee

Nomination Committee

Chair

Appointed:

21 January 2022

Key areas of expertise:

Sustainability Strategy, Business Transformation, Governance,

Commercial Transactions, Performance Management and

Energy Transition

Skills and experience:

Claire has more than 30 years’ business experience, principally in

the energy sector, and has held UK and international leadership

positions, most recently with Tullow Oil plc and, prior to that, with

BG Group plc and British Gas plc. Claire is an environmental

scientist and an experienced ESG professional and holds a degree

in Environmental Studies awarded by Northumbria University and

an MBA from Imperial College Management School. She is also a

Fellow of the Energy Institute and a Fellow of Chapter Zero.

External appointments:

Non-executive director and Chair of the ESG Committee of Ibstock

plc

Non-executive director and Senior Independent Director of James

Fisher and Sons plc

Non-executive member of the National Armaments Director Group

Advisory Board

Nationality:

British

Claire Hawkings

Independent Non-Executive

Director

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Appointed:

30 June 2021

Key areas of expertise:

Transportation/Travel/Engineering and Infrastructure,

Turnaround, Corporate Finance/M&A, Governance

Skills and experience:

Jane spent her executive career with Deloitte, where she spent

more than 25 years advising multi-national companies, including

businesses in transport, leisure, consumer and technology sectors.

Since 2012, she has served as a Non-executive director and Audit

Committee Chair at several UK public companies in a range of

sectors. Previous roles include Non-executive director of Sirius

Minerals plc (2015–2020), when the company was acquired by

Anglo American plc), Costain Group plc and of Devro plc (2012–

2020), and Non-executive director and Audit Committee Chair of

DCC plc (2012–2022). In addition to broad international experience

in a range of sectors, Jane brings substantial audit, risk and audit

committee expertise to the Board.

External appointments:

Non-executive director and Remuneration Committee Chair of

Glanbia plc

Non-executive director and Audit Committee Chair of Morgan

Advanced Materials plc

Nationality:

British

Appointed:

30 June 2021

Key areas of expertise:

Defence and Aerospace, Government Contracting, Turnaround,

Corporate Finance/M&A, Pensions, Governance

Skills and experience:

Peter was Group Finance Director of BAE Systems plc (and a Director

of BAE Systems, Inc.) from 2011 until his retirement in 2020, having

previously served in increasingly senior financial and M&A roles

since joining the company in 1999. Peter’s early career was spent at

De La Rue Systems, which he joined as a trainee accountant, and

then, GEC Marconi, where he became Finance Director of Marconi

Electric Systems. In addition to his strong strategic and financial

background, Peter brings to the Board extensive experience in

heavily regulated industries with significant contractual

relationships with government.

External appointments:

Non-executive director of Cohort plc

Nationality:

British

Jane Lodge

Independent Non-Executive

Director

Peter Lynas

Senior Independent

Non-Executive Director

Key

Audit Committee

Responsible Business Committee

Remuneration Committee

Executive Committee

Nomination Committee

Chair

Executive Committee members

Graham Sutherland, Chief Executive Officer

Ryan Mangold, Chief Financial Officer

David Blizzard, General Counsel and

Company Secretary

David joined FirstGroup in April 2022 as Company Secretary and

became General Counsel and Company Secretary in August

2025. He was previously Company Secretary at Signature

Aviation plc and has also worked in governance roles at Barclays

and PricewaterhouseCoopers. David is a barrister and fellow of

the Chartered Governance Institute.

Janette Bell, Managing Director, First Bus

Janette became Managing Director of First Bus in October 2020.

She was previously Chief Executive Officer of P&O Ferries. Having

joined P&O in 2012 as Commercial Director, she was a key part of

the executive team that devised and led a transformation of the

business, including establishing a new on-board proposition for

customers, driving greater efficiencies and placing its first order

for new ferries in over a decade. She was appointed CEO in 2018.

Janette has also held senior executive and consultant positions

at Hammerson plc, Centrica and PwC. She has an MBA from the

University of Stirling. Janette is also a non-executive director of

Grainger plc.

Steve Montgomery, Managing Director, First Rail

Steve’s career in the railway industry spans over 40 years, during

which time he has gained significant experience in all aspects of

rail management. He started his working life with British Rail and

held various senior posts before becoming Operations and

Safety Director at ScotRail, coinciding with FirstGroup taking over

the franchise in 2004. He was appointed Managing Director of

First ScotRail in 2009, and under his leadership the franchise

achieved the highest ever levels of customer satisfaction and

punctuality in its history. He was appointed Managing Director of

First Rail in September 2015.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Directors

The Company has formal procedures to review and,

if appropriate, authorise conflicts of interest. These

procedures have operated effectively throughout

the year. Any external Board appointments are

approved by the Board ahead of time.

The Board carries out an annual review of the

independence of its Non-Executive Directors. All the

Non-Executive Directors are considered to have the

appropriate skills, knowledge, experience and

character to bring independent and objective

judgement and insight to the Board’s deliberations.

The Chair was considered to be independent on

appointment and we are committed to ensuring

that the Board comprises a majority of independent

Non-Executive Directors.

The biographies of all the current Board members

are set out on pages 75 to 77.

Following a recommendation from the Nomination

Committee, the Board recommends that all

Directors are reappointed at the AGM, where

they will offer themselves for re-election.

As noted above, the Board has documented a

split of responsibilities between the Chair and

the Chief Executive Officer, and we have agreed

responsibilities for the Committee Chairs,

Senior Independent Director and Non-Executive

Directors. The Board reviewed and reconfirmed

these arrangements in March 2026, and they are

summarised on page 74 and available in full on

our website.

Culture

FirstGroup is values-based and has five Values:



Committed to customers



Dedicated to safety



Supportive of each other



Accountable for performance



Setting the highest standards

These Values underpin decisions taken at all levels

of the organisation and are wholly consistent with

the duties of Directors. The operating companies

also have their own values, consistent with the

above but expressed differently for their respective

workforces. The Board monitors culture in a variety

of ways, receiving information from many sources to

enable them to understand and monitor the culture

of the organisation.

The primary sources are:



Regular updates from the CEO, CFO and divisional

MDs within their reports to the Board



The Employee Director in the first half of the year;



The reports from the Colleague Advisory

Panel meetings (in the second half and as

we go forward)



The results from engagement surveys



Review of matters reported to the confidential

whistleblowing hotline



People sections of reports to the Responsible

Business Committee



Meeting people when the Board visits the Group’s

operating locations

Additionally, the Board receives updates on

adherence with our Ethics and Compliance training

programmes, which require employees to complete

an ongoing programme of training relevant to their

role and include IT security training, anti-bribery,

modern slavery and competition law training.

The Responsible Business Committee met five

times during the year and considered a range of

very important topics. The two divisions report on

four main areas at each meeting – safety, people,

environment, and community and social impact –

which helps them understand the culture within the

businesses. The broader work of the Responsible

Business Committee is set out in the Strategic report

from page 30 and the governance arrangements

for the Responsible Business Committee are set

out on page 73.

Workforce voice

During the year we have transitioned from having an

employee director on the Board to a new Colleague

Advisory Panel chaired by Myrtle Dawes. The Panel

will meet twice each year to discuss topics of

interest to the workforce, and Myrtle will report on

the discussions to the Board. Following the Board

meeting the Panel members will receive feedback

on the Board discussions and an update will be

provided to the wider workforce through our normal

communication channels.

The Panel was advertised to all employees and there

were over 220 applications. Twenty Panel members

were selected and we have a diverse membership

including frontline employees, supervisors, and

middle and senior managers.

The first meeting was held in February 2026 and

included an induction covering the role of the Board

and what the Board was looking for from the Panel.

The first substantive discussion was based around

the Group’s strategy and Myrtle reported the themes

at the Board meeting in March – the feedback

loop was completed with a summary of the Board

discussion being reported back to Panel members.

Panel members were invited to suggest the

substantive topics for discussion in FY 2027

and the topics will be agreed with the Board.

Panel members will serve for two to four years

and then rotate off with another colleague being

selected to join the Panel.

Compliance with the

UK Corporate Governance Code

1 Basis on which the company

generates and preserves value

This is covered in the Strategic report on pages

04 to 71.

2 The Board should assess and

monitor culture

Throughout the year, the Board monitors culture

through a variety of sources, and an explanation

is given in the columns to the left.

3 Engagement with major shareholders

The regular engagement with shareholders is led

by Executive Directors, and regular roadshow

events are held with larger shareholders

following results announcements.

The Chair, Committee Chairs and the Senior

Independent Director are available to

shareholders on request, and if there is a

matter requiring shareholder input, the

most appropriate Director will engage with

shareholders. On several occasions during

the year the Chair met with large investors.

4 Action if 20% of shareholders vote

against a proposal

Not applicable in FY 2026 – shareholders

overwhelmingly supported all the resolutions

at the AGM. The Board would expect to comply

with the Code if any resolution received less

than 80% support.

5 Views of key stakeholders and

S172 statement

A comprehensive Section 172 statement is set

out on page 59 within the Strategic report.

The Board has refreshed its approach for

engagement with the workforce (read more

about this on page 78).

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Commitment

All Directors are expected to attend each Board meeting and each Committee meeting for which they are

members, unless there are exceptional reasons preventing them from attending. The attendance levels were

excellent in FY 2026 and are shown in the table below. The Nomination Committee adopted an over-boarding

policy in early 2022 and further detail is provided in the report of the Nomination Committee.

Board meetings

Board meetings focus on strategy and financial and business performance. At each meeting, the Board

receives an update from any of the Board Committee meetings that have been held since the last meeting

together with a presentation from the CEO, the CFO, the Managing Director of the rail division, the Managing

Director of the bus division, the Group Employee Director and the Company Secretary. Other key matters

considered by the Board during the scheduled meetings are set out in the table below.

Deliver

day in,

day out

Drive

modal

shift

Lead in

environmental

and social

sustainability

Diversify

our

portfolio

Governance

/Other

June

Year-end matters, approval of

Results and Annual Report, including

the risk disclosures

•

Cybersecurity update

•

Strategic review

•

Review of whistleblowing

•

Modern Slavery Statement

and actions

•

July

Strategic update

•

Deep dive into the Group’s public

affairs strategy

•

AI update

•

September

Strategic update

•

Business presentation from the

First London bus leadership team

•

Pension, Treasury, Tax and anti-

fraud policy updates

•

October

Strategy day – detailed

strategy review

•

Review of a wide range of

opportunities

•

November

Half year results

•

Open access approvals

•

Review of whistleblowing

•

January

Budget assumptions

•

Strategic update

•

March

Budget review and approval

•

Board evaluation

•

Colleague Advisory Panel

•

Terms of reference and delegations

•

C Governance reporting to focus on

Board decisions and outcomes in

context of strategy

The Board has delegated the day-to-day running

of the Company to the Chief Executive Officer

who, with the Executive Committee, ensures that

teams have the necessary resources to meet

their objectives.

6 Workforce concerns

(known as whistleblowing)

The Board reviews the process and a report

covering the matters raised by the workforce

twice each year. If a serious concern was

substantiated between the reviews, it would be

escalated to the Board immediately, rather than

waiting until the next report was due.

D Responsibilities and engagement

with shareholders and stakeholders

There is a comprehensive programme to engage

with shareholders and stakeholders, led by the

Executive Directors. The engagement with the

different stakeholders is set out in the Strategic

report, with the relevant section starting on page

56.

E Workforce policies and practices

The Group has a comprehensive framework

of policies and practices that are aligned with

the Values and the long-term success of the

Company. Examples of the practices are set

out within the Workforce section of the Strategic

report that starts on page 43. The relevant

policies are owned by the HR teams and cover

the full range of employment issues expected for

a diverse workforce.

Compliance with the Corporate Governance Code

F Chair leads the Board and is

responsible for its effectiveness

The Chair is responsible for leading the Board

and its effectiveness. The duties are set out in a

document published on the Company’s website.

The Chair led the Board effectiveness exercise

during FY 2026 with the Company Secretary.

The output from the effectiveness review was

discussed at the Board meeting in March 2026

and areas of focus were agreed for FY 2027.

G Appropriate combination of

Executive and Non‑Executive Directors

There is an appropriate division of responsibilities

between the Executives and Non-Executives. The

matters reserved to the Board are clearly defined

and the matters reserved to the Board would

ensure that any significant potential transaction

is put to the Board for approval.

7 Conflicts of interest

The Board reviews all Directors’ external

appointments twice each year to confirm that

they do not create a conflict of interest. If a

Director had a conflict in respect of a particular

contract or arrangement being considered by

the Board, there is a process for the Director to

declare that conflict and the Board would decide

whether or not it was appropriate for the Director

to be involved in discussions on that matter. If the

situation arose where there was a conflict the

most likely solution is that the Director would

recuse themselves for that item of business.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Induction

On appointment, all new Directors receive a

comprehensive induction tailored to their

experience, background and areas of focus.

The programme is designed to help each new

Director become fully effective in their role as

quickly as possible and provide them with a good

understanding of the Group’s businesses, key

drivers of operational and financial performance,

the role of the Board and its Committees, the

approach to corporate governance and the

duties and responsibilities of being a Director

of a publicly listed company.

Lena Wilson’s induction continued into FY 2026

with a number of site visits and meetings with

shareholders and advisers.

Continuing professional development

From time to time, training sessions are organised

for the Board, and in FY 2026 the Board received

technical briefings on The Economic Crime and

Corporate Transparency Act 2023 (ECCTA); new and

effective guidance for IFRS and UK GAAP reporting;

Financial Reporting Council update on accounting;

and updates on narrative, corporate governance

and sustainability reporting.

The Board was also joined by guest speakers to

discuss views on the UK economy and global

geopolitical environment.

From time to time, the Directors attend seminars

and round table discussions aligned to their areas

of responsibility or interest.

Shareholder engagement

Primary responsibility for shareholder engagement

sits with the Executive Directors.

The Executive Directors meet with larger

shareholders twice each year, normally shortly

after publication of the annual or interim results,

and at other times if required. As noted above,

Lena Wilson met a number of the top shareholders

as part of her induction.

8 Concerns about operation of the

Board or concerns held by a NED

on resignation

No resignations or any such concerns have been

raised during the period.

9 Chair independent on appointment

Lena Wilson was independent on appointment.

10 Identification of independent NEDs

The Board has concluded that Sally Cabrini,

Myrtle Dawes, Claire Hawkings, Jane Lodge and

Peter Lynas are independent in character and

judgement.

11 At least half the Board is independent

Five of the eight Directors (62.5%) are

independent and are considered by the Board

to be independent.

12 Appointment of Senior Independent

Director and review of Chair

Peter Lynas was appointed as the Senior

Independent Director on 30 June 2021. Peter

acted as Chairman for five months during FY

2025. Peter led the Non-Executive Directors’

review of the Chair’s performance, and he

discussed the feedback with the Chair.

13 Non‑Executives’ role

The Non-Executives hold Executive Directors to

account and regularly meet, normally at the

conclusion of each Board meeting, without any

members of the Executive team. Refer to page 73

for further details.

Compliance with the Corporate Governance Code

14 Roles of Chair, Chief Executive and

Senior Independent Director and

Committee terms of reference

The responsibilities for these roles are set out in

writing, and the document is available on the

Company’s website. Each Committee reviewed

its terms of reference during FY 2026, and

recommended changes were approved by the

Board. The terms of reference for the Committees

are also available on the Company’s website.

15 See page 83

I The Board, supported by the

Company Secretary, should ensure

that it has resources to function

effectively

The Board effectiveness review indicates that

the Board is operating effectively, and the Chair

and Company Secretary discussed this matter

in light of the feedback from the Board

effectiveness review.

16 Access to and appointment of the

Company Secretary

The appointment or removal of the Company

Secretary is reserved to the Board. Since

appointment on 1 April 2022, David Blizzard has

worked with the Chair and Committee Chairs to

help them discharge their responsibilities.

All Directors have direct access to the Company

Secretary, and governance matters are raised

with the Board as they arise.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Diversity and inclusion

We believe that a diverse workforce that represents

the communities in which we operate is vital to the

Group’s success. We value the differences each

colleague brings to their role, making the Group

stronger and better able to meet the needs of

our customers and the communities in which

we operate.

Board diversity

The Group has selected 28 March 2026 as the

reference date for the data provided below.

Throughout the period under review and on the

selected reference date, the Company has complied

with the requirements that at least 40% of the Board

are women and also at least one member of the

Board is from a minority ethnic background,

aligned with the Parker Review recommendation.

Following the appointment of Lena Wilson on

1 February 2025, the Company has complied with

the external target that at least one of the senior

Board positions (Chair, Chief Executive Officer,

Senior Independent Director or Chief Financial

Officer) is a woman. The Audit Committee, the

Remuneration Committee and the Responsible

Business Committee are all also chaired by women.

The Nomination Committee is committed to a

meritocratic appointment process, and as and

if any Board role becomes available, it will ensure

a diverse longlist of candidates.

There have been no changes to the composition

of the Board since 28 March 2026. All Directors and

members of the Executive management team are

based in the UK and have been willing to freely

disclose the information required for the disclosures

below. Our approach to collecting the data has been

to ask the relevant people for the information.

The required tables reporting on sex/gender and

ethnic representation are set out below. The diversity

data for levels below the Board is set out in the

Workforce section starting on page 43.

Reporting table on sex/gender representation

FirstGroup plc Board of Directors

Specified senior positions

Executive management

(defined as the Executive Committee)

Number of Board members

Percentage of the Board

Number of senior positions

on the Board (CEO, CFO, SID

and Chair)

Number in executive

management

Percentage of the executive

management

Men

37.5%

80%

Women

62.5%

20%

Not specified/prefer not to say

–

Reporting table on ethnicity representation

FirstGroup plc Board of Directors

Specified senior positions

Executive management

(defined as the Executive Committee)

Number of Board members

Percentage of the Board

Number of senior positions

on the Board (CEO, CFO, SID

and Chair)

Number in executive

management

Percentage of the executive

management

White British or other white (including minority-white groups)

87.5%

100%

Mixed/Multiple ethnic groups

–

Asian/Asian British

–

Black/African/Caribbean/Black British

12.5%

–

Other ethnic group, including Arab

–

Not specified/prefer not to say

–

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Board

continued

Board evaluation

The Board conducted an internal review in respect

of FY 2026.

2025 Board evaluation

In FY 2025, given the recent appointment of a new

Chair the Board conducted a relatively light touch

review and the areas of focus for FY 2026 were set

out in last year’s Annual Report and an update on

progress is set out below.

The Board agreed the following areas of focus for

FY 2026:



Quality of papers – further enhancements,

with specific clear requests, visual presentation

(such as RAG ratings), and generally shorter and

more focused papers. There were comments

suggesting further improvements, with greater

standardisation and shorter, clearer requests



Increased focus on stakeholders, particularly:

shareholders; customers; employees and

suppliers



Deep dives/spotlights at Board/Board Committee

level into key issues and principal risks to support

strategic oversight



Succession/talent management at Board level

(to pick up last year’s action) and also look at

succession for Executive Committee and those

reporting to the Executive Committee. Continue

finding opportunities to meet members of senior

management team below Executive Committee

2026 Board evaluation

The Chair supported by the Company Secretary

conducted interviews with each of the other

Directors covering a wide range of topics. Ahead

of the interviews the Chair circulated a document

setting out the broad themes and areas of

discussion to help Board members prepare.

The review conducted in respect of FY 2026 provided

evidence of progress against the agreed areas of

focus set out in the previous column. The feedback

in the Board evaluation acknowledged the positive

change in reporting of KPIs, the management

accounts and strategic updates. These documents

helped pitch discussions at the right level and on the

right topics. The work of the Nomination Committee

in progressing its work on talent and succession

planning was also acknowledged.

The Board spent time at its meeting in March 2026

discussing the outputs of the evaluation and,

amongst other things, the report identified the

following strengths:



As noted above the Board felt that the areas of

focus for FY 2026 had been largely addressed



Directors agreed that the introduction of an

additional full day meeting to review strategy was

a very valuable addition to the Board calendar



Directors felt that there were strong processes

in place to identify and manage risks and that

the Board provided a good level of oversight,

however they flagged that it was important not

to be complacent



Directors felt that there had been a material

improvement over the last 18 months in the quality

of discussions and challenge supported by a new

approach to presenting key topics

Compliance with the

Corporate Governance Code

L Annual evaluation process

An internal evaluation was conducted in FY 2026

covering the Board and its Committees. The

process is set out in the columns to the left.

The Chair held one-to-one meetings with each

of the Non-Executive Directors in December 2025

to review the performance of the individual

Directors. The Senior Independent Director

conducted a review of the Chair’s performance

in the last quarter of the financial year and

provided feedback directly to the Chair.

22 Act on results of evaluation

The Board agreed actions following the 2025

evaluation and updates are provided on the

agreed actions. The areas of focus resulting from

the FY 2026 exercise are set out in this report and

the Board intends to report on progress in the

Annual Report next year.

Agreed actions

The Board agreed the following actions for FY 2027:



Continue the work on positive culture and

dynamics of Board and Committee meetings



Retain the existing format for reporting and

discussing performance and strategic updates

at Board meetings and the continuous

improvement of the content



The Board through the Nomination Committee

with support from the Executive team to

accelerate the talent and succession work



Accelerate the work on simplification of the

Remuneration Committee meetings – process

and papers



Continue the work to focus on the right

themes and topics for the Responsible

Business Committee

Board and Committee attendance

Chair

Non–Executive Directors

Employee

Director

Executive Directors

Director

Lena

Wilson

Sally

Cabrini

Myrtle

Dawes

Claire

Hawkings

Jane

Lodge

Peter

Lynas

Ant

Green

Graham

Sutherland

Ryan

Mangold

Board

6/6

1/1

6/6

Audit Committee

–

4/4

–

Remuneration Committee

–

4/4

–

Nomination Committee

4/4

1/1

–

Responsible Business Committee

–

4/4

1/1

–

Ant Green stepped down as the Employee Director on 25 July 2025.

21 Formal and rigorous annual

evaluation

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Nomination Committee report

Lena Wilson CBE

Chair, Nomination Committee

Main responsibilities

The primary role of the Nomination Committee

is to ensure that the Board and its Committees

have the appropriate skills, knowledge,

experience and diversity to operate effectively

and deliver strategy. The Committee is

responsible for identifying the skills required,

leading the Director appointment process, and

considering succession planning for Directors

and other senior executives.

The terms of reference are available on the

Group’s website.

Committee members:

Lena Wilson (Chair)

Sally Cabrini

Myrtle Dawes

Claire Hawkings

Jane Lodge

Peter Lynas

Dear Shareholder,

This year the Nomination Committee made

recommendations to the Board regarding

engagement with the workforce and proposed

changes to facilitate this. Additionally, the

Committee conducted a talent and succession

review looking at the Executive Committee and three

levels below. This was a very useful exercise to help

the Committee understand the quality and depth

of talent in the organisation and the senior roles

with internal successors and the level of readiness.

More detail is provided overleaf.

In the coming financial year, the Committee will

continue to review the succession plans to support

the delivery of the next stage in the Company’s

strategic delivery.

Lena Wilson CBE

Chair

17 June 2026

17 Establish a Nomination committee

The Board has established a Nomination

committee and its membership complies with

the Code requirements.

18 Annual re‑election of all Directors

Following the year end and having reviewed the

output from the Board effectiveness review, it was

agreed that all Directors would stand for

re-election at the Company’s AGM in July 2026.

19 Chair’s tenure less than nine years

Lena Wilson was appointed as Chair of the Board

on 1 February 2025.

20 Open advertising/search

consultancy for NED roles

An external search consultancy was used for the

Chair appointment made during 2024 and the

Committee appointed Sam Allen Associates to

support the search. The Nomination Committee

anticipates that a similar approach would be

adopted for future appointments to the Board.

L 21 and 22 See page 82

23 Work of the Nomination Committee

The work of the Nomination Committee is set out

in this report.

H Non‑Executives have sufficient time

to meet responsibilities

The over-boarding policy adopted by the

Nomination Committee in 2022 helps ensure that

Directors are not too busy to effectively discharge

their responsibilities. The high attendance levels

at the Board and Committee meetings held

during the year also supports this.

15 Time demands considered on

new appointments

The over-boarding policy provides guidance

which means these issues can be considered

consistently and objectively. The table on page

84 demonstrates that all Directors are in

compliance with the policy.

J Appointments subject to a formal,

rigorous and transparent process.

An effective succession plan should

be maintained for the Board and

senior management

During the year the Committee undertook a

review of succession plans for the senior

executive roles in the organisation.

K Board and Committees have

combination of skills, experience

and knowledge

The Board effectiveness reviews confirmed that

the Board and Committees felt they had an

appropriate combination of skills, experience

and knowledge to discharge their functions.

The Directors’ key skills are set out in their

biographies.

Compliance with the Corporate Governance Code

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

In March 2026, the Committee continued discussions

following on from the succession planning exercise.

The Committee reviewed its terms of reference

and also considered the Board and Committee

composition. The Committee concluded that no

changes were required and communicated this

to the Board.

The Executive Directors and the divisional Managing

Directors attend meetings by invitation of the Chair.

The Committee is supported by the Company

Secretary, who has attended all meetings during

the year.

Policy on appointments to the Board

The Committee recognises the value that individuals

from diverse backgrounds can bring to Board

deliberations. The Committee considers diversity in

its wider sense, including gender, length of tenure

and nationalities. In line with the Committee’s

diversity policy, when considering the appointment

of a new Director, the Committee adopts a formal,

rigorous and transparent procedure and due

regard is given to ensuring fairness and diversity

through the consideration of skills, experience,

competencies, sector knowledge, independence

and individual characteristics. Prior to any

appointment, the Committee evaluates the

composition of the Board and, in light of that

evaluation, prepares a full description of the

role and capabilities required.

In identifying suitable candidates, the Committee:



uses open advertising or the services of external

advisers to facilitate the search



considers candidates on merit and against

objective criteria ensuring appointees have

sufficient time to fulfil their Board and

Committee responsibilities (giving due

consideration to the Company’s over-boarding

policy described below)



considers candidates from a wide range

of backgrounds

Over-boarding policy

The policy was adopted in 2022 and has been

applied when reviewing additional external

appointments and will be applied to appointments

to the Board. Under the policy, Directors may hold

five mandates on publicly listed companies. For the

purposes of calculating this limit:



a non-executive directorship counts as one

mandate



a non-executive chair counts as two mandates



a position as executive director (or a comparable

role) is counted as three mandates

The Company will consider the nature and

scope of the various appointments and the

companies concerned, and if any exceptional

circumstances exist.

The table below shows tenure and total mandates held by the current Directors, including their appointment to the FirstGroup Board.

Position

Members

Appointment date

End of current three‑year term

Mandates held

Chair

Lena Wilson

1 February 2025

February 2028

Non-Executive Directors

Sally Cabrini

24 January 2020

January 2029

Myrtle Dawes

1 April 2022

April 2028

Claire Hawkings

1 January 2022

January 2028

Jane Lodge

30 June 2021

June 2027

Peter Lynas

30 June 2021

June 2027

Executive Directors

Graham Sutherland

16 May 2022

N/A

Ryan Mangold

31 May 2019

N/A

A non-executive directorship on a listed company counts as one mandate; Chair of a listed company counts as two mandates and a position as an executive director on a listed company counts as three

mandates.

Key activities during the year

In June 2025, following a request from the Board,

the Nomination Committee considered the

obligations under Provision 5 of the Code regarding

engagement with the workforce. The Committee

recommended a Colleague Advisory Panel

(read more about this on page 78) and that Myrtle

Dawes be appointed as the Designated Director

for the workforce and she Chair the Colleague

Advisory Panel. The Committee also considered

and recommended the reappointment of

Directors at the AGM and also reviewed the

other commitments of the Directors and noted

that no Board members were ‘overboarded’.

At its meeting in November the Committee received

a detailed presentation from the Executive Directors

and Managing Directors of divisions looking at talent

and succession planning at senior levels within the

organisation. The presentations followed an

extensive exercise led by the HR teams to support

managers to assess their team members. The

Committee will continue this work in the coming

financial year.

In January 2026, the Committee reviewed several

follow-up actions from the succession planning

activities in November and also considered the

reappointment of Sally Cabrini who had served

on the Board for six years and recommended

to the Board her reappointment.

Nomination Committee report

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Audit Committee report

Jane Lodge

Chair, Audit Committee

Main responsibilities

The primary role of the Audit Committee is

to review and monitor the integrity of the

financial reporting by the Company, to

review the Group’s internal control and risk

management systems, to oversee the

Group’s Internal Audit function, to oversee

the relationship with the external auditor

and to report to shareholders on its activities.

The terms of reference are available on the

Group’s website.

Committee members:

Jane Lodge (Chair)

Sally Cabrini

Myrtle Dawes

Claire Hawkings

Peter Lynas

Dear Shareholder,

I am delighted to introduce the report from the Audit

Committee for the 52 weeks ended 28 March 2026.

The report provides an overview of the activities

undertaken by the Committee during the year and

explains the significant issues and judgements that

the Committee considered during the year and, in

particular, when approving this Annual Report.

The Audit Committee has a key governance role

and, on behalf of the Board and shareholders,

reviews important matters relating to financial

reporting, internal controls, risk management and

compliance with regulations and legislation.

As part of the half year reporting process, the

Committee carefully considered, amongst other

things, progress of the acquisition accounting for

First Bus London, a review of going concern, a review

of the judgements associated with pensions,

insurance and legal exposures, taxation, and

concluded that DfT TOC expiries should not be

accounted for as discontinued operations. The

Committee also made the required

recommendations to the Board.

The primary issues considered at the year end are

set out in a table on page 87.

The Committee received regular updates on the

Group’s system of internal control, including

progress against the overall programme and

conclusions on the design and effectiveness of

key controls that mitigate financial, operational,

reporting and compliance risk. Progress continues

to be made in standardising the internal controls

framework and establishing assurance over material

controls in line with regulatory reforms, providing the

Committee with greater assurance over the

effectiveness of the control environment. In addition,

the Committee reviewed the processes and controls

that the Group has in place to prevent fraud.

Jane Lodge

Chair, Audit Committee

17 June 2026

Membership and attendance

The membership of the Committee is set out in the

column to the left and attendance is set out on page

82. Jane Lodge and Peter Lynas have recent and

relevant financial experience and the requisite

competence in accounting. Sally Cabrini, Myrtle

Dawes and Claire Hawkings, the other members of

the Committee, have the necessary skills and

financial literacy to discharge their responsibilities.

The Chair of the Board, the Chief Executive Officer,

the Chief Financial Officer, the General Counsel and

Company Secretary, the Director of Finance, the

Head of Internal Audit, the Group Head of Financial

Reporting and the external audit partner routinely

attend meetings of the Committee. In addition,

others are invited to attend all or parts of meetings

as required, to provide the Committee with

additional insight on relevant matters. Other

members of the Board have an open invitation

to attend Committee meetings, and they did so

on a number of occasions during the year. The

Committee holds private sessions without

management present and regularly meets with

the internal and external auditors (again without

management present).

Key activities during the year

The Committee has an extensive agenda of items

of business focusing on financial reporting, internal

control, risk management, and internal and external

audit, in addition to certain standing matters that

the Committee considers at each meeting, as well

as any specific topical items that arise during the

course of the year.

Compliance with the

Corporate Governance Code

24 Establish an Audit Committee

The Board has established an Audit Committee.

Currently it has five members, all of whom are

independent Directors, and two of whom (Jane

Lodge and Peter Lynas) have recent and relevant

financial experience and the requisite

competence in accounting to meet the Code

requirements. The Committee believes it has

sufficient sector-relevant competence to

discharge its duties.

25 Committee’s role

The Committee’s role is summarised in the

report that follows. The terms of reference are

on the Company’s website. The Committee

is comfortable that its role meets the Code

requirements.

26 Annual Report to describe

work of Committee

This report discharges this Code Provision.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Internal control, risk management

and internal audit



Reviewed the structure and effectiveness of the

Group’s system of risk management and the

related disclosures in the Annual Report and

financial statements



Reviewed the Group’s risk management activities

undertaken by the divisions and at Group level in

order to identify, measure and assess the Group’s

principal and emerging risks and reviewed the risk

appetite statement, developed by management,

for recommendation to the Board



Approved the annual Internal Audit plan and

reviewed reports from the Internal Audit team

relating to control matters; monitored progress

against the plan and any deviations were agreed



Monitored the Group’s insurance

arrangements, insured and uninsured

claims and material litigation



Reviewed plans and progress to enhance the

internal control environment ahead of expected

regulatory and legislative changes

During the year, the Committee fully discharged its

responsibilities under the terms of reference, and

these broadly fall under three areas:

Accounting, tax and financial reporting



Reviewed and approved the half year and annual

results considering the significant accounting

policies, principal estimates and accounting

judgements used in their preparation, the

transparency and clarity of disclosures and

compliance with financial reporting standards



Reviewed the basis for preparing the half year

and full year accounts on a going concern basis

with input from the external auditors



Considered and approved management’s

assessment of the Group’s prospects and

longer-term viability contained within the

Annual Report



Received reports from management and the

external auditors on accounting, financial

reporting regulation and tax issues



Reviewed and assessed whether the Annual

Report, taken as a whole, was fair, balanced

and understandable



Reviewed the Non-Audit Services Policy, Tax

Strategy, Treasury Policy and the application

of the Adjusted Items Policy



Reviewed the assumptions such as future growth

rates, cash flows and discount rate used in the

impairment models and the output from the

impairment review



Reviewed the non-GAAP measures in the

Company’s reporting



Reviewed the assumptions used to calculate

the pension liabilities

External audit



Considered and approved the scope, audit plan,

terms of engagement and fees for the external

audit work to be undertaken in respect of FY 2026



Received reports from the external auditor on its

findings during the half year review and the full

year audit



Considered the objectivity and independence of

the external auditor and the effectiveness of the

external audit process, taking into account its

policies to maintain independence, non-audit

work undertaken by the auditors and compliance

with the Company’s policy on the provision of

non-audit services and applicable regulations



Considered and approved the letters of

representation to the external auditors



Considered and recommended to the Board the

reappointment of the external auditor at the AGM

Compliance with the

Corporate Governance Code

M Formal transparent policies to

ensure independence of audit

The auditors’ policies and the Company’s

Non-Audit Services Policy help ensure the

independence of the auditor. The Non-Audit

Services Policy is reviewed by the Committee

on an annual basis and was last reviewed in

March 2026.

There is additional commentary on the

assessment of the internal and external auditors

on page 90.

Audit Committee report

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Significant issues and judgements

How the Audit Committee addressed these issues

Acquisition accounting relating to First Bus London

On 28 February 2025, the Group completed its acquisition of London bus operator RATP Dev Transit

London Limited. The management team completed a purchase price allocation and acquisition

accounting exercise. Key judgements comprised identification and valuation of intangible assets,

onerous contract provisions, identification of other liabilities and tax implications including treatment

of brought forward tax losses.

The Committee received accounting judgement papers from the management team and reviewed by the

external auditors. The Committee challenged management’s assumptions regarding discount rates used,

the classification of goodwill and intangible assets, the magnitude of the onerous contract provision

including overhead allocation and the recoverability of deferred tax assets. The Committee concluded

that the acquisition accounting adjustments were reasonable, and the disclosures were appropriate.

Pension assumptions and funding

The Group participates in a number of defined benefit pension schemes. Management exercises significant

judgement when determining the assumptions used to value the pension liabilities as these are particularly

sensitive to changes in the underlying assumptions. Scheme valuations were conducted during the year and

changes were made to the assumptions which were considered to be in acceptable ranges.

Management engaged with external experts and the Committee considered and challenged the

assumptions used for estimating the liabilities. Sensitivity analysis was performed on the key assumptions:

inflation, discount rate and mortality. The overall liabilities were assessed for reasonableness. Further detail

on pensions is provided in note 34 in the consolidated financial statements.

Going concern and viability

The Group regularly prepares an assessment detailing available resources to support the going concern

assumption and the long-term viability statements. Management concluded that the financial statements

should be prepared on a going concern basis and there were no material uncertainties which require

disclosure. We continue to provide essential services to our customers and the communities we serve and

anticipate doing so for the foreseeable future.

The Committee reviewed and challenged management’s funding forecasts and sensitivity analysis,

including the impact of a range of potential downside scenarios. These assessments considered key

variables such as passenger volume growth in First Bus and open access, First Bus London Quality Incentive

Contracts performance, the level of performance fees in the Rail division, and ESG-related risks including

climate change. Following its review at the June 2026 meeting, the Committee recommended to the Board

the adoption of both the going concern and viability assessment, and the related statements for inclusion

in this report.

Consideration of DfT TOCs for disclosure as discontinued operations

During the year, the DfT implemented government policy to bring the DfT TOCs into public ownership. As part

of this transition, SWR’s NRC concluded in May 2025 and the business exited the Group. The judgement

considered whether the DfT TOCs met the criteria for classification as discontinued operations under IFRS 5.

The Committee received accounting judgement papers from management. After assessing the

implications of the DfT TOC contract expiries, the Committee concluded that these did not meet the

criteria for classification as discontinued operations under IFRS 5. In reaching this view, the Committee

noted that the Group continues to operate passenger rail services through its open access operations,

that the expiries did not constitute abandoned operations, and that the businesses did not qualify as held

for sale disposal groups.

Reversal of impairment of parent company’s investment in First Bus

Management has reassessed the recoverable amount of the parent company’s investment in First Bus

following a sustained improvement in financial performance since the impairment was recognised in FY

2020. Updated forecasts show stronger profitability and cash generation indicating that the conditions which

led to the impairment have eased. Key estimates and judgements relate to the forecasts used in the

assessment of impairment and discount rates.

The Audit Committee reviewed management’s assessment of improved financial performance of First Bus

and the resulting indicators that the prior impairment may be reversible. The Committee challenged the key

forecast assumptions, including downside scenarios, and the discount rate used. The matter was discussed

with external auditors and the Committee concluded that indicators of impairment reversal existed and the

quantum of the impairment reversal was appropriate.

Significant issues and key accounting judgements reviewed during the year

The matters the Committee considers to be significant for the FY 2026 Annual Report and financial statements are as follows:

Audit Committee report

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Internal controls

The Committee receives regular updates on

the Group’s system of internal control, including

progress against the overall programme and

conclusions on the design and effectiveness of

key controls that mitigate financial, operational,

reporting and compliance risk. Progress continues

to be made in standardising the internal controls

framework, providing the Committee with

greater assurance over the effectiveness

of the control environment.

During the financial year, any control

weaknesses identified through the operation

of our risk management and internal control

processes were monitored and resolved in line

with our normal business operations. In FY 2026,

no material control weaknesses were identified.

Overall, the Committee is satisfied that the Group’s

internal control framework was operating effectively

as at the year end.

The ongoing work to establish assurance over

material controls in line with regulatory reforms

is progressing well and continues to be assessed

by the Committee at least bi-annually. Material

financial, operational, compliance and reporting

controls have been tested during the year through

the established attestation methodology,

and minor weaknesses addressed. Mitigating

alternative controls and processes are in place

where improvements remain underway. Full testing

will take place in FY 2027 to ensure that the

requirements of regulatory reforms are met.

Assurance

FirstGroup plc maintains a broad range of

assurance over its internal controls through

regulatory compliance, governance structures and

established oversight mechanisms. This includes

internal audits, management reviews, and risk

assessments designed to ensure key controls

operate effectively to safeguard assets, support

accurate financial reporting, and maintain

compliance with legal and regulatory requirements.

As part of the audit process, external auditors

provide independent assurance over the accuracy

and integrity of the Company’s financial statements

and review the Annual Report. Additionally, Grant

Thornton provides independent assurance over the

Company’s climate-related metrics.

Internal control framework/assurance

While the Board retains ultimate responsibility

for risk management and the internal control

environment, the Committee is responsible for

reviewing the adequacy, design, robustness and

effectiveness of the Group’s risk management

and internal control systems, including financial,

operational, reporting and compliance controls.

Periodic review and ongoing monitoring of risk

management and internal control frameworks

are essential components of any system of risk

management and internal control.

The Committee assesses the adequacy, design and

effectiveness of the Company’s financial reporting

processes, risk assessment systems and material

internal controls. In addition to periodic reviews by

the Committee, the Board undertakes an annual

in-depth review of the effectiveness of material

internal controls, including the operation of financial,

operational and compliance controls.

The Committee also advises the Board on the nature

and extent of the principal and emerging risks the

Company may be willing to take in order to achieve

its long-term strategic objectives. This process

results in the Company’s risk appetite policy, which is

subsequently reviewed and approved by the Board.

The process applied by the Committee in

reviewing the effectiveness of the system of risk

management and internal control is outlined below,

together with a summary of the actions that have

been or are being taken to improve the overall

control environment.

Risk management

The Board, through the Committee, is responsible for

determining the nature and extent of any significant

risks the Group faces in order to achieve its strategic

objectives, as well as the nature and extent of the

external risk environment.

To fulfil this responsibility, the Committee oversees

a Group-wide system of risk management and

internal control that identifies and enables

management and the Board to evaluate and

manage the Group’s principal and emerging risks.

The system is tailored to the particular needs and

risks to which the Company faces and is designed

to manage rather than eliminate risk. Owing to the

limitations inherent in any system of internal control,

this system provides robust, but not absolute,

assurance against material misstatement or loss.

The Committee assessed the Group’s risk

management methodology, which is used to

identify and manage the principal and emerging

risks, as well as the reporting and categorisation

of Group risks, and made recommendations for

improvement. Changes were implemented with the

Committee’s oversight. See the Risk management

section of the Strategic report starting on page 60

for further information on the Group’s risk

management system.

The Committee also reviewed the process for

assessing the principal and emerging risks that

could threaten the Company’s business model,

future performance, risk appetite, solvency or

liquidity to make the long-term viability statement

on page 70 and considered the appropriate period

for which the Company was viable.

The Company’s policies on financial risk

management, including the Company’s exposure

to liquidity risk, credit risk and certain market-based

risks, including foreign exchange rates, interest rates

and fuel and electricity prices, can be found in note

22 to the consolidated financial statements.

Compliance with the

Corporate Governance Code

N Fair, balanced and understandable

assessment of prospects

27 The report is fair, balanced and

understandable

The Committee, on behalf of the Board, reviews

the Annual Report to confirm that it believes it to

be fair, balanced and understandable. In addition

to its own knowledge and assessment, the

Committee takes comfort from the reviews

conducted by the Executive Committee,

particularly in respect of fairness and balance.

The external reviews as part of the preparation

and sign-off process give comfort in respect of

understandability.

The Board reviewed the Annual Report and each

Director confirmed to the best of his or her

knowledge that the Annual Report and Accounts,

taken as a whole, is fair, balanced and

understandable, and provides the information

necessary for shareholders to assess the

Company’s and the Group’s position and

performance, business model and strategy.

O Procedures to oversee internal

control framework and identification

of principal risks

The procedures are described to the left.

28 Assessment of emerging and

principal risks

The emerging and principal risks are disclosed in

the Risk management section of the Strategic

report starting on page 60 and the assessment

process is also set out in detail in that part of the

Annual Report. The Audit Committee reviews the

detailed outputs from the work completed by the

Executive team.

Audit Committee report

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Financial and business reporting

The Board recognises its responsibility to present a

fair, balanced and understandable assessment of

the Group’s position and prospects in its reporting to

shareholders. This responsibility encompasses all

published information including, but not limited to,

the half year and full year financial statements,

regulatory news announcements and other

publicly disclosed information.

The quality of the Company’s reporting is ensured

by having procedures in place for the review of

information by management. There are also strict

procedures to determine who has authority to

release information. A statement of the Directors’

responsibilities for preparing the financial

statements can be found on page 118.

The Group adopts a financial reporting and

information system that complies with generally

accepted accounting practice. The Group Finance

Manual details the Group’s accounting policies and

procedures with which subsidiaries must comply.

Budgets are prepared by subsidiary company

management which are then consolidated into

divisional budgets. These are subject to review by

both senior management and the Executive

Directors followed by formal approval by the Board.

Regular forecast updates are completed during the

year and compared against actions required. Each

subsidiary unit prepares a monthly report of

operating performance with a commentary on

variances against budget and the prior year, which

is reviewed by senior management. Similar reports

are prepared at a Group level. KPIs, both financial

and operational, are monitored on a weekly basis.

In addition, business units participate in strategic

reviews, which include consideration of long-term

financial projections and the evaluation of

business alternatives.

Key elements of the Group’s risk management

framework that operated throughout the year are:



A centrally coordinated internal audit programme

to verify that policies and internal control

procedures are being correctly implemented and

operate to identify any risks at an early stage



An agreed methodology for ranking the level of

risk in each of its business operations and the

principal and emerging risks



Divisions identifying and reviewing their principal

and emerging risks, the adequacy of controls for

monitoring and managing risks, and reviews by

senior management



Implementation of appropriate strategies to

mitigate principal and emerging risks, including

careful internal monitoring, and ensuring external

specialists are consulted where necessary



Updated divisional and Group risks, which are

reviewed by the Chief Executive Officer and Chief

Financial Officer, are presented to the Executive

Committee for assessment on a regular basis



Reviewing and monitoring the confidential

reporting system to allow employees to raise

concerns about possible legal, regulatory,

financial reporting or any other improprieties



A Remuneration Policy for executives that

motivates them, without delivering excessive

benefits or encouraging excessive risk-taking

Twice a year, the Board is presented with an update

for its assessment of the principal and emerging

risks facing the Group, together with a risk map,

highlighting any changes made since the prior

update together with the relevant rationale.

Each Committee that reports regularly to the

Board also provides an update on the status

of risks considered within its remit.

Reviews of internal controls within operating units

by Internal Audit have sometimes highlighted

control weaknesses, which are discussed with

management and, where appropriate, the

Committee, and remedial action plans are agreed.

Action plans are monitored by Internal Audit and, in

some cases, follow-up visits to the operating entity

are conducted until such time as the controls that

have been put in place are working effectively. No

material losses, contingencies or uncertainties that

would require disclosure in the Annual Report have

been identified during the year by this process.

The Committee, in conjunction with the Executive

team, regularly reviews and develops the internal

control environment to make continual

improvements. No significant internal control failings

were identified during the year. Where any gaps

were identified, processes were put in place to

address them, and these are monitored. In addition,

as stated above, management intends to continue

to improve the standardisation, documentation and

testing of internal controls to give the Committee

greater comfort around the effectiveness of the

control environment.

The process is designed to provide assurance

by way of cumulative assessment. It is a

risk-based approach.

Compliance with the

Corporate Governance Code

29 Monitor risk management and

internal control

This provision of the Code is not yet in force. The

Board anticipates it will comply with this provision

when it comes into force. The Audit Committee

has overseen the preparatory work and the work

completed is set out in the Internal control

section on page 88.

30 Going concern basis of accounting

The Audit Committee considered the going

concern basis of accounting statement set out

on page 71 complies with the Code provision.

31 Assessment of the current position

and principal risks/Viability

Statement

The principal risks are set out in the Strategic

report on pages 62 to 69, together with a

description of the risk management processes

in place.

The Viability statement complies with the Code

Provision and is set out on page 70.

Audit Committee report

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

External audit

External auditor independence

and objectivity

PricewaterhouseCoopers LLP (PwC) was

appointed the Company’s external auditor

following a competitive tender process in 2020,

and it undertook the FY 2021 audit. Andy Ward

is the Senior Statutory Auditor.

The independence of the external auditor is

essential to the provision of an objective opinion

on the true and fair view presented in the financial

statements. PwC’s independence and objectivity

are safeguarded by a number of control

measures including:



Limiting the nature of non-audit services

performed by the external auditor



The external auditor’s own internal processes to

vet and approve any requests for any non-audit

work to be performed by the external auditor



Monitoring changes in legislation related to

auditor independence and objectivity to assist

the Company to remain compliant



The rotation of the lead audit partner after

five years



Independent reporting lines from the external

auditor to the Committee and ensuring the

external auditor is afforded the opportunity for

in-camera sessions with the Committee



Placing restrictions on the employment by the

Group of certain employees of the external auditor



Providing a confidential helpline that employees

can use to report any concerns, including those

relating to the relationship between Group

employees and the external auditor



An annual review by the Committee of the

policy in place to ensure the objectivity

and independence of the external auditor

is maintained

Assessing the effectiveness of the

external audit process

The Committee, other Board members, senior

management in both the corporate functions

and within the operations, and the Internal

Audit team evaluated PwC’s performance,

and the effectiveness of the external audit process

during FY 2026. The Committee also considered

the independence and objectivity of PwC.

The following factors were considered:

Internal Audit

The Internal Audit function advises management

on the extent to which systems of internal control

are adequate and effective to manage business

risk, safeguard the Group’s resources, and ensure

compliance with the Group’s policies and legal

and regulatory requirements. It provides objective

assurance on risk and controls to senior

management, the Committee and the Board.

Internal Audit’s work is focused on the Group’s

principal and emerging risks.

The mandate and programme of work of the Internal

Audit function is considered and approved by the

Committee annually and includes a number of

internal audits and health checks across the Group’s

divisions. Findings are reported to relevant

operational management and to the Committee.

The Internal Audit function follows up on the

implementation of recommendations and reports

on progress to senior management and to the

Committee at each meeting.

The Internal Audit function is a combination of

outsourced and insourced resource. The Head of

Internal Audit reports functionally to the Chair of the

Committee and administratively to the CFO.

The effectiveness of the Internal Audit function’s

work is continually monitored using a variety of

inputs, including the ongoing audit reports received,

the Committee’s interaction with the function’s head,

an annual review of the function’s internal quality

assurance report, a quarterly summary dashboard

providing a snapshot of the progress against the

Internal Audit plan tabled at each Committee

meeting as well as any other ad-hoc quality

reporting requested.

Taking all these elements into account, the

Committee concluded that the Internal Audit

function was an effective provider of assurance over

the Company’s risks and controls and appropriate

resources were available as required.



The quality of the interactions between the audit

team and the Committee, other Board members,

management and those involved in the

preparation of the accounts



Whether the scope of the audit and the planning

process were appropriate for the delivery of an

effective audit



The external auditor’s progress achieved against

the agreed audit plan and communication of

any changes to the plan, including changes in

perceived audit risks



The competence with which the external auditor

handled the key accounting and audit

judgements and communication of the same

with management and the Committee



The external auditor’s compliance with relevant

regulatory, ethical and professional guidance on

the rotation of partners



The expertise and resources of the external

audit team conducting the audit



Whether the statutory audit contributed to the

integrity of the Group’s financial reporting

Taking into account the factors above and feedback

from management, members of the Committee

and the Board, the Committee concluded that the

external audit process and services provided by

PwC were satisfactory. The feedback was shared

with PwC and any opportunities for improvement

will be considered and agreed.

Policy on the provision

of non‑audit services

The Committee’s policy on the use of the external

auditor for non-audit services includes the

identification of non-audit services that may be

provided and those that are prohibited. The policy

requires that the external auditor will only be used

for non-audit services where regulation permits, the

Group benefits in a cost-effective manner and the

external auditor maintains the necessary degree of

independence and objectivity. The policy provides

for a cap on fees for non-audit work of 70% of the

average of fees paid to the audit firm over the

previous three years for audit services.

The Committee receives regular reports on any

non-audit assignments awarded to the external

auditor and a breakdown of non-audit fees incurred.

The Committee is satisfied that the Company was

compliant during the year with both the Code and

the FRC’s Ethical Standard in respect of the scope

and maximum permitted level of fees incurred for

non-audit services provided by PwC. Details of

amounts paid to the external auditor for audit

and non-audit services for the 52 weeks ended

28 March 2026 are set out in note 6 to the

consolidated financial statements.

Tax strategy

We believe we have a responsibility to manage our

tax affairs in a way that sustainably benefits the

customers and communities we serve. We also have

a responsibility to shareholders to ensure we pay the

right amount of tax and ensure compliance with the

tax rules in each country in which we operate. In the

UK, HMRC has categorised the Group as low risk

given our systems, processes and governance

structures. Further information on our tax strategy,

which was reviewed by the Committee and

subsequently approved by the Board in September

2025, is available on our website. The tax strategy is

reviewed annually by the Committee.

Compliance with the Competition

and Markets Authority Order

Pursuant to Article 7.1 of The Statutory Audit Services

for Large Companies Market Investigation

(Mandatory Use of Competitive Tender Processes

and Audit Committee Responsibilities) Order 2014,

the Company confirms that it has complied with

the provisions during FY 2026, including Part 5 in

relation to the role of the Committee. Under this

Order we are required to put the statutory audit

out to tender every 10 years and in our case this

will be for the period ended March 2031.

Audit Committee report

continued

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Responsible Business Committee report

Claire Hawkings

Chair, Responsible Business Committee

Main responsibilities

The Committee has oversight of safety, the

people strategy, the environmental impact of

the Group’s activities, sustainability and

community engagement.

The terms of reference are available on the

Group’s website.

Committee members:

Claire Hawkings (Chair)

Sally Cabrini

Myrtle Dawes

Jane Lodge

Peter Lynas

Dear Shareholder,

Leading in environmental and social sustainability

is a key pillar within the Group’s strategy, the

delivery of which is overseen by the Responsible

Business Committee.

The Committee’s remit is broad but has key

focus areas: safety; climate and environment;

governance; disclosures; and social value

covering our people, communities and broader

stakeholder groups.

A major highlight of the year was the scale and pace

of the electrification programme across the Group.

These achievements demonstrate our leadership

in both reducing our own emissions and enabling

the broader transition to zero emission mobility

across the UK.

We now have more than 1,400 zero emission

vehicles, reflecting steady progress towards our

target of a fully zero-emission commercial bus fleet

by 2035. We continued to transform our operations

through targeted investment in clean transport.

The Group now has four fully and seventeen partially

electrified depots, with at least four further depots

expected to be electrified in FY 2027. We also

advanced infrastructure for the wider transport

ecosystem through the launch of FirstCharge, our

new commercial charging proposition enabling

local authorities, businesses and fleet operators to

access reliable high-capacity charging solutions.

In rail, GWR oversaw the introduction of the UK’s first

rapid-charging battery train into passenger service

in west London. The initiative shows how rapid-

charging battery trains offer a scalable model for

decarbonising parts of the rail network. The Group

continued to make progress with commitments to

its people, communities and diversity and inclusion

targets. This was driven by clear leadership and

delivery at a local level.

The Committee ensures our responsible business

activities are supported by robust plans and

performance metrics. Performance reports are

shared with the Committee at each meeting and

provide an essential mechanism for understanding

progress and taking action.

This report focuses on the governance of the

Responsible Business Committee and the

key governance matters are set out in the

paragraphs below.

I look forward to working with the Executive team in

the coming year as we continue to implement the

four-pillar strategy for the Group.

Claire Hawkings

Chair, Responsible Business Committee

17 June 2026

Membership and attendance

The Committee membership is set out in the

column to the left and the attendance records

are shown on page 82.

The General Counsel and Company Secretary

attended all meetings during the year and, at the

invitation of the Committee Chair, the Chair of the

Board, the Chief Executive Officer, the Chief People

Officer, the Chief Sustainability and Compliance

Officer, the Divisional Managing Directors and the

Head of Internal Audit attended relevant sections of

meetings to support the work of the Committee with

inputs on their areas of responsibility or expertise.

Key activities during the year

The Responsible Business Committee met on four

occasions and in each meeting received a report

from the Chief Executive Officer on safety matters.

Senior representatives from First Rail and First Bus

attended and each presented progress in four

areas: safety, people, environment and community.

The Committee oversees the focus on safety

performance across the Group, with positive trends

in most key indicators. The Committee received

detailed reports on significant safety matters,

customer injuries and reviewed investigation

findings including root causes and corrective action

plans. Lessons learnt were also routinely discussed.

In June 2025, the Committee reviewed the Annual

Report disclosures and governance including TCFD

and were provided a horizon-scanning update.

In September 2025, the Committee received an

update on strategic targets and a forward-looking

view on planned activities, Scope 3 and a materiality

review. The Committee also reviewed the external

recognition from external bodies and areas in which

to focus effort to improve any such ratings.

In January 2026, the Committee received an

in-depth presentation on the Group’s future

carbon footprint and Climate Transition Plan.

The Committee also reviewed Occupational

Psychological research into human factors

impacting safety performance – findings from

which have led to changes in bus training. The

Committee reviewed its terms of reference.

In March 2026, the Committee received an update

on science-based targets, along with a review of

Scope 3 and our supply chain and approved the

Group’s Safety Policy. It also reviewed the Group’s

ethnicity, diversity and inclusion targets and the

Group’s ethnic and gender pay gap reporting, noting

the Group’s commitment to the Parker Review.

Throughout the year, the Committee has worked

with the Remuneration Committee to oversee the

development of and performance against key

performance measures that form part of the

variable remuneration of the Executive team.

FY 2027

At the meeting in June 2026, the Committee

reviewed the Responsible Business disclosures,

the TCFD reporting and reviewed the carbon

footprint disclosures and the assurance work

undertaken by Grant Thornton. The Committee

will continue to provide oversight of driving

improvement in safety performance, elements of the

people strategy, the environmental impact of the

Group’s activities and our community engagement.

We will continue with the further electrification of our

bus operations while also enhancing our

understanding of our climate strategy’s resilience by

updating our climate transition risks assessment.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

Dear Shareholder,

I am pleased to present the Directors’ Remuneration

report for the 52 weeks ended 28 March 2026.

The Directors’ Remuneration report covers the required

regulatory information and provides further context

and insight into our pay arrangements for Directors

and other Group employees. We set out our key

decisions since last year, the assessment of FY 2026

performance and determination of pay, and our

approach to ensuring executive pay outcomes

are fair in the context of wider employee pay.

FY 2026 was another year of strong performance,

despite continued external pressures. The strong

performance has been driven by successful

execution of the Group’s UK-focused growth

and diversification strategy.

Group adjusted operating profit of £219.4m

remained at a similar level as FY 2025 (£222.8m)

despite the transfer of SWR to the DfTO in May 2025.

Our First Bus division has delivered strong growth,

increasing revenues from approximately £800m

to over £1.4bn over the past four years. In FY 2026,

adjusted operating profit rose by 7% to £102.8m,

despite reduced government funding (c.£26m),

increased employer National Insurance costs

(c.£15m), and lower passenger volumes following

the increase in fare cap to £3 across England.

The integration of First Bus London has exceeded

expectations, contributing £310m in revenue.

Within Regional Bus, we responded effectively

to headwinds through operational discipline and

cost management, including hedging strategies.

Revenue grew by 4%, supported by improvements

in revenue per mile, reduced lost mileage, and a

significant increase in Net Promoter Score to 17.2.

Business and Coach performance has strengthened

through new contract wins, the launch of FlixBus

operations, and recent acquisitions. Our expanded

footprint now includes approximately 1,000 coaches

and multiple depots.

In First Rail, we continued to progress strategic

priorities, expanding open access capacity,

delivering National Rail Contracts, and securing

the London Overground contract. Open access

operations saw passenger growth of 4%, with

revenue increasing to £109.3m (FY 2025: £106.4m)

and adjusted operating profit of £25.6m.

Looking ahead, we are well positioned for sustained

growth. In First Bus, we will focus on commercial

expansion, increased market share in Business

and Coach, and leveraging electrification. As the

regional bus industry transitions, our experience,

large, well-capitalised fleet and depot network

will enable us to actively participate in upcoming

franchise and partnership opportunities. In First Rail,

we will continue to grow our open access operations

and pursue complementary opportunities aligned

with our expertise.

Directorate changes

As disclosed on page 78, our approach to ensuring

the employee voice is heard in the Board room has

changed and we have transitioned from having an

employee on the Board to a Colleague Advisory Panel

chaired by a designated Non-Executive Director.

As a result, Anthony Green retired at the 2025 AGM.

I would like to thank Anthony for his contributions

to the Committee. Myrtle Dawes was appointed as

Designated Non-Executive Director for Workforce

and Chair of the Colleague Advisory Panel as of

25 July 2025. Full details on fees paid are set out

in the table on page 102.

Remuneration policy

Our Remuneration Policy was put to shareholders

for approval at the 2024 AGM and received the support

of the vast majority of shareholders. A summary of

shareholder voting is on page 108. A summary of the

Policy is on pages 109 to 112.The full Policy can be found

on the FirstGroup plc website and pages 144 to 155 of

the 2024 Annual Report.

Overview of financial performance,

operating achievements and

strategic progress

FY 2026 has been another year of strong operational

and financial performance:



Group adjusted operating profit of £219.4m

(FY 2025: £222.8m)



FY 2026 full year dividend of 7.2p recommended

(FY 2025: 6.5p)



£89m was returned to shareholders via dividends

and £50m through the buyback programme



Award and mobilisation of the London Overground

contract, annual revenues of c.£300m over the

eight-year contract



Further progressed our diversification strategy

with the acquisition of three more coach

businesses in FY 2026



Continued to lead in electrification, with one

of the largest zero emission bus fleets in the UK

(26% of our fleet) and three fully electrified depots



Significant improvement in our Net Promoter

Score in regional bus, up from 10.6 in FY 2025

to 17.2 in FY 2026



Employee engagement in the Bus division

increased markedly to 66% in FY 2026, up

from 41% in FY 2023

As a Committee, we believe it is imperative to

strike the right balance between incentivising

the management team, rewarding strong

performance and being equitable in the broader

context, taking into account the experience of

our wider stakeholders, including our employees

and shareholders.

Sally Cabrini

Chair, Remuneration Committee

Main responsibilities

The Remuneration Committee is primarily

responsible for determining the policy for

Executive Director remuneration and setting

the remuneration for the Chair, the Executive

Directors and senior management.

The Committee also reviews wider workforce

remuneration, related policies and the

alignment of incentives and rewards with

culture, taking these into account when setting

the policy for Executive Director remuneration.

The terms of reference are available

on the Group’s website.

Committee members:

Sally Cabrini (Chair)

Myrtle Dawes

Claire Hawkings

Jane Lodge

Peter Lynas

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Remuneration Committee report

FY 2026 Executive Annual Bonus Plan (EABP):

The

FY 2026 EABP was based 70% on financial metrics

(50% Group adjusted operating profit, 20% Group

adjusted cash flow), and 30% on non-financial

metrics (20% operational scorecard and 10% on

personal objectives).

The Committee carefully considered performance

against each of the financial and non-financial

targets and then a broader consideration of overall

performance. Group adjusted operating profit was

between on-target and maximum for an achievement

of 66.1% of maximum. Cash flow was above maximum,

for an achievement of 100% of maximum. Overall

achievement against the operational scorecard

was 54.4% of maximum. In respect of personal

objectives, the Committee awarded Graham

Sutherland and Ryan Mangold 90% and 80%

of maximum, respectively.

The formulaic EABP award for the Executive Directors

resulted in awards of 72.9% for Graham Sutherland

and 71.9% of maximum for Ryan Mangold. The

Committee reviewed the overall outcome in the

context of the Group’s underlying performance

and was satisfied with this level of payout.

Full details of targets and performance achieved

are set out on pages 98 and 99.

2023 LTIP:

The vesting of the LTIP granted in 2023 was

subject to the following performance measures:



50% EPS



35% relative total shareholder return

(TSR) vs FTSE 250



7.5% zero emission (ZE) fleet transformation



7.5% Scope 1&2 emissions (tCO

e) reduction

Performance against the 2023 measures is

as follows:



Delivered strong earnings growth, with adjusted

EPS of 20.3p, resulting in 100% vesting under

this element



Relative TSR vs FTSE 250 performance was at the

83rd percentile versus the peer group, resulting

in 100% vesting under this element



Outperformed against our ZE fleet transformation

target, with a total of 1,154 new ZE buses by

28 March 2026, resulting in 100% vesting under

this element



Outperformed against our emissions reduction

target, with an outturn of 30.9% reduction,

resulting in 100% vesting under this element

Therefore, the formulaic vesting of the 2023 LTIP award

was 100%. The Committee carefully reviewed the

overall formulaic vesting outcome in the context of

the Group’s underlying financial performance and

was satisfied that there was no need to exercise

discretion. The shares will be held for an additional

two years to provide alignment with our shareholders.

Full details of the 2023 LTIP are set out on page 99.

2025 LTIP:

The Committee determined that the 2025

LTIP award made to the CEO, CFO and other senior

leaders would be measured against EPS, relative

TSR and an ESG Scorecard (comprising two

environmental measures and two ED&I measures),

over a three-year period.

Full details of targets are set out on page 100.

Remuneration for FY 2027

The Committee carefully considered base salary

increases for the Executive Directors holistically,

taking into account FY 2027 base salary increases

applied to the wider workforce, the competitive

market and investor guidance that base salary

increases for Executive Directors should be aligned

with those provided to the wider workforce.

Therefore, the Committee approved an increase of 3%

for Graham Sutherland and Ryan Mangold, effective

1 April 2026. See page 103 for more information.

The Executive Directors have an opportunity

to receive a maximum of 150% (half of which

is deferred into shares for three years) of base

salary under the FY 2027 EABP.

The FY 2027 EABP is based on the following metrics:



60% Group adjusted operating profit



20% Group adjusted cash flow



20% operational scorecard

Details on the metrics are set out on page 103. The

Committee considers the forward-looking annual

bonus targets to be commercially sensitive, but full

disclosure of targets and performance outcome will

be set out in next year’s Annual report on remuneration.

It is the Committee’s intention to make awards

under the LTIP this year, and it is anticipated that

the approach regarding metrics will be similar to

the 2025 LTIP, with some changes. The 2026 LTIP

consists of 55% EPS, 35% relative TSR and 10% on

additional ZE buses. The targets for the 2026 LTIP

awards are set out on page 103.

Given the changes to our business, including the

renationalisation of the DfT TOCs and changes

arising from bus franchising we have decided not to

include Scope 1&2 emissions reduction and the ED&I

metrics in the 2026 LTIP. We remain fully committed

to both reducing our greenhouse gas emissions as

well as our ED&I agenda.

Setting meaningful Scope 1&2 targets that the

Executive Directors can influence would be

extremely complex in light of the changes to our

business, however, management can reduce our

greenhouse gas emissions by increasing our ZE bus

fleet, achieving the maximum target would result in

a reduction of over 41,000 tCO

e. Additionally, our

employee demographics are expected to change

materially as a result of the changes to our business,

therefore, it would not be feasible to set meaningful

and robust three-year ED&I targets at this time.

Remuneration fairness

As a Remuneration Committee, we consider senior

team pay in the context of wider workforce pay,

policies and practices, and a number of items are

tabled at Committee meetings every year to ensure

the approach throughout the Group is fair.

The Remuneration in context section of the report on

pages 95 and 96 provides a summary of the items

and the factors that the Committee considers when

making executive reward decisions.

Key activities during the year

The Committee has:



approved the FY 2026 EABP payout for Executive

Directors and other senior employees



determined the vesting of the 2023 LTIP



reviewed and approved the FY 2026 Directors’

Remuneration report



approved the 2025 LTIP awards



agreed the FY 2027 EABP approach



reviewed wider workforce remuneration

and related policies



approved the 2025 Save As You Earn scheme



reviewed its terms of reference

2027 Remuneration Policy

The current Directors’ Remuneration Policy was

approved at the 2024 AGM and, in line with the

standard three-year approval cycle, will expire at

the 2027 AGM. Ahead of this, the Committee will

carry out a comprehensive review to ensure the

Policy remains aligned with the Group’s future

growth strategy. I look forward to engaging with

shareholders over the course of the year to discuss

any proposed amendments to the policy.

Governance

The Committee actively monitors developments in

corporate governance and the guidelines produced

by shareholders and their representative bodies.

We have provided further details on our approach

to pay throughout the Group on pages 95 and 96.

The audited sections of the Annual report on

remuneration are clearly marked.

In conclusion

We are committed to maintaining an open and

transparent dialogue with our shareholders on

executive remuneration. We consider ongoing

engagement to be vital in ensuring that our

approach to remuneration continues to be

aligned with the long-term interests of the

Group’s shareholders and wider stakeholders.

We welcome the feedback received during

the year and hope to receive your support at

our upcoming AGM.

Sally Cabrini

Chair, Remuneration Committee

17 June 2026

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Remuneration Committee report

continued

Key to our strategic pillars

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social sustainability

Diversify

our portfolio

Base salary

20%

Pension

and benefits

EABP

22%

LTIP

56%

£2,974

Base salary

21%

Pension

and benefits

EABP

23%

LTIP

52%

£2,376

221.5

88.9

86.0

1,704.1

5.4

This section summarises the pay our Executive Directors received in FY 2026.

Read more on pages 97 to 99

CEO

CFO

FY 2026 Executive Annual Bonus Plan (EABP)

Weighting

Measure

Threshold

(0% payment)

Target (50%

payment)

Maximum

(100% payment)

Outcome

as % of

maximum

award

Link to

strategy

50%

Group adjusted operating profit

33.0%

Target

£155.8m

£168.4m

£185.2

Performance

20%

Group adjusted cash flow

20.0%

Target

£92.1m

£99.2m

£127.5m

Performance

20%

Operational scorecard

10.9%

Performance

10%

Personal objectives

CEO

9.0%

CFO

8.0%

Total bonus achieved (as % of maximum)

CEO

72.9%

CFO

71.9%

Weighting

Measure

Threshold

(0% payment)

Maximum

(100% payment)

Outcome

as % of

maximum

award

Link to

strategy

50%

EPS

50%

Target

12.1p

15.7p

Performance

35%

Relative TSR

35%

Target

Median

Upper quartile

Performance

7.5%

Zero emission fleet

7.5%

Target

600

850

Performance

7.5%

Emissions reduction

7.5%

Target

12%

15%

Performance

Total (as % of maximum)

100%

£173.8m

20.3p

1,154

30.9%

£140.2m

83rd percentile

90%

80%

FY 2026 single figure total

remuneration (£’000s)

Spend on pay (£m)

FY 2026 single figure total remuneration

Shareholding requirement –

progress in FY 2026

Requirement

200%

of base salary within 5 years of appointment

At 28 March 2026

CEO

277%

CFO

535%

Total employee pay

Adjusted operating profit

Distributions to shareholders

Spend on zero emission vehicles

Total Executive Director pay

54.4%

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Remuneration at a glance

In setting the remuneration for Executive Directors,

the Committee considers the Group’s overall

approach to employee reward. Given the diverse

nature of the operations of our divisions and the

employment markets in which they operate,

remuneration practices vary across the organisation

to ensure they remain relevant to each individual

market. This includes recognising that approximately

85% of colleagues are covered by collective

bargaining arrangements, which shape pay

structures and outcomes.

The Remuneration Committee and the Responsible

Business Committee discuss a number of items each

year to ensure the organisation’s approach to reward

remains consistent and fair. All members of the

Remuneration Committee also sit on the Responsible

Business Committee, so although the final two items

below are formally considered by the Responsible

Business Committee, Remuneration Committee

members participate in those discussions. Insights

from the Responsible Business Committee are then

fed into the Remuneration Committee.



A report summarising wider workforce pay

policies and practices, with updates provided

on a regular basis



The CEO pay ratio and underlying statistics



Gender and ethnicity pay gap reports, including

statistics from each UK reporting entity



The actions management is taking to improve

diversity in the workforce and close pay gaps

where they exist

The table on page 96 (Wider workforce

remuneration) summarises the approach to

pay at FirstGroup. The main difference between

the structure of our most senior employees’

remuneration and that of the wider workforce

is that senior employee remuneration is more

heavily weighted to variable pay, linked to

business performance.

The Committee recognises the importance

of transparency and seeks to ensure that the

workforce understands how Executive Director

remuneration is determined. To support this, the

Group’s communication channels are used to

signpost the information set out in the Directors’

remuneration report.

Treating our people fairly

Effective 1 April 2024, First Bus became a Real Living

Wage employer. First Bus have gone beyond the

accreditation requirements and have also included

all apprentices.

Across the Group, pay structures vary. For non-

collectively bargained employees in First Bus,

recent salary increase budgets have been

weighted towards lower earners.

Employees receive a range of benefits in addition

to base salary, including retail discounts and

supermarket savings, holiday buy and sell and

cycle to work.

We continue to offer the Save As You Earn (SAYE)

share scheme, enabling colleagues to purchase

discounted shares following a three-year savings

contract. There are c.4,250 active colleagues

participating in at least one of the three current

schemes (15.6% of eligible colleagues), contributing

an average of c.£200 per month. From the first

relaunched scheme in 2023, which matures in

September 2026, there are currently c.2,350 active

colleagues who subscribed at an option price of 111p

(the closing share price on 27 March 2026 was 168.9p).

Travel benefits include free travel for employees and

their families across their own network. Employees

are also able to purchase discounted rail and bus

travel across the Group. In FY 2026, more than 113,000

rail and 23,500 bus discounted tickets were purchased

across the Group.

All employees also have access to an Employee

Assistance Programme, which offers employees

free access to a virtual GP, online physiotherapy,

wellbeing and counselling services, legal

and financial support as well as a number

of other services.

Healthcare benefits for First Bus colleagues include

the Simplyhealth scheme, which provides cashback

on everyday healthcare costs. In FY 2026, nearly

4,000 colleagues utilised Simplyhealth, receiving

over £340,000 in cashback.

We operate a number of different monetary and

non-monetary recognition programmes and events

in which colleagues at all levels of the business

participate in. These programmes range from spot

bonuses to annual recognition events, such as the

Our Way Awards in First Bus, recognising individuals

and teams for exemplary performance throughout

the year.

Engaging with our colleagues

While the Committee does not formally consult with

the workforce on Executive Director remuneration,

it takes into account wider workforce views and

experience through a range of established

engagement mechanisms.

The Group also engaged with its workforce through

the Designated Non-Executive Director for Workforce

and Chair of the Colleague Advisory Panel, Myrtle

Dawes at events also attended by other Non-

Executive Directors. The Panel gives colleagues the

opportunity to get together with our Non-Executive

Directors, and discuss their views on what is working

well and where we can improve. It brings together

leaders, managers, supervisors and frontline

colleagues, encouraging open dialogue and

different perspectives.

Across our businesses we have ‘Your Voice’

engagement surveys that run at least annually

across First Bus, First Rail and the corporate

centre. First Bus has improved response rates

and engagement scores over the past three

years have risen to 66% (+25% in 4 years). Across

our Rail businesses, the engagement score is 71%.

A key part of our engagement strategy is enabling

local teams to take ownership of the employee

experience in ways that resonate with their unique

contexts. While the overarching strategy provides

clarity and alignment, we trust local leaders to

shape meaningful interventions on the ground.

This approach has built stronger emotional

connections, improved communication, and

driven performance from the depot floor up.

To support this, First Bus have recently launched a

new personalised colleague app ‘Blink’, which brings

simpler tools and clearer updates to help colleagues

feel more connected. It is an easily accessible central

hub, where all colleagues and leaders can share

important content and updates directly. It is also

a place where achievements are seen, shared

and celebrated across the whole company.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Remuneration in context

Strategic alignment of remuneration

The table below sets out how each of the performance metrics used in our incentive plans for FY 2026 is aligned to the Company’s strategy. See pages 13 to 14 for more information

on our strategy.

Measure

Deliver

day in, day out

Drive

modal shift

Lead in environmental and

social sustainability

Diversify

our portfolio

EABP

Group adjusted operating profit

Group adjusted cash flow

Operational performance

Personal performance

LTIP

EPS

Relative TSR

Zero emission fleet

Scope 1&2 emissions reduction

All employees

Base salary



Base salaries are reviewed annually.



When setting pay for Executive Directors and the Executive Committee, the Committee considers salary increases for the wider workforce.

Pension



We are committed to helping our colleagues save for retirement through a variety of Company pension arrangements, designed in

line with market practice.

All-employee

share schemes



All UK employees with at least six months of service are eligible to participate in our HMRC-approved all-employee share schemes.

Under SAYE, employees can make monthly savings over a period of three years, with the option to purchase FirstGroup shares at a

discount of up to 20% of the market value of shares on grant. Under Buy as You Earn (BAYE), our Share Incentive Plan (SIP), eligible

employees can purchase shares from their pre-tax salary and become shareholders in the Company.

Benefits



We offer a range of benefits to our employees, including our Employee Assistance Programme, discounts and cashback at major retailers,

and discounted travel on our networks. See page 95 for more information.



Both divisions run workplace health and wellbeing programmes to support employees in staying fit and healthy.

Senior executives

and management

Annual bonus



Incentivises successful execution of our business strategy and operational goals.

LTIP



Senior executives with sufficient line of sight to drive long-term sustained value creation for our shareholders.

Shareholding guidelines



Executive Directors and Executive Committee members are required to hold a material percentage of their salary in Company shares

within five years of appointment, ensuring alignment with the shareholder experience.

Wider workforce remuneration

Key to our strategic pillars

Deliver day

in, day out

Drive

modal shift

Lead in environmental

and social

sustainability

Diversify

our portfolio

Remuneration in context

continued

The Remuneration Committee makes a holistic safety assessment at each year end, which can reduce the formulaic outturn of the EABP to reflect safety performance.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

The Annual report on remuneration sets out



Directors’ remuneration for FY 2026, on pages 97 to 102



The statement of the planned implementation of policy in FY 2027, on page 103

This part of the Directors’ remuneration report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended).

The Annual report on remuneration and Chair’s statement will be put to an advisory shareholder vote at the 2026 AGM.

Single total figure of remuneration for Executive Directors (audited)

Salaries

Taxable

benefits

Pension

Total fixed

remuneration

Annual bonus

LTIP

2,3

Other

Total

variable

remuneration

Total

remuneration

Graham Sutherland – CEO

FY 2026 £’000s

606

637

662

1,675

–

2,337

2,974

FY 2025 £’000s

589

619

726

2,349

3,076

3,695

Ryan Mangold – CFO

FY 2026 £’000s

508

599

548

1,229

–

1,777

2,376

FY 2025 £’000s

494

582

608

1,724

2,333

2,915

Half of the annual bonus earned is deferred into shares for a period of three years.

The value of the 2023 LTIP, which had a three-year performance period ending 28 March 2026, was calculated using the average share price over the last three months of FY 2026 (182.7p). In line with reporting requirements, the LTIP values include dividend equivalent amounts of

£143,301 and £105,180 for the Chief Executive Officer and Chief Financial Officer, respectively. £398,309 and £292,351 of the value for the Chief Executive Officer and Chief Financial Officer, respectively, is attributed to share price growth as the share price at award was 135.2p in 2023.

The value for FY 2025 relates to the 2022 LTIP, which had a three-year performance period ending 29 March 2025. The value of the 2022 LTIP for Graham Sutherland and Ryan Mangold reported in the 2025 report (£1.709m and £1.254m, respectively) was an estimate based on the

average share price over the last three months of FY 2025 (164.73p). The actual value of the 2022 LTIP on the 18 August 2025 vesting date was £2.349m and £1.724m for Graham Sutherland and Ryan Mangold, respectively (based on share price of 225.7p); this includes actual dividend

equivalents received of £153,669 and £112,776, respectively.

Graham Sutherland and Ryan Mangold both participate in the 2024 SAYE scheme. More detail on the scheme can be found on page 96. The value of their options under the 2024 scheme has been valued as the number of options subscribed for, multiplied by the difference between

the closing share price on the date before grant (153.4p) and the option price (123.0p), which is a 20% discount.

More detail can be found below.

Benefits (audited)

Graham Sutherland’s benefits for the year comprised £1,285 for UK private medical insurance. Ryan Mangold’s benefits for the year comprised a £12,000 car allowance and £3,213 for UK private medical insurance.

Pension (audited)

Graham Sutherland received a pension allowance of 5% of his base salary, £30,285. Ryan Mangold received a pension allowance of 15% of his base salary, £76,230.

We operate a number of different pension arrangements across the Group, including defined benefit pension schemes. No Director has a prospective benefit under a defined benefit pension.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Annual report on remuneration

FY 2026 performance and reward decisions

As a Committee, we believe it is imperative to strike the right balance between incentivising the management team, rewarding strong performance and being equitable in the broader context.

When assessing the performance of the Executive Directors, the Remuneration Committee takes a broad view of financial performance delivered, the shareholder experience and the outcome for the Company’s

stakeholders, including customers, employees and the communities in which we operate. When considering remuneration outcomes, the Committee takes into account performance against specific metrics on safety,

including workplace fatalities and injuries, and customer satisfaction, as well as environmental, social and governance matters such as significant environmental incidents, large or serial fines or sanctions from regulatory

bodies, and significant adverse legal judgements or settlements. The Committee has broad discretion to ensure incentive outcomes are appropriate.

FY 2026 Executive Directors’ annual bonus (audited)

For FY 2026, the annual bonus maximum opportunity was 150% of salary for both Executive Directors. As in previous years, the EABP aimed to incentivise improved performance against a range of financial and non-financial

metrics. The structure of the bonus was weighted so that 70% was based on financial metrics and 30% on non-financial metrics. The Committee retains overriding discretion to adjust the overall bonus outturn (including to

£nil) if a serious safety failing or deterioration is identified.

The chart below sets out the targets, performance achieved and corresponding bonus outturns on a formulaic basis against the financial and qualitative targets.

FY 2026 annual bonus outcome

Measure

Weighting

Threshold:

On target:

50%

Maximum:

100%

Outturn

Bonus achievement

Payout %

Group adjusted operating profit (pre-IFRS 16 basis)

50%

£155.8m

£168.4m

£185.2m

£173.8m

66.1%

33%

Group adjusted cash flow

20%

£92.1m

£99.2m

£127.5m

£140.2m

100%

20%

Operational scorecard:

First Bus Net Promoter Score

3.5%

10.6

11.6

12.6

17.2

100%

3.5%

First Bus employee engagement score

3.5%

63%

65%

67%

66%

75%

2.6%

First Bus overall fleet MPG

8.2

8.3

8.4

8.3

50%

1.5%

First Rail average TOC scorecard score

2.3

65%

3.3%

First Rail Train on Self Cancellations: Lumo

2.5%

>24

First Rail Train on Self Cancellations: Hull

2.5%

>24

Personal objectives

10%

N/A

see below

Group adjusted operating profit is assessed on a pre-IFRS 16 basis, as this more appropriately reflects the underlying risk given that the majority of IFRS 16 impacts are not for our account. Pre-IFRS 16 basis is readily understood by management teams and is used in banking

covenants. Group operating profit post-IFRS 16 is £219.4m. See note 4 for the reconciliation.

Group adjusted cash flow is assessed from continuing operations on a pre-IFRS 16 basis. It excludes London capital expenditure (-£25.9m), acquisitions (-£35.3m), interest and tax (-£22.9m), dividends to shareholders (-£38.9m), share buyback (-£50.4m), and share purchases for

Employee Benefit Trust (-£24.3m).

Personal objectives

The Committee considered performance against personal strategic objectives for both Graham Sutherland and Ryan Mangold. The Committee sought feedback from the Chair of the Board in determining the

achievement of the personal objectives element of the EABP for Graham Sutherland. It was noted that Graham Sutherland has had a very strong year as CEO. Some specific achievements include:



Implemented target operating model to position the Group for sustainable growth and value creation



Delivered all FY 2025 M&A integration, including First Bus London which is performing ahead of expectations



Continued to execute our UK-focused growth strategy with the acquisition of three coach companies in the year, growth in open access and award of the London Overground contract

Ryan Mangold has had another strong year. Some specific achievements include:



Maintained a strong balance sheet and disciplined capital allocation policy, critically important given uncertainty



Delivered solutions to support innovation in Bus electric supply to facilitate lower future operating costs



Continued to execute our UK-focused growth strategy with the acquisition of three coach companies in the year, growth in open access and award of the London Overground contract

As noted in the Chief Executive Officer’s review, performance on the financial measures was strong for the Group as a whole. There was also strong performance in respect of the non-financial measures (as detailed

above). The Committee determined that Graham and Ryan had delivered their personal objectives to a high standard. The Committee accordingly awarded Graham Sutherland and Ryan Mangold 9% and 8% out of

a possible 10%, respectively, for their personal objectives.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Annual report on remuneration

continued

Taking into account the above outcomes, the formulaic EABP award for Graham Sutherland and Ryan Mangold resulted in a potential award of 72.9% and 71.9% of the maximum, respectively. The Committee considered this

formulaic performance in the context of the Group’s wider performance and decided that it did not need to exercise any discretion to reduce this outcome. Under the approved policy, 50% of the award is normally paid in

cash, with 50% deferred into shares (deferred share awards vest after three years, subject to continued employment, and are not subject to any further performance conditions).

The overall bonus payout for FY 2026 was therefore as follows:

Graham Sutherland

Ryan Mangold

Maximum EABP opportunity (% of salary)

150%

EABP achieved (as % of maximum)

72.9%

71.9%

EABP (% of salary)

109.4%

107.9%

Total EABP

£662,430

£548,176

EABP – Cash

£331,215

£274,088

EABP – Deferred shares

£331,215

£274,088

Long-Term Incentive Plan

The vesting of 2023 LTIP awards was subject to achieving the following performance conditions over a three-year performance period ending 28 March 2026:

Vesting of 2023 Long‑Term Incentive awards (audited)

Metrics

Weighting

Threshold:

20%

Maximum:

100%

Outturn

% of award

which vested

Adjusted EPS

50%

12.1p

15.7p

20.3p

100%

Relative TSR vs FTSE 250 (excluding Investment Trusts)

35%

Median

Upper quartile

83rd percentile

100%

Sustainability Scorecard

ZE fleet (# vehicles)

7.5%

600

850

1,154

100%

Emissions reduction: Scope 1&2 emissions (tCO

e) reduction

7.5%

12%

15%

30.9%

100%

Total

100%

Grant Thornton have verified the FY 2026 outturn and agreed the methodology applied in respect of FY 2020 baseline. Carbon Footprint Limited have reviewed our baseline calculations and have provided assurance in respect of our FY 2026 baseline.

As a result of this outcome, awards vested as follows:

Executive Director

Total number of

shares granted

Proportion of

award vesting

(% max)

Face value of

shares vesting

(£’000)

Value attributable

to share price

movement

(£’000)

Value of

dividend

equivalents due

(£’000)

Value of

resultant

award

(£’000)

Graham Sutherland

838,017

100%

£1,531

£398

£143

£1,675

Ryan Mangold

615,088

100%

£1,124

£292

£105

£1,229

The face value of the 2023 LTIP at vesting has been calculated based on the average share price over the last three months of FY 2026 (182.7p).

At vesting, £398,309 and £292,351 of the value for Graham Sutherland and Ryan Mangold, respectively, is attributed to share price growth (the share price at award was 135.2p in 2023).

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

Governance report

Introduction

Annual report on remuneration

continued

Long‑Term Incentive awards made during the year

The Committee determined that the 2025 awards would be measured against EPS, relative TSR and an ESG Scorecard (comprising two environmental measures and two diversity and inclusion metrics), over a three-year

period. The measures of the 2025 LTIP are consistent with the 2024 LTIP award.

Awards were made in June 2025 and are subject to an additional two-year holding period as well as malus and clawback. Before an award vests, the Committee must be satisfied that the underlying performance of the

Group is satisfactory and has the ability to amend the formulaic vesting outcome if it believes this is appropriate. The Committee believes that having a performance override is an important feature of the plan, as it

mitigates the risk of unwarranted vesting outcomes.

The targets in the 2025 LTIP were set based on information known at the time. The Committee is mindful of the impact that renationalisation of the DfT TOCs may have on the 2025 LTIP targets. The Committee will consider if

any adjustments to the 2025 LTIP (either positive or negative) are necessary due to factors outside of management’s control. Full disclosure of any adjustments made will be provided in the relevant remuneration report.

Details of the performance metrics, targets and comparator group for the 2025 LTIP awards are set out below:

2025 Long‑Term Incentive Plan performance metrics (audited)

ESG Scorecard

Adjusted EPS

Relative TSR

vs FTSE 250

Additional ZE

buses

in service/on order

by 31 March 2028

Scope 1&2 emissions

(tCO

reduction

Gender diversity in

senior leadership

Ethnic diversity in

senior leadership

Weighting

50%

30%

7.5%

2.5%

Threshold (20% vesting)

17.5p

Median

590

29%

38.7%

9.6%

Maximum (100% vesting)

21.5p

Upper quartile

890

34%

40%

11%

Vesting will be on a straight-line basis between threshold and maximum.

EPS will be assessed on a pre-IFRS 16 basis, as this aligns with how performance is measured internally and is most readily understood by management teams (Group adjusted operating profit in the EABP is measured on a pre-IFRS 16 basis for the same reason). A reconciliation from

IAS 17 to post-IFRS 16 EPS will be included in the FY 2028 Directors’ remuneration report so as to provide clarity between the LTIP targets and achievement relative to the reported EPS on a statutory basis.

Relative TSR will be assessed against the FTSE 250 Index, excluding investment trusts.

4 Zero emission.

Tonnes of carbon dioxide equivalent (tCO

e).

From SBT base year 2020.

An LTIP award of 200% and 175% of salary were granted to Graham Sutherland and Ryan Mangold, respectively, on 12 June 2025.

2025 Long‑Term Incentive Plan grants (audited)

Details of Graham Sutherland’s and Ryan Mangold’s awards (granted in the form of conditional share awards) are set out below:

Executive Director

Share price

at date of grant

Face value

(% of base salary)

Number

of shares

awarded

Face value

of award

% of award

which vests

at threshold

Performance

period

Graham Sutherland

217.8p

200%

556,198

£1,211,400

20%

1.4.25 – 31.3.28

Ryan Mangold

217.8p

175%

408,333

£889,350

20%

1.4.25 – 31.3.28

The share price at grant for the LTIP awards is closing mid-market share price for the day preceding the grant date.

As is normal practice, the Committee will ensure that any vesting is appropriate in the context of underlying financial performance and the experience of our wider stakeholders. The Committee retains the ability to apply

discretion in the event that the value at vesting is considered to be an unjustified windfall gain taking into account the performance of the Group.

Strategic report

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statements

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Annual Report and Accounts 2026

100

Governance report

Introduction

Annual report on remuneration

continued

Performance graphs

200

100

150

31/03/16

31/03/17

31/03/18

31/03/19

31/03/20

31/03/21

31/03/22

31/03/23

31/03/24

30/03/25

29/03/26

FirstGroup plc

Total shareholder return

FTSE 250 Index

Total shareholder return

Remuneration of the Chief Executive Officer

The table below shows the total remuneration figure for the Chief Executive Officer, during each of the past ten years. The total remuneration figure includes the annual bonus and LTIP awards that vested based on

performance in those years. The annual bonus percentages show the payout for each year as a percentage of the maximum.

2017

Tim

O’Toole

2018

Tim

O’Toole

2019

Tim

O’Toole

2019

Wolfhart

Hauser

2019

Matthew

Gregory

2020

Matthew

Gregory

2021

Matthew

Gregory

2022

Matthew

Gregory

2022

David

Martin

2023

David

Martin

2023

Graham

Sutherland

2024

Graham

Sutherland

2025

Graham

Sutherland

2026

Graham

Sutherland

Total remuneration (£’000s)

1,267

1,100

175

266

422

788

840

2,246

320

134

1,191

1,398

3,694

2,974

EABP (% of maximum potential)

–

N/A

33.4

–

N/A

82.1

72.9

LTIP vesting (% of maximum potential)

16.3

–

N/A

12.5

14.6

88.5

N/A

–

100

No EABP was paid to Tim O’Toole in 2017 or 2018. He received a conditional deferred share award in 2017.

Remuneration for Tim O’Toole until he stepped down as CEO on 31 May 2018. Tim O’Toole was not eligible for an annual bonus or LTIP awards.

Remuneration for Wolfhart Hauser for his period as Executive Chairman, 1 June to 12 November 2018. Wolfhart Hauser was not eligible for EABP or LTIP awards.

Remuneration for Matthew Gregory as Chief Executive Officer from 13 November 2018 until he stepped down on 13 September 2021.

Remuneration for David Martin for his period as Interim Executive Chairman from 13 September 2021 until 30 June 2022. David Martin was not eligible for EABP or LTIP awards.

Remuneration of Graham Sutherland from his appointment as Chief Executive Officer on 16 May 2022. Salary and EABP have been pro-rated for time served.

The graph above shows the TSR performance of £100 invested in FirstGroup plc shares over the past ten years compared with an equivalent investment in the FTSE 250. The FTSE 250 Index has been selected as it

provides an established and broad-based index, of which the Company is a constituent.

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Annual Report and Accounts 2026

101

Governance report

Introduction

Annual report on remuneration

continued

Directorate changes

Effective 25 July 2025, Myrtle Dawes was appointed to the role of Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel. For FY 2025, she received an additional fee of £6,110 p.a. for this

role. As a result of this change Ant Green (Employee Director) retired at the AGM in July 2025.

Payments for loss of office (audited)

Anthony Green was paid six months’ notice (£31,935) in respect of him retiring from the Board as Group Employee Director.

Payments to past Directors (audited)

No payments to past Directors were made during FY 2026.

Chair and Non-Executive Directors’ fees (audited)

NED fees were increased by 2.8% effective 1 April 2025, resulting in NED fees of £63,870 p.a. with additional fees of £13,220 p.a. payable to the Senior Independent Director and the Chairs of the Audit, Responsible Business and

Remuneration Committees. The fee for the Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel was set at £6,110 p.a. for FY 2026. No changes were made to the Chair’s fee in FY 2026.

From 1 April 2026 NED fees and the Chair fee increased by 3.0%, taking the basic NED fee to £65,790, the Chair fee to £298,700, the additional fee for the Senior Independent Director and Chairs of the Audit, Responsible

Business Committee Chairs and Senior Independent Director to £13,617 and the fee for the Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel to £6,294.

FY 2026

FY 2025

£’000

Basic fee

Committee

Chair

SID

Taxable

benefits

Total

Basic fee

Committee

Chair

SID

Taxable

benefits

Total

Lena Wilson

290

–

300

–

Sally Cabrini

–

Myrtle Dawes

–

Claire Hawkings

–

Jane Lodge

–

Peter Lynas

–

Anthony Green

–

The Company meets all reasonable travel, subsistence, accommodation and other expenses, including any tax where such expenses are deemed taxable, incurred by the Chair of the Board and NEDs in the course of performing their duties.

Lena Wilson was appointed to the Board as Chair on 1 February 2025, with a fee of £290,000, and her fees for FY 2025 were pro-rated.

Myrtle Dawes was appointed Designated Non-Executive Director for Workforce and Chair of the Colleague Advisory Panel as of 25 July 2025. The additional fee for this appointment is £6,110 p.a. and her additional fee for FY 2026 has been pro-rated.

Peter Lynas, Senior Independent Director, acted as Chairman from 10 September 2024 until the appointment of Lena Wilson on 1 February 2025. For this period, he was paid an additional fee of £22,005 bringing his total fees for FY 2025 to £96,995.

Anthony Green retired from the Board as Group Employee Director at the 2025 AGM. In addition to his fee as Group Employee Director, he received earnings from the Group as an employee amounting to £32,024 in FY 2025 and £32,367 in FY 2026.

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Annual Report and Accounts 2026

102

Governance report

Introduction

Annual report on remuneration

continued

Implementation of Remuneration Policy for FY 2027

Annual base salary

The Committee carefully considered base salary increases for the Executive Directors holistically, taking into

account FY 2027 base salary increases applied to the wider workforce (see page 95 for more information),

investor guidance, the Group’s strong performance in FY 2026 as well as the macroeconomic environment.

The Committee decided it would be appropriate to award a base salary increase of 3.0% for Graham Sutherland

and Ryan Mangold, increasing their base salary to £623,900 and £523,500, respectively, from 1 April 2026.

FY 2027 Executive Directors’ annual bonus

For FY 2027, the EABP will continue to incentivise improved performance against a range of financial and

non-financial metrics. The financial targets are set by the Committee based on a number of factors such

as the Group’s business plan, individual business unit level performance, consensus and expectations for

FY 2027. Changes from FY 2026 include inclusion of First Rail London, and increasing the weighting of Group

adjusted operating profit from 50% to 60% following the removal of the personal performance element

from the Executive Directors’ annual bonus. The personal performance of the Executive Directors will still

be assessed, however, personal performance will no longer be bonusable. This change further strengthens

alignment with shareholder experience by increasing the proportion of bonus linked directly to Group

financial performance. The precise measures under the operational scorecard may change each year

depending on annual business priorities.

The performance measures for FY 2027 are:

Measure

Weighting

Group adjusted operating profit

60%

Group adjusted cash flow

20%

Operational scorecard:

First Bus Net Promoter Score

3.5%

First Bus employee engagement score

3.5%

First Bus overall fleet MPG

First Rail scorecard

First Rail open access TOC on self-cancellations

The targets for FY 2027 will be disclosed in next year’s report when they are no longer commercially sensitive.

The FY 2027 annual bonus maximum and threshold levels of bonus as a percentage of base salary will be as follows:

Executive Director

Maximum

Threshold

Graham Sutherland

150%

Ryan Mangold

150%

All payouts will be subject to the Committee’s discretion as well as malus and clawback provisions.

Half of any bonus earned will be deferred into the Company’s shares for three years, conditional upon

continued employment. The Committee has demonstrated, in assessing bonus outcomes, including in

respect of FY 2021 and FY 2020, that it is prepared to set aside the formulaic outcome and reduce awards

or introduce a further condition, to ensure that business performance or the impact of a significant event

is properly reflected.

2026 Long‑Term Incentive awards

It is the Committee’s intention to make awards under the LTIP this year. Awards of 200% and 175% of salary will

be made to the Chief Executive Officer and Chief Financial Officer, respectively. The Committee has agreed

that the 2026 LTIP awards will be subject to EPS, relative TSR and ESG performance measures. These measures

are consistent with recent LTIP awards, although refinements have been made to the ESG metric. As noted on

page 93, Scope 1&2 emissions reduction targets and gender and ethnicity representation targets have not

been included within the 2026 LTIP meaning the ESG metric will be based solely on ZE bus fleet targets. By

increasing our ZE bus fleet management can directly reduce our greenhouse gas emissions. The achievement

of the maximum ZE buses target is expected to result in a reduction of over 41,000 tCO

Setting meaningful Scope 1&2 targets that the Executive Directors can influence would be extremely complex

in light of the changes to our business. Additionally, the re-nationalisation of the DfT TOCs and potential

changes arising from bus franchising are expected to materially alter our employee demographics. As a

result, it would not be feasible to set meaningful and robust three-year gender and ethnicity representation

targets at this time. We remain fully committed to reducing our greenhouse gas emissions and to our ED&I

agenda, and progress will continue to be monitored and driven through inclusion within the Board KPIs.

Details of the performance metrics, targets and comparator group for the 2026 LTIP awards are set out below.

The Committee is mindful of the importance of ensuring that any awards under the 2026 LTIP are aligned

with shareholder value. The EPS target range of 20.7p to 24.7p has been set based on internal forecasts. The

Committee considers the target range to be appropriately stretching, taking into account the impact of the

renationalisation of the DfT TOCs and future earnings potential from portfolio growth and diversification.

Adjusted EPS

Relative

TSR vs FTSE

250

Additional ZE

buses in

service or on

order by 31

March 2029

%Weighting

55%

35%

10%

Threshold (20% vesting)

20.7p

Median

590

Maximum (100% vesting)

24.7p

Upper

Quartile

750

Vesting will be on a straight-line basis between threshold and maximum.

Relative TSR will be assessed against the FTSE 250 Index (excluding Investment Trusts).

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Annual Report and Accounts 2026

103

Governance report

Introduction

Annual report on remuneration

continued

Directors’ interests in share awards (audited)

The outstanding LTIP, deferred share bonus awards of Directors are set out in the table below. There have been no changes to the terms of any share awards granted to Directors.

During year

Director

Plan

Date

of grant

Number of shares

under award

as at

29.03.25

Awards

granted

Awards

released

Awards

lapsed

Number of shares

under award

as at

28.03.26

Exercise

price

(£)

Face value

of awards

(£)

Date on which

awards vest/

become

exercisable

Expiry date

Graham Sutherland

LTIP

18.08.22

972,590

nil

1,100,000

18.08.25

N/A

09.06.23

838,017

nil

1,133,000

09.06.26

N/A

12.06.24

715,048

nil

1,178,400

12.06.27

N/A

12.06.25

556,198

nil

1,211,400

12.06.28

N/A

Deferred bonus

09.06.23

252,191

252.191

nil

340,963

09.06.26

N/A

12.06.24

242,343

nil

399,381

12.06.27

N/A

12.06.25

166,574

nil

362,800

12.06.28

N/A

SAYE

13.07.23

13,621

1.11

18,743

01.09.26

01.03.27

11.07.24

2,413

1.23

3,701

01.09.27

01.03.28

Ryan Mangold

LTIP

18.08.22

713,770

nil

807,275

18.08.25

N/A

09.06.23

615,088

nil

831,600

09.06.26

N/A

12.06.24

524,893

nil

865,025

12.06.27

N/A

12.06.25

408,333

nil

889,350

12.06.28

N/A

Deferred bonus

18.08.22

289,456

nil

327,375

18.08.25

N/A

09.06.23

240,545

nil

325,217

09.06.26

N/A

12.06.24

203,286

nil

335,015

12.06.27

N/A

12.06.25

139,745

nil

304,365

12.06.28

N/A

SAYE

13.07.23

13,621

1.11

18,743

01.09.26

01.03.27

11.07.24

2,413

1.23

3,701

01.09.27

01.03.28

Ant Green

SAYE

13.07.23

1,945

1.11

2,676

01.09.26

01.03.27

11.07.24

1,508

1.23

2,313

01.09.27

01.03.28

11.07.25

824

1.78

1,831

01.09.28

01.03.29

LTIP – from FY 2023 onwards, granted in the form of conditional share awards under the Long-Term Incentive Plan. Awards are subject to clawback and malus and subject to an additional two-year holding period.

Deferred bonus shares – 50% of the bonus awarded. Awards after FY 2023 are granted in the form of conditional share awards under the EABP. Awards are subject to clawback and malus.

SAYE – options granted under the all-employee share scheme.

Participants are entitled to receive accrued dividends or dividend equivalents under the LTIP and EABP pro-rated in proportion to the amount of the award that vests.

The table above shows the maximum number of shares that could be released if awards were to vest in full. In respect of LTIP and deferred bonus awards, participants are entitled to receive dividends or dividend equivalent amounts, once the share awards have vested.

The face value of LTIP and deferred bonus awards made has been calculated by multiplying the maximum number of shares that could vest by or become exercisable by the average closing mid-market share price on the day preceding the grant date. For deferred bonus and LTIP

awards made on 12.06.25, this is 217.8p. For SAYE awards, the face value of options under the 2023 scheme is determined by multiplying the number of options subscribed for by the closing mid-market share price on the date before grant (137.6p). The face value of the 2024 and 2025

SAYE awards is determined by multiplying the number of options subscribed for, including the tax-free savings bonus, by the closing mid-market share price on the date before grant (2024 SAYE: 153.4p, 2025 SAYE: 222.2p).

LTIP awards will not vest until the date the Committee determines whether performance conditions have been met, or if later, the date specified above. If dealing restrictions apply on the date of vesting, then vesting will occur on the first date after dealing restrictions cease to apply.

The market share price on the date of vest, 18 August 2025, was 225.0p.

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Annual Report and Accounts 2026

104

Governance report

Introduction

Annual report on remuneration

continued

Directors’ shareholding, shareholding guidelines and summary of outstanding

share interests (audited)

Under the terms of the Policy approved by shareholders at the 2024 AGM, Executive Directors are expected

to hold shares, or rights to shares in the Company, equivalent to a minimum of 200% of base salary within

a five-year period from their date of appointment to create greater alignment of the Executive Directors’

interests with those of shareholders. Executive Directors are also normally expected to hold the in-employment

guideline (or full actual holding if lower) in the first year following cessation of employment and 50% (or full

actual holding if lower) in the second year following cessation of employment.

The Committee reserves the right to relax or waive the application of such guidelines in certain

circumstances, including the impending retirement of an Executive Director.

The table below sets out the shareholdings of the Executive Directors and their connected persons’

shareholdings (including beneficial interests) and a summary of outstanding and unvested share awards

as at 28 March 2026. It shows that Graham Sutherland’s current shareholding is 277.5% of his base salary

and Ryan Mangold’s current shareholding is 534.5% of his base salary.

The Committee believes that it is an essential part of the Policy that Executive Directors build significant

shareholdings. The retention and build-up of equity is important in a long-term business such as FirstGroup, as it

encourages decisions to be made on a long-term, sustainable basis for the benefit of customers and shareholders.

There has been no change in the Directors’ interests in the ordinary share capital of the Company between

those set out below and the date of approval of this report with the exception of Ryan Mangold’s partnership

shares acquired through our all-employee SIP. The beneficial interests of Directors who served during the

year ending 28 March 2026 and their connected persons in the shares of the Company as at that date and

29 March 2025 are shown below.

Ordinary shares beneficially owned

Directors

Date of

appointment

At 29.03.25 or

appointment

date if later

28.03.26

Unvested

EABP/SAYE/

SIP shares

3,4

Unvested

LTIP

Vested but not

exercised

EABP/

LTIP awards

Shareholding

requirement

as % of salary

Current

shareholding

as % of

salary

6,7

shareholding

requirement

achieved

Executive Directors

Graham Sutherland

16.05.22

250,005

644,675

677,142

2,109,263

N/A

200%

277.5%

138.7%

Ryan Mangold

31.05.19

1,766,290

1,298,277

600,381

1,548,314

N/A

200%

534.5%

267.3%

Non-Executive Directors

Lena Wilson

01.02.25

14,000

31,000

Sally Cabrini

24.01.20

10,000

Myrtle Dawes

01.04.22

3,497

Anthony Green

15.09.20

1,674

4,277

Claire Hawkings

21.01.22

10,000

Jane Lodge

30.06.21

15,000

Peter Lynas

30.06.21

80,000

Or date of leaving, if earlier.

Ryan Mangold participates in the all-employee SIP. His partnership shares are held in trust and are not at risk of forfeiture. Ryan Mangold acquired an additional 264 partnership shares between 28 March 2026 and the date of approval of this report.

EABP shares are deferred shares that are subject to continued employment, but not subject to further performance conditions.

SIP matching shares awarded to Ryan Mangold are held in trust and are at risk of forfeiture if the corresponding partnership shares are withdrawn from trust within three years. No matching shares were awarded between 28 March 2026 and the date of approval of this Report.

LTIP awards are conditional share awards and nil cost options subject to ongoing performance conditions.

Based on the closing share price on 27 March 2026 (168.9p).

The percentage shown includes the after-tax value of vested but unexercised awards and the after-tax value of unvested EABP awards that are subject to continued employment.

Shares for Non-Executive Directors are held outright, with no attaching performance conditions.

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Annual Report and Accounts 2026

105

Governance report

Introduction

Annual report on remuneration

continued

Dilution

The Company ensures that the level of shares granted under the Company’s share plans and the means

of satisfying such awards remains within best practice guidelines, so that dilution from employee share

awards does not exceed 10% of the Company’s issued share capital for all share plans and 5% in respect

of executive share plans in any ten-year rolling period. The Committee monitors dilution levels at least

once a year. At 28 March 2026, 3.9% of the Company’s issued share capital had been issued for the

purpose of the SAYE, BAYE and LTIP over a ten-year period.

Employee Benefit Trust (EBT)

The FirstGroup EBT has been established to acquire ordinary shares in the Company, by subscription or

purchase, from funds provided by the Group to satisfy rights to shares arising on the exercise or vesting of

awards under the Group’s share-based incentive plans. As at 28 March 2026, 19,922,152 shares were held

by the EBT to hedge outstanding awards of 42,566,919. This means that the EBT holds sufficient shares to

satisfy approximately 46.8% of outstanding awards.

External board appointments

Where Board approval is given for an Executive Director to accept an outside non-executive directorship,

the Director is entitled to retain any fees received, unless the appointment is in connection with the business

of the Group. Graham Sutherland was appointed as Non-Executive Director of HICL Infrastructure PLC with

effect from 21 May 2025.

Company

Retained fees (£)

Graham Sutherland

HICL Infrastructure PLC

59,953

Percentage change in remuneration levels

The table below shows the movement in the salary, benefits and annual bonus for all Directors between the

current and previous financial year compared with that for the average UK employee (First Bus and First Rail,

but excluding the corporate centre). For the benefits and bonus per employee, the figures are based on those

employees eligible to participate in such schemes.

Executive Directors

Non-Executive Directors

Average UK

employees

6,7

change

FY 2026

Salary/fees

3.5%

2.8%

12.7%

2.8%

Benefits

5.5%

41.0%

6.5%

145.7%

29.8%

78.8%

(48.1)%

9.6%

107.1%

0.0%

Annual bonus

(28.7)%

(6.9)%

(6.8)%

change

FY 2025

Salary/fees

4.0%

N/A

4.0%

Benefits

135.6%

51.0%

5.7%

N/A

10.9%

40.8%

(30.7)%

67.2%

67.6%

0.0%

Annual bonus

(19.0)%

(9.2)%

(9.1)%

–

change

FY 2024

Salary/fees

6.0%

3.0%

N/A

3.0%

Benefits

(15.6)%

(46.2)%

(2.6)%

N/A

102%

(4.8)%

(30.9)%

48.8%

(47.5)%

0.0%

Annual bonus

9.1%

3.0%

–

change

FY 2023

Salary/fees

5.9%

N/A

2.4%

N/A

0.0%

N/A

0.0%

(14.6)%

0.0%

Benefits

(7.3)%

N/A

0.0%

N/A

(41.8)%

N/A

24.0%

116.2%

0.0%

Annual bonus

(32.3)%

N/A

(0.7)%

–

change

FY 2022

Salary/fees

11.1%

N/A

7.1%

N/A

6.1%

N/A

0.0%

Benefits

4.2%

N/A

0.0%

N/A

0.0%

Annual bonus

576.6%

N/A

–

We use all UK employees as a reference, as we believe this provides a more accurate reference point. Pay increases for the majority of UK employees in First Bus and First Rail are collectively bargained with trade unions in individual operating companies in First Bus and First Rail.

Some of these agreements are multi-year deals.

Graham Sutherland was appointed to the Board as Chief Executive Officer on 16 May 2022. As such, no comparison to FY 2022 is available and his FY 2023 pay has been annualised for comparison purposes.

Bonuses were not paid in FY 2020 or FY 2021, therefore, the percentage change in annual bonus to FY 2022 is ‘N/A’, meaning that the year-on-year change cannot be calculated.

Lena Wilson was appointed as Chair on 1 February 2025. As such, no comparison before FY 2026 is available, her FY 2025 fee has been annualised for comparison purposes.

Myrtle Dawes was appointed as designated NED for Workforce and Chair of the Colleague on 25 July 2025, the additional fee she receives has been annualised for comparison purposes. Myrtle Dawes was appointed to the Board on 1 April 2022. As such, no comparison to before FY

2024 is available.

Claire Hawkings, Jane Lodge and Peter Lynas were appointed to the Board in FY 2022. FY 2022 fees have been annualised for comparison purposes.

Peter Lynas served as Chair of Board Safety Committee from September 2021 to March 2022. For comparison purposes, the fee he received as Committee Chair has been annualised. Peter Lynas’ fees decreased in FY 2023 compared with FY 2022 as he no longer served as Chair of a

Committee. Peter Lynas acted as Chairman from 10 September 2024 until the appointment of Lena Wilson as Chair on 1 February 2025. As such, he received a fee of £22,005 for this role. Peter Lynas resumed the role of Senior Independent Director on 1 February 2025. For comparison

purposes, FY 2025 fees relate to the fees he receives as a Senior Independent Director.

Anthony Green retired from the Board as Group Employee Director at the 2025 AGM, his FY 2026 fee has been annualised for comparison purposes.

Private medical insurance premium rates for all employees, including the Executive Directors, were lower in FY 2024 compared with previous years due to a Covid rebate. Likewise, premium rates increased by 51% for all employees in FY 2025.

Directors’ salary/fee figures for FY 2021 reflect the voluntary 20% reduction between April to July 2020. There were no changes to NED fees between FY 2020 and FY 2023, but an increase of 3.0% in FY 2024 and 4.0% in FY 2025.

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Annual Report and Accounts 2026

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Introduction

Annual report on remuneration

continued

CEO pay ratio

In line with reporting requirements, the table below sets out the ratio at the 25th, 50th and 75th percentiles

of the total remuneration received by the Chief Executive Officer, compared with the total remuneration

received by our UK employees. The Company has calculated the ratios in accordance with the methodology

of Option B as it was deemed the most reasonable and practical approach given the collation of data

exercise required for gender pay gap reporting. There has been no departure from this methodology and

no element of pay has been omitted. It should be noted that the pay ratio may vary year-on-year and the

incentive outcomes for the Chief Executive Officer can impact the results significantly. We will provide an

explanation in each year’s report around the change in the ratio as well as any additional context, where

helpful, to understand variance. The UK employees at the lower quartile, median and upper quartiles were

identified as at 5 April 2025 and their salary and total remuneration were calculated in respect of actual pay

data from 30 March 2025 to 28 March 2026.

The Committee is satisfied that these pay ratios are consistent with our pay, reward and progression policies

and that these colleagues are representative of the relevant percentiles across the organisation, as they

represent frontline workers in our First Bus and First Rail divisions, i.e., the large majority of our UK workforce

receiving basic pay, overtime, holiday pay and employer pension contributions. The figures also include

sick pay (where relevant).

The decrease in the CEO pay ratio compared with FY 2025 is driven by the variable pay awards. The FY 2026

EABP vesting outcome is slightly reduced compared to FY 2025 and the share price movement between

FY 2025 and FY 2026 affects the reported value of the 2023 LTIP award.

The Committee is satisfied that the data included in the CEO pay ratio table reflect the goals of the Group’s

Remuneration Policy to support colleagues in the performance of their roles in collectively delivering the

Group’s strategy. In particular, the performance-based framework that rewards employees for their

individual efforts and the performance of the Company, and to structure pay in a simple and transparent

manner, have been applied consistently.

Pay ratio

Year

Method

25th

percentile

50th

percentile

75th

percentile

FY 2026

Option B

83:1

77:1

55:1

Total remuneration

£35,690

£38,807

£53,737

Salary only

£32,166

£34,636

£45,530

FY 2025

Option B

116:1

90:1

61:1

FY 2024

Option B

42:1

40:1

26:1

FY 2023

Option B

34:1

30:1

22:1

FY 2022

Option B

68:1

62:1

41:1

FY 2021

Option B

30:1

25:1

16:1

FY 2020

Option B

32:1

25:1

17:1

For FY 2026 the CEO total remuneration was £2,974,310 and the CEO salary was £605,700.

Relative importance of spend on pay

The table below sets out the Company’s expenditure on pay relative to adjusted operating profit, shareholder distributions by way of dividends and share buybacks, as well as spend on zero emission vehicles, an area of

significant investment.

FY 2026

£m

FY 2025

£m

change

Adjusted operating profit

221.5

222.2

-0.3%

Distributions to shareholders

88.9

84.2

5.6%

Spend on zero emission vehicles

86.0

38.9

121.1%

Total employee pay

1,704.1

1,710.9

-0.4%

Group adjusted operating profit, as reported in note 5 in the notes to the consolidated financial statements, has been used as a comparison as it is a key financial metric that the Board considers when assessing Company performance.

Distributions to shareholders, as reported in the consolidated statement of changes in equity, of £88.9m in FY 2026 consists of £38.9m in dividends (£45.6m including non-controlling interests) and £50.0m share buyback (£50.4m including related costs). Distributions to shareholders

in FY 2025 of £84.2m consists of £34.2m in dividends (£37.6m including non-controlling interests) and £50.0m share buyback (£50.4m including related costs).

Spend on zero emission vehicles is our spend, net of grant funding.

Total employee pay is the total pay for all Group employees, including pension and social security costs. The average monthly number of employees in FY 2026 was 30,995 (FY 2025: 30,763).

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Annual Report and Accounts 2026

107

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Introduction

Annual report on remuneration

continued

Committee membership and attendance

The membership of the Committee is shown on page 92 and attendance is set out on page 82. After each

meeting, the Chair of the Committee presents a report on its activities to the Board. The Chief Executive

Officer, General Counsel and Company Secretary and the Committee’s external remuneration adviser

will normally attend meetings by invitation, to provide advice and respond to specific questions. Other

attendees may include the Chair, Chief People Officer, Chief Financial Officer and the Director of Group

Reward. Attendees are not involved in any decisions and are specifically excluded from any matter

concerning their own remuneration. The Group Company Secretary and General Counsel acts as

secretary to the Committee.

Who supports the Committee?

The Committee can obtain the advice of external remuneration consultants and is solely responsible for

their appointment, retention and termination, and for the approval of the basis of their fees and other

terms. The Chair of the Committee agrees the protocols under which the external remuneration

consultants provide advice.

During the early part of FY 2026, the Committee was supported by Willis Towers Watson (WTW). WTW

provided independent advice and commentary on a range of topics, including Directors’ remuneration,

discretionary share plans, corporate governance and executive remuneration trends. WTW’s fees for advice

provided to the Committee were £58,800 (FY 2025: £60,040), charged on a time-spent basis. WTW provided

remuneration advice, including the provision of benchmark data, to the Company.

In November 2025, following a competitive tender process led by the Chair of the Committee, Deloitte was

appointed. During the year Deloitte provided independent advice and commentary on a range of topics,

including Directors’ remuneration, discretionary share plans, corporate governance and executive

remuneration trends. Deloitte’s fees for advice provided to the Committee were £20,500, charged

on a time-spent basis.

WTW and Deloitte are both members of the Remuneration Consultants Group Code of Conduct and adhere

to this Code in their dealings with the Committee. The Committee reviews the appointment of its advisers

annually and is satisfied that the advice it receives is objective and independent.

Shareholder voting on remuneration

At the 2025 AGM, shareholders approved the Directors’ remuneration report. Shareholders approved the

Directors’ Remuneration Policy at the 2024 AGM, which was published in the FY 2024 Annual Report and

Accounts. The results of these votes are shown below.

To approve the Directors’ remuneration

report at the 2025 AGM

To approve the Directors’ Remuneration

Policy at the 2024 AGM

2025 AGM voting

2024 AGM voting

Votes for

441,012,155

Votes against

15,310,095

Votes withheld

198,405

Votes for

426,755,092

Votes against

29,479,055

Votes withheld

286,508

Note: A ‘Vote withheld’ is not a vote in law and is not counted in the calculation of the votes ‘for’ and ‘against’ a resolution.

To approve the relevant Directors’ remuneration report

Votes for

Votes against

2025 AGM

98.33%

1.67%

Note: A ‘Vote withheld’ is not a vote in law and is not counted in the calculation of the votes ‘for’ and ‘against’ a resolution.

To approve the Directors’ Remuneration Policy

Votes for

Votes against

2024 AGM

93.54%

6.46%

Further engagement

The Committee values its continued dialogue with shareholders and engages directly with them and their

representative bodies at the earliest opportunity. Shareholder feedback received in relation to the AGM, as

well as any additional feedback and guidance received during the year, is considered by the Committee

as it develops the Company’s remuneration framework and practices.

In line with Provision 3 of the Code, the Committee Chair welcomes questions from shareholders on the

Committee’s activities.

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Annual Report and Accounts 2026

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Introduction

Annual report on remuneration

continued

The current Remuneration Policy was approved at the 2024 Annual General Meeting on 26 July 2024. The full Policy can be found on the FirstGroup plc website and on pages 144 to 155 in the FY 2024 Directors’ Remuneration report.

The Company’s Policy remains to attract, retain and motivate its leaders and to ensure they are focused on delivering business priorities within a framework designed to promote the long-term success of FirstGroup and

align with shareholder interests. In order to prevent any conflicts of interest, the Committee is composed entirely of independent Non-Executive Directors. No individual is involved in deciding their own remuneration.

Malus and clawback

Malus and clawback provisions apply to the EABP and LTIP awards. Malus provisions allow us to reduce the amount of any unvested awards, potentially to zero, prior to payment or vesting. Cash bonuses under the EABP can

be clawed back up to the third anniversary of payment and deferred share awards may be subject to malus up to the vesting date. LTIP awards can be clawed back up to the fifth anniversary of grant. The period in which

malus and clawback provisions may apply is appropriate as it aligns with the vesting period of incentives and reflects the time during which risks or exposure may materialise.

Events that may trigger the Remuneration Committee to apply malus and/or clawback include, but are not limited to:



a material misstatement (including any omission) in the Company’s financial results



where the award, or the vesting outcome of the award, was based on a material error, or any inaccurate or misleading information



any form of misconduct



insolvency or corporate failure



regulatory censure or significant reputational damage

The Committee confirms that malus and clawback provisions were not exercised during the year.

The diagram below illustrates the balance of pay and time period of each element of the Policy for Executive Directors.

Total pay over five years

Year 1

Year 2

Year 3

Year 4

Year 5

Fixed pay

Salary

Fixed pay

Benefits, Pension

EABP

(Malus and clawback

provisions apply)

Up to 150% of salary

50% in cash

50% in shares. Three-year deferral period

No further performance conditions

LTIP

(Malus and clawback

provisions apply)

Up to 200% of salary

Three-year performance period

Two-year holding period

No further performance conditions

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Remuneration Policy summary

The table below sets out an overview of the key areas of the Policy and summarises how the Committee applied the Policy in FY 2026, together with details of how the Committee intends to implement the Policy in FY 2027.

Purpose and link

to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2026

How we plan to implement

the Policy in FY 2027

Salary

To attract and maintain

high calibre executives with

the attributes, skills and

experience required

to deliver the Group’s strategy.

Typically reviewed annually, effective from 1 April.

Any increases take account of:



Company and individual performance

and experience



role and responsibilities



market positioning



external indicators, such as inflation and market

conditions, and



pay increases made to the wider workforce

No recovery or withholding applies.

Salary increases (in percentage terms) for Executive

Directors will normally be with reference to increases

made to the wider workforce, however there is no formal

maximum. Where the Committee considers it necessary

or appropriate, larger increases may be awarded in

individual circumstances, including, but not limited to,

factors such as an increase in the size or scope of the

role, or the individual’s development and performance

in the role.

The Committee has the flexibility to set the salary of

a new hire at a discount to the market level and to

realign it in subsequent years as the individual gains

experience in the role. In exceptional circumstances,

the Committee may agree to pay above market levels

to secure or retain an individual who is considered by

the Committee to possess significant and relevant

experience that is critical to the delivery of the

Company’s strategy.

An increase of 2.8% was

applied to the CEO and CFO

from 1 April 2025. This increase

was aligned to the general

non-collectively bargained

employee salary increase.

An increase of 3.0% was applied

to the CEO and CFO from 1 April

2026. This increase was aligned

to the increase for the general

non-collectively bargained

employee salary increase. See

page 103 for more information.

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Governance report

Introduction

Remuneration Policy summary

continued

Purpose and link

to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2026

How we plan to implement

the Policy in FY 2027

Benefits

Provide market-competitive

benefits to assist in attracting

and retaining executives and

to support them in the

performance of their roles.

A range of benefits may be provided, including,

but not limited to, private medical insurance,

life assurance, long-term disability insurance,

company car allowance, general employee

benefits, including participation in our all-employee

share plans and travel and related expenses.

The cost of benefits is not pre-determined, reflecting

the need to allow for increases associated with the

provision of benefits. As such, there is no formal maximum.

Normal Company

benefit provision.

No change to FY 2026.

Pension benefits

Allows executives to build

long-term savings for their

retirement and ensures the

total remuneration package

is competitive.

Payment may be made into a pension scheme

or delivered as a cash allowance.

Executive Directors receive a pension contribution, or

cash allowance, of up to the average pension benefit

for the wider UK workforce, up to a maximum of 15% of

base salary.

The CEO receives a pension

contribution or cash allowance

of 5% of base salary. The CFO

pension contribution remains

at 15% of base salary.

No change to FY 2026.

Annual bonus

To focus on the delivery

of annual goals, to strive

for superior performance and

to achieve specific targets

which support the strategy.

The deferred share element

provides alignment with

shareholders and

supports retention.

Bonuses are awarded annually under the

Executive Annual Bonus Plan (EABP).

At least half the bonus awarded in any year will

be deferred into shares, normally for a period

of three years.

The EABP is reviewed annually to ensure

performance measures and targets are

appropriate and support the strategy.

Dividend equivalent payments may accrue on

shares which vest under the EABP.

The Committee retains the discretion, acting fairly

and reasonably, to alter the bonus outcome in light

of the underlying performance of the Group, taking

into account any factors it considers relevant.

Malus and clawback provisions apply.

The maximum annual bonus opportunity for

the Executive Directors is 150% of salary.

Performance measures

(as a % of maximum):

Operating profit – 50%

Cash flow – 20%

Operational – 20%

Personal objectives – 10%

FY 2026 bonus awards of

109.4% (72.9% of maximum)

for the CEO and 107.9% of base

salary (71.9% of maximum) for

the CFO. See pages 98 and 99

for further details.

No change to the maximum

opportunity for FY 2026.

Performance measures

(as a % of maximum):

Operating profit – 60%

Cash flow – 20%

Operational – 20%

See page 103 for further details.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

111

Governance report

Introduction

Remuneration Policy summary

continued

Purpose and link

to strategy

Operation

Maximum opportunity

How we implemented the

Policy in FY 2026

How we plan to implement

the Policy in FY 2027

Long-Term Incentive Plan (LTIP)

Incentivises the execution of

strategy, and drives long-term

value creation and alignment

with shareholders.

Awards under the LTIP are conditional rights

to receive shares or nil cost options over

shares, subject to continued employment

or good leaver status and the achievement

of performance conditions.

Up to 20% of the maximum may be payable for

threshold performance, with maximum vesting

being equal to 100% of any award made.

Shares which vest under the LTIP are typically

subject to an additional holding period of

two years.

Dividend equivalent payments may accrue

on shares which vest under the LTIP.

The Committee retains the discretion, acting fairly

and reasonably, to alter the LTIP outcome in light of

the underlying performance of the Group, taking

account any factors it considers relevant.

Malus and clawback provisions apply.

Normal award policy is for a maximum annual

award opportunity of 200% of base salary for

the Chief Executive Officer and 175% for other

Executive Directors.

In exceptional circumstances, awards of up to 300% of

base salary may be made, such as to aid recruitment.

Performance measures

(as a % of maximum):

EPS – 50%

Relative TSR – 30%

ESG Scorecard – 20%

Grant levels:

CEO – 200% of salary

CFO – 175% of salary

See page 100 for details of the

targets for the 2025 LTIP awards

granted in the year.

The 2023 LTIP had a vesting

outcome of 100%. See page 99

for further details.

No change to maximum

LTIP opportunities. Performance

measures (as a %of maximum):

EPS – 55%

Relative TSR – 35%

Additional ZE buses – 10%

See page 103 for detail on

LTIP awards to be granted

for FY 2027.

Shareholding guidelines

To ensure that Executive

Directors’ interests are aligned

with those of shareholders.

During employment

The Executive Directors are expected to hold

shares, or rights to shares, equivalent in value

to a minimum of 200% of base salary within a

five-year period from their date of appointment.

Post-employment

Following cessation, Executive Directors are

normally expected to hold:



the in-employment guideline (or full actual

holding if lower) for the first year following

cessation of employment, and



50% of the in-employment guideline (or full

actual holding if lower) for the second year

following cessation of employment

The post-employment guideline will apply to share

awards granted under incentive plans from the

2021 AGM onwards and will not include shares

purchased outright by an Executive Director.

Not applicable.

CEO – 200% of salary

CFO – 200% of salary

See page 105 for further details

on shareholding requirements

and outstanding share awards.

No change to requirements.

Strategic report

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Annual Report and Accounts 2026

112

Governance report

Introduction

Remuneration Policy summary

continued

Compliance with the Corporate Governance Code

P Remuneration policies and practices designed to support strategy

The Directors’ Remuneration Policy, which was approved at the 2024 AGM, was designed with consideration of the UK Corporate Governance Code. The majority of the Executive Directors’ remuneration is through

performance-related incentives linked to the Group’s strategic goals. Half of any Executive Director’s annual bonus that vests under the EABP is deferred into shares that vest after three years. Any awards that vest

under the LTIP are subject to a further two-year holding period. Additionally, the Executive Directors have shareholding guidelines and post-cessation shareholding guidelines provide a clear link to the Group’s

ongoing performance and shareholder experience. See pages 144 to 155 of the 2024 Annual Report for the 2024 Policy.

Q Formal and transparent procedure for developing policy on executive remuneration

FirstGroup welcomes open and frequent dialogue with shareholders on its approach to remuneration. Major shareholders have been consulted on the Committee’s approach to remuneration.

R Directors to exercise independent judgement and discretion when authorising remuneration outcomes

The Remuneration Policy allows for the use of discretion to adjust the formulaic incentive outcomes if they are not reflective of underlying performance of the Group. As noted under Provision 37, discretion has been

applied to reduce formulaic outcomes under the EABP in FY 2020 and FY 2021, resulting in no bonus being awarded in either year. The Committee also used its discretion to apply a downward adjustment resulting

in an overall reduction of 10% of the 2020 LTIP award that vested in June 2023.

32 Establish a remuneration committee

The Company has a Remuneration Committee in accordance with the requirements of the Code.

33 Delegation of responsibilities and review of workforce remuneration and related policies

When determining senior team pay, the Committee considers it in the context of wider workforce pay, policies and practices. Each year, a number of items are tabled at Committee meetings to ensure the approach

throughout the Group is fair. See pages 95 and 96 for further information.

34 Non-executive director remuneration

The Company’s NEDs each receive an annual fee reflecting the time commitment for their roles. An additional fee is paid to the Senior Independent Director and Chairs of the Audit, Remuneration and Responsible

Business Committees to reflect the additional time commitment associated with these roles. The NEDs do not receive any performance-related pay or equity awards. NEDs are permitted to buy shares in the Company,

subject to the Company’s share dealing code. See page 102 for fees paid to NEDs and the Chair.

35 Consultants appointed by the committee

Following a formal tender process, Deloitte was appointed by the Committee in November 2025, replacing Willis Towers Watson.

Strategic report

Financial

statements

FirstGroup

Annual Report and Accounts 2026

113

Governance report

Introduction

Compliance with the Corporate Governance Code

36 Remuneration schemes should promote long-term holdings by executive directors

Executive Directors are required to hold shares to the value of 200% of base salary within five years of appointment. Post-cessation, Executive Directors must maintain 100% of their in-employment shareholding guideline

in the first year following employment, dropping to 50% in the second year (or the full actual holding if lower).

37 Use of discretion

As noted in Principle R, the Committee has the ability to use discretion to override formulaic outcomes.

The Committee used its discretion to reduce formulaic outcomes under the FY 2020 and FY 2021 EABP, resulting in no payout in both years, to ensure performance is reflective of the Company’s underlying performance

and aligned with the shareholder experience. The Committee also used its discretion to apply a downward adjustment resulting in an overall reduction of 10% of the 2020 LTIP award that vested in June 2023.

38 Malus & clawback provisions

Malus and clawback provisions apply to both the EABP and LTIP. Malus and clawback provisions were not exercised during the year.

39 Only basic salary to be pensionable

The Company complies with this provision and pension contributions are aligned with the wider workforce. See page 96 for further information.

40 Notice and contractual periods

The notice and contractual periods for the Executive Directors are for one year.

41 Report on the work of the committee and reporting requirements

The strategic rationale for our Executive Director remuneration policies and structures is set out in the Remuneration Committee Chair’s letter on pages 92 and 93 and in the Annual report on remuneration on pages 97

to 108. The Committee is satisfied that the remuneration outcomes are appropriate, considering internal and external measures and the wider workforce pay.

We encourage an open dialogue with shareholders on executive remuneration matters.

In developing the Remuneration Policy, we consider alignment with the wider workforce pay policies. The Committee reviews wider workforce pay and practices and Myrtle Dawes chairs the Colleague Advisory Panel

and answers questions.

Strategic report

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statements

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Annual Report and Accounts 2026

114

Governance report

Introduction

Directors’ report and additional disclosures

Powers of the Directors

The Directors are responsible for the management

of the business of the Company and may exercise

all powers of the Company subject to applicable

legislation and regulation and the Company’s

Articles of Association (Articles).

Conflicts of interest

The Directors have a statutory duty under the

Companies Act 2006 to avoid situations in which

they have, or can have, a direct or indirect interest

that conflicts, or may conflict, with the interests of the

Company. This duty is in addition to the existing duty

that a Director owes to the Company to disclose to

the Board any transaction or arrangement under

consideration by the Company. The Company’s

conflict of interest procedures are reflected in the

Articles. In line with the Companies Act 2006, the

Articles allow the Directors to authorise conflicts

and potential conflicts of interest where appropriate.

The decision to authorise a conflict can only be

made by non-conflicted Directors. Directors do

not participate in decisions concerning their own

remuneration or interests.

The Company Secretary minutes the consideration

of any conflict or potential conflict of interest and

authorisations granted by the Board. On an ongoing

basis, the Directors inform the Company Secretary

of any new, actual or potential conflict of interest

that may arise or if there are any changes in

circumstances that may affect an authorisation

previously given. Even when authorisation is given,

a Director is not absolved from their duty to promote

the success of the Company.

Furthermore, the Articles include provisions relating

to confidential information, attendance at Board

meetings and availability of Board papers to protect

a Director from breaching their duty if a conflict of

interest arises.

The Directors present their report on the affairs of the

Group, together with the audited financial statements

and the report of the auditor for the 52 weeks ended

28 March 2026. Information required to be disclosed

in the Directors’ report may be found below and is

incorporated into the Directors’ report by cross-

reference to the following sections of the Annual

Report and financial statements in accordance with

the Companies Act 2006 (the 2006 Act) and Listing

Rule 9.8.4R of the Financial Conduct Authority.

Information

Page

Sustainability governance

Greenhouse gas emissions

Proposed final dividend

Risk factors and principal risks;

going concern and viability

statements

60 to 71

Governance arrangements;

human rights and anti-

corruption and bribery matters

32 to 33

Long-term incentive schemes

99 to 100

Financial instruments and

related market transactions

161 to 167

Directors

The Directors of the Company who served during

the year are shown on pages 75 to 77.

Details of the Directors’ interests in shares can

be found in the Directors’ remuneration report

on page 104.

During the year, no Director had any interest in any

shares or debentures in the Company’s subsidiaries,

or any material interest in any contract with the

Company or a subsidiary being a contract of

significance in relation to the Company’s business.

These provisions will only apply where the

circumstance giving rise to the potential conflict

of interest has previously been authorised by the

Directors. The Board considers that the formal

procedures for managing conflicts of interest

currently in place have operated effectively

during the year under review.

Election and re-election of Directors

Directors are required under the Articles to submit

themselves for election by shareholders at the AGM

following their appointment by the Board. Also, in

accordance with best practice and the Code, all

Directors put themselves forward for re-election by

shareholders annually. This year they will do so at

the AGM on 30 July.

Directors’ indemnities and

liability insurance

FirstGroup maintains liability insurance for its

Directors and Officers. The Company has also

granted indemnities to the extent permitted by law

to each of the Directors, the Company Secretary and

a number of other executives and senior managers.

These indemnities were in place throughout the

period and are uncapped in amount in relation to

certain losses and liabilities which they may incur

to third parties in the course of acting as a Director

or Officer of the Company, or any of its associated

companies. Neither the indemnity, nor insurance

cover provides protection in the event a Director

or Officer is proved to have acted fraudulently or

dishonestly. The indemnity is categorised as a

‘qualifying third party indemnity’ for the purposes

of the Companies Act 2006 and will continue in

force for the benefit of Directors and Officers on

an ongoing basis.

Research and development

The Group does not conduct any meaningful

research or development.

Disclosure of information to the

external auditor

Each of the Directors who held office at the date of

approval of this report confirm that, so far as they

are aware, there is no relevant audit information

(being information needed by the auditor in

connection with preparing its audit report), of which

the Company’s auditor is unaware, and each of the

Directors has taken all the steps that they ought

reasonably to have taken as a Director in order to

make themselves aware of any relevant audit

information and to establish that the Company’s

auditor is aware of that information.

This confirmation is given and should be interpreted

in accordance with the provisions of Section 418 of

the Companies Act 2006.

Share capital

As at 28 March 2026, the Company’s issued share

capital was 570,695,015 ordinary shares of 5 pence,

each credited as fully paid, and the Company held

8,164,166 of these shares in treasury. The issued

share capital of the Company which carries voting

rights of one vote per share comprised 562,530,849

ordinary shares. Further details of the Company’s

issued share capital are shown in note 25 to the

Company’s financial statements.

The Company’s shares are listed on the London

Stock Exchange.

Articles of Association

The description in this section summarises certain

provisions of the Company’s Articles and applicable

Scottish law concerning companies. This summary

is qualified in its entirety by reference to this

Company’s Articles and the Companies Act 2006.

The Company’s Articles may be amended by a

special resolution of the Company’s shareholders.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

115

Directors’ report and additional disclosures

continued

Substantial shareholdings

As at 28 March 2026, the Company had been notified under the FCA’s Disclosure, Guidance and

Transparency Rule of the following interests in its total voting rights of 3% or more:

Name of shareholder

Number of

ordinary shares

% of total

voting rights

Date of

notification

Ameriprise Financial, Inc.

56,164,499

9.98

19 November 2025

BlackRock, Inc

34,142,655

5.96

4 August 2025

Schroders Plc

28,079,627

4.99

5 January 2026

Dimensional Fund Advisors LP

28,034,918

4.97

25 September 2025

Majedie Asset Management Limited

60,915,714

4.99

3 February 2021

Aberforth Partners LLP

33,717,348

4.97

6 September 2023

Coast Capital Management LP

25,169,383

3.35

20 May 2022

Between 28 March 2026 and the date of this report:

Name of shareholder

Number of

ordinary shares

% of total

voting rights

Date of

notification

Equiniti Trust (Jersey) Limited as trustee of the

FirstGroup plc Employee Benefit Trust

23,092,254

4.10

26 May 2026

Dimensional Fund Advisors LP

28,167,366

5.01

29 May 2026

Going concern and viability

Directors are required to consider if it is appropriate

to adopt the going concern basis of accounting.

Disclosure of the Directors’ deliberations to determine

whether it is appropriate to adopt the going concern

basis of accounting in addition to consideration of

whether there are any material uncertainties which

may affect the Group’s ability to continue to adopt

this basis can be found in the Going concern

statement on page 71, the Audit Committee report

starting on page 85 and in note 2 to the financial

statements. In summary, the Directors have

concluded that it is appropriate to prepare the

financial statements on a going concern basis.

Directors are also required to provide a broader

assessment of viability over a longer period, which

can be found on page 70.

Employee share plans

The Company operates a number of employee

share plans, details of which are set out in note 33

and in the Directors’ remuneration report that starts

on page 92.

All of the Company’s employee share plans

contain provisions relating to change of control.

On a change of control, options and awards granted

to employees may vest and in the case of options

become exercisable, subject to the satisfaction of

any applicable performance conditions at the time.

Stakeholder engagement

The Board has determined that the Group’s

stakeholders are customers, investors, government,

employees, communities and our strategic partners

and suppliers. The Board is aware that its actions

and decisions impact our stakeholders. Effective

engagement with stakeholders is important to the

Board as it strengthens the business and helps to

deliver a positive result for all our stakeholder

groups. In order to comply with Section 172 of the

Companies Act, the Board is required to take into

consideration the interests of stakeholders and

include a statement setting out the way in which

Directors have discharged this duty during the year.

The Group’s stakeholders are identified on pages

56 to 58 of the Strategic report and the statement of

compliance with Section 172 is set out on page 59.

Further information on workforce engagement can

also be found on page 46.

Purchase of own shares

At the AGM of the Company in 2024, authority was

granted for the Company to purchase up to 14.99%

of its ordinary shares. The Company announced a

£50m buyback programme on 10 June 2025 under

the authority granted at the 2024 AGM and restricted

this to 14.99% of the issued share capital on the day

before the programme commenced. The £50m

buyback programme completed on 2 October 2025.

Any buybacks commencing before the 2026 AGM

will be conducted under the authority granted at

the 2025 AGM although if the authority is renewed

then the renewed authority may be relied upon. The

Company anticipates seeking authority to purchase

up to 14.99% of its ordinary shares at the AGM in 2026.

Political donations

At the 2025 AGM, shareholders passed a resolution

to authorise the Company and its subsidiaries to

make political donations to political parties or

independent election candidates, to other political

organisations, or to incur political expenditure (as

such terms are defined in Sections 362 to 379 of the

2006 Act), in each case in amounts not exceeding

£100,000 in aggregate. As the authority granted at

the 2025 AGM will expire, renewal of this authority

will be sought at this year’s AGM. Further details

are available in the Notice of AGM.

As a result of the broad definition used in the 2006

Act of matters constituting political donations, it

is possible that normal business activities, which

might not be thought to be political expenditure

in the usual sense, could be covered. Accordingly,

authority is being sought as a precaution to ensure

that the Company’s normal business activities do

not infringe the 2006 Act, but it is not the policy of

the Company to make donations to UK or EU political

organisations, nor to incur other political expenditure

in the UK or EU.

No political donation nor expenditure was incurred

by the Company and its subsidiaries during FY 2026.

The rights attached to the ordinary shares of the

Company are defined in the Company’s Articles.

No person has any special rights of control over

the Company’s share capital and all issued

shares are fully paid.

Voting rights

Shareholders are entitled to attend and vote at any

general meeting of the Company. It is the Company’s

practice to hold a poll on every resolution at general

meetings. This means that each member present in

person or by proxy has one vote for every share held.

In the case of joint holders the vote of the senior

shareholder who tenders a vote, whether in person

or by proxy, shall be accepted to the exclusion of the

votes of the other joint holders and, for this purpose,

seniority shall be determined by the order in which

the names stand in the Register of Members in

respect of the joint holding.

Dividend rights

The Directors may declare an interim dividend and

shareholders may by ordinary resolution declare

final dividends, but the amount of the final dividend

may not exceed the amount recommended by

the Board.

Transfer of shares

There are no specific restrictions on the size of

a holding, nor on the transfer of shares which are

both governed by the general provisions of the

Company’s Articles and prevailing legislation. The

Directors are not aware of any agreements between

holders of the Company’s shares that may result in

restrictions on the transfer of securities or on voting

rights at any meeting of the Company.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

116

Directors’ report and additional disclosures

continued

First Rail

As at 31 March 2026, the Group’s contracted

passenger rail operators, First Greater Western

Limited and First Trenitalia West Coast Rail Limited

(jointly owned with Trenitalia) are each party to

a contractual agreement with the Secretary of

State for Transport. These agreements are subject

to termination clauses which may apply on a

change of control.

First Greater Western Limited, First Trenitalia West

Coast Rail Limited and the Group’s non-contracted

rail operators, Hull Trains Company Limited and East

Trains Limited each hold railway licences as required

by the Railways Act 1993 (as amended); these

licences may be revoked on three months’ notice

if a change of control occurs without the approval

of the ORR. All of these operators also require and

hold track access agreements with Network Rail

Infrastructure Limited under which they are

permitted to access railway infrastructure.

Failure by any of the operators to maintain its railway

licence is a potential termination event under the

terms of the track access agreements. The Group’s

railway operators also lease rolling stock from

specialist rolling stock leasing companies such as

Eversholt Rail Group, Rock Rail Limited, Beacon Rail

Limited, Porterbrook Leasing Company Limited and

Angel Trains Limited. A material number of the

individual leasing agreements include change of

control provisions. The Group is also involved from time

to time in bidding processes for transport contracts in

the UK and further afield which customarily include

change in circumstance provisions which would be

triggered on a change of control and could result in

termination or rejection from further participation in

the relevant competitions.

On 25 May 2025, the operations of First MTR South

Western Trains Limited (jointly owned with MTR

Corporation) were transferred to the Department for

Transport Operator (South Western Railway Limited).

Certain provisions of First MTR South Western Trains

Limited National Rail Contract will remain in force

until the final net assets of First MTR South Western

Limited have been settled and the company wound

down. This process is expected to take a number of

years, in line with experience on previous franchises.

Change of control – significant

agreements

Financing agreements

As at 28 March 2026, the Group had a £300m

multi-currency revolving credit and guarantee

facility between, amongst others, the Company

and The Royal Bank of Scotland plc dated

30 January 2025, maturing in January 2031.

Following any change of control of the Company,

individual lenders may negotiate with the Company

with a view to resolving any concerns arising from

such change of control. If the matter has not been

resolved within 30 days, an individual bank may

cancel its commitment and the Company must

repay the relevant proportion of any drawdown.

The Group also had a £100m term loan facility

between, amongst others, the Company and The

Royal Bank of Scotland plc dated 10 March 2025,

maturing in March 2028. Following any change of

control of the Company, individual lenders may

negotiate with the Company with a view to resolving

any concerns arising from such change of control.

If the matter has not been resolved within 30 days,

an individual bank may cancel its commitment and

the Company must repay the relevant proportion of

any drawdown.

The Group also had a £150m Green Hire Purchase

Finance Facility between, amongst others, the

Company and Lloyds Bank plc dated 21 December

2023, maturing in December 2026. Following any

change of control of the Company, individual

lenders may negotiate with the Company with a

view to resolving any concerns arising from such

change of control. If the matter has not been

resolved within 30 days, an individual bank may

cancel its remaining available commitment under

the facility and immediately terminate any hire

agreements already in place.

In addition:



(i) Open access operations – We are mobilising

First Rail Stirling Limited to operate services

between Stirling and Euston and First Wales &

Western Limited to operate services between

Paddington and Carmarthen. Both of these

operators hold track access agreements with

Network Rail Infrastructure Limited. First Rail Stirling

Limited holds a safety certificate and operator

licence and First Wales & Western Limited will apply

for the same in due course. As with the Group’s

other railway operators, each of these operators

have leases for rolling stock from specialist rolling

stock leasing companies in place.



(ii) London Overground concession – The Group

was awarded the contract to operate the London

Overground network, to be delivered through

its subsidiary, First Rail London Limited. The

contract commenced on 3 May 2026 and, as

at 31 March 2026, the business was in the process

of mobilisation. As with the Group’s other rail

activities, the concession is subject to customary

contractual and regulatory requirements,

including operator licensing, safety certification

and change of control provisions.

Significant shareholders’ agreements

The Group, through First Rail Holdings Limited, has

shareholders’ agreements governing its relationship

with MTR Corporation in relation to the SWR rail

operator, and with Trenitalia in relation to the West

Coast Partnership rail operator. As is customary, these

agreements include provisions addressing change

of control. Notwithstanding the transfer of the SWR

operations to the DfTO, the shareholder agreement

with MTR Corporation survives this transfer.

FirstGroup plc entered into a strategic partnership

with Hitachi Zero Carbon (HZC), via a 50:50 joint

venture, to purchase up to 1,000 bus batteries as

part of its fleet decarbonisation journey.

Streamlined Energy and Carbon

Reporting (SECR) compliance

In compliance with the SECR requirements, our GHG

emissions and our energy consumption and energy

and emissions reduction initiatives are reported on

page 36.

Management report

The Strategic and Directors’ reports together are the

management report for the purposes of the FCA’s

DGTR 4.1.5R.

The Directors’ report was approved by a Board

Committee on behalf of the Board on 17 June 2026.

David Blizzard

General Counsel and Company Secretary

17 June 2026

395 King Street

Aberdeen AB24 5RP

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

117

Statement of Directors’ responsibilities

The Directors are responsible for safeguarding the

assets of the Group and Company and hence for

taking reasonable steps for the prevention and

detection of fraud and other irregularities.

The Directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and Company’s

transactions and disclose with reasonable accuracy

at any time the financial position of the Group

and Company and enable them to ensure that the

financial statements and the Directors’ Remuneration

report comply with the Companies Act 2006.

The Directors are responsible for the maintenance

and integrity of the Company’s website. Legislation

in the United Kingdom governing the preparation

and dissemination of financial statements may

differ from legislation in other jurisdictions.

Directors’ confirmations

Each of the Directors, whose names and functions

are listed in the Governance report confirms that,

to the best of their knowledge:



The Group financial statements, which have been

prepared in accordance with UK-adopted

international accounting standards, give a true

and fair view of the assets, liabilities, financial

position and profit of the Group;



The Company financial statements, which

have been prepared in accordance with United

Kingdom Accounting Standards, comprising FRS 101,

give a true and fair view of the assets, liabilities

and financial position of the Company; and



The Strategic report includes a fair review of the

development and performance of the business

and the position of the Group and Company,

together with a description of the principal risks

and uncertainties that it faces.

Statement of Directors’ responsibilities

in respect of the financial statements

The Directors are responsible for preparing the

Annual Report and Accounts 2026 and the financial

statements in accordance with applicable law

and regulation.

Company law requires the Directors to prepare

financial statements for each financial year. Under

that law the Directors have prepared the Group

financial statements in accordance with UK-

adopted international accounting standards and

the Company financial statements in accordance

with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards,

comprising FRS 101 ‘Reduced Disclosure Framework’,

and applicable law).

Under company law, Directors must not approve the

financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of

the Group and Company and of the profit or loss of

the Group for that period. In preparing the financial

statements, the Directors are required to:



Select suitable accounting policies and then

apply them consistently;



State whether applicable UK-adopted

international accounting standards have been

followed for the Group financial statements and

United Kingdom Accounting Standards,

comprising FRS 101 have been followed for the

Company financial statements, subject to any

material departures disclosed and explained in

the financial statements;



Make judgements and accounting estimates

that are reasonable and prudent; and



Prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the Group and Company will

continue in business.

In the case of each Director in office at the date the

Directors’ report is approved:



So far as the Director is aware, there is no relevant

audit information of which the Group’s and

Company’s auditors are unaware; and



They have taken all the steps that they ought

to have taken as a Director in order to make

themselves aware of any relevant audit information

and to establish that the Group’s and Company’s

auditors are aware of that information.

Ryan Mangold

Chief Financial Officer

17 June 2026

395 King Street

Aberdeen AB24 5RP

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Report on the audit of the financial statements

Opinion

In our opinion:



FirstGroup plc’s group financial statements and company financial statements (the “financial

statements”) give a true and fair view of the state of the group’s and of the company’s affairs as at

28 March 2026 and of the group’s profit and the group’s cash flows for the 52 week period then ended;



the group financial statements have been properly prepared in accordance with UK-adopted

international accounting standards as applied in accordance with the provisions of the Companies

Act 2006;



the company financial statements have been properly prepared in accordance with United Kingdom

Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101

“Reduced Disclosure Framework”, and applicable law); and



the financial statements have been prepared in accordance with the requirements of the Companies

Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts 2026

(the “Annual Report”), which comprise:



the Consolidated balance sheet as at 28 March 2026;



the Company balance sheet as at 28 March 2026;



the Consolidated income statement for the period then ended;



the Consolidated statement of comprehensive income for the period then ended;



the Consolidated statement of changes in equity for the period then ended;



the Company statement of changes in equity for the period then ended;



the Consolidated cash flow statement for the period then ended; and



the notes to the financial statements, comprising material accounting policy information and other

explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities

for the audit of the financial statements section of our report. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to

our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to

listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with

these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical

Standard were not provided.

Other than those disclosed in Note 6, we have provided no non-audit services to the company in the period

under audit.

Our audit approach

Context

The Group consists of two main divisions, Rail and Bus. In the Rail division, two train operating companies

(‘TOCs’) have continued to operate under contracts with the Department for Transport (‘DfT’) with Great

Western Railway (‘GWR’) and Avanti West Coast (‘AWC’) on National Rail Contracts for the full year. Under

each contract this has meant a fixed management fee was received to operate at agreed service levels,

as well as a performance-based fee element. The structure of the contracts within the Rail division reduces

the revenue and cost risk compared to previous franchise arrangements. On 4 December 2024, the Government

announced its programme to transition passenger rail services into public ownership. As a result, the Group’s

third TOC, South Western Railway (‘SWR’), transferred back to public ownership when their national rail contract

expired on 25 May 2025. On the 8 May 2026, the government confirmed that GWR will move into public ownership on

13 December 2026. This is a non-adjusting post balance sheet event. The programme is expected to continue

with AWC to follow. Outside of the TOCs the Rail Division also includes open access contracts – Hull Trains

and East Coast Trains (‘Lumo’) – which have experienced growth year on year. First Bus continued to receive

government support and has continued to receive funding with a £3 bus fare cap in England since December 2024.

The period to 28 March 2026 was the first full 52 weeks of trading for First Bus London as part of the Group,

following its acquisition from RATP in February 2025.

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Overview

Audit scope

The scope of our audit determines where we go and what we do, the best types of audit evidence to obtain,

the right areas of operations to focus on and the resources needed to deliver this. As group auditors we are

required to obtain sufficient audit evidence from the components of the group. In addition to FirstGroup plc,

the parent company, we have determined there are four in scope components for group reporting purposes:



Each TOC is a separate component, with GWR and AWC in scope for group reporting



First Bus



East Coast Trains (‘Lumo’)

Key audit matters



Valuation of pension liabilities driven by salary increase, mortality, discount rate and inflation level

assumptions (group)



Valuation of complex investments within the pension assets (group)



Valuation of First Bus Holdings investment subject to impairment reversal assessment (parent)

Materiality



Overall group materiality: £18,500,000 (2025: £20,000,000) based on 0.4% of revenue (2025: 0.4% of revenue)



Overall company materiality: £12,400,000 (2025: £12,400,000) based on 1% of total assets (2025: 1% of

total assets)



Performance materiality: £13,900,000 (2025: £15,000,000) (group) and £9,300,000 (2025: £9,300,000)

(company)

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement

in the financial statements.

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Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in

the audit of the financial statements of the current period and include the most significant assessed risks of

material misstatement (whether or not due to fraud) identified by the auditors, including those which had the

greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of

the engagement team. These matters, and any comments we make on the results of our procedures thereon,

were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

The key audit matters below are consistent with last year.

Key audit matter

How our audit addressed the key audit matter

Valuation of pension liabilities driven by salary increase, mortality, discount rate and

inflation level assumptions (group)

The group has significant gross defined benefit

obligations. The total liabilities reduced due to the

handover of the South Western Rail Train Operating

Contract (‘TOC’) before contract adjustment. The

valuation of pension plan liabilities requires estimation

in determining appropriate assumptions such as

salary increases, mortality rates, discount rates and

inflation levels. Movement in these assumptions can

have a material impact on the determination of the

liability, and these assumptions are considered to be

the significant audit risk. Management uses external

actuaries to assist in determining these assumptions,

and management’s actuaries carry out the valuation

of the pension liabilities based on these assumptions.

In addition to the significant audit risk, there are

restrictions under IAS 19 and IFRIC 14 as to when a

net pension surplus should be recognised, as well

as balance sheet adjustments in respect of First Rail

due to the Rail contract adjustments. Refer to note

34 and the critical accounting judgements and key

sources of estimation uncertainty section in note 2.

Refer to the Audit Committee report for a description

of its assessment of the significant judgements.

We engaged our PwC Actuarial team as Auditor’s

Experts to help the audit team assess whether

the assumptions used in calculating the defined

benefit liabilities were reasonable and that the

methodology aligns to appropriate accounting

standards. We assessed whether mortality rate

assumptions were appropriate for each plan

selected for testing and, where applicable,

incorporated considerations of relevant national

actuarial data. We also assessed whether the

discount rates and inflation rates were consistent

with our internally developed benchmarks and in

line with market information for these schemes.

We examined the salary increase assumptions to

consider whether they represent management’s

best estimate. In addition to our significant risk

areas, we reviewed the trust deeds and statutory

legislation relevant to each plan where applicable.

We also assessed management’s judgement with

regard to the rail contract adjustment and found no

exceptions. We evaluated the calculations prepared

by the external actuaries to assess whether the

disclosed pension liabilities are consistent with the

assumptions used. We have reviewed the scheme

contract terms and conclude that it is appropriate

to recognise a net surplus under IFRIC 14. Based

on procedures performed and our materiality,

we consider that the assumptions used to value

the pension obligation are within an acceptable

range. We assessed the appropriateness of

the related disclosures in note 34 of the group

financial statements and consider them to be

materially appropriate.

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Key audit matter

How our audit addressed the key audit matter

Valuation of complex investments within the pension assets (group)

As set out in note 34, the group has significant gross

defined benefit plan assets. The pension schemes in

which the Group participates hold unquoted pooled

investment vehicles which invest in private equity,

infrastructure, and property funds. There is significant

estimation uncertainty in determining the valuation

of these investments which are based on inputs that

are not directly observable. The funds where the

valuation requires significant judgement and has

a higher risk of material error across the group total

£238.7m (2025: £316.9m). The funds are present in

the FirstGroup UK Bus Section of the FGPS. There

is a potential range of reasonable outcomes to

the valuations of these assets greater than our

materiality for the financial statements as a whole.

We obtained pricing confirmations directly from

investment managers as primary sources of

evidence. We performed additional procedures

on investments that are more complex in nature

and with a higher potential risk of material error

to evaluate whether there is any contradictory

evidence suggesting that the pricing confirmations

do not reflect an appropriate valuation as at the

balance sheet date. For those investments these

procedures included one or more of the following:

Obtained the most recent third party controls

assurance reports and bridging letters on

the valuation procedures and investment

managers’ operations;

Reviewed the pricing of transactions taking

place close to the balance sheet date;

Performed look back testing of previous valuations

provided by investment managers to their audited

financial statements;

Performed independent internet based

searches for information suggesting any doubts in

the investment managers’ capability of pricing;

and/or

Reviewed investment contributions and

distributions between the valuation date and the

balance sheet date and obtained affirmations

from investment managers that the price taken

is the latest price available where the valuation

date is different to the balance sheet date.

Based on the procedures performed we have no

findings to report.

Key audit matter

How our audit addressed the key audit matter

Valuation of First Bus Holdings investment subject to impairment reversal

assessment (parent)

Investments in subsidiaries are measured in the

Company balance sheet at cost less accumulated

impairment. The carrying value of the investment

in the Bus division is supported by its recoverable

amount, which has historically been determined

using a value-in-use methodology. Investments

are reviewed for impairment where indicators of

impairment exist and for potential reversal where

there is evidence that a previous impairment may

no longer apply. Management identified an

impairment reversal trigger during the year. Under

IAS 36, this requires evidence of a change in the key

assumptions underpinning the original impairment.

Management’s assessment is that these conditions

have now been met. An impairment reversal is

judgemental and contains significant assumptions

that are materially sensitive to change. Further

details are set out in note 5 to the plc Company

accounts and in the Key sources of estimation

uncertainty section of note 1.

An impairment provision in First Bus Holdings Limited

(‘FBH’) primarily arose during FY20 when provisions

of £434m were recognised. The impairment was

partially reversed in FY22 due to the recovery from

Covid-19 when the Bus division demonstrated

improved performance. Revenues and operating

profit have continued to grow organically since then.

We have evaluated management’s assessment of

the reversal trigger and the resulting value-in-use

(“VIU”) calculation, focusing on whether the

improvement in underlying assumptions is both

sustained and supportable. Our procedures over the

assessment provided by management included:

Assessing management’s forecasting of revenue

growth and passenger volume assumptions

against historical trends and observed recovery;

corroborating operating margins and cost

assumptions, including inflationary pressures;

reviewing capital expenditure plans for

consistency with the operational requirements

of the business;

evaluating the discount rate and long term

growth assumptions, with support from our

valuations team;

verified adjustments made in relation to

debt balances and tax cash flows; and

assessed reasonableness of cashflow from

dividends from subsidiaries of FBH. From the

procedures performed we consider the cash

flow forecasts to be reasonable and the existence

of a relevant reversal trigger to be present.

Based on the above factors we concur with

management’s level of impairment reversal

recorded in the investment in FBH. We have also

assessed the disclosures in the Annual Report and

Accounts and consider them to be appropriate.

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How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion

on the financial statements as a whole, taking into account the structure of the group and the company,

the accounting processes and controls, and the industry in which they operate.

The Group is organised into two primary operating divisions, First Bus and First Rail. There are over 130 reporting

units within the consolidation, the majority of which are inactive although there is some trading activity in

nine reporting units in addition to those included in Group reporting scope. We have defined a component

as a business unit where legal entities have been grouped together based on the fact they have the same

management, the same control environment and also considering the way the component reports to the

group. We have determined there are four components required for Group reporting as follows: GWR, AWC

and First Bus as full scope components, with Lumo reporting on certain financial statement line items

contributing to operating profit. We have also performed audit procedures over significant or large

balances outside of the in scope entities.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the process management adopted

to assess the extent of the potential impact of climate risk on the Group’s financial statements and support

the disclosures made within the Note 2 and Note 11.

In addition to enquiries with management, we also:



Read the governance processes in place to assess climate risk



Read additional reporting made by the entity on climate including its Environmental Performance Report

We challenged the completeness of management’s climate risk assessment by:



Reading external reporting made by management including the Carbon Disclosure Project submissions



Reading the entity’s website /communications for details of climate related impacts

Management has made commitments to operate a fully zero emission Bus fleet by 2035. Management

considers the impact of climate risk does give rise to a potential material financial statement impact.

The key areas of the financial statements where management evaluated that climate risk has a potentially

significant impact are disclosures relating to impairment assessment of goodwill and carrying value of

investments in subsidiaries.

Using our knowledge of the business we evaluated management’s risk assessment, its estimates as set out

in note 2 of the financial statements and resulting disclosures where significant. We considered the following

areas that could potentially be materially impacted by climate risk and consequently we focused our audit

work in these areas:



Valuation of goodwill



Carrying value of investment in subsidiaries

To respond to the audit risks identified in these areas we tailored our audit approach to address these, in

particular, we:



Challenged management on how the impact of climate commitments made by the Group would impact

the assumptions within the discounted cash flows prepared by management that are used in the Group’s

and Company’s impairment analysis.



Evaluated whether the impact of both physical and transition risks arising due to climate risk had been

appropriately included in the recoverable value of the Group’s assets.



Challenged whether the impact of climate risk in the Directors’ assessments and disclosures of going

concern and viability were consistent with management’s climate impact assessment.

We also considered the consistency of the disclosures in relation to climate change (including the

disclosures in the Task Force on Climate-related Financial Disclosures (TCFD) section) within the Annual

Report with the financial statements and our knowledge obtained from our audit.

Our procedures did not identify any material impact in the context of our audit of the financial statements

as a whole, or our key audit matters for the period ended 28 March 2026.

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Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope

of our audit and the nature, timing and extent of our audit procedures on the individual financial statement

line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate

on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole

as follows:

Financial statements – group

Financial statements – company

Overall materiality

£18,500,000 (2025: £20,000,000).

£12,400,000 (2025: £12,400,000).

How we determined it

0.4% of revenue (2025: 0.4%

of revenue)

1% of total assets (2025: 1% of

total assets)

Rationale for benchmark applied

Overall materiality is based on

the Group’s revenue. We consider

revenue to continue to be an

appropriate benchmark due to

the Rail business operating on

contracts with the DfT and the

business model of the Bus

operations. In recognition of other

benchmarks that can be applied

to the business, we have therefore

used 0.4% of revenue (consistent

with prior year) resulting in an

appropriate materiality for the

size and scale of the Group.

The entity is a holding company

of the rest of the Group and is not

a trading entity. Therefore an

asset based measure is

considered appropriate.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall

group materiality. The range of materiality allocated across components was between £1,080,000 and

£17,575,000.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate

of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance

materiality in determining the scope of our audit and the nature and extent of our testing of account balances,

classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality

was 75% (2025: 75%) of overall materiality, amounting to £13,900,000 (2025: £15,000,000) for the group financial

statements and £9,300,000 (2025: £9,300,000) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements,

risk assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at

the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit

above £925,000 (group audit) (2025: £1,000,000) and £620,000 (company audit) (2025: £620,000) as well as

misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt

the going concern basis of accounting included:



obtaining and agreeing management’s going concern assessment to the business’ board approved plan

and ensuring that the base case scenario indicates that the business generates sufficient cash flows to

meets its obligations within the going concern assessment period while complying with covenant

arrangements;



considering the extent to which the group’s and company’s future cash flows might be adversely affected

by discontinuation of Government support, return of National Rail Contracts to public ownership, the

impact of contingent liabilities, pending litigation, or cost of living;



reviewing management’s cash flow forecasts, assessing the existing sources of finance and considering

the overall impact on liquidity;



ensuring the mathematical accuracy of management’s models;



evaluating management’s severe but plausible scenario and ensuring this is appropriately modelled

through the cash flows;



considering the risk of breach of the covenant arrangements in place for external borrowings under the

severe but plausible scenario;



evaluating whether the cash flows in the going concern period include the costs associated with achieving

the group’s climate change goals such as capital expenditure on battery, electric and hydrogen fuel cell

vehicle fleet;



performing further sensitivity analysis on the severe but plausible scenario; and



considering the adequacy of the disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s

ability to continue as a going concern for a period of at least twelve months from when the financial

statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis

of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee

as to the group’s and the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to the directors’ statement in the financial statements

about whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in

the relevant sections of this report.

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Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, accordingly, we do

not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of

assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial statements

or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an

apparent material inconsistency or material misstatement, we are required to perform procedures to conclude

whether there is a material misstatement of the financial statements or a material misstatement of the other

information. If, based on the work we have performed, we conclude that there is a material misstatement

of this other information, we are required to report that fact. We have nothing to report based on

these responsibilities.

With respect to the Strategic report and Directors’ report and additional disclosures, we also considered

whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report

certain opinions and matters as described below.

Strategic report and Directors’ report and additional disclosures

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic

report and Directors’ report and additional disclosures for the period ended 28 March 2026 is consistent with

the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in

the course of the audit, we did not identify any material misstatements in the Strategic report and Directors’

report and additional disclosures.

Directors’ Remuneration

In our opinion, the part of the Remuneration Committee report to be audited has been properly prepared

in accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term

viability and that part of the corporate governance statement relating to the company’s compliance with

the provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities

with respect to the corporate governance statement as other information are described in the Reporting on

other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements

of the corporate governance statement is materially consistent with the financial statements and our

knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:



The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;



The disclosures in the Annual Report that describe those principal risks, what procedures are in place to

identify emerging risks and an explanation of how these are being managed or mitigated;



The directors’ statement in the financial statements about whether they considered it appropriate to

adopt the going concern basis of accounting in preparing them, and their identification of any material

uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve

months from the date of approval of the financial statements;



The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this

assessment covers and why the period is appropriate; and



The directors’ statement as to whether they have a reasonable expectation that the company will be able

to continue in operation and meet its liabilities as they fall due over the period of its assessment, including

any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company was

substantially less in scope than an audit and only consisted of making inquiries and considering the directors’

process supporting their statement; checking that the statement is in alignment with the relevant provisions of

the UK Corporate Governance Code; and considering whether the statement is consistent with the financial

statements and our knowledge and understanding of the group and company and their environment obtained

in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the corporate governance statement is materially consistent with the financial statements and

our knowledge obtained during the audit:



The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary for the members to assess the group’s and

company’s position, performance, business model and strategy;



The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems; and



The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to

the company’s compliance with the Code does not properly disclose a departure from a relevant provision

of the Code specified under the Listing Rules for review by the auditors.

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Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements,

the directors are responsible for the preparation of the financial statements in accordance with the

applicable framework and for being satisfied that they give a true and fair view. The directors are also

responsible for such internal control as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

company’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the directors either intend to liquidate

the group or the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our

opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to employment laws and regulations, and health and safety

legislation, and we considered the extent to which non-compliance might have a material effect on the

financial statements. We also considered those laws and regulations that have a direct impact on the

financial statements such as the Companies Act 2006 and UK tax legislation. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of

override of controls), and determined that the principal risks were related to posting inappropriate journal

entries including those to manipulating revenue, earnings before interest and tax (‘EBIT’) and management

bias within accounting estimates. The group engagement team shared this risk assessment with the

component auditors so that they could include appropriate audit procedures in response to such risks in

their work. Audit procedures performed by the group engagement team and/or component auditors

included:



Enquiries of management at the Group and divisional levels;



Enquiries of the Group’s legal teams;



Enquiries with component auditors;



Review of internal audit reports in so far as they related to the financial statements;



Identifying and testing journal entries, in particular certain journal entries posted with unusual account

combinations which result in an impact to revenue or EBIT; and



Challenging estimates and judgements made by management in determining significant accounting

estimates, in particular in relation to valuation of pensions liabilities, valuation of complex investments

within the pension assets and recoverability of investments held by the parent.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of

instances of non-compliance with laws and regulations that are not closely related to events and transactions

reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is

higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment

by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly

using data auditing techniques. However, it typically involves selecting a limited number of items for testing,

rather than testing complete populations. We will often seek to target particular items for testing based on

their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion

about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s

website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

126

Independent auditors’ report to the members of FirstGroup plc

continued

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body

in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in

giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom

this report is shown or into whose hands it may come save where expressly agreed by our prior consent

in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:



we have not obtained all the information and explanations we require for our audit; or



adequate accounting records have not been kept by the company, or returns adequate for our audit have

not been received from branches not visited by us; or



certain disclosures of directors’ remuneration specified by law are not made; or



the company financial statements and the part of the Remuneration Committee report to be audited are

not in agreement with the accounting records and returns; or



a corporate governance statement has not been prepared by the company.

We have no exceptions to report arising from this responsibility.

Appointment

We were first appointed by the company for the financial year ended 27 March 2021. Our uninterrupted

engagement covers 6 financial years.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to

include these financial statements in an annual financial report prepared under the structured digital format

required by DTR 4.1.15R – 4.1.18R and filed on the National Storage Mechanism of the Financial Conduct

Authority. This auditors’ report provides no assurance over whether the structured digital format annual

financial report has been prepared in accordance with those requirements.

Andy Ward (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Watford

17 June 2026

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Introduction

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Annual Report and Accounts 2026

127

Continuing Operations

Notes

2026

£m

2025

(restated)

£m

Revenue

3,5

4,751.9

5,233.9

Operating costs

(4,532.5)

(5,011.3)

Operating profit

5,6

219.4

222.6

Investment income

7.1

7.7

Finance costs

(69.8)

(65.4)

Profit before tax

156.7

164.9

Tax

(37.3)

(31.3)

Profit from continuing operations

119.4

133.6

Profit from discontinued operations

2.1

4.7

Profit for the year

121.5

138.3

Attributable to:

Equity holders of the parent

118.3

127.5

Non‑controlling interests

3.2

10.8

121.5

138.3

Earnings per share

Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the Company

Basic earnings per share

21.0p

20.5p

Diluted earnings per share

20.2p

19.7p

Earnings per share for profit attributable to the ordinary equity holders of the Company

Basic earnings per share

21.4p

21.3p

Diluted earnings per share

20.6p

20.5p

Adjusted results (from continuing operations)

Adjusted operating profit

219.4

222.8

Adjusted profit before tax

156.7

165.1

Adjusted EPS

20.3p

19.4p

Adjusted diluted EPS

19.6p

18.6p

Adjusted for certain items as set out in note 4.

and expenses by £167.6m. The restatement has no impact on any profitability measure or other primary statements. Full details are provided in note 2.

The accompanying notes form an integral part of this consolidated income statement.

Consolidated income statement

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

128

Notes

2026

£m

2025

£m

Profit for the year

121.5

138.3

Items that will not be reclassified subsequently to profit or loss

Actuarial (losses)/gains on defined benefit pension schemes

(26.9)

32.9

Deferred tax on actuarial gains/(losses) on defined benefit pension schemes

6.6

(7.5)

(20.3)

25.4

Items that may be reclassified subsequently to profit or loss

Hedging instrument movements

22.9

(4.0)

Deferred tax on hedging instrument movements

(5.8)

1.0

Exchange differences on translation of foreign operations – continuing operations

(2.8)

(2.1)

Exchange differences on translation of foreign operations – discontinued operations

3.2

3.1

17.5

(2.0)

Other comprehensive (loss)/income for the year

(2.8)

23.4

Total comprehensive income for the year

118.7

161.7

Attributable to:

Equity holders of the parent

115.5

150.9

Non‑controlling interests

3.2

10.8

118.7

161.7

Total comprehensive income for the year attributable to owners of FirstGroup plc arises from:

Attributable to:

Continuing operations

113.4

151.6

Discontinued operations

5.3

10.1

118.7

161.7

The accompanying notes form an integral part of this consolidated statement of comprehensive income.

Consolidated statement of comprehensive income

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

129

Notes

2026

£m

2025

(restated

)

£m

Non‑current assets

Goodwill

157.0

144.7

Other intangible assets

21.9

14.8

Property, plant and equipment

1,727.1

2,037.2

Non‑current receivables

1.5

–

Deferred tax assets

18.2

46.5

Retirement benefit assets

22.0

27.3

Derivative financial instruments

3.9

0.3

Financial assets

71.6

104.2

Investments

2.3

2.6

Investments in associates

2.0

–

2,027.5

2,377.6

Current assets

Inventories

29.3

30.8

Trade and other receivables

586.4

761.6

Current tax assets

6.2

7.4

Cash and cash equivalents

432.0

487.1

Derivative financial instruments

19.6

0.2

Financial assets

0.4

–

1,073.9

1,287.1

Total assets

3,101.4

3,664.7

Current liabilities

Trade and other payables (restated

)

888.9

1,072.7

Tax liabilities – Other tax and social security

56.8

59.6

Borrowings

447.1

481.4

Derivative financial instruments

0.6

3.0

Provisions

68.5

92.1

Current liabilities

1,461.9

1,708.8

Net current liabilities

(388.0)

(421.7)

Notes

2026

£m

2025

(restated

)

£m

Non‑current liabilities

Other payables (restated

)

120.5

135.5

Borrowings

710.2

991.3

Derivative financial instruments

–

1.0

Retirement benefit liabilities

2.1

4.6

Provisions

87.2

111.0

920.0

1,243.4

Total liabilities

2,381.9

2,952.2

Net assets

719.5

712.5

Equity

Share capital

28.5

37.5

Share premium

693.3

Hedging reserve

15.6

(2.2)

Other reserves

31.4

22.4

Own shares

(37.5)

(31.1)

Translation reserve

(21.5)

(21.9)

Retained earnings

0.2

(1.3)

Equity attributable to equity holders of the parent

710.0

696.7

Non‑controlling interests

9.5

15.8

Total equity

719.5

712.5

See note 28 for details on the prior year restatement arising from the finalisation of the First Bus London acquisition accounting

adjustments.

The Group has restated the analysis between Current and Non‑current Other payables for the prior year, to correct the expected maturity

of deferred capital grants previously classified as Current liabilities. This reduces Current Other payables by £135.5m and increases

Non‑current Other payables by the same amount.

The accompanying notes form an integral part of this consolidated balance sheet.

Ryan Mangold

17 June 2026

Consolidated balance sheet

As at 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

130

Share capital

(note 25)

£m

premium

£m

Hedging

reserve

(note 26)

£m

Other

reserves

(note 26)

£m

Own shares

(note 26)

£m

Translation

reserve

(note 27)

£m

Retained

earnings/

(deficit)

£m

Total

£m

Non-

controlling

interests

£m

Total

equity

£m

Balance at 31 March 2024

37.5

693.3

(1.8)

22.4

(20.4)

(22.9)

(74.8)

633.3

8.4

641.7

Profit for the period

–

127.5

10.8

138.3

Other comprehensive income/(loss) for the period

–

(3.0)

–

1.0

25.4

23.4

–

23.4

Total comprehensive income/(loss) for the period

–

(3.0)

–

1.0

152.9

150.9

10.8

161.7

Hedging instrument movements transferred to balance sheet (net of tax)

–

2.6

–

2.6

–

2.6

Transactions with owners in their capacity as owners

Shares bought back but not yet cancelled

–

(50.4)

–

(50.4)

Dividends paid

–

(34.2)

(3.4)

(37.6)

Movement in EBT and treasury shares

–

(10.7)

–

(5.4)

(16.1)

–

(16.1)

Share‑based payments

–

10.5

–

10.5

Deferred tax on share‑based payments

–

0.1

–

0.1

Balance at 29 March 2025

37.5

693.3

(2.2)

22.4

(31.1)

(21.9)

(1.3)

696.7

15.8

712.5

Balance at 30 March 2025

37.5

693.3

(2.2)

22.4

(31.1)

(21.9)

(1.3)

696.7

15.8

712.5

Profit for the period

–

118.3

3.2

121.5

Other comprehensive income/(loss) for the period

–

17.1

–

0.4

(20.3)

(2.8)

–

(2.8)

Total comprehensive income for the period

–

17.1

–

0.4

98.0

115.5

3.2

118.7

Hedging instrument movements transferred to balance sheet (net of tax)

–

0.7

–

0.7

–

0.7

Transactions with owners in their capacity as owners

Shares bought back but not yet cancelled

–

(50.4)

–

(50.4)

Cancellation of treasury shares

(9.0)

–

9.0

–

Dividends paid

–

(38.9)

(9.5)

(48.4)

Movement in EBT and treasury shares

–

(6.4)

–

(17.6)

(24.0)

–

(24.0)

Share‑based payments

–

10.4

–

10.4

Balance at 28 March 2026

28.5

693.3

15.6

31.4

(37.5)

(21.5)

0.2

710.0

9.5

719.5

The accompanying notes form an integral part of this consolidated statement of changes in equity.

Consolidated statement of changes in equity

For the 52 weeks ended 28 March 2026/29 March 2025

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Annual Report and Accounts 2026

131

Notes

2026

£m

2025

£m

Cash generated by operations

681.5

828.2

Tax paid

(0.9)

(6.0)

Interest paid

(65.0)

(68.0)

Net cash from operating activities

615.6

754.2

Investing activities

Interest received

4.9

7.7

Proceeds from disposal of property, plant and equipment

45.7

17.9

Purchases of property, plant and equipment

(241.8)

(150.7)

Purchases of software

(11.2)

(5.7)

Proceeds from capital grant funding

51.5

66.4

Investment in associate

(2.0)

–

Acquisition of businesses (net of cash acquired)

(33.3)

(86.5)

Net cash used in investing activities

(186.2)

(150.9)

Financing activities

Shares purchased by Employee Benefit Trust

(24.3)

(16.1)

Treasury shares purchased via share buyback scheme and directly associated costs

(50.4)

(91.8)

External dividends paid

(38.9)

(34.2)

Dividends paid to non‑controlling shareholders

(6.7)

(3.4)

Term loan drawdown

35.0

65.0

Proceeds from rolling credit facility

150.0

80.0

Repayment of rolling credit facility

(150.0)

(75.0)

Repayment of bond issues

–

(96.2)

Repayment of lease liabilities

(411.4)

(503.5)

Repayment of asset backed financial liabilities

(21.1)

(9.8)

Proceeds from asset backed financial liabilities

57.4

36.7

Proceeds from NextGen facility

7.5

6.8

Fees for finance facilities

(0.6)

–

Net cash flow used in financing activities

(453.5)

(641.5)

Net decrease in cash and cash equivalents before foreign exchange movements

(24.1)

(38.2)

Cash and cash equivalents at beginning of year

430.7

468.7

Foreign exchange movements

(0.1)

0.2

Cash and cash equivalents at end of year

406.5

430.7

Cash flows of discontinued operations are shown in note 20.

Notes

2026

£m

2025

£m

Reconciliation to cash flow statement

Cash and cash equivalents – balance sheet

432.0

487.1

Bank overdraft

(25.5)

(56.4)

Cash and cash equivalents at end of year per consolidated balance sheet

406.5

430.7

Consolidated cash flow statement

For the 52 weeks ended 28 March 2026/29 March 2025

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Financial

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Introduction

FirstGroup

Annual Report and Accounts 2026

132

Notes

2026

£m

2025

£m

Net decrease in cash and cash equivalents in year

(24.1)

(38.2)

(Increase)/decrease in debt excluding leases

(42.5)

19.4

Repayment of lease liabilities and asset backed financial liabilities

432.4

513.3

Inception and reassessment of leases and asset backed financial liabilities (restated

)

(104.9)

(335.5)

Foreign exchange movements

(0.1)

0.2

Other non‑cash movements

(0.5)

–

Movement in net debt in year (restated

)

260.3

159.2

Net debt at beginning of year (restated

)

(985.6)

(1,144.8)

Net debt at end of year (restated

)

(725.3)

(985.6)

The finalisation of the First Bus London acquisition accounting exercise increased the value of lease liabilities acquired, resulting in a restatement of the Inception of leases and the prior year closing net debt in the table above. See note 2 for more details of the restatement.

The accompanying notes form an integral part of this consolidated cash flow statement.

Note to the consolidated cash flow statement – reconciliation of net cash flow to movement in net debt

Strategic report

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Financial

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Introduction

FirstGroup

Annual Report and Accounts 2026

133

Financial

Introduction

Strategic report

Governance report

statements

FirstGroup

Annual Report and Accounts 2026

134

Notes to the consolidated financial statements

1 General information

FirstGroup plc is a company incorporated by shares and domiciled in the United Kingdom under the

Companies Act 2006. The address of the registered office is 395 King Street, Aberdeen, Scotland, United

Kingdom AB24 5RP. The nature of the Group’s operations and its principal activities are set out in the Strategic

report on pages 04 to 71.

These financial statements are presented in pounds sterling. Foreign operations are included in accordance

with the accounting policies set out in note 2.

2 Material accounting policies

Basis of accounting

The consolidated financial statements of FirstGroup plc comply with UK‑adopted international accounting

standards and with the requirements of the Companies Act 2006. There were no unendorsed standards

effective for the period ended 28 March 2026 affecting these consolidated and separate financial statements.

The financial statements have been prepared on the historical cost basis, except for the revaluation of

certain financial instruments, and on a going concern basis as described in the going concern statement

within the Strategic report on page 71.

As set out on page 70, the Group has undertaken detailed reviews of a range of severe but plausible financial

and operational scenarios using financial outlook modelling. Based on their review of the financial forecasts

and having regard to the risks and uncertainties to which the Group is exposed, the Directors believe that

the Company and the Group have adequate resources to continue in operational existence for at least a

12‑month period from the date on which the financial statements were approved. Accordingly, the financial

statements have been prepared on a going concern basis.

The financial statements for the 52 weeks ended 28 March 2026 include the results and financial position

of the First Rail businesses for the year ended 31 March 2026 and the results and financial position of all the

other businesses for the 52 weeks ended 28 March 2026. The financial statements for the 52 weeks ended

29 March 2025 include the results and financial position of the First Rail businesses for the year ended

31 March 2025 and the results and financial position of all the other businesses for the 52 weeks ended

29 March 2025.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities

controlled by the Company (its subsidiaries). Control exists when the Company has power over an investee

entity, exposure to variable returns from its involvement with the entity and the ability to use its power over

the entity to affect its returns.

Non‑controlling interests in subsidiaries are identified separately from the Group’s equity interest therein.

The present ownership interests of non‑controlling shareholders entitle their holders to a proportionate share

of net assets upon liquidation, and may initially be measured at fair value, or at the non‑controlling interests’

proportionate share of their fair value of the acquiree’s identifiable net assets. The choice of measurement

is made on an acquisition‑by‑acquisition basis. Other non‑controlling interests are initially measured at fair

value. Subsequent to acquisition, the carrying amount of non‑controlling interests is the amount of those

interests at initial recognition plus the non‑controlling interests’ share of subsequent changes in equity. Total

comprehensive income is attributed to non‑controlling interests even if this results in the non‑controlling

interests having a deficit balance.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income

statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting

policies used into line with those used by the Group.

All intra‑group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The acquisition of subsidiaries is accounted for using the acquisitions method. The consideration for

each acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given,

liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the

acquiree. Acquisition‑related costs are recognised in the income statement as incurred.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition

under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date.

Assets and disposal groups held for sale and dis

continued

operations

Non‑current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is

highly probable that they will be recovered primarily through sale rather than through continuing use. This

condition is regarded as met only when the sale is highly probable and the asset is available for immediate

sale in its present condition. Management must be committed to the sale which should be expected to

qualify for recognition as a completed sale within one year of the date of classification.

Such assets, or disposal groups, are measured at the lower of their carrying amount and fair value less costs

to sell. Impairment losses on initial classification as held for sale and subsequent gains and losses on

remeasurement are recognised in profit or loss.

A disposal group qualifies as a discontinued operation if it is a component of an entity that either has been

disposed of, or is classified as held for sale, and:



represents a separate major line of business or geographical area of operations; or



is part of a single coordinated plan to dispose of a separate major line of business or geographical area

of operations; or



is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single

amount as profit or loss after tax from discontinued operations in the income statement.

Goodwill and intangible assets

Goodwill arising on consolidation is recognised as an asset at the date that control is acquired. Goodwill

is measured as the excess of the sum of the consideration transferred, the amount of any non‑controlling

interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity

over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units

(CGUs) which are tested for impairment annually, or more frequently where there is an indication that the

CGU may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the CGU,

the impairment loss is allocated to the goodwill of the CGU and then to the other assets of the CGU pro‑rata

on the basis of the carrying amount of each asset in the CGU. An impairment loss recognised for goodwill is

not reversed in a subsequent period. On disposal of a subsidiary, associate or jointly controlled entity, the

attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Computer software is recognised separately as an intangible asset and is carried at cost less accumulated

amortisation and accumulated impairment losses. Costs include software licences, website development,

costs attributable to the development, design and implementation of the computer software and internal

costs directly attributable to the software. Software is amortised on a straight‑line basis over its useful

economic life (three to five years).

Financial

Introduction

Strategic report

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FirstGroup

Annual Report and Accounts 2026

135

Notes to the consolidated financial statements

continued

2 Material accounting policies

continued

Revenue recognition

Under IFRS 15 revenue is recognised when control of a good or service transfers to the customer. The point at which

goods and services are transferred to the customer is based on the fulfilment of performance obligations.

As the Group has the right to consideration corresponding directly with the value of performance completed to

date, customer contract revenue is recognised consistent with the amount that the Group has a right to invoice.

The Group is therefore exercising the practical expedient not to explain transaction prices allocated to unsatisfied

performance obligations at the end of the reporting period.

Revenue principally comprises revenue from train passenger services, road passenger transport, and certain

management and maintenance services in the UK. Where appropriate, amounts are shown net of rebates and

sales taxes. An explanation of the types of revenue is set out below.

Note that revenues include contractual and direct fiscal support. This is covered in more detail further on

in this note.

Passenger revenues

Passenger revenues primarily relate to ticket sales through First Bus and the First Rail businesses. Passenger

revenue is recognised at both a point in time and over time. Ticket sales for journeys of less than one week’s

duration are recognised on the first date of travel. Ticket sales for season tickets, travel cards and open‑return

tickets are initially deferred then recognised over the period covered by the relevant ticket. Concessionary

amounts are recognised in the period in which the service is provided. Where customers are due compensation

due to delays in their journeys, such payments are treated as a reduction in passenger revenue in line with IFRS 15

Revenue from Contracts with Customers.

Contract revenues

Contract revenues mainly relate to tenders and route contracts in First Bus. Revenues are recognised as the

services are provided over the length of the contract and based on a transaction price which is defined in the

terms of the contract.

Rail contract subsidy receipts

Revenue in the First Rail businesses includes subsidy receipts from the Department for Transport (DfT) for National

Rail Contracts (NRCs), with amounts receivable under these arrangements including certain funded operational

projects. Revenue also includes amounts attributable to the Train Operating Companies (TOCs), predominantly

based on models of route usage, by the Railway Settlement Plan in respect of passenger receipts. Revenue is

recognised over time as the performance obligations are met as agreed between the individual TOCs and the DfT.

Other revenue sources

Other revenue sources mainly relate to non‑rail subsidies, revenue arising from ancillary services to other rail and

road passenger service providers for maintenance, refuelling and other associated services and to sundry third

parties for the use of space at terminals and on‑board vehicles for other business activities, e.g. retail outlets, taxi

ranks, catering and advertising. Other revenues are recognised at both a point in time and over time.

Service agreement premium/subsidy

DfT TOCs are subject to fixed payments in the form of a premium paid to, or subsidy received from, the DfT. TOCs

are entitled to earn performance based fees and a contracted margin, and the service agreement premium/

subsidy is calculated to deliver this margin. It is calculated with direct reference to costs and revenues for each

annual accounting period, and there is no clawback mechanism for payments received, or linkage between

calculations from one annual period to the next, and as such the unit of account is deemed to be each annual

reporting period. Periodic payments are received from or made to the DfT. In annual periods where a net subsidy

is received from the DfT this is considered to be an IAS 20 government grant and is accounted for accordingly.

The grant is considered to provide for the contracted margin, the performance based fees, and compensates

for the excess of allowed costs over revenues, however it is not IFRS 15 revenue from a contract with a customer.

Where revenues exceed allowable costs, and the associated premium payment is made to the DfT, this is

considered to be an operating levy, and the payments are presented within operating costs.

Contractual and direct fiscal support

The principal direct fiscal support recognised during the year comprised £376.9m (2025: £347.8m) of NRC funding

in the First Rail businesses, and £20.0m (2025: £21.9m) of funding in First Bus. These are recognised within revenue

in accordance with IFRS 15 when control of the good or service is transferred to the customer and the Group is

entitled to the consideration.

First Bus

The English, Scottish and Welsh Governments have each supported bus operators, through a variety of

funding schemes since March 2020. In England, the BSOG+ scheme provides funding through enhanced

BSOG rates per litre and an additional payment per km operated for eligible miles. In addition to this the DfT

implemented a cap on all single fares across the country in January 2023, starting at £2 and increasing to £3

in January 2025, with operators being reimbursed for any revenue foregone as a result of the reduced ticket

prices, and funding being confirmed through to March 2027. In Scotland, funding is provided by the NSG

scheme which replaced their BSOG scheme. In Wales funding is provided through BSSG and the tendering

of routes which are no longer commercially viable.

First Rail

The DfT TOC NRCs transferred substantially all revenue and substantially all cost risk to the government and for

the current and prior periods our First Rail contracts were operated under the terms of these arrangements:



GWR operated under an NRC to June 2028. On 7 May 2026, First Greater Western Railway Ltd received notice

from the Department for Transport that its National Rail Contract would expire on 13 December 2026, at which

point GWR will hand over to the DfT Operator.



WCP/Avanti were awarded a nine‑year NRC in September 2023, with a minimum core three‑year term to

October 2026.



SWR operated under an NRC which expired on 25 May 2025.

Under the arrangements, our franchised TOCs are paid a fixed management fee to continue to operate the

rail network at a service level agreed with the government. Performance‑based fees are earned through a

combination of scorecards and quantified target methodologies benchmarked off this agreed service level.

DfT funding including the management and performance fee is recognised as revenue in rail contracts subsidy

receipts, in line with the revenue recognition policy for contract subsidy receipts from the DfT.

Disaggregated revenue by operating segment is set out in note 5.

Leasing

Lease identification

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,

a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for

consideration.

Right of use asset

At the commencement date, the right of use asset is initially measured at cost, which comprises the initial amount

of the lease liability adjusted for any lease payments made at or before the commencement date, less any

incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the Group

to dismantle and remove the underlying asset or restore the underlying asset or the site on which it is located.

The right of use asset is depreciated on a straight‑line basis over the shorter of the estimated useful life

of the asset, the lease term or current expected contract terms for rail TOCs at the balance sheet date. In

addition, the right of use asset is periodically reduced by impairment losses, if applicable, and adjusted

for certain remeasurements of the lease liability.

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Lease liability

At the commencement date of the lease, the lease liability is initially measured at the present value of

lease payments to be made over the lease term. The lease payments include fixed payments (including

in‑substance fixed payments) less any lease incentives receivable, variable lease payments that depend

on an index or a rate, and amounts expected to be paid by the Group under residual value guarantees.

The lease payments also include the exercise price of a purchase option if the Group is reasonably certain

to exercise that option. Payments of penalties for terminating a lease, if the lease term reflects the Group

exercising the option to terminate the lease, are also included. The payments are discounted at the

incremental borrowing rate since the rates implicit in the leases are not readily available.

The lease liability is measured by increasing the carrying amount to reflect the interest on the lease liability

and reducing the carrying amount to reflect the lease payments made. The carrying value is remeasured

when there is a change in future lease payments arising from a change in an index or rate, if there is a

change in the Group’s estimate of the amount expected to be payable under a residual value guarantee,

or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

Lease incentives

The Group assesses reimbursements from lessors, to establish whether these represent lease incentives.

Where a lease incentive is identified, the income is spread over the term of the related lease.

Short‑term leases and leases of low‑value assets

The Group applies the short‑term lease recognition exemption to selected leases that have a lease term

of 12 months or less from the commencement date and do not contain a purchase option and where it is

not reasonably certain that the lease term will be extended. It also applies the low‑value assets recognition

exemption to leases of assets of low value based on the value of the asset when it is new, regardless of the

age of the asset being leased. Lease payments on short‑term leases and leases of low‑value assets are

recognised as an expense on a straight‑line basis over the lease term.

On the balance sheet, right of use assets have been included in property, plant and equipment and lease

liabilities have been included in borrowings.

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary

economic environment in which it operates (its functional currency). For the purpose of the consolidated

financial statements, the results and financial position of each Group company are expressed in pounds

sterling, which is the functional currency of the Company, and the presentation currency for the consolidated

financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than

the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions.

At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are

retranslated at the rates prevailing on the balance sheet date. Non‑monetary assets and liabilities carried at

fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when

the fair value was determined. Non‑monetary items that are measured in terms of historical cost in a foreign

currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary

items, are included in profit or loss for the period. Exchange differences arising on the retranslation of

non‑monetary items carried at fair value are included in profit or loss for the period, except for differences

arising on the retranslation of non‑monetary items in respect of which gains and losses are recognised

within other comprehensive income. For such non‑monetary items, any exchange component of that gain

or loss is also recognised within other comprehensive income.

In order to hedge its exposure to certain foreign exchange risks, the Group holds currency swaps and borrowings

in foreign currencies (see note 22 for details of the Group’s policies in respect of foreign exchange risks).

On consolidation, the assets and liabilities of the Group’s overseas operations are translated at the closing

exchange rates on the balance sheet date. Income and expense items are translated at the average exchange

rates for the period. Exchange differences arising from the average exchange rates used and the period

end rate, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation

differences are recognised as income or as expenses in the period in which the operation is disposed of.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,

which are assets that necessarily take a substantial period of time to get ready for their intended use or

sale, are added to the cost of those assets, until such time as the assets are substantially ready for their

intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Non‑GAAP measures and performance

In measuring the Group and divisional adjusted operating performance, additional financial measures

derived from the reported results have been used by management in order to eliminate factors which distort

year‑on‑year comparisons. The Group’s adjusted performance is used to explain year‑on‑year changes

when the effect of certain items is significant, including strategic items (including material M&A and Group

restructuring projects), costs of acquisitions including aborted acquisitions, and impairment of assets. Other

items below £5.0m would not normally be considered as adjusting items unless part of a larger strategic

project, but items which distort year‑on‑year comparisons that exceed this amount could potentially be

classified as an adjusting item and are assessed on a case‑by‑case basis. Such potential adjusting other

items may include: restructuring and reorganisation costs; property gains or losses; aged legal and

self‑insurance claims; movements on insurance discount rates; onerous contract provisions; pension

settlement gains or losses; and other items which management has determined as not being relevant to an

understanding of the Group’s underlying business performance. Subsequent remeasurements of adjusting

items are also recognised as an adjusting item in the future period in which the remeasurement occurs.

Management considers that this overall basis supports year‑on‑year business performance comparisons,

to underpin planning and decision making on resource allocation. The Group does not consider the

non‑GAAP measures to be more important than, or superior to, IFRS measures. See note 4 for the

reconciliation to non‑GAAP measures and performance.

Retirement benefit costs

The Group operates or participates in a number of pension schemes, which include both defined benefit

schemes and defined contribution schemes.

Payments to defined contribution plans are charged as an expense as they fall due. There is no further

obligation to pay contributions into a defined contribution plan once the contributions specified in the plan

rules have been paid.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit

Method, with actuarial updates being carried out at each balance sheet date. Actuarial gains and losses are

recognised in full in the period in which they occur. They are recognised outside the income statement and

presented in the consolidated statement of other comprehensive income.

All past service costs are recognised immediately in the consolidated income statement.

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Where changes to the benefits in payment on defined benefit pension schemes require a change in scheme

rules or ratification by the Trustees, the change is recognised as a past service charge or credit in the income

statement. Where changes in assumptions can be made without changing the Trustee agreement, these are

recognised as a change in assumptions in other comprehensive income.

The retirement benefit position recognised in the balance sheet represents the present value of the defined

benefit obligation as reduced by the fair value of scheme assets. Any residual asset resulting from this

calculation is limited to refunds economically available to the Company, in the form of either a public

sector payment or the present value of future service costs recognised via suspension of cash contributions.

Various TOCs in the First Rail business participate in the Railways Pension Scheme (RPS), which is an industry‑wide

defined benefit scheme. The Group is obligated to fund the relevant section of the scheme over the period for

which the contract is held. The full liability is recognised on the balance sheet, which is then reduced by a

‘contract adjustment’ so that the net liability reflects the Group’s obligations to fund the scheme over the

contract term, subject to any changes in the schedule of contributions following a statutory valuation.

Retirement benefits are also covered in the Key sources of estimation uncertainty section of note 2 below.

Tax

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as

reported in the income statement because it excludes items of income or expense that are taxable or

deductible in other years and it further excludes items that are never taxable or deductible. The Group’s

liability for current tax is calculated using tax rates that have been enacted or substantively enacted by

the balance sheet date and includes an estimate of the tax which could be payable as a result of differing

interpretation of tax laws.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts

of assets and liabilities in the financial statements and the corresponding tax bases used in the computation

of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are

generally recognised for all taxable temporary differences and deferred tax assets are recognised to the

extent that it is probable that taxable profits will be available against which deductible temporary differences

can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the

initial recognition of goodwill, or from the initial recognition (other than in a business combination) of other

assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries

and associates, and interests in joint ventures, except where the Group is able to control the reversal of the

temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the

extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the

asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled

or the asset is realised and is based on the estimated tax consequences of items that are subject to differing

interpretations of tax laws. Deferred tax is charged or credited in the income statement, except when it

relates to items charged or credited in other comprehensive income or directly to equity, in which case

the deferred tax is also dealt with within other comprehensive income or directly in equity respectively.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax

assets against current tax liabilities and when they relate to income taxes levied by the same tax authority

and the Group intends to settle its current tax assets and liabilities on a net basis.

The Group follows IFRIC 23 Uncertainty over Income Tax Treatments. IFRIC 23 sets out how to determine the

accounting tax position when there is uncertainty over income tax treatments. The interpretation requires

the Group to determine whether uncertain tax positions are assessed separately or as a Group, and



Assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed

to be used, by an entity in its income tax filings:

•

If yes, the Group should determine its accounting tax position consistently with the tax treatment used

or planned to be used in its income tax filings.

•

If no, the Group should reflect the effect of uncertainty in determining its accounting tax position using

either the most likely amount or the expected value method.

Property, plant and equipment

Properties for provision of services or administrative purposes are carried at cost, less any recognised

impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in

accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other

property assets, commences when the assets are ready for their intended use.

Passenger carrying vehicles and other plant and equipment are stated at cost less accumulated

depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, other than freehold land, the land element of

long leasehold properties or on assets in the course of construction, over their estimated useful lives, using

the straight‑line method, on the following bases:


Freehold buildings	50 years straight‑line
Passenger carrying vehicles	seven to 17 years straight‑line
Other plant and equipment	three to 25 years straight‑line

Assets specific to TOCs are depreciated over the lesser of their estimated useful lives or the rail contract term

expected at the balance sheet date.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the

sales proceeds and the carrying amount of the asset and is recognised in income.

Capital grants

Capital grants relating to property, plant and equipment are held in other payables and released to the

income statement over the expected useful lives of the assets concerned. Capital grants are not recognised

until there is a reasonable assurance that the Group will comply with the conditions attaching to them and

that the grants will be received.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to

determine whether there is any indication that those assets have suffered an impairment loss. If any such

indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairment loss (if any). Where the asset does not generate cash flows that are independent from other

assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,

the estimated future cash flows are discounted to their present value using a pre‑tax discount rate that

reflects current market assessments of the time value of money and the risks specific to the asset for which

the estimates of future cash flows have not been adjusted.

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If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of

the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised

estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount

that would have been determined had no impairment loss been recognised for the asset or CGU in prior years.

A reversal of an impairment loss is recognised as income immediately.

Inventories

Inventories of spare parts and consumables are stated at the lower of cost and net realisable value, after making

appropriate allowances for obsolete and slow‑moving items. Cost comprises direct materials and, where applicable,

those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is

calculated using the weighted average cost method. Where the purchase of inventory was the hedged item in a cash

flow hedge relationship, the initial carrying amount of the recognised inventory is adjusted by the associated hedging

gain or loss transferred from the hedging reserve (a basis adjustment). There are no material inventory allowances.

Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group

becomes a party to the contractual provisions of the instrument.

Financial assets

Financial assets can be measured at amortised cost, fair value through profit or loss or fair value through

other comprehensive income. The measurement basis is determined by reference to both the business

model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

Financial assets are classified into one of three primary categories:

Financial assets at amortised cost

Financial assets at amortised cost are non‑derivative financial assets held for collection of contractual cash flows

where those cash flows represent solely payments of principal and interest. Financial assets at amortised cost are

subsequently measured using the effective interest method and are subject to impairment. Gains and losses are

recognised in profit or loss when the asset is derecognised, modified or impaired.

Fair value through profit and loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets

designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily

required to be measured at fair value. Financial assets are classified as held for trading if they are acquired

for the purpose of selling or repurchasing in the near term. Derivatives are also classified as held for trading

unless they are designated as effective hedging instruments.

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair

value with net changes in fair value recognised in the income statement within finance costs. Transaction

costs arising on initial recognition are expensed in the income statement.

Fair value through other comprehensive income

The Group does not have any financial assets held at fair value through other comprehensive income.

The Group also includes restricted cash balances within Financial assets, where balances are held as

collateral for third party arrangements and are not readily available for general use by the business.

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangements entered into. An equity instrument is any contract that evidences a residual interest in the

assets of the Group after deducting all of its liabilities. Equity instruments issued by the Company are

recorded at the proceeds received net of direct issue costs.

Financial liabilities

Bank borrowings

Interest‑bearing bank loans, asset backed financial liabilities and overdrafts are measured on an amortised cost basis.

Bonds and loan notes

These are measured either on an amortised cost basis or at fair value, if designated.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using

the effective interest rate method.

Derivative financial instruments and hedge accounting

The Group uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate

and commodity risks. Use of such financial instruments is governed by policies and delegated authorities

approved by the Board. The Group does not hold or issue derivative financial instruments for trading purposes.

The main derivative financial instruments used by the Group are interest rate swaps, fuel swaps, and cross

currency interest rate swaps. Such instruments are initially recognised at fair value and subsequently

remeasured to fair value at the reported balance sheet date. The fair values are calculated by reference

to market exchange rates, interest rates and fuel prices at the period end, and supported by counterparty

confirmations. Where derivatives do not qualify for hedge accounting, any gains or losses on remeasurement

are immediately recognised in the Group income statement. Where derivatives qualify for hedge accounting,

recognition of any resultant gain or loss depends on the nature of the hedge relationship and the item being

hedged. At inception of designated hedging relationships, the Group documents the risk management

objective and strategy for undertaking the hedge, the nature of the risks being hedged and the economic

relationship between the item being hedged and the hedging instrument.

Fair value hedging

The fair value change on qualifying hedging instruments is recognised in profit or loss. The carrying amount

of a hedged item not already measured at fair value is adjusted for the fair value change attributable to the

hedged risk with a corresponding entry in profit or loss.

Cash flow hedging

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are

designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated

under the heading of hedging reserve, limited to the cumulative change in fair value of the hedged item from

inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or

loss. Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified

to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised

hedged item. However, when the hedged forecast transaction results in the recognition of a non‑financial item

such as inventory, the gains and losses previously recognised in other comprehensive income and accumulated

in equity are removed from equity and included as a basis adjustment in the initial measurement of the cost of

that item. This transfer does not affect other comprehensive income, however the hedging gains and losses that

will subsequently be transferred as basis adjustments are categorised as amounts that may be reclassified

subsequently to profit or loss, as such a reclassification may occur in the event that the hedged transaction is no

longer expected to occur. Furthermore, if the Group expects that some or all of the loss accumulated in the cash

flow hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss.

Net investment hedging

Derivative financial instruments are classified as net investment hedges when they hedge the Group’s

net investment in an overseas operation. The effective element of any foreign exchange gain or loss

from remeasuring the derivative instrument is recognised directly in other comprehensive income and

accumulated in the foreign currency translation reserve. Any ineffective element is recognised immediately

in the Group income statement. Gains and losses accumulated in the foreign currency translation reserve

are included in the Group income statement on the disposal or partial disposal of the foreign operation.

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2 Material accounting policies

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Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is

probable that the Group will be required to settle that obligation. Provisions are measured at the Directors’

best estimate of the expenditure required to settle the obligation at the balance sheet date and are

discounted to present value where the effect is material.

Self‑insurance

The Group’s policy is to self‑insure high‑frequency, low‑value claims within the businesses. In addition there

are typically a smaller number of major claims during a financial year for which cover is obtained through

third party insurance policies subject to an insurance deductible. Where the Group holds legacy self‑insurance

exposures related to disposed businesses, insurance and re‑insurance policies have been purchased to

de‑risk this exposure. Provision is made under IAS 37 Provisions, Contingent Liabilities and Contingent Assets

for the estimated cost of settling uninsured claims for incidents occurring prior to the balance sheet date.

The provision is discounted to appropriately reflect the timing of future cash claims settlements. Self‑insurance

is also covered in the Key sources of estimation uncertainty section of note 2 below.

Share‑based payments

The Group issues equity‑settled share‑based payments to certain employees. Equity‑settled share‑based

payments are measured at fair value at the date of grant. The fair value is expensed over the vesting period,

based on the Group’s estimate of shares that will eventually vest and is adjusted for the effects of

non‑market‑based vesting conditions.

Fair value is measured by use of a Black‑Scholes or other appropriate valuation model. The expected life used

in the model has been adjusted, based on management’s best estimate, for the effects of non‑transferability,

exercise restrictions and behavioural considerations.

Joint operations

Where the Group assesses a joint arrangement to be a joint operation, it recognises its direct right to the

assets, liabilities, revenue and expenses of the joint operation, and its share of any jointly held or incurred

assets, liabilities, revenue and expenses. These have been incorporated in the financial statements under

the appropriate headings.

Dividend distributions

Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

Adoption of new and revised standards

The accounting policies adopted are consistent with those of the previous financial year except for the

changes arising from new standards and amendments to existing standards which have been adopted

in the current year.

The following amended standards and interpretations were adopted by the Group during the year:



Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates

There has been no material change as a result of applying this amendment. No significant impact is expected

from any of the future standards and amendments that are visible, with the exception of IFRS 18 Presentation

and Disclosure in Financial Statements, which is effective from 1 January 2027, and which is expected to

change the presentation of the consolidated financial statements.

The Group is currently in the process of determining the expected impact of applying IFRS 18. A transition plan

has been developed and an initial impact assessment has been undertaken, and the Group is on track to

report its first IFRS 18‑compliant interim financial statements for the period ending 25 September 2027, and

annual financial statements for the year ending 25 March 2028. The application of the new Standard will

change the presentation of the consolidated financial statements, most notably the categorisations within

the income statement and related disclosure detail, as well as classifications within the statement of cash

flows. It will also require the presentation of management‑defined performance measures to complement

the structured summary on the face of the income statement, and the Group is presently assessing the

appropriate measures to be reported under this definition.

Restatements

National Rail Contracts – premium payments

During the year, the Group has reassessed its accounting policy regarding DfT subsidy receipts and premium

payments under its NRCs. Subsidies received under the NRCs continue to represent amounts for lost passenger

revenues and the subsidy income from the DfT is therefore recognised within revenue in line with IAS 20

Government grants. When amounts are due to be paid back to the DfT (the obligating event being generation

of profits above contractual fixed profit margins), the Group has concluded that these do not represent a

refund of government grant amounts received in previous periods, instead per IAS 37 Provisions, Contingent

Liabilities and Contingent Assets and IFRIC 21 Levies the premium amounts above the contractual margin

should have previously been treated as a levy expense rather than as a deduction of revenue.

The Group has therefore restated its FY 2025 income statement to correct this classification. A levy expense of

£167.6m has been recognised, rather than a deduction from revenue, therefore increasing both revenue and

expenses by £167.6m. The restatement has no impact on any profitability measure or other primary statements.

Acquisition accounting adjustments relating to First Bus London

During the year, the Group finalised its IFRS 3 acquisition accounting adjustments in relation to the acquisition

on 28 February 2025 of London bus operator RATP Dev Transit Limited and its subsidiaries (First Bus London).

Provisional adjustments were reported in the FY 2025 Annual Report, and therefore the Group has now restated

the prior year comparative information to reflect these finalised adjustments. The final acquisition adjustments

are detailed in note 28. There is no material impact on the FY 2025 income statement as a result of the finalisation

exercise, and as such the prior year income statement has not been restated.

Deferred capital grant liabilities

The Group has restated the analysis between Current and Non‑current Other payables for the prior year, to

reflect the expected maturity of deferred capital grants previously classified as Current liabilities. This reduces

Current Other payables by £135.5m and increases Non‑current Other payables by the same amount.

Key sources of estimation uncertainty and significant judgements

The preparation of financial statements in conformity with generally accepted accounting principles requires

the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of

the financial statements and the reported amounts of revenues and expenses during the reporting period.

Although these estimates are based on management’s best knowledge, actual results may ultimately differ

from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions

to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only

that period, or in the period of revision and future periods if the revision affects both current and future periods.

The following are the critical estimates and judgements that the Directors have made in the process of

applying the Group’s accounting policies and that have the most significant effect on the amounts

recognised in the financial statements.

Defined benefit pension arrangements

Railway Pension Scheme

As at the balance sheet date, the Group sponsored two sections of the Railway Pension Scheme (RPS), relating

to its obligations for its contracted TOCs, and a further section for Hull Trains, its open access operator. The RPS

is a defined benefit pension scheme which covers the whole of the UK rail industry. The RPS is partitioned into

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sections and, for the sections that relate to contracts, the Group is responsible for the funding of these

sections only while it operates the relevant contract. In contrast to the pension schemes operated by most

businesses, the RPS is a shared cost scheme which means that costs are formally shared 60% employer and

40% employee. The Group only recognises amounts in relation to its share of costs in the income statement,

and for the contracted TOCs, those amounts are then reimbursed to the TOCs as part of the overall allowable

contracted operating expenses. Management of the RPS is not the responsibility of the Group, nor is it able to

benefit from any future surplus, or liable for any deficit, of those funds.

At the end of the contract term, responsibility for funding the relevant section of the scheme, and consequentially

any deficit or surplus existing at that date, is passed to the next contractor. At each balance sheet date a

contract adjustment is recognised against the IAS 19 net pension asset or liability to reflect that portion

expected to pass to the next contractor.

The Directors view this arrangement as analogous to the circumstances described in paragraphs 92‑94 of

IAS 19 (Revised) with a third party taking on the obligation for future contributions. As there is no requirement

to make contributions to fund the current deficit, it is assumed that all of the current deficit will be funded by

another party and hence none of that deficit is attributable to the current contractor. In respect of the future

service costs, there is currently no pension obligation in respect of those costs. When the costs are recognised

in the income statement, the extent to which the committed contributions fall short determines the amount

that is to be covered by contributions of another party in future, which is recognised as an adjustment to

service cost in the income statement. Under circumstances where contributions are renegotiated, such as

following a statutory valuation, an adjustment will be recognised in the income statement, whilst changes

in actuarial assumptions continue to be recognised through other comprehensive income.

The Directors consider this judgement to be the most appropriate interpretation of IAS 19 to reflect the

specific circumstances of the RPS where the contract commitment is only to pay contributions during the

period in which we run the contract.

Actuarial assumptions

The UK schemes’ retirement benefit obligations are discounted at a rate set by reference to market yields at

the end of the reporting period on high‑quality corporate bonds. Significant assumptions are made when

setting the criteria for bonds to be included in the population from which the yield curve is derived. The most

significant criteria considered for the selection of bonds include the issue size of the corporate bonds, quality

of the bonds and the identification of outliers which are excluded to align with the characteristics of each

scheme. Management follows actuarial advice from a third party when determining these judgements.

Other key estimates include the longevity of members, expected rates of salary increases and inflation.

We take specialist advice on these from our actuarial advisers which aims to consider the likely experience

taking into account each scheme’s characteristics. Our approach is to review these assumptions for each

scheme following completion of their funding valuations, and more frequently only if appropriate to do so.

The majority of invested pension scheme assets are held in asset classes where a deep market exists and

therefore where market prices are readily available. Some of the more illiquid assets do not have such a

deep market, and so a discounted cash flow valuation methodology is adopted, using cash flows provided

by fund managers using their best estimates of the distributions from the investments. The critical estimate

in respect of these cash flows is the discount rate applied with reference to the yield on a government bond

of suitable duration, adjusted to take into account the relevant asset‑specific risks (primarily credit default

risk and liquidity risk). Both the quantum of the cash flows and the discount rate adopted require an element

of judgement, and changes to either could alter the valuation ascribed to the assets.

The carrying amount of the Group’s continuing retirement benefit arrangements at 28 March 2026 was an

asset of £19.9m (2025: asset of £22.7m). Further details and sensitivities are set out in note 34.

Other areas of judgement and accounting estimates

The consolidated financial statements include other areas of judgement and accounting estimates, and

while these do not meet the IAS 1 definition of significant accounting estimates or critical accounting

judgements, the recognition and measurement of certain material assets and liabilities are based on

assumptions, or are subject to longer‑term uncertainties.

Acquisition accounting adjustments relating to First Bus London

On 28 February 2025, the Group completed its acquisition of London bus operator RATP Dev Transit London

Limited and its subsidiaries (First Bus London). The Group has now finalised the purchase price allocation

exercise for First Bus London, and this identified a number of adjustments to reflect the fair value of the assets

and liabilities acquired.

The key sources of estimation uncertainty and significant judgements resulting from the transaction relate to

the acquisition accounting exercise, and the recognition and measurement of assets acquired and liabilities

assumed. Key areas of judgement include, but are not limited to, the measurement of contract intangibles

and onerous contract provisions, the valuations of property, plant and equipment (including freehold land

and buildings), recognition of other liabilities and provisions, recognition and valuation of deferred tax assets,

and the resulting goodwill arising from the transaction. Note 28 provides more details on the finalised

acquisition accounting exercise.

Impairment of assets in CGUs

The key sources of estimation uncertainty in relation to the potential risk of impairment of assets in CGUs

relate to the cash flow forecasts including significant judgements in deciding what assumptions to make

regarding the future financial performance of the CGU, the ongoing macroeconomic uncertainty, and the

Group’s future climate‑related targets and ambitions. This is covered in more detail in note 11.

Determining First Rail National Rail Contract expiry dates

On 28 November 2024, the Passenger Railway Services (Public Ownership) Act 2024 received Royal Assent,

allowing passenger train operators with contracts with the DfT to be brought into public ownership.

An initial timetable for this process was published in December 2024. The Group’s South Western Railway NRC

expired in May 2025. The timetable published at that time indicated that other TOCs would be taken into

public ownership by October 2027, but with no dates then specified for Great Western Railway or West Coast

Partnership. At the FY 2026 balance sheet date, no NRC expiry dates had been announced for Great Western

Railway or West Coast Partnership. The Group was therefore required to make judgements to assess the

most likely expiry dates for these NRCs at the balance sheet date.

These expiry date judgements are then used to identify lease terms in certain situations and useful lives

of property, plant and equipment for TOCs. If there were to be a change in the judgement regarding lease

expiry dates, this would result in a reassessment of the right of use asset and lease liabilities. Similarly, a

change in useful lives for TOC property, plant and equipment would result in a change to the carrying value

of those assets. There were no changes during the year to the Group’s judgements for NRC expiry dates.

On 7 May 2026, First Greater Western Railway Ltd received notice from the Department for Transport

that its NRC would expire on 13 December 2026, at which point GWR will hand over to the DfT Operator.

As this notification was received after the balance sheet date, the Group has concluded that it represents

a non‑adjusting event.

DfT TOCs – income statement classification

South Western Railway transferred to DfT ownership in May 2025 when its NRC expired, and Great Western

Railway’s NRC will expire on 13 December 2026. A detailed timetable has yet to be announced for the Group’s

West Coast Partnership TOCs, but the Government has indicated that all TOCs would be taken into public

ownership by October 2027. The Group has therefore reviewed the application of IFRS 5 Non‑current Assets

Held for Sale and Discontinued Operations in respect of its DfT TOCs.

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Notes to the consolidated financial statements

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2 Material accounting policies

continued

The Group’s DfT TOCs will no longer be a part of the Group when each TOC’s individual NRC expires, whether at

their specified end dates, or when the appropriate contractual notice period is given by the DfT. However, the

Group does not consider that these contract expiries would represent discontinued operations per IFRS 5 as they

are not considered a disposal of operations. The contracts represent the vehicle for the Group’s arrangements

with the DfT to provide rail passenger services, rather than a separate discontinued operation, and the contracts

expire upon their enforceable end point. Furthermore, the Group’s First Rail operating segment will continue to run

passenger rail operations via its open access businesses and its contract to operate the London Overground rail

services, and the Group remains committed to investing in, and further expanding, its First Rail passenger rail

operations and services in the future. This is further evidenced by the acquisition of new open access licences

and further applications to operate open access passenger rail services.

Climate change

In the preparation of the Group’s consolidated financial statements, management has considered the

potential impact of climate change, particularly in the context of the disclosures included in the Strategic

report (including the Task Force for Climate‑related Disclosures), and the Group’s own climate‑related

ambitions and targets, including its stated Sustainability strategic pillar. This includes an assessment of how

the Group’s accounting estimates and judgements are impacted by the Group’s pathway to achieving its

stated ambitions and targets and delivering on its Sustainability strategic pillar, as well as by climate‑related

risks and opportunities for the Group.

Actions required to drive the Group’s climate‑related ambitions and targets and to deliver on its Sustainability

strategic pillar, including their financial impacts, are factored into the longer‑term business planning cycles

of the Group. The following areas of estimation have been considered as part of these planning cycles, in

addition to those detailed in the Key sources of estimation uncertainty section. Management does not

believe that these areas will have a material impact on financial reporting estimates and judgements in

the next year. Owing to the inherent medium/longer‑term uncertainty with regard to climate‑related risks

and opportunities, it is not currently possible to assess whether in the future, these areas of estimation and

judgement may have a more material impact on carrying values of assets and liabilities. Management will

continue to regularly assess climate‑related risks in the context of the estimates and judgements made in

the preparation of the Group’s financial statements.

Going concern and viability

There may be a risk of increased future costs and capital investment requirements to ensure compliance

with environmental regulatory requirements (for example carbon taxes/charges, or other emissions‑related

restrictions), and to achieve the Group’s stated sustainability targets and ambitions. However, the Group

believes that there is likely to be an increasing modal shift towards public transport, as awareness grows

among customers of climate‑related issues, and with governmental support for transport decarbonisation,

which could create new opportunities for the Group.

Carrying value of non‑current assets

Environmental regulatory requirements, in parallel with the Group’s climate‑related targets and ambitions,

may further accelerate the transition to electrification of vehicle fleets. Transitional risks relating to the

evolution of climate‑related technologies may alter the expected obsolescence profile of existing vehicle

fleets. These factors may impact the Group’s estimates of the useful lives of existing assets, their residual

values, and the risk of asset impairment. The Group monitors closely the accounting estimates in relation

to its vehicle fleets to ensure they remain reasonable.

Provisions

Climate‑related legislative and regulatory changes may, in future, require the Group to assess whether

environmental provisions are necessary, for example the potential introduction of carbon taxes/charges. In

parallel with the work towards achieving its climate‑related ambitions and targets, the Group tracks such

legislative changes to ensure the impact on the business is well understood and managed effectively.

Other areas of the financial statements which may also be impacted by climate‑related risks and

opportunities include:



Share‑based payments – certain of the Group’s share‑based payments arrangements include a

sustainability target (see note 33), and the Group’s ability to meet these targets may impact the amount

or timing of any share‑based payments.



Deferred tax assets – recoverability of deferred tax assets is dependent on future profitability, which may

be impacted by climate‑related factors.



Borrowing facilities – during the year, the Group has entered into innovative funding arrangements for the

future purchase of both electric bus batteries and electric bus bodies (chassis and drivetrain). The timing

of the utilisation of these facilities to support the Group’s decarbonisation and sustainability targets may

impact levels of borrowing and finance costs for the Group.

Going concern

The Board carried out a review of the Group’s financial projections for the 18 months to 30 September 2027

and evaluated whether it was appropriate to prepare the full year results on a going concern basis. In doing

so, the Board considered whether any material uncertainties exist that cast doubt on the Group’s and the

Company’s ability to continue as a going concern over the going concern period.

Consistent with prior years, the Board’s going concern assessment is based on a review of future trading

projections, including whether banking covenants are likely to be met and whether there is sufficient

committed facility headroom to accommodate future cash flows for the going concern period.

Divisional management teams prepared detailed, bottom‑up projections for their businesses reflecting the

impact of macroeconomic considerations on the operating environment, assumptions on passenger volumes

and government support, as well as the impact of actions required to address the Group’s climate‑related

targets and ambitions, and having regard to the risks and uncertainties to which the Group is exposed.

Base case scenario

The Board considered the annual budget to 31 March 2027 and medium‑term plan including the period to

September 2027 to be the base case scenario for the purpose of the going concern assessment for the FY

2026 year end. These projections were the subject of a series of executive management reviews and were

used to establish the base case scenario that was used for the purposes of the going concern assessment.

The Bus base case assumes a gradual net profit increase from passenger volumes and yields in FY 2027,

with some offset from cost inflation. The base case also reflects the impact of the acquisitions completed

in FY 2025 and FY 2026, including First Bus London and coaching businesses. The Rail base case reflects the

expected expiry of the Group’s remaining NRCs, and the commencement of the London Overground contract

in May 2026. The macro projections in the updated base case assume that the UK operates in a low‑growth

economy with inflationary pressures. The annual budget and medium‑term plan also capture the expected

financial impact of the actions required to support the Group’s climate‑related targets and ambitions, and

the cash flow impact of other capital allocation decisions which the Group may consider.

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continued

2 Material accounting policies

continued

Downside scenario

In addition, a downside case was also modelled which assumes a more adverse macroeconomic recovery

profile, including the potential impacts of geopolitical instability. In First Bus the downside case assumes a

reduction in passenger volumes as well as the impact of other unexpected cost inflation, driving a 25%

reduction in Bus profitability. In First Rail, the downside case assumes TOC performance fee awards at 50%

of expected levels, volume and revenue reductions in Hull Trains and Lumo driving a 25% reduction in open

access profitability, and other unbudgeted cost and inflationary risks. The downside scenario also considers

potential impacts of a significant climate‑related event or unbudgeted decarbonisation costs, as well as the

risk of one‑off safety, regulatory non‑compliance or technology incidents. The downside scenario also takes

into account some controllable mitigating actions available to the Group.

Mitigating actions

If the performance of the Group were to be more adversely impacted than assumed in the base case or

downside case scenarios, the Group would reduce and defer planned growth capital expenditure and further

reduce costs in line with a lower‑volume operating environment to the extent that the essential services we

operate in First Bus are not required to be run for the governments and communities we support, as well as

further reviews of other Group capital allocation decisions.

Going concern statement

Based on the review of the financial forecasts for the period to September 2027 and having regard to the risks

and uncertainties to which the Group is exposed, the Directors have a reasonable expectation that the Group

has adequate resources to continue in operational existence for at least the 12‑month period from the date

on which the financial statements were approved, including compliance with banking covenants under both

the base case and downside scenarios. Accordingly, they continue to adopt a going concern basis of

accounting in preparing the consolidated financial statements in this full year report.

3 Revenue


		2025
	2026	(restated 1 )
	£m	£m
Services rendered	4,013.1	4,317.2
First Rail contract subsidy receipts	419.2	580.4
Other revenues	319.6	336.3
Revenue from continuing operations	4,751.9	5,233.9
Discontinued operations	–	–
Revenue	4,751.9	5,233.9

The Group has identified certain funding mechanisms with the DfT where amounts due to the DfT have previously been treated as

deductions from revenue. Upon further review, the Group has judged that these amounts should instead be recognised as an expense in

the income statement. The prior year income statement comparative information has been re‑presented accordingly. The re‑

presentation is within the income statement and has no impact on profit measures or the other primary statements.

Disaggregated revenue by operating segment is set out in note 5.

Other revenues principally represent funding mechanisms in First Bus and the First Rail businesses.

4 Reconciliation to non‑GAAP measures and performance

In measuring the Group and divisional adjusted operating performance, additional financial measures derived

from the reported results have been used by management in order to eliminate factors which distort

year‑on‑year comparisons, and to enable the like‑for‑like monitoring of the Group’s recurring operations

over time. The Group’s adjusted performance is used to explain year‑on‑year changes when the effect of

certain items is significant, including strategic items (including material M&A and Group restructuring

projects), costs of acquisitions including aborted acquisitions, and impairment of assets. Other items below

£5.0m would not normally be considered as adjusting items unless part of a larger strategic project, but

items which distort year‑on‑year comparisons that exceed this amount could potentially be classified as an

adjusting item and are assessed on a case‑by‑case basis. Such potential adjusting other items may include:

restructuring and reorganisation costs; property gains or losses; aged legal and self‑insurance claims;

movements on insurance discount rates; onerous contract provisions; pension settlement gains or losses;

and other items which management has determined as not being relevant to an understanding of the

Group’s underlying business performance. Subsequent remeasurements of adjusting items are also

recognised as an adjusting item in the future period in which the remeasurement occurs.

The Group’s statutory revenue measure will be impacted as NRCs are taken into public ownership. As a result,

during FY 2025 the Group identified Adjusted revenue as a new performance measure, to provide an indication

of the Group’s revenue excluding that from NRCs. Adjusted revenue is defined as revenue excluding that

element to DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no

revenue risk. The Adjusted revenue measure includes management and performance fee income earned by

the Group from its DfT TOC contracts.

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4 Reconciliation to non‑GAAP measures and performance

continued

	2026	2025
Reconciliation of operating profit to adjusted operating profit on a continuing basis	£m	£m
Operating profit on a continuing basis	219.4	222.6
Adjustments for:
Greyhound Canada	–	0.2
Total operating profit adjustments on a continuing basis	–	0.2
Adjusted operating profit on a continuing basis (note 5)	219.4	222.8

	2026	2025
Reconciliation of operating profit to adjusted operating profit/(loss) on a discontinued basis	£m	£m
Operating profit from discontinued operations	2.1	4.9
Adjustments for:
CARES receipt	–	(0.4)
Retirement benefit restructuring credits	–	(5.1)
Total operating profit adjustments from discontinued operations	–	(5.5)
Adjusted operating profit/(loss) from discontinued operations	2.1	(0.6)

	2026	2025
Reconciliation of profit before tax to adjusted profit before tax and adjusted earnings	£m	£m
Profit before tax (including discontinued operations)	158.8	169.6
Adjusting operating profit items – continuing operations	–	0.2
Adjusting operating profit items – discontinued operations	–	(5.5)
Adjusted operating profit items – total operations	–	(5.3)
Adjusted profit before tax including discontinued operations	158.8	164.3
Rail management fee‑based operations – IFRS 16 adjustment	(2.8)	(1.1)
Adjusted tax charge	(37.3)	(41.1)
Non‑controlling interests 1	(4.0)	(7.1)
Adjusted earnings including discontinued operations	114.7	115.0

Statutory non‑controlling interests in 2026 and 2025 reflect Avanti West Coast and South Western Railway.

	2026	2025
Reconciliation of tax charge to adjusted tax charge	£m	£m
Tax charge (note 9)	37.3	31.3
Non‑recurring historical tax refund (note 9)	–	3.0
Write‑back of previously unrecognised deferred tax assets (note 9)	–	6.8
Adjusted tax charge (including discontinued)	37.3	41.1
Adjusted tax charge – continuing operations	37.3	41.1
Adjusted tax charge – discontinued operations	–	–

Adjusting items – 2026

There were no adjusting items in the year for either continuing or discontinued operations.

Adjusting items –

continued

operations –2025

Greyhound Canada

A net £0.2m charge was incurred in the period relating to the continued winding down of Greyhound

Canada operations.

Adjusting items – dis

continued

operations –2025

CARES receipt

A credit of £0.4m was recognised in the period on receipt of CARES funding in relation to the discontinued

North American operations.

Legacy US pensions scheme buy‑out

On 16 July 2024, the Group agreed terms with an insurance company to buy out the remaining liabilities

of the legacy Greyhound US pension plan, with the plan being terminated thereafter. Following a Group

contribution of $6m, gross liabilities valued at $155m (£123m) at the FY 2024 year end were removed from

the Group’s balance sheet and the Group recognised a net settlement gain after related costs of £5.1m in

the income statement as an adjusting item.

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4 Reconciliation to non‑GAAP measures and performance

continued

	2026	2025
First Bus EBITDA comprises:	£m	£m
Pre‑IFRS 16 EBITDA	164.7	144.0
IFRS 16 adjustments 1	36.1	16.1
First Bus adjusted EBITDA per segmental results table (note 5)	200.8	160.1

	2026	2025
First Rail EBITDA comprises:	£m	£m
Non‑management fees‑based TOCs pre‑IFRS 16 EBITDA	51.2	40.8
Group’s share of management fee income available for dividends (net of tax and non‑controlling interest)	29.3	39.0
Tax on management fee income	11.1	15.4
Non‑controlling interest	4.0	7.2
IFRS 16 adjustments 1	415.1	537.3
First Rail adjusted EBITDA per segmental results table (note 5)	510.7	639.7

	2026	2025
Group items EBITDA comprises:	£m	£m
Pre‑IFRS 16 EBITDA	(13.3)	(21.4)
IFRS 16 adjustments 1	2.6	2.0
Group items adjusted EBITDA per segmental results table (note 5)	(10.7)	(19.4)

	2026	2025
First Rail adjusted operating profit comprises:	£m	£m
Non‑management fees‑based TOCs	45.4	40.3
Group’s share of management fee income available for dividends (net of tax and non‑controlling interest)	29.3	39.0
Tax on management fee income	11.1	15.4
Non‑controlling interest	4.0	7.2
IFRS 16 adjustments 1	40.1	46.9
First Rail adjusted operating profit per segmental results table (note 5)	129.9	148.8

	2026	2025
Reconciliation of pre‑IFRS 16 adjusted EBIT to post‑IFRS 16 adjusted EBIT	£m	£m
Pre‑IFRS 16 adjusted EBIT	173.8	173.4
IFRS 16 adjustments 1	45.6	49.4
Post‑IFRS 16 adjusted EBIT	219.4	222.8

	2026	2025
Reconciliation of statutory revenue to adjusted revenue 2	£m	£m
Revenue – statutory basis (restated 3 )	4,751.9	5,233.9
Deduct: DfT TOC revenue (restated 3 )	(3,160.1)	(4,048.6)
Add back: DfT TOC management and performance fees	46.8	71.7
Add back: Intercompany eliminations related to DfT TOCs	77.1	113.0
Adjusted revenue	1,715.7	1,370.0

	2026	2025
Reconciliation of reported net debt to adjusted net debt	£m	£m
Reported net debt (note 30)	725.3	985.6
IFRS 16 lease liabilities (note 20)	(850.0)	(1,214.4)
Ring‑fenced cash (note 18)	262.4	315.7
Adjusted net debt	137.7	86.9

IFRS 16 adjustments to EBITDA principally reflect the add back of operating lease rental costs charged to the income statement before the adoption of IFRS 16. IFRS 16 adjustments to operating profit reflect operating lease rental costs less depreciation charges on right of use assets.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk. The Adjusted revenue measure includes management and performance fee income earned by the Group from its DfT TOC contracts.

The Group has identified certain funding mechanisms with the DfT where amounts due to the DfT have previously been treated as deductions from revenue. Upon further review, the Group has judged that these amounts should instead be recognised as an expense in the income

statement. The prior year income statement comparative information has been re‑presented accordingly. The re‑presentation is within the income statement and has no impact on profit measures or the other primary statements.

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5 Business segments and geographical information

For management purposes, the Group is organised into three divisions – First Bus, First Rail and Group items. Greyhound Canada is categorised as a continuing operation, and sits within Group items as its trading operations

have ceased.

The divisions are managed separately in line with the differing services that they provide and the geographical markets in which they operate. There is a clear distinction between each division and no judgement is

required to identify each reportable segment.

The segment results for the 52 weeks ended 28 March 2026 are as follows:


	Continuing operations
					Discontinued
	First Bus	First Rail	Group items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Passenger revenue	810.5	2,638.3	–	3,448.8	–	3,448.8
Contract revenue	583.6	–	(19.3)	564.3	–	564.3
Rail contract subsidy receipts	–	419.2	–	419.2	–	419.2
Other	49.5	270.1	–	319.6	–	319.6
Revenue	1,443.6	3,327.6	(19.3)	4,751.9	–	4,751.9
Rail TOC revenue adjustments	–	(3,055.2)	19.0	(3,036.2)	–	(3,036.2)
Adjusted revenue 2	1,443.6	272.4	(0.3)	1,715.7	–	1,715.7
Adjusted EBITDA 3	200.8	510.7	( 10.7)	700.8	2.1	702.9
Depreciation	(107.8)	(450.4)	(2.2)	(560.4)	–	(560.4)
Software amortisation	(1.8)	(2.5)	(0.4)	(4.7)	–	(4.7)
Capital grant amortisation	11.6	72.1	–	83.7	–	83.7
Segment results	102.8	129.9	(13.3)	219.4	2.1	221.5
Other adjustments (note 4)	–	–	–	–	–	–
Operating profit/(loss) 4	102.8	129.9	(13.3)	219.4	2.1	221.5
Investment income	2.0	0.4	4.7	7.1	–	7.1
Finance costs	(21.9)	(36.4)	(11.5)	(69.8)	–	(69.8)
Profit/(loss) before tax	82.9	93.9	(20.1)	156.7	2.1	158.8
Tax						(37.3)
Profit after tax						121.5


	Continuing operations
					Discontinued
	First Bus	First Rail	Group Items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Capital additions	206.8	52.6	–	259.4	–	259.4

Capital additions comprises intangible asset additions and acquisitions (note 12) and property, plant and equipment acquisitions and additions (note 13).

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Notes to the consolidated financial statements

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5 Business segments and geographical information

continued

			Net assets/
	Total assets	Total liabilities	(liabilities)
Balance sheet 5	£m	£m	£m
Greyhound retained	22.9	(27.2)	(4.3)
First Bus	1,308.5	(351.8)	956.7
First Rail	1,187.8	(737.1)	450.7
	2,519.2	(1,116.1)	1,403.1
Group items	125.8	(51.7)	74.1
Borrowings and cash	432.0	(1,157.3)	(725.3)
Taxation	24.4	(56.8)	(32.4)
Total	3,101.4	(2,381.9)	719.5

Group items comprise central management and other items.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk.

EBITDA is adjusted operating profit less capital grant amortisation plus depreciation plus software amortisation.

Although the segment results are used by management to measure performance, statutory operating profit by operating division is also disclosed for completeness.

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intercompany balances, net debt and taxation.

The segment results for the 52 weeks ended 29 March 2025 were as follows:

	Continuing operations
		First Rail			Discontinued
	First Bus	(restated 6 )	Group items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Passenger revenue	785.6	3,310.7	–	4,096.3	–	4,096.3
Contract revenue	249.2	–	(28.3)	220.9	–	220.9
Rail contract subsidy receipts	–	580.4	–	580.4	–	580.4
Other	46.7	289.6	–	336.3	–	336.3
Revenue	1,081.5	4,180.7	(28.3)	5,233.9	–	5,233.9
Rail TOC revenue adjustments	–	(3,891.9)	28.0	(3,863.9)	–	(3,863.9)
Adjusted revenue 2	1,081.5	288.8	(0.3)	1,370.0	–	1,370.0
Adjusted EBITDA 3	160.1	639.7	(19.4)	780.4	(0.6)	779.8
Depreciation	(77.0)	(541.1)	(2.1)	(620.2)	–	(620.2)
Software amortisation	(0.9)	(1.3)	(0.5)	(2.7)	–	(2.7)
Capital grant amortisation	13.8	51.5	–	65.3	–	65.3
Segment results	96.0	148.8	(22.0)	222.8	(0.6)	222.2
Other adjustments (note 4)	–	–	(0.2)	(0.2)	5.5	5.3
Operating profit/(loss) 4	96.0	148.8	(22.2)	222.6	4.9	227.5
Investment income	0.5	0.2	7.0	7.7	0.1	7.8
Finance costs	(9.5)	(47.8)	(8.1)	(65.4)	(0.3)	(65.7)
Profit/(loss) before tax	87.0	101.2	(23.3)	164.9	4.7	169.6
Tax						(31.3)
Profit after tax						138.3

	Continuing operations
					Discontinued
	First Bus	First Rail	Group items 1	Total	operations	Total
	£m	£m	£m	£m	£m	£m
Capital additions (restated) 6	240.1	47.0	–	287.1	–	287.1

Capital additions comprises intangible asset additions and acquisitions (note 12) and property, plant and equipment acquisitions and additions (note 13).

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5 Business segments and geographical information

continued

	Total	Total	Net assets/
	assets	liabilities	(liabilities)
	(restated 6 )	(restated 6 )	(restated 6 )
Balance sheet 5	£m	£m	£m
Greyhound retained	34.3	(44.8)	(10.5)
First Bus	1,198.8	(374.0)	824.8
First Rail	1,745.4	(947.0)	798.4
	2,978.5	(1,365.8)	1,612.7
Group items	145.2	(54.1)	91.1
Borrowings and cash	487.1	(1,472.7)	(985.6)
Taxation	53.9	(59.6)	(5.7)
Total	3,664.7	(2,952.2)	712.5

Group items comprise central management and other items.

Adjusted revenue is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk.

EBITDA is adjusted operating profit less capital grant amortisation plus depreciation plus software amortisation.

Although the segment results are used by management to measure performance, statutory operating profit by operating division is also disclosed for completeness.

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intercompany balances, net debt and taxation.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Geographical information

The Group’s operations are located predominantly in the United Kingdom, with the prior year also including residual United States of America and Canada segment assets. The following table provides an analysis of the

Group’s revenue by geographical market:


		2025
	2026	(restated 1 )
Revenue	£m	£m
United Kingdom/Republic of Ireland	4,751.9	5,233.9
Total continuing operations	4,751.9	5,233.9
United States of America – discontinued operations	–	–
Total discontinued operations	–	–
Total revenue	4,751.9	5,233.9

The following is an analysis of non‑current assets excluding financial instruments, deferred tax and pensions, the carrying amount of segment assets, and additions to property, plant and equipment and intangible assets,

analysed by the geographical area in which the assets are located:


	Non‑current assets excluding financial		Additions to property, plant and		Carrying amount of
	instruments deferred tax and pensions		equipment and intangible assets		segment total assets
		2025		2025		2025
	2026	(restated 1 )	2026	(restated 1 )	2026	(restated 1 )
	£m	£m	£m	£m	£m	£m
United Kingdom/Republic of Ireland	1,909.5	2,196.7	259.4	287.1	3,054.1	3,576.5
Canada – continuing operations	–	–	–	–	0.5	0.5
Unallocated corporate items	–	–	–	–	24.4	53.9
Total – continuing operations	1,909.5	2,196.7	259.4	287.1	3,079.0	3,630.9
USA – discontinued operations	2.3	2.6	–	–	22.4	33.8
Total – discontinued operations	2.3	2.6	–	–	22.4	33.8
	1,911.8	2,199.3	259.4	287.1	3,101.4	3,664.7

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

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6 Operating profit

Operating profit has been arrived at after charging/(crediting):


		2025
	2026	(restated 1 )
	£m	£m
Depreciation – owned assets	152.0	113.8
Depreciation – right of use assets	408.4	506.4
Operating commitments	360.8	505.8
Other intangible asset amortisation charges	4.7	2.7
Capital grant amortisation	(83.7)	(65.3)
Cost of inventories recognised as an expense	219.6	236.0
Employee costs (note 7)	1,704.1	1,710.7
Gain on disposal of property, plant and equipment	(9.4)	(0.2)
Impairment reversal	(0.9)	–
Auditor’s remuneration (see below)	3.9	3.6
Rail contract payments	208.5	168.2
Bus service operator grants and fuel duty rebates	46.0	40.9
Foreign exchange	0.1	0.3
Other operating costs	1,518.4	1,788.4
Operating costs – continuing operations	4,532.5	5,011.3
Operating income – discontinued operations	(2.1)	(4.9)
Operating costs – continuing and discontinued operations	4,530.4	5,006.4

statement. The prior year income statement comparative information for ‘Rail contract payments’ in the table above has been re‑presented accordingly. The re‑presentation is within the income statement and has no impact on profit measures or the other primary statements.

See note 1 Restatements section for more information.

Amounts payable to PricewaterhouseCoopers LLP and its associates by the Company and its subsidiary undertakings for continuing and discontinued operations in respect of audit and non‑audit services are shown below:


	2026	2025
	£m	£m
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts	0.3	0.2
Fees payable to the Company’s auditor and its associates for the audit of the Company’s subsidiaries pursuant to legislation	3.3	3.2
Total audit fees	3.6	3.4
Audit‑related assurance services	0.2	0.1
Other non‑audit services	0.1	0.1
Total non‑audit fees	0.3	0.2

Fees payable to PricewaterhouseCoopers LLP and its associates for non‑audit services to the Company are not required to be disclosed because the consolidated financial statements are required to disclose such fees on

a consolidated basis.

Details of the Group’s policy on the use of auditors for non‑audit services, the reasons why the auditor was used rather than another supplier and how the auditor’s independence and objectivity were safeguarded are set

out in the Corporate Governance report on page 90. No services were provided pursuant to contingent fee arrangements.

Non‑audit services principally reflect the review of the half yearly financial information and other regulatory reporting.

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7 Employee costs

The average monthly number of employees including discontinued operations (including Executive Directors) was:


	2026	2025
	Number	Number
Operational	27,768	27,698
Administration	3,227	3,065
	30,995	30,763

The aggregate remuneration including discontinued operations (including Executive Directors) comprised:


	2026	2025
	£m	£m
Wages and salaries	1,478.2	1,486.4
Social security costs	157.4	149.1
Pension costs (note 34)	68.5	75.2
	1,704.1	1,710.7

Wages and salaries include a charge in respect of share‑based payments of £10.4m (2025: £10.5m).

Disclosures on Directors’ remuneration, share options, long‑term incentive schemes and pension entitlements required by the Companies Act 2006 and those specified for audit by the Financial Conduct Authority (FCA)

are contained in the tables/notes within the Annual report on remuneration on pages 92 to 108. Directors’ emoluments in aggregate were £6.0m (2025: £6.1m).

8 Investment income and finance costs


	2026	2025
	£m	£m
Bank interest receivable	(4.9)	(7.2)
Interest on pensions	(2.2)	(0.6)
Total investment income (including discontinued operations)	(7.1)	(7.8)
Bonds	–	3.1
Bank interest and facility fees	14.5	8.2
Finance charges payable in respect of lease liabilities	48.1	49.6
Finance charges payable in respect of asset backed financial liabilities	6.5	3.7
Interest on long‑term provisions	0.7	1.0
Interest on pensions	–	0.1
Total finance costs (including discontinued operations)	69.8	65.7

Finance costs are stated after charging fee expenses of £1.6m (2025: £1.1m). There was no interest capitalised into qualifying assets in either the current or prior period.

Investment income of £nil (2025: £0.1m) and finance costs of £nil (2025: £0.3m) relate to discontinued operations (note 19).

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9 Tax on profit on ordinary activities


	2026	2025
	£m	£m
Current tax charge	1.4	6.6
Adjustments with respect to prior years	1.2	(2.8)
Total current tax charge (including discontinued operations)	2.6	3.8
Origination and reversal of temporary differences	34.8	36.2
Adjustment in respect of prior years	(0.1)	(1.9)
Write‑back of previously unrecognised deferred tax assets	–	(6.8)
Total deferred tax charge (note 23)	34.7	27.5
Total tax charge (including discontinued operations)	37.3	31.3
Tax charge attributable to:
Profit from continuing operations	37.3	31.3
Profit from discontinued operations	–	–

UK corporation tax is calculated at 25% (2025: 25%) of the estimated assessable profit for the year. Tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Deferred tax has been provided

at 25% on temporary differences at the balance sheet date.

As the Group’s parent company is domiciled and listed in the UK, the Group uses the UK corporation tax rate to reconcile its effective tax rate. The tax charge for the year can be reconciled to the UK corporation tax rate as follows:


	2026	2026	2025	2025
	£m	%	£m	%
Profit from continuing operations before income tax expense	156.7	N/A	164.9	N/A
Profit from discontinued operations before income tax expense	2.1	N/A	4.7	N/A
Profit from total operations	158.8	100.0	169.6	100.0
Tax at the UK corporation tax rate of 25% (2025: 25%)	39.7	25.0	42.4	25.0
Non‑deductible expenditure	0.6	0.4	–	–
Non‑taxable income	(3.4)	(2.1)	–	–
Tax rates outside of the UK	(0.1)	(0.1)	0.1	0.1
Unrecognised losses	(0.6)	(0.4)	0.3	0.2
Non‑recurring historical tax refund	–	–	(3.0)	(1.8)
Other adjustments in relation to prior years	1.1	0.7	(1.7)	(1.0)
Write‑back of previously unrecognised deferred tax assets	–	–	(6.8)	(4.0)
Tax charge and effective tax rate for the year	37.3	23.5	31.3	18.5

Future years’ tax charges would be impacted if the final liability for currently open years is different from the amount currently provided for. The future tax charge may also be affected by the levels and mix of profits in the countries

in which we operate including differing foreign exchange rates that apply to those profits. Changes to the prevailing tax rates and tax rules in any of the countries in which we operate may also impact future tax charges.

In addition to the amount charged/(credited) to the income statement, deferred tax relating to actuarial gains/(losses) on defined benefit pension schemes of £(6.6)m (2025: £7.5m) and cash flow hedges of £5.8m

(2025: £(1.0)m) have been (credited)/charged to comprehensive income together with a further £0.2m (2025: £0.8m) on cash flow hedges and £nil (2025: £0.1m) on share‑based payments taken directly to equity.

These amount to a total (credit)/charge of £(0.6)m (2025: £7.2m) recognised in other comprehensive income and equity.

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10 Earnings per share (EPS)

EPS is calculated by dividing the profit/loss attributable to equity shareholders of £118.3m (2025: profit of £127.5m) by the weighted average number of ordinary shares of 553.4m (2025: 597.7m). The number of ordinary

shares used for the basic and diluted calculations is shown in the table below.

The difference in the number of shares between the basic calculation and the diluted calculation represents the weighted average number of potentially dilutive ordinary share options.


	2026	2025
	Number	Number
	m	m
Weighted average number of shares used in basic calculation	553.4	597.7
Executive share options	21.6	25.0
Weighted average number of shares used in the diluted calculation	575.0	622.7

The adjusted EPS is intended to highlight the recurring operating results of the Group before certain other adjustments as set out in note 4, and before IFRS 16 charges relating to the Group’s management fee‑based Rail

operations. A reconciliation is set out below:


	2026		2025
		EPS		EPS
	£m	(pence)	£m	(pence)
Basic profit/EPS	118.3	21.4	127.5	21.3
Management fee‑based Rail operations – IFRS 16 adjustments	(2.8)	(0.6)	0.5	0.1
Other adjustments (note 4)	–	–	(5.3)	(0.9)
Non‑controlling interest	(0.8)	(0.1)	2.1	0.4
Non‑recurring historical tax refund	–	–	(3.0)	(0.5)
Write‑back of previously unrecognised deferred tax assets	–	–	(6.8)	(1.1)
Adjusted profit/EPS attributable to the ordinary equity holders of the Company	114.7	20.7	115.0	19.3
Adjusted profit/(loss)/EPS from discontinued operations	2.1	0.4	(0.8)	(0.1)
Adjusted profit/EPS from continuing operations	112.6	20.3	115.8	19.4


	2026	2025
	pence	pence
Diluted EPS	20.6	20.5
Adjusted diluted EPS	19.9	18.5

The adjusted EPS on a continuing basis is set out below:


	2026		2025
		EPS		EPS
	£m	(pence)	£m	(pence)
Basic profit/EPS	116.2	21.0	122.8	20.5
Management fee‑based Rail operations – IFRS 16 adjustments	(2.8)	(0.6)	0.5	0.1
Other adjustments (note 4)	–	–	0.2	–
Non‑controlling interest	(0.8)	(0.1)	2.1	0.4
Non‑recurring historical tax refund	–	–	(3.0)	(0.5)
Write‑back of previously unrecognised deferred tax assets	–	–	(6.8)	(1.1)
Adjusted profit/EPS from continuing operations	112.6	20.3	115.8	19.4


	2026	2025
	pence	pence
Diluted EPS	20.2	19.7
Adjusted diluted EPS	19.6	18.6

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11 Goodwill


	£m
Cost
At 29 March 2025 (restated 1 )	144.7
Additions (note 28)	12.3
At 28 March 2026	157.0
Accumulated impairment losses
At 29 March 2025	–
At 28 March 2026	–
Carrying amount
At 28 March 2026	157.0
At 29 March 2025 (restated 1 )	144.7

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting

adjustments.

Impairment testing

At the year end, the carrying value of goodwill was reviewed for impairment in accordance with IAS 36

Impairment of Assets.

In carrying out this review, climate‑related impacts were considered, in line with the TCFD disclosures.

This work assessed FirstGroup’s potential exposure to climate‑related transition and physical risks, across

different climate scenarios, over the short, medium and long term, and estimated cumulative Enterprise

Value at Risk over the period FY 2026 to FY 2030.

Transition risks included potential impacts from increased carbon prices and route constraints due to

new zero emission zones, as well as technology costs from an accelerated shift to a zero emission fleet

and the impairment of carbon‑intensive vehicles. Physical risks concentrated mainly on flooding as the

most material impact. Key findings are outlined on pages 50 to 54 of this report and focus on direct risks

to FirstGroup.

For impairment calculations, the 2.5°C (Stated Policy) scenario modelled by Marsh was used, which identified

technology risks as ‘medium impact’ and flooding risks as ‘low impact’ over the next four years.

The Group’s stated CGUs and goodwill balances are First Bus (excluding London) (£135.7m); First Bus London

(£7.2m); First Rail DfT TOCs (£nil); and First Rail (excluding DfT TOCs) (£14.1m).

Full detailed impairment testing has been performed on a value in use basis on the First Bus (excluding

London) CGU. Following the finalisation of the First Bus London acquisition accounting adjustments,

impairment testing was also performed for the goodwill arising from that transaction, with no impairment

noted. The value of the DfT TOC asset base is protected by the passthrough and termination arrangements

of the respective NRCs, such that no impairment is expected to arise on these assets. Impairment testing was

undertaken for the First Rail (excluding DfT TOCs) CGU, with no impairment noted.

The Group prepares cash flow forecasts derived from the Board‑approved plan for 2026/27 to 2028/29 which

takes account of both past performance and expectations for future developments. Cash flows beyond the

plan period are extrapolated using estimated long‑term growth rates which do not exceed the long‑term

average growth rate for the market. Cash flows are discounted using a pre‑tax discount rate derived from

a market participant’s weighted average cost of capital, benchmarked to externally available data.

Impairment testing – First Bus (excluding London)

First Bus (excluding London) value in use has been assessed based on the projected cash flows for FY 2027

to FY 2029 from the Board‑approved forecasts. These have been extrapolated to perpetuity cash flows and

discounted to a net present value based on the following assumptions.

First Bus (excluding London) has £278m of positive headroom at 28 March 2026 (29 March 2025: £277m)

based on a 1.9% long‑term growth rate assumption (2025: 1.9%), 11.7% discount rate (2025: 11.2%) and 9.8%

terminal margin (2025: 9.8%), which reflects the impact of expected future passenger volumes and yields,

as well as planned resizing of the network.

Break‑even would arise at:



14.5% discount rate (with a 9.8% terminal margin);



6.2% terminal operating margin (applying the cap to just the final year/terminal value) using a 11.7%

discount rate; or



7.5% terminal operating margin throughout the forecast period and terminal margin (applying the cap

in all years at 7.5%, not just in the terminal years) using a 11.7% discount rate.

As the break‑even points lie outside management’s range of reasonable expectation, no impairment of

First Bus is proposed.

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12 Other intangible assets


	Customers
	contracts
	(restated 2 )	Software	Total
	£m	£m	£m
Cost
At 31 March 2024	–	41.0	41.0
Acquisitions	2.3	0.3	2.6
Additions	–	5.7	5.7
Disposals	–	(1.2)	(1.2)
Reclassifications 1	–	(2.7)	(2.7)
At 29 March 2025	2.3	43.1	45.4
At 30 March 2025	2.3	43.1	45.4
Additions 3	–	11.2	11.2
Disposals	–	(5.1)	(5.1)
Reclassifications	–	0.3	0.3
At 28 March 2026	2.3	49.5	51.8
Accumulated amortisation and impairment
At 31 March 2024	–	30.6	30.6
Charge for year	–	2.7	2.7
Reclassifications 1	–	(2.7)	(2.7)
At 29 March 2025	–	30.6	30.6
At 30 March 2025	–	30.6	30.6
Charge for year	0.4	4.3	4.7
Disposals	–	(5.1)	(5.1)
Reclassifications 1	–	(0.3)	(0.3)
At 28 March 2026	0.4	29.5	29.9
Carrying amount
At 28 March 2026	1.9	20.0	21.9
At 29 March 2025	2.3	12.5	14.8

As part of the Group’s continuing efforts to streamline reporting processes it was identified that £0.3m (2025: £2.7m) had been incorrectly classified between cost and accumulated amortisation.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Additions in the year include £1.3m of internally generated intangible assets.

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13 Property, plant and equipment

Owned assets


		Passenger
	Land and	carrying vehicle
	buildings	fleet	Other plant and	Total
	(restated 2 )	(restated 2 )	equipment	(restated 2 )
	£m	£m	£m	£m
Cost
At 31 March 2024	235.1	828.3	689.6	1,753.0
Acquisitions (note 28)	48.3	56.0	14.0	118.3
Additions	31.4	60.0	69.1	160.5
Disposals	(1.4)	(44.1)	(10.9)	(56.4)
Reclassifications 1	16.3	–	(13.6)	2.7
Transfers to right of use assets	–	(2.3)	(8.4)	(10.7)
Foreign exchange movements	–	(0.3)	–	(0.3)
At 29 March 2025	329.7	897.6	739.8	1,967.1
At 30 March 2025	329.7	897.6	739.8	1,967.1
Acquisitions (note 28)	7.0	7.3	0.7	15.0
Additions	21.5	118.9	92.8	233.2
Disposals	(29.9)	(63.7)	(301.6)	(395.2)
Reclassifications	(12.3)	–	12.3	–
Transfers to right of use assets	(0.6)	–	(5.6)	(6.2)
Foreign exchange movements	0.1	1.0	–	1.1
At 28 March 2026	315.5	961.1	538.4	1,815.0
Accumulated depreciation and impairment
At 31 March 2024	62.9	426.8	515.2	1,004.9
Charge for year	10.8	53.4	49.6	113.8
Disposals	(0.6)	(41.1)	(7.4)	(49.1)
Reclassifications 1	–	–	2.7	2.7
Foreign exchange movements	–	(0.1)	–	(0.1)
At 29 March 2025	73.1	439.0	560.1	1,072.2
At 30 March 2025	73.1	439.0	560.1	1,072.2
Charge for year	11.6	59.1	81.3	152.0
Disposals	(24.1)	(59.1)	(270.6)	(353.8)
Impairment reversal	–	–	(0.9)	(0.9)
Foreign exchange movements	0.1	0.5	–	0.6
At 28 March 2026	60.7	439.5	369.9	870.1
Carrying amount
At 28 March 2026	254.8	521.6	168.5	944.9
At 29 March 2025	256.6	458.6	179.7	894.9

As part of the Group’s continuing efforts to streamline reporting processes it was identified that £16.3m of assets had been incorrectly classified between Land and buildings, and Other plant and equipment, and that £2.7m had been incorrectly classified between cost and

accumulated depreciation.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

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13 Property, plant and equipment

continued

An amount of £85.0m (2025: £58.0m) in respect of assets under construction is included in the carrying amount of land and buildings and other plant and equipment, mainly relating to development of electric charging

infrastructure in First Bus.

At 28 March 2026 the Group had entered into contractual capital commitments amounting to £365.2m (2025: £341.5m), principally representing purchase of passenger carrying vehicles, electrical infrastructure and DfT

TOC and open access operation commitments.

Right of use assets


			Passenger
		Land and	carrying vehicle
		buildings	fleet	Other plant and	Total
	Rolling stock	(restated 1 )	(restated 1 )	equipment	(restated 1 )
	£m	£m	£m	£m	£m
Cost
At 31 March 2024	3,743.4	65.1	60.4	25.6	3,894.5
Additions	6.5	6.2	8.0	1.2	21.9
Acquisitions	–	18.9	64.7	–	83.6
Disposals	(75.5)	(3.3)	(10.0)	(1.5)	(90.3)
Reassessment	124.6	1.0	–	–	125.6
Transfers from owned assets	–	–	2.3	8.4	10.7
At 29 March 2025	3,799.0	87.9	125.4	33.7	4,046.0
At 30 March 2025	3,799.0	87.9	125.4	33.7	4,046.0
Additions	9.0	8.8	23.2	2.0	43.0
Acquisitions	–	0.7	–	–	0.7
Disposals	(782.4)	(8.4)	(1.5)	(1.4)	(793.7)
Transfers from owned assets	–	0.6	–	5.6	6.2
At 28 March 2026	3,025.6	89.6	147.1	39.9	3,302.2
Accumulated depreciation and impairment
At 31 March 2024	2,395.6	33.2	50.2	8.2	2,487.2
Charge for period	485.4	8.8	8.3	3.9	506.4
Disposals	(75.2)	(3.3)	(9.9)	(1.5)	(89.9)
At 29 March 2025	2,805.8	38.7	48.6	10.6	2,903.7
At 30 March 2025	2,805.8	38.7	48.6	10.6	2,903.7
Charge for period	370.0	11.5	23.3	3.6	408.4
Disposals	(782.4)	(7.4)	(1.2)	(1.1)	(792.1)
At 28 March 2026	2,393.4	42.8	70.7	13.1	2,520.0
Carrying amount
At 28 March 2026	632.2	46.8	76.4	26.8	782.2
At 29 March 2025	993.2	49.2	76.8	23.1	1,142.3

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The discounted lease liability relating to the right of use assets included above is shown in note 21.

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13 Property, plant and equipment

continued

			Passenger
		Land and	carrying vehicle
		buildings	fleet	Other plant and	Total
	Rolling stock	(restated 1 )	(restated 1 )	equipment	(restated 1 )
Owned assets and right of use assets	£m	£m	£m	£m	£m
Carrying amount
At 28 March 2026	632.2	301.6	598.0	195.3	1,727.1
At 29 March 2025	993.2	305.8	535.4	202.8	2,037.2

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The maturity analysis of lease liabilities is presented in note 21.

	2026	2025
Amounts recognised in income statement (including discontinued operations)	£m	£m
Depreciation expense on right of use assets	408.4	506.4
Interest expense on lease liabilities	48.1	49.6
Expense relating to leases of short‑term leases	0.3	–
Expense relating to leases of low‑value assets	0.4	–
	457.2	556.0

14 Investments


	2026	2025
	£m	£m
Other investments	2.3	2.6
Investments in associates	2.0	–

In August 2025, the Group announced a minority investment in Palmer Energy Technology to bring the latest, innovative battery storage units to its First Bus sites.

15 Inventories


	2026	2025
	£m	£m
Spare parts and consumables from continuing operations	29.3	30.8

In the opinion of the Directors there is no material difference between the balance sheet value of inventories and their replacement cost. There was no material write‑down of inventories during the current or prior year.

16 Trade and other receivables

	2026	2025
Amounts due within one year (from continuing operations)	£m	£m
Trade receivables	255.2	364.1
Loss allowance	(0.4)	(10.6)
Trade receivables net	254.8	353.5
Other receivables	94.7	171.0
Amounts recoverable on contracts	33.7	57.5
Prepayments	54.8	37.2
Accrued income	148.4	142.4
	586.4	761.6

	2026	2025
Amounts due over one year (from continuing operations)	£m	£m
Other receivables	1.5	–

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16 Trade and other receivables

continued

	2026	2025
Movement in accrued income:	£m	£m
Balance as at 30 March 2025/31 March 2024	142.4	229.0
Additions	241.8	382.1
Accrued income invoiced during the year	(235.8)	(468.7)
Balance as at 28 March 2026/29 March 2025	148.4	142.4

The loss allowance is assessed against all receivables within the scope of IFRS 9, with the majority relating to credit loss allowances arising from contracts with customers.

Other receivables includes £35.7m (2025: £60.4m) of VAT receivables, £19.8m (2025: £13.8m) of receivables from government bodies for fuel duty rebates, and £16.0m (2025: £31.0m) of insurance recoveries.

Amounts recoverable on contracts relates to amounts due from governmental and similar bodies for agreed contractual changes.

Accrued income principally comprises amounts relating to contracts with customers billed each month. Any amount previously recognised as accrued income is reclassified to trade receivables at the point at which it is

invoiced to the customer.

Credit risk

Credit risk is the risk that financial loss arises from failure by a customer or counterparty to meet its obligations under a contract.

Credit risk exists in relation to the Group’s financial assets, which comprise trade receivables, amounts recoverable on contracts and accrued income of £432.0m (2025: £564.0m), cash and cash equivalents of £432.0m

(2025: £487.1m) and derivative financial instruments of £23.5m (2025: £0.5m).

The Group’s maximum exposure to credit risk for all financial assets at the balance sheet date was £892.8m (2025: £1,051.6m). The exposure is spread over a large number of unconnected counterparties and the maximum

single concentration with any one counterparty was £192.0m (2025: £228.0m) at the balance sheet date.

The Group’s credit risk is primarily attributable to its trade receivables, amounts recoverable on contracts and accrued income. The amounts presented in the balance sheet are net of credit loss allowances, estimated by

the Group’s management based on prior experience and their assessment of the current economic environment. The credit loss allowance at the balance sheet date was £0.4m (2025: £10.6m).

Most trade receivables, amounts recoverable on contracts and accrued income are with public or quasi‑public bodies, principally the DfT, Network Rail and local authorities in the UK. The Group does not consider any of

these counterparties to be a significant risk. Each division within the Group has a policy governing credit risk management on receivables.

The counterparties for bank balances and derivative financial instruments are mainly represented by lending banks and large banks with a minimum of ‘A’ credit ratings assigned by international credit rating agencies.

These counterparties are subject to approval by the Board. Group Treasury policy limits the maximum deposit with any one counterparty to £150.0m and limits the maximum term to three months.

Impairment of trade receivables amounts recoverable on contracts and accrued income

The Group applies the IFRS 9 simplified approach to measuring expected credit losses for all trade receivables, amounts recoverable on contracts and accrued income at each reporting date.

Provision matrices are used to measure expected losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns, such as geographical region, service type,

and customer type and rating. The calculation reflects the probability‑weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current conditions and

forecasts of future economic conditions.

Trade receivables, amounts recoverable on contracts and accrued income are written off when there is no reasonable expectation of recovery.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

The majority of the Group’s customers are governmental or similar bodies and hence there are not considered to be any issues with the recoverability of these receivables. Further there have not been any significant issues

with the recoverability of non‑governmental receivables.

The gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income for which the loss allowance is measured at an amount equal to the lifetime expected credit losses under the

simplified method, is analysed below:


			Days past due:
			2026
	Carrying amount	Current	Less than 30 days	30‑90 days	90‑180 days	Over 180 days
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	0.1%	–	0.3%	–	–	0.3%
Gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income	437.3	293.3	76.8	22.3	13.7	31.2
Loss allowance (from continuing operations)	0.4	0.1	0.2	–	–	0.1

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16 Trade and other receivables

continued


			Days past due:
			2025
	Carrying amount	Current	Less than 30 days	30‑90days	90‑180days	Over 180 days
	£m	£m	£m	£m	£m	£m
Expected credit loss rate	1.9%	–	0.1%	–	–	19.8%
Gross carrying amount of trade receivables, amounts recoverable on contracts and accrued income	564.0	354.3	98.3	44.1	14.2	53.1
Loss allowance (from continuing operations)	10.6	–	0.1	–	–	10.5

The table above is an aggregation of different provision matrices for each of the customer segment groupings, as outlined above. The expected loss rate for each ageing category is the weighted average loss rate across

these groupings. The ‘current’ category consists primarily of receivables from groupings for which, based on historical losses and both the current and forecast economic conditions, the expected credit losses are negligible,

resulting in the application of a close to 0% loss rate.

	2026	2025
Movement in the loss allowance for trade receivables	£m	£m
At 30 March 2025/31 March 2024	10.6	41.7
Amounts written‑off during the year	(0.3)	–
Increase in allowance recognised in the income statement	0.2	2.5
Amounts recovered during the year	–	(1.6)
Reversal of provision	(10.1)	(32.0)
At 28 March 2026/29 March 2025	0.4	10.6

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.

17 Trade and other payables

		2025
	2026	(restated 1 )
Amounts falling due within one year (from continuing operations)	£m	£m
Trade payables	286.6	352.2
Other payables	138.7	157.4
Accruals	320.5	398.1
Deferred income	132.4	140.2
Season ticket deferred income – Rail	10.7	24.8
	888.9	1,072.7

		2025
	2026	(restated 1 )
Amounts falling due after one year (from continuing operations)	£m	£m
Other payables	120.5	135.5
	120.5	135.5

	2026	2025
Movement in deferred income	£m	£m
Balance as at 30 March 2025/31 March 2024	140.2	129.0
Additions	173.3	208.2
Recognised during the period	(157.0)	(198.4)
Business acquisitions	–	1.4
Expiry of SWR NRC	(24.1)	–
Balance as at 28 March 2026/29 March 2025	132.4	140.2

The Group has restated the analysis between Current and Non‑current Other payables for the prior year, to reflect the expected maturity of deferred capital grants previously classified as Current liabilities. This reduces Current Other payables by £135.5m and increases Non‑current

Other payables by the same amount.

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17 Trade and other payables

continued

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. Deferred income and season ticket deferred income principally comprises amounts relating to contracts

with customers.

Other payables includes £15.9m (2025: £32.0m) for the purchase of property, plant and equipment where increased payment terms have been agreed with the supplier due to the nature of the payable. Other payables also

include deferred capital grants from government or other public bodies of £201.8m (2025 restated: £245.3m).

The average credit period taken for trade purchases is 41 days (2025: 39 days). The Group has controls in place to ensure that all payments are paid within the appropriate credit timeframe. The Directors consider that the

carrying amount of trade and other payables approximates to their fair value.

18 Cash and cash equivalents


	2026	2025
	£m	£m
Cash and cash equivalents	432.0	487.1

The fair value of cash and cash equivalents approximates to the carrying value. Cash and cash equivalents includes ring‑fenced cash of £262.4m (2025: £315.7m). Ring‑fenced cash is cash held in the Group which has

restrictions around its use or distribution. The most significant ring‑fenced cash balances are held by the Group’s First Rail subsidiaries. All non‑distributable cash in franchised Rail subsidiaries is considered ring‑fenced

under the terms of the NRC.

19 Discontinued operations

	2026	2025
Discontinued operations	£m	£m
Revenue	–	–
Operating income	2.1	4.9
Operating profit	2.1	4.9
Investment income	–	0.1
Finance costs	–	(0.3)
Profit before tax	2.1	4.7
Tax	–	–
Profit for the year after tax	2.1	4.7
Attributable to:
Equity holders of the parent	2.1	4.7
Non‑controlling interests	–	–
	2.1	4. 7

	2026	2025
EPS	pence	pence
Basic EPS	0.4	0.8
Diluted EPS	0.4	0.8

	2026	2025
Cash flow	£m	£m
Net cash outflow from operating activities	(5.7)	(8.0)
Net cash inflow from investing activities	–	0.7
Net decrease in cash generated	(5.7)	(7.3)

	2026	2025
Other comprehensive income	£m	£m
Actuarial gain on defined benefit pension schemes	–	1.9
Exchange differences on translation of discontinued operations	3.2	3.1
Total	3.2	5.0

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20 Borrowings

		2025
	2026	(restated 3 )
	£m	£m
On demand or within one year
Lease liabilities (note 21) 1,2	400.2	408.8
Asset backed financial liabilities (note 21) 2	21.4	16.2
Bank overdraft	25.5 56.4
Total current liabilities	447.1	481.4
Within one to two years
Lease liabilities (note 21) 1,2	262.3	392.6
Asset backed financial liabilities (note 21) 2	19.9	12.9
NextGen battery debt	1.6	–
Syndicated loan facilities	99.6	64.3
	383.4	469.8
Within two to five years
Lease liabilities (note 21) 1,2	135.5	362.5
NextGen battery debt	20.8	15.0
Asset backed financial liabilities (note 21) 2	67.4	39.8
Syndicated loan facilities	2.5	2.4
	226.2	419.7
Over five years
Lease liabilities (note 21) 1,2	52.0	50.5
NextGen battery debt	5.0	4.9
Asset backed financial liabilities (note 21) 2	43.6	46.4
	100.6	101.8
Total non‑current liabilities at amortised cost	710.2	991.3

The right of use assets relating to lease liabilities are shown in note 13.

The maturity analysis of lease liabilities and asset backed financial liabilities is presented in note 21.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Effective interest rates

The effective interest rates at the balance sheet dates were as follows:


	2026	Maturity	2025	Maturity
Bank overdraft	SONIA +1%	–	SONIA + 1%	–
Revolving credit facility	SONIA +0.95%	January 2031	SONIA + 0.75%	January 2030
Term loan facility	SONIA +1.55%	March 2028	SONIA +1.35%	March 2027
	Average fixed		Average fixed
Asset backed financial liabilities	rate of 4.8%	Various	rate of 4.6%	Various

All borrowings are denominated in pounds sterling, except for £7.2m (2025: £0.2m), which are denominated in euro.

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20 Borrowings

continued

Borrowing facilities

The Group had £295.0m (2025: £295.0m) of undrawn committed borrowing available under its revolving credit facility as at March 2026. In addition there was £43.0m (2025: £92.4m) committed headroom available

under the Husk Finance facility and £26.1m (2025: £40.9m) under the NextGen Battery facility, and £nil (2025: £85.0m) under the term loan facility. Total undrawn bank borrowing facilities at year end stood at £374.1m

(2025: £523.3m) of which £364.1m (2025: £513.3m) was committed and £10.0m (2025: £10.0m) was uncommitted.

Capital management

The Group aims to maintain an investment grade credit rating and appropriate balance sheet liquidity headroom. The Group has a net debt to EBITDA ratio of 1.0 times as at March 2026 for the continuing Group

(2025 (restated

): 1.3 times).

Liquidity within the Group has remained strong. At year end there was £508.2m (2025: £628.3m) of committed headroom and free cash. The Group’s Treasury policy requires a minimum of £250m of committed headroom

at the year end and half year for the budget year, and £200m for year two of the three‑year plan. The Group’s net debt at 28 March 2026, was £725.3m (2025 (restated

): £985.6m) as set out in the Financial review on page 28.

The Group’s primary objectives of capital management is to ensure that the Group is able to continue as a going concern, to maintain an optimal capital structure and adequate liquidity headroom to deliver on

shareholder and stakeholder expectations. The Group’s capital structure consists of equity and net debt. The Group actively manages its capital structure and will adjust it when appropriate should economic conditions

change. The Group’s debt is monitored on the basis of a gearing ratio, being net debt divided by EBITDA, further details of which are provided in the Chief Financial Officer’s review.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

21 Lease liabilities and asset backed financial liabilities

The Group had the following lease liabilities and asset backed financial liabilities at the balance sheet dates, excluding liabilities relating to the discontinued operations:

			Asset backed	Asset backed
		Lease liabilities	financial	financial
	Lease liabilities	2025	liabilities	liabilities
	2026	(restated 1 )	2026	2025
Maturity analysis	£m	£m	£m	£m
Due in less than one year	432.3	451.1	22.4	16.9
Due in more than one year but not more than two years	279.2	418.8	21.9	14.2
Due in more than two years but not more than five years	155.3	382.7	81.2	47.8
Due in more than five years	71.2	68.4	61.5	68.7
	938.0	1,321.0	187.0	147.6
Less future financing charges	(88.0)	(106.6)	(34.7)	(32.2)
	850.0	1,214.4	152.3	115.4

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The total cash outflow for the lease liabilities and asset backed financial liabilities recorded on the balance sheet amounted to £459.5m and £27.2m respectively (2025: £553.3m and £13.8m).

The right of use assets related to the lease liabilities is presented in note 13.

22 Derivative financial instruments and financial assets

Non‑derivative financial assets


	2026	2025
	£m	£m
Total non‑derivative financial assets
Total non‑current assets	71.6	104.2
Total current assets	0.4	–
Total non‑derivative financial assets	72.0	104.2

Certain pension partnership structures were implemented during 2023. These structures involved the creation of special purpose vehicles (SPVs) to hold cash to fund the Bus and Group pension schemes, if required, based

on a designated funding mechanism. Management have concluded that these amounts represent financial assets under IAS 32. During the year £40.6m was redeemed from these entities, of which £20.6m was returned to

the Bus section of the FirstGroup Pension Scheme as part settlement of the Group’s funding obligations and £20m was returned to the Group.

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22 Derivative financial instruments and financial assets

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Derivative financial instruments


	2026	2025
	£m	£m
Total derivatives
Total non‑current assets	3.9	0.3
Total current assets	19.6	0.2
Total assets from continuing operations	23.5	0.5
Total current liabilities	0.6	3.0
Total non‑current liabilities	–	1.0
Total liabilities from continuing operations	0.6	4.0
Derivatives designated and effective as hedging instruments carried at fair value
Non‑current assets
Fuel derivatives (cash flow hedge)	3.8	0.3
Currency forwards (cash flow hedge)	0.1	–
	3.9	0.3
Current assets
Fuel derivatives (cash flow hedge)	19.3	0.2
Currency forwards (cash flow hedge)	0.3	–
	19.6	0.2
Current liabilities
Fuel derivatives (cash flow hedge)	–	2.1
Currency forwards (cash flow hedge)	0.6	0.9
	0.6	3.0
Non‑current liabilities
Fuel derivatives (cash flow hedge)	–	0.4
Currency forwards (cash flow hedge)	–	0.3
Interest rate swaps (NextGen)	–	0.3
	–	1.0

The Group enters into derivative transactions under International Swaps and Derivatives Association Master Agreements that allow for the related amounts to be set‑off in certain circumstances. The amounts set out

as Fuel derivatives and Currency forwards in the table above represent the derivative financial assets and liabilities of the Group that may be subject to the above arrangements and are presented on a gross basis.

Derivative liabilities of £nil (2025: £nil) were subject to netting arrangements. Total cash flow hedges are an asset of £22.9m (2025: £3.5m liability).

The following losses were transferred from equity into inventory as basis adjustments during the year:

	2026	2025
	£m	£m
Operating losses	0.9	3.3

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22 Derivative financial instruments and financial assets

continued

The estimated fair values of the Group’s financial assets and financial liabilities (including trade and other receivables and trade and other payables) are a reasonable approximation to the carrying value of these items.

The estimated fair value of cash and cash equivalents, financial assets and bank overdrafts are a reasonable approximation to the carrying value of these items.

	Fair values at	Fair values at
	28 March	29 March
	2026	2025	Fair value
Financial assets/(liabilities)	£m	£m	hierarchy	Valuation technique(s) and key inputs
Derivative contracts
1) Fuel derivatives	23.1	(2.0)	Level 2	Discounted cash flow; future cash flows are estimated based on forward fuel prices and contract
				rates and then discounted at a rate that reflects the credit risk of the various counterparties.
2) Currency forwards	(0.2)	(1.2)	Level 2	Discounted cash flow; future cash flows are estimated based on forward foreign exchange rates and
				contract rates and then discounted at a rate that reflects the credit risk of the various counterparties.
3) Interest rate swaps	–	(0.3)	Level 2	Future cash flows are estimated based on interest rates and then discounted at a rate that reflects the
				credit risk of the various counterparties.

The following table illustrates the carrying value of all financial assets and liabilities held by the Group on a continuing basis:

	2026
	Assets and	At fair value
	liabilities at	through profit and	At fair value	Derivatives used
	amortised costs	loss	through OCI	for hedging	Total
Classification of financial instruments	£m	£m	£m	£m	£m
Financial assets and derivatives
Cash and cash equivalents	432.0	–	–	–	432.0
Trade receivables, amounts recoverable under contracts
and accrued income	437.3	–	–	–	437.3
Non‑derivative financial instruments	72.0	–	–	–	72.0
Derivative financial instruments	–	–	–	23.5	23.5
	941.3	–	–	23.5	964.8
Financial liabilities and derivatives
Interest bearing loans and borrowings 1	1,157.3	–	–	–	1,157.3
Trade and other payables	807.5	–	–	–	807.5
Derivative financial instruments	–	–	–	0.6	0.6
	1,964.8	–	–	0.6	1,965.4

Includes lease liabilities and asset backed financial liabilities as set out in note 21.

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	2025 (restated 2 )
	Assets and	At fair value
	liabilities at	through profit and	At fair value	Derivatives used
	amortised costs	loss	through OCI	for hedging	Total
Classification of financial instruments	£m	£m	£m	£m	£m
Financial assets and derivatives
Cash and cash equivalents	487.1	–	–	–	487.1
Trade receivables, amounts recoverable under contracts
and accrued income	564.0	–	–	–	564.0
Non‑derivative financial instruments	104.2	–	–	–	104.2
Derivative financial instruments	–	–	–	0.5	0.5
	1,155.3	–	–	0.5	1,155.8
Financial liabilities and derivatives
Interest bearing loans and borrowings 1	1,472.7	–	–	–	1,472.7
Trade and other payables (restated 3 )	962.9	–	–	–	962.9
Derivative financial instruments	–	–	–	4.0	4.0
	2,435.6	–	–	4.0	2,439.6

Includes lease liabilities and asset backed financial liabilities as set out in note 21.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Deferred capital grants of £81.9m had not been excluded from trade and other payables in the prior year.

	Commodity price	Electricity price	Foreign exchange
As at 28 March 2026	risk	risk	price risk
Nominal amount of hedging	0.72m bbls	118,336 MWh	$62.6m
< 1 year	048m bbls	61,320 MWh	$42.4m
1–2 years	0.24m bbls	57,016 MWh	$20.2m
2–5 years	–	–	–
> 5 years	–	–	–
Average hedged rate	$87.45/bbl	£71.8/MWh	1.32
	Apr 26 – Mar	Apr 26 – Mar	Apr 26 – Mar
Maturity	28	28	28
Carrying amount of hedging instruments
Assets – Derivatives (£m)	20.7	2.4	0.4
Liabilities – Derivatives (£m)	–	–	(0.6)
Liabilities – Borrowings (£m)	–	–	–
Carrying amount of hedged item
Liabilities – Borrowings (£m)	N/A	N/A	N/A
Accumulated amount of fair value hedging adjustments included in carrying amount of hedged item
Liabilities – Borrowings (£m)	N/A	N/A	N/A
Changes in fair value of hedged item used for calculating hedge ineffectiveness	(21.4)	(2.1)	0.9
Changes in fair value of hedging instrument used in calculating hedge effectiveness	21.4	2.1	(0.9)
Changes in fair value of hedging instrument accumulated in cash flow hedge reserve	14.9	2.0	0.8

No gains and losses on derivatives designated for hedge accounting have been charged through the consolidated income statement in either the current or prior year.

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22 Derivative financial instruments and financial assets

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Financial risk management

The Group is exposed to financial risks including liquidity risk, credit risk and certain market‑based risks principally being the effects of changes in foreign exchange rates, interest rates and fuel prices. The Group manages

these risks within the context of a set of formal policies established by the Board. Certain risk management responsibilities are formally delegated by the Board, principally to a sub‑committee of the Board and to the Chief

Financial Officer and to the Treasury Committee. The Treasury Committee comprises the Chief Financial Officer and certain senior finance employees and is responsible for approving hedging transactions permitted

under Board‑approved policies, monitoring compliance against policy and recommending changes to existing policies.

Liquidity risk

Liquidity risk is the risk that the Group may encounter difficulty in meeting obligations associated with financial liabilities. The objective of the Group’s liquidity risk management is to ensure sufficient committed liquidity

resources exist. The Group has a diversified debt structure largely represented by medium‑term unsecured syndicated committed bank facilities, medium‑ to long‑term unsecured bond debt and finance leases. It is a

policy requirement that debt obligations must be addressed well in advance of their due dates.

The Group’s Treasury policy requires a minimum of £250m of committed headroom at the year end and half year for the budget year, and £200m for year two of the three‑year plan. At year end, the total amount of these

facilities stood at £632.4m (2025: £682.4m), and committed headroom was £364.1m (2025: £513.3m), in addition to free cash balances of £144.1m (2025: £115.3m). The next material contractual expiry of revolver bank facilities

is in January 2031.

The average duration of net debt (excluding ring‑fenced cash) at 28 March 2026 was 4.1 years (2025: 4.1 years).

The following tables detail, on a continuing basis, the Group’s expected maturity of payables for its borrowings, derivative financial instruments and trade and other payables. The amounts shown in these tables are

prepared on an undiscounted cash flow basis and include future interest payments in the years in which they fall due for payment.


					2026
	< 1 year £m	1‑2 years £m	2‑5 years £m	> 5 years £m	Total £m
Borrowings 1	480.2	402.3	259.9	138.5	1,280.9
FX forwards	0.6	–	–	–	0.6
Trade and other payables	807.5	–	–	–	807.5
	1,288.3	402.3	259.9	138.5	2,089.0
	2025 (restated 2 )
	< 1 year £m	1‑2 years £m	2‑5 years £m	> 5 years £m	Total £m
Borrowings 1	524.4	497.3	447.9	142.9	1,612.5
Fuel derivatives	2.1	0.4	–	–	2.5
FX forwards	0.9	0.3	–	–	1.2
Interest rate derivatives	–	0.3	–	–	0.3
Trade and other payables	962.9	–	–	–	962.9
	1,490.3	498.3	447.9	142.9	2,579.4

Includes lease liabilities and asset backed financial liabilities as set out in note 21.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments, and adjustments to the current/non‑current analysis of deferred capital grants.

No derivative financial instruments had collateral requirements or were due on demand in any of the years. Derivative financial instruments are net settled.

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22 Derivative financial instruments and financial assets

continued

Currency risk

Currency risk is the risk of financial loss to foreign currency net assets, earnings and cash flows reported in pounds sterling due to movements in exchange rates.

‘Certain’ and ‘highly probable’ foreign currency transaction exposures may be hedged at the time the exposure arises for up to two years at specified levels, or longer if there is a very high degree of certainty. The Group is

also exposed to currency risk relating to its UK fuel costs which are denominated in US dollars. This is hedged through entering a series of average rate forward contracts on a similar profile to our fuel hedging programme.

Forward currency risk is designated in the cash flow hedges, however valuation movements arising from changes in currency‑basis spreads are excluded from the relationships as costs of hedging. At the balance sheet

date the value to be recorded in a separate component of equity was immaterial, and as such no separate reserve has been shown within the primary financial statements.

IFRS 7 requires the Group to show the impact on profit after tax and hedging reserve on financial instruments from a movement in exchange rates. The following analysis details the Group’s sensitivity to a 10% strengthening

in pounds sterling against the US dollar. A 10% weakening in pounds sterling against the US dollar would have an equal but opposite effect to that shown below. The analysis has been prepared based on the change taking

place at the beginning of the financial year and being held constant throughout the reporting period. A positive number indicates an increase in earnings or equity where pounds sterling strengthens against the US dollar.

	2026	2025
	£m	£m
Impact on profit after tax	0.3	0.4
Impact on hedging reserve	(1.2)	0.2

Interest rate risk

The Group has variable rate debt and cash and therefore net income is exposed to the effects of changes to interest rates. The Group Treasury policy objective is to maintain fixed interest rates at a minimum of 50% of

on‑balance sheet net debt over the medium term, so that volatility is substantially reduced year‑on‑year to EPS. The policy objective is primarily achieved through fixed rate debt. The policy on interest rate risk within

operating leases is to hedge 100% by agreeing fixed rentals with the lessors. The main floating rate benchmarks on variable rate debt is sterling SONIA.

At 28 March 2026, 64% (2025: 87%) of gross debt (pre‑IFRS 16 and overdraft) was fixed. This fixed rate protection had an average duration of 4.1 years (2025: 4.0 years).

Interest rate risk within operating leases is hedged 100% by agreeing fixed rentals with the lessors prior to inception of the lease contracts.

The following sensitivity analysis details the Group’s sensitivity to a 100 basis points (1%) increase in interest rates throughout the reporting period with all other variables held constant.

	2026	2025
	£m	£m
Impact on profit after tax	(0.5)	(1.2)

Diesel fuel price risk

The Group purchases its fuel on a floating price basis and is therefore exposed to changes in diesel prices, primarily in relation to First Bus operations. The Group’s policy objective is to maintain a significant degree of fixed

price protection in the short term with lower levels of protection in the medium term, so that the businesses affected are protected from any sudden and significant increases and have time to prepare for potentially higher

costs, whilst retaining some access for potentially lower costs over the medium term. To achieve this the Group operates a progressive hedging policy. The policy hedge target levels differ by division but are monitored

monthly and appropriate actions taken to maintain satisfactory hedge levels. Diesel derivatives are used to hedge UK exposure. Risk component hedging has been adopted under IFRS 9, meaning that the hedged price

risk component of the purchased diesel matches that of the underlying derivative commodity. The hedged risk component is considered to be separately identifiable and reliably measurable. Variances in pricing of the

derivative commodities and the purchased fuel are primarily driven by further refinement of the fuel or the associated transportation costs which were excluded from the hedge relationship. Currently First Bus diesel

exposure is hedged 88% to March 2027 and 53% to March 2028.

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22 Derivative financial instruments and financial assets

continued

The Group has entered into swaps for periods from April 2026 to March 2028 with the majority of these swaps relating to the 52 weeks ending 31 March 2027. The swaps give rise to monthly cash flow exchanges with

counterparties to offset the underlying settlement of floating price costs, except where they have a deferred start date. Gains or losses on fuel derivatives are recycled from equity into inventory on qualifying hedges

to achieve fixed rate fuel costs within operating results.

The following analysis details the Group’s sensitivity on profit after tax and equity if the price of diesel fuel had been $10 per barrel higher during the 52 weeks ending 29 March 2026 and at the year end:


	2026	2025
	£m	£m
Impact on profit after tax	(0.3)	(0.4)
Impact on hedging reserve	4.1	4.3

Electricity price risk

The Group purchases electricity on a floating price basis and is therefore exposed to changes in electricity prices, primarily in relation to First Bus. The Group’s policy objective is to maintain a significant degree of fixed

price protection in the short term, so that the businesses affected have time to prepare for prices after the current hedge period expires. To achieve this the Group uses cash flow hedge financial instruments to achieve

significant fixed price certainty.

The Group has entered into swaps for periods from April 2026 to March 2028, hedging 77% of ‘at risk’ exposure to March 2027 and 72% of ‘at risk’ exposure to March 2028. The swaps give rise to monthly cash flow exchanges

with counterparties to offset the underlying settlement of floating price costs, except where they have a deferred start date. Gains or losses on electricity derivatives will be recycled from equity to the income statement on

qualifying hedges to achieve fixed rate electricity costs within operating results.

During the year to 31 March 2026 the Group hedged 70% of electricity price risk in relation to First Bus.

The following analysis details the Group’s sensitivity on profit after tax and equity if the price of electricity had been £50 per MWh higher during the 52 weeks ending 29 March 2026 and at the year end:


	2026	2025
	£m	£m
Impact on profit after tax	(0.7)	(0.4)
Impact on hedging reserve	4.4	2.6

23 Deferred tax

The major deferred tax (assets)/liabilities recognised by the Group and movements thereon during the current and prior reporting periods are as follows:


	Accelerated tax	Retirement benefit	Other temporary
	depreciation	schemes	differences	Tax losses	Total
	£m	£m	£m	£m	£m
At 30 March 2024	32.4	(4.6)	(27.4)	(40.0)	(39.6)
Charge/(credit) to income statement	(0.1)	1.9	16.6	9.1	27.5
Charge/(credit) to other comprehensive income and equity	–	7.5	(0.3)	–	7.2
Acquisitions and disposals of subsidiaries (restated 1 )	12.3	(0.3)	(5.8)	(47.8)	(41.6)
At 29 March 2025 (restated 1 )	44.6	4.5	(16.9)	(78.7)	(46.5)
Charge/(credit) to income statement	27.3	6.2	(0.4)	1.6	34.7
Charge/(credit) to other comprehensive income and equity	–	(6.6)	6.0	–	(0.6)
Acquisitions and disposals of subsidiaries	2.0	–	(0.8)	(7.0)	(5.8)
At 28 March 2026	73.9	4.1	(12.1)	(84.1)	(18.2)

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

With respect to the total net deferred tax asset of £18.2m, net deferred tax assets of £17.3m have been recognised in the UK and Ireland as the Group forecasts sufficient taxable profits in future periods and a deferred tax

asset of £0.9m relating to the US is recognised because it is probable that book gains will arise on the remaining US property portfolio.

No deferred tax has been recognised on tax losses of £352.3m (2025: tax losses of £413.9m) as there are insufficient future profits forecast in North America.

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24 Provisions


	Onerous contracts	Insurance claims	Legal and other	Total
	£m	£m	£m	£m
At 29 March 2025	36.5	94.3	79.4	210.2
First Bus London acquisition accounting adjustments 1	(9.9)	1.0	1.8	(7.1)
At 29 March 2025 (restated 1 )	26.6	95.3	81.2	203.1
Charged to the income statement	4.2	16.8	11.1	32.1
Utilised in the year	(21.3)	(36.8)	(8.9)	(67.0)
Notional interest	–	0.7	–	0.7
Expiry of SWR NRC	–	–	(12.0)	(12.0)
Foreign exchange movements	–	(1.0)	(0.2)	(1.2)
At 28 March 2026	9.5	75.0	71.2	155.7
Current liabilities	9.5	23.7	35.3	68.5
Non‑current liabilities	–	51.3	35.9	87.2
At 28 March 2026	9.5	75.0	71.2	155.7
Current liabilities	16.6	32.6	42.9	92.1
Non‑current liabilities	10.0	62.7	38.3	111.0
At 29 March 2025 (restated 1 )	26.6	95.3	81.2	203.1

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

The insurance claims provision arises from estimated exposures for incidents occurring prior to the balance sheet date. It is anticipated that the majority of such claims will be settled within the next four years although

certain liabilities in respect of lifetime obligations of £1.1m (2025: £1.0m) can extend for more than 25 years. The utilisation of £36.8m (2025: £34.9m) represents payments made against the current liability of the preceding

year as well as the settlement of claims resulting from incidents occurring in the current year.

The insurance claims provisions, of which £19.2m (2025: £34.7m) relates to legacy Greyhound claims, includes £16.0m (2025: £31.0m) which is recoverable from insurance companies and a receivable is included within other

receivables in note 16.

Legal and other provisions relate to estimated exposures for cases filed or thought highly likely to be filed for incidents that occurred prior to the balance sheet date. It is anticipated that most of these items will be settled

within ten years. Also included are provisions in respect of costs anticipated on the exit of surplus properties which are expected to be settled over the remaining terms of the respective leases and dilapidation, other

provisions in respect of contractual obligations under rail franchises and restructuring costs. The dilapidation provisions are expected to be settled at the end of the respective franchise.

The onerous contract provision of £28.1m was recognised on acquisition of London bus operator RATP Dev Transit London Limited and its subsidiaries in the prior year. The provision recognises that a number of contracts between

the acquired business and TfL are loss making and therefore the Group has provided for the expected shortfall in these contracts, where the unavoidable costs of fulfilling these contracts outweigh the expected benefits.

25 Called up share capital

	Number of shares
Allotted, called up and fully paid (ordinary shares of 5p each)	million	£m
Balance as at 29 March 2025	750.7	37.5
Cancellation of treasury shares	(180.0)	(9.0)
Balance as at 28 March 2026	570.7	28.5

The Company has one class of ordinary shares which carries no right to fixed income.

On 10 June 2025, the Company announced a share buyback programme to purchase up to £50m of ordinary shares. This buyback programme completed on 3 October 2025 having repurchased 22,439,652 shares for

a total consideration of £50.4m including transaction costs.

On 26 January 2026, the Company announced that 180,000,000 shares held in treasury were cancelled. The nominal value of these shares was £9.0m.

The Board is proposing that a final dividend of 5.0p per share, resulting in a total dividend payment of c.£27m, be paid on 7 August 2026 to shareholders on the register at 3 July 2026, subject to approval by shareholders

at the 2026 AGM.

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26 Reserves

The share premium account represents the premium on shares issued since 1999 and arose principally on the rights issue on the Ryder acquisition in 1999 and the share placings in 2007 and 2008. The reserve is

non‑distributable. The hedging reserve records the movement on designated hedging items. The own shares reserve represents the cost of shares in FirstGroup plc purchased in the market and either held as treasury

shares or held in trust to satisfy the exercise of share options.

Hedging reserve

The movements in the hedging reserve were as follows:


	2026	2025
	£m	£m
Balance at 29 March 2025/30 March 2024	(2.2)	(1.8)
Transfer to hedging reserve through consolidated statement of comprehensive income
Diesel derivatives	21.4	(4.3)
Electricity derivatives	2.1	1.2
Interest rate swaps – NextGen	0.3	0.2
Currency forwards	(0.9)	(1.1)
	22.9	(4.0)
Tax on derivative hedging instrument movements through statement of comprehensive income	(5.8)	1.0
Transfer from hedging reserve to the balance sheet:
Diesel derivatives	(1.6)	0.9
Electricity derivatives	0.5	1.6
Currency forwards	2.0	0.9
	0.9	3.4
Tax on derivative hedging instrument movements to the balance sheet	(0.2)	(0.8)
	15.6	(2.2)
Cumulative loss on hedging instruments reclassified to the income statement	–	–
Balance at 28 March 2026/29 March 2025	15.6	(2.2)

Own shares

The number of own shares held by the Group at the end of the year was 28,086,318 (2025: 185,125,956) FirstGroup plc ordinary shares of 5p each. Of these, 19,922,152 (2025: 19,401,442) were held by the FirstGroup plc Employee

Benefit Trust and 157,229 (2025: 157,229) were held as treasury shares, with a further 8,006,937 (2025: 165,567,285) held as treasury shares as a result of the share buyback programmes. Both trusts and treasury shares have

waived the rights to dividend income from the FirstGroup plc ordinary shares. The market value of the shares at 28 March 2026 was £47.4m (2025: £303.6m).


	Capital
	redemption	Capital	Total other
	reserve	reserve	reserves
	£m	£m	£m
At 29 March 2025	19.7	2.7	22.4
Cancellation of treasury shares	9.0	–	9.0
At 28 March 2026	28.7	2.7	31.4

The capital redemption reserve represents the cumulative par value of all shares bought back and cancelled, less the associated transaction costs and stamp duty. The capital reserve arose on acquisitions made in 2000.

Neither reserve is distributable.

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27 Translation reserve


	2026	2025
	£m	£m
At 29 March 2025/30 March 2024	(21.9)	(22.9)
Movement for the financial year	0.4	1.0
At 28 March 2026/29 March 2025	(21.5)	(21.9)

The translation reserve records exchange differences arising from the translation of the balance sheets of foreign currency denominated subsidiaries offset by movements on loans used to hedge the net investment in

those foreign subsidiaries.

28 Acquisition of businesses and subsidiary undertakings


	Tetley’s Motor	London and Bath
	Services	Sightseeing	J& B Travel	Keane Travel	Hills Coaches	Total
	£m	£m	£m	£m	£m	£m
Provisional fair value of net assets acquired
Property, plant and equipment	2.0	10.0	1.8	–	1.9	15.7
Deferred tax	(0.3)	6.9	(0.4)	–	(0.4)	5.8
Inventories	–	0.3	–	–	–	0.3
Trade and other receivables	2.7	0.9	1.7	–	0.3	5.6
Cash and cash equivalents	2.1	0.4	0.6	–	0.3	3.4
Trade and other payables	(0.1)	(3.5)	(0.7)	–	(0.1)	(4.4)
Taxation	(0.2)	–	(0.1)	–	(0.1)	(0.4)
Provisions	–	(0.5)	–	–	–	(0.5)
Lease liabilities	–	(0.7)	–	–	–	(0.7)
Asset backed financial liabilities	–	(0.3)	(0.1)	–	–	(0.4)
Net identifiable assets acquired	6.2	13.5	2.8	–	1.9	24.4
Goodwill	5.0	2.4	2.2	0.5	2.2	12.3
Net assets acquired	11.2	15.9	5.0	0.5	4.1	36.7
Satisfied by:
Cash consideration	11.2	15.9	5.0	0.5	4.1	36.7
Less: cash and cash equivalents acquired	(2.1)	(0.4)	(0.6)	–	(0.3)	(3.4)
Net cash outflow in respect of acquisitions	9.1	15.5	4.4	0.5	3.8	33.3

Acquisitions in 52 weeks to 28 March 2026

On 27 July 2025, the Group announced the acquisition of Tetley’s Motor Services Limited, a Leeds‑based coach and bus business which has been in operation for more than 75 years.

On 29 August 2025, the Group purchased the business of Keane Travel Limited, an Essex‑based coach operator.

On 11 December 2025, the Group announced the acquisition of RATP Dev’s sightseeing operations in London and Bath. Currently operating under the brand Tootbus. The acquisition strengthens FirstGroup’s presence across

London and the south‑west of England. Entering the sightseeing market in London and Bath will further diversify FirstGroup’s business, and the additional depots will provide operational and cost efficiencies and create

opportunities for future expansion.

On 18 December 2025, the Group acquired J&B Travel Limited, a Leeds‑based coach operator with a fleet of 15 coaches. The acquisition will further strengthen the Group’s position in the UK coach market and enhance its

presence in key UK regions.

On 27 January 2026, the Group acquired Hills Coaches of Wolverhampton. Hills Coaches operates a fleet of 22 coaches and provides a range of services including private hire, day excursions and long‑term contracts.

The acquisition underlines the Group’s commitment to growing the coach divisions and expands the Group’s operational footprint into the West Midlands.

The businesses acquired during the year contributed £6.7m to Group revenue and £(1.7)m of losses to Group operating profit from the date of acquisition, with the losses mainly from the London Sightseeing business.

If the acquisitions had been completed on the first day of the financial year, revenue from the acquisitions for the year would have been £22.4m and operating losses from the acquisitions would have been £(4.2)m,

with the losses mainly from the London Sightseeing business.

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28 Acquisition of businesses and subsidiary undertakings

continued

Acquisitions in 52 weeks to 29 March 2025

On 21 October 2024, the Group announced its acquisition of Anderson Travel, a coach operator providing contracted school, private hire, mini coach and tour services in and around London.

On 25 October 2024, the Group announced its acquisition of Lakeside Group, a Shropshire and Cheshire‑based company that provides school, B2B and B2C private hire services, with a fleet of around 145 buses and coaches.

On 4 February 2025, the Group announced its acquisition of Matthews Coach Hire Limited, a coach and bus operator in Ireland with a fleet of more than 40 vehicles.

On 28 February 2025, the Group announced the acquisition of London bus operator RATP Dev Transit London Limited and its subsidiaries (First Bus London).

On 19 August 2024, the Group acquired Grand Union Trains WCML Holdings Limited and its subsidiary companies, which owns the open access track access rights for the London Euston to Stirling route. On 4 December 2024,

the Group acquired Grand Union Trains GWML Holdings Limited and its subsidiary companies, which owns the open access track access right for the London Paddington to Carmarthen route.

The businesses acquired during FY 2025 contributed £34.6m to Group revenue and £2.2m profit to Group operating profit from the date of acquisition.

If the acquisitions had been completed on the first day of FY 2025, revenue from the acquisitions for the year would have been £315.7m and operating losses from the acquisitions would have been £(17.7)m.

First Bus London – finalisation of acquisition accounting adjustments

During the year, the Group finalised its IFRS 3 acquisition accounting adjustments in relation to the acquisition on 28 February 2025 of London bus operator RATP Dev Transit Limited and its subsidiaries (First Bus London).

Provisional adjustments were reported in the FY 2025 Annual Report, and therefore the Group has now restated the prior year comparative information to reflect these finalised adjustments. There is no material impact on

the FY 2025 income statement as a result of the finalisation exercise, and as such the prior year income statement has not been restated.


	Provisional	Adjustments	Final
	£m	£m	£m
First Bus London – fair value of net assets acquired
Intangible assets	3.9	(1.3)	2.6
Property, plant and equipment	169.9	9.2	179.1
Deferred tax	44.3	(0.6)	43.7
Inventories	2	–	2
Trade and other receivables	12	–	12
Cash and cash equivalents	0.4	–	0.4
Trade and other payables	(24.7)	–	(24.7)
Taxation	(3.9)	–	(3.9)
Provisions	(54.2)	7.1	(47.1)
Lease liabilities	(69.9)	(10.8)	(80.7)
Asset backed financial liabilities	(43.3)	–	(43.3)
Net identifiable assets acquired	36.5	3.6	40.1
Goodwill	10.8	(3.6)	7.2
Net assets acquired	47.3	–	47.3

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29 Net cash from operating activities


	2026	2025
	£m	£m
Operating profit from:
Continuing operations	219.4	222.6
Discontinued operations	2.1	4.9
Total operations	221.5	227.5
Adjustments for:
Depreciation charges	560.4	620.2
Capital grant amortisation	(83.7)	(65.3)
Software and other intangible amortisation charges	4.7	2.7
Reversal of impairments	(0.9)	–
Share‑based payments	10.4	10.5
Profit on disposal of property, plant and equipment	(9.4)	(0.2)
Operating cash flows before working capital and pensions	703.0	795.4
Decrease/(increase) in inventories	1.8	(2.4)
Decrease in receivables	188.0	109.4
Decrease in payables	(175.2)	(31.3)
Decrease/(increase) in financial assets	35.0	(1.0)
Decrease in provisions due within one year	(23.9)	(13.9)
Decrease in provisions due over one year	(23.8)	(14.0)
Defined benefit pension payments greater than income statement charge	(23.4)	(14.0)
Cash generated by operations	681.5	828.2
Tax paid	(0.9)	(6.0)
Interest paid¹	(65.0)	(68.0)
Net cash from operating activities 2	615.6	754.2

Interest paid includes £48.1m relating to lease liabilities (2025: £49.6m).

Net cash from operating activities is stated after an outflow of £3.7m (2025: outflow of £3.2m) in relation to financial derivative settlement.

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30 Analysis of changes in net debt


	At
	29 March		Foreign		At
	2025	Cash	exchange		28 March
	(restated 4 )	flow	movements	Other 3	2026
	£m	£m	£m	£m	£m
Components of financing activities:
Bank loans	(66.7)	(35.0)	–	(0.4)	(102.1)
Lease liabilities 1	(1,214.4)	459.5	–	(95.1)	(850.0)
Asset backed financial liabilities 2	(115.3)	(30.2)	–	(6.8)	(152.3)
NextGen battery debt	(19.9)	(7.5)	–	–	(27.4)
Total components of financing activities	(1,416.3)	386.8	–	(102.3)	(1,131.8)
Cash	171.4	(1.8)	–	–	169.6
Bank overdrafts	(56.4)	30.9	–	–	(25.5)
Ring‑fenced cash	315.7	(53.3)	–	–	262.4
Cash and cash equivalents	430.7	(24.2)	–	–	406.5
Net debt (including held for sale – discontinued operations)	(985.6)	362.6	–	(102.3)	(725.3)

Lease liabilities ‘other’ includes £95.1m net inception of new leases and interest charges. Net inception of leases comprises £48.6m inception of new leases, being £4.4m of rolling stock leases, £23.2m of passenger carrying vehicle leases and £21.0m of property and other leases,

offset by £1.6m termination of leases. Termination of leases includes £0.3m of passenger carrying vehicle leases and £1.3m of property and other leases. Interest charges are £48.1m.

Asset backed financial liabilities ‘other’ of £6.8m comprises of interest charges of £6.5m and fee amortisation of £0.7m, offset by the capitalisation of new facility set up costs of £(0.4)m.

The ‘other’ column for debt items consists of the net inception/acquisition of new leases, as well as interest charges. The ‘cash flow’ column consists of repayments of principal and interest (financing activities and operating activities respectively in the consolidated cash flow

statement).

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.


	At		Foreign		At
	30 March	Cash	exchange	Other 3	29 March
	2024	flow	movements	(restated 4 )	2025 (restated 4 )
	£m	£m	£m	£m	£m
Components of financing activities:
Bank loans	–	(70.0)	–	3.3	(66.7)
Bonds	(96.2)	102.8	–	(6.6)	–
Lease liabilities 1	(1,458.5)	553.3	–	(309.2)	(1,214.4)
Asset backed financial liabilities 2	(45.6)	(22.9)	–	(46.8)	(115.3)
Share of NextGen battery debt	(13.2)	(6.8)	–	0.1	(19.9)
Total components of financing activities	(1,613.5)	556.4	–	(359.2)	(1,416.3)
Cash	246.9	(75.7)	0.2	–	171.4
Bank overdrafts	(27.8)	(28.1)	–	(0.5)	(56.4)
Ring‑fenced cash	249.6	66.1	–	–	315.7
Cash and cash equivalents	468.7	(37.7)	0.2	(0.5)	430.7
Net debt (including held for sale – discontinued operations)	(1,144.8)	518.7	0.2	(359.7)	(985.6)

Lease liabilities ‘other’ of £309.2m comprises £125.6m from lease term reassessments and £0.4m termination of leases. In addition there is £50.8m inception of new leases, being £24.7m of rolling stock leases, £10.3m of passenger carrying vehicle leases and £15.8m of property and

other leases, and interest charges of £49.6m. A further £80.7m of lease liabilities were recognised as a result of the First Bus London acquisition and £2.9m as a result of other acquisitions.

Asset backed financial liabilities ‘other’ of £46.8m comprises £43.3m passenger carrying vehicle asset backed financial liabilities on acquisition of First Bus London, and interest charges of £3.5m.

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

Accrued interest of £nil (2025: £nil) is excluded from the values above and derivative valuations are presented as the clean values.

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31 Contingent liabilities

To support subsidiary undertakings in their normal course of business, FirstGroup plc and certain subsidiaries have indemnified certain banks and insurance companies who have issued performance bonds for £58.4m

(2025: £47.2m) and letters of credit for £111.3m (2025: £123.3m). The performance bonds primarily relate to First Rail franchise operations of £56.4m (2025: £47.1m), UK Bus operations of £2.0m (2025: £nil) and residual North

American obligations of £nil (2025: £0.1m). The letters of credit relate substantially to insurance arrangements in the UK and North America. The parent company has committed further support facilities of up to £80.1m to

First Rail TOCs of which £64.5m remains undrawn. Letters of credit remain in place to provide collateral for legacy Greyhound insurance and pension obligations.

The Group is party to certain unsecured guarantees granted to banks for overdraft and cash management facilities provided to itself and subsidiary undertakings. The Company has given certain unsecured guarantees

for the liabilities of its subsidiary undertakings arising under certain operating arrangements, HP contracts, finance leases, operating leases and certain pension scheme arrangements. It also provides unsecured cross

guarantees to certain subsidiary undertakings as required by VAT legislation. First Bus subsidiaries have provided unsecured guarantees on a joint and several basis to the FirstGroup Pension Scheme Trustee.

In its normal course of business the Group has ongoing contractual negotiations with government and other organisations. The Group is party to legal proceedings and claims which arise in the normal course of business,

including but not limited to employment and safety claims. The Group takes legal advice as to the likelihood of success of claims and counterclaims. No provision is made where due to inherent uncertainties, no accurate

quantification of any cost, or timing of such cost, which may arise from any of the legal proceedings can be determined.

The Group’s operations are required to comply with a wide range of regulations, including environmental and emissions regulations. Failure to comply with a particular regulation could result in a fine or penalty being

imposed on that business, as well as potential ancillary claims rooted in non‑compliance.

32 Operating commitments


	2026	2025
	£m	£m
Minimum payments made under contractual terms recognised in the income statement for the year:
Plant and machinery	0.9	5.6
Track and station access	356.3	481.3
Other assets	3.6	18.9
	360.8	505.8

At the balance sheet dates, the Group had outstanding commitments for future payments under non‑cancellable operating contracts, which fall due as follows:


	2026	2025
	£m	£m
Within one year	268.0	355.6
In the second to fifth years inclusive	73.9	175.3
After five years	171.9	198.1
	513.8	729.0

Included in the above commitments are contracts held by the First Rail businesses with Network Rail for access to the railway infrastructure, track, stations and depots of £270.0m (2025: £481.0m).

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33 Share‑based payments

Equity‑settled share option plans

The Group recognised total expenses of £10.4m (2025: £10.5m) related to equity‑settled share‑based payment transactions.

All Employee Plans

(a) Save As You Earn (SAYE)

The Group operates an HMRC‑approved savings‑related share option scheme. The scheme is based on eligible employees being granted options and their agreement to opening a sharesave account with a nominated

savings carrier and to save weekly or monthly over a three‑year period. Sharesave accounts are held with Computershare. The right to exercise the option is at the employee’s discretion in the six months following the end

of the three‑year period. The plan rules set out the treatment of those who leave employment before the end of the savings contract. The scheme was offered in FY 2024, FY 2025 and FY 2026. During FY 2026, 2,522 employees

accepted the invitation to join the scheme and just over 6.1 million options were granted at a price of 178 pence per share. Further information is provided in the table below.

	SAYE 2023	SAYE 2024	SAYE 2025
	Options	Options	Options
	Number	Number	Number
Outstanding at the beginning of the year	13,364,629	9,326,957	–
Granted during the year	–	–	6,105,523
Exercised during the year	(1,985,048)	(504,488)	(1,825)
Lapsed during the year	(2,110,747)	(2,349,333)	(443,989)
Outstanding at the end of the year	9,268,834	6,473,136	5,659,709
Exercisable at the end of the year	78,870	32,512	8,244
Weighted average exercise price (pence)	111.0	123.0	178.0
Weighted average share price at date of exercise (pence)	202.0	203.0	190.0

(b) Buy As You Earn (BAYE)

BAYE enables eligible employees to purchase shares from their gross income. If the shares are held in trust for five years or more, no income tax and National Insurance will be payable. Since August 2023 no matching

shares have been offered with the Company preferring to allocate the cost to support a larger number of options under the SAYE plan. The matching shares will be forfeited if the corresponding partnership shares are

removed from trust within three years of award.

In March 2026 there were 2,061 (March 2025: 2,655) participants who purchased shares during the month through the BAYE scheme. During the year, scheme participants have purchased 884,524 shares.

Discretionary plans

Prior to FY 2022 the discretionary awards were structured as nil cost options. Since that date the awards have been granted as conditional shares; there is no economic difference for the Company or participants following

this change.

DBS awards vest over a three‑year period following the financial year that they relate to and are typically settled by equity.

	DBS 2015	DBS 2016	DBS 2017	DBS 2018	DBS 2019	DBS 2020	DBS 2021
	Options	Options	Options	Options	Options	Options	Options
	Number	Number	Number	Number	Number	Number	Number
Outstanding at the beginning of the year	36,546	26,796	6,538	14,254	29,291	37,031	129,268
Granted during the year	–	–	–	–	–	–	–
Forfeited during the year	–	–	–	–	–	–	–
Exercised/released during the year	(26,085)	–	–	(6,594)	(17,334)	(15,860)	(102,105)
Lapsed during the year	(10,461)	–	–	–	–	–	(1,354)
Outstanding at the end of the year	–	26,796	6,538	7,660	11,957	21,171	25,809
Exercisable at the end of the year	–	26,796	6,538	7,660	11,957	21,171	25,809
Weighted average share price at date of exercise (pence)	186.5	N/A	N/A	223.0	204.1	207.1	195.9

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33 Share‑based payments

continued

	DBS 2022	DBS 2023	DBS 2024	DBS 2025
	Conditional	Conditional	Conditional	Conditional
	Shares Number	Shares Number	Shares Number	Shares Number
Outstanding at the beginning of the year	1,360,526	831,260	795,978	–
Granted during the year	–	–	–	546,037
Forfeited during the year	–	–	–	–
Exercised/released during the year	(1,357,790)	–	–	–
Lapsed during the year	(2,736)	–	–	–
Outstanding at the end of the year	–	831,260	795,978	546,037
Exercisable at the end of the year	–	–	–	–
Weighted average share price at date of exercise (pence)	210.8	N/A	N/A	N/A

(d) Long‑Term Incentive Plan (LTIP)

The LTIP awards granted in 2021 through to 2025 have relative TSR, EPS and sustainability targets. Where the threshold measures are exceeded, the awards are settled by equity.

	LTIP 2021	LTIP 2022	LTIP 2023	LTIP 2024	LTIP 2025
	Options	Conditional	Conditional	Conditional	Conditional
	Number	Shares Number	Shares Number	Shares Number	Shares Number
Outstanding at the beginning of the year	31,241	7,223,320	7,090,438	6,711,864	–
Granted during the year	–	–	–	–	5,129,273
Forfeited during the year	–	(72,944)	(271,825)	(492,499)	(82,695)
Lapsed during the year	–	–	–	–	–
Exercised during the year	(31,241)	(7,150,376)	–	–	–
Outstanding at the end of the year	–	–	6,818,613	6,219,365	5,046,578
Exercisable at the end of the year	–	–	–	–	–
Weighted average share price at date of exercise (pence)	183.4	225.7	N/A	N/A	N/A

(e) Executive Share Plan (ESP)

ESP awards vest over a three‑year period following the financial year that they relate to and are typically settled by equity.

	ESP 2015	ESP 2016	ESP 2017	ESP 2018	ESP 2019	ESP 2020	ESP 2021
	Options	Options	Options	Options	Options	Options	Options
	Number	Number	Number	Number	Number	Number	Number
Outstanding at the beginning of the year	38,167	41,444	17,308	63,657	250,881	14,718	350,832
Granted during the year	–	–	–	–	–	–	–
Forfeited/lapsed during the year	(21,285)	–	–	–	–	–	(6,854)
Exercised/released during the year	(16,882)	–	(4,282)	(21,063)	(88,757)	–	(210,255)
Outstanding at the end of the year	–	41,444	13,026	42,594	162,124	14,718	133,723
Exercisable at the end of the year	–	41,444	13,026	42,594	162,124	14,718	133,723
Weighted average share price at date of exercise/release (pence)	192.4	N/A	217.8	219.0	226.6	N/A	211.4
				ESP 2022	ESP 2023	ESP 2024	ESP 2025
				Conditional	Conditional	Conditional	Conditional
				Shares Number	Shares Number	Shares Number	Shares Number
Outstanding at the beginning of the year				16,001	7,972	467,304	–
Granted during the year				–	–	–	6,352
Forfeited/lapsed during the year				–	–	–	–
Exercised/released during the year				(16,001)	(3,986)	(2,874)	–
Outstanding at the end of the year				–	3,986	464,430	6,352
Exercisable at the end of the year				–	–	–	–
Weighted average share price at date of exercise/release (pence)				225.7	225.2	225.2	N/A

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33 Share‑based payments

continued

The fair values of the awards granted during the last two years were measured using a Black‑Scholes model

except for the TSR element of the LTIPs which were measured using a Monte Carlo model. The inputs into the

models were as follows:

	2026	2025
	pence	pence
Weighted average share price at grant date (pence)
– DBS	217.8	164.8
– LTIP	217.8	164.5
– ESP	182.0	164.4
Weighted average exercise price at grant date (pence)
– DBS	–	–
– LTIP	–	–
– ESP	–	–
Expected volatility (%)
– DBS	N/A	N/A
– LTIP	38	59
– ESP	N/A	N/A
Expected life (years)
– DBS	3.0	3.0
– SAYE schemes	N/A	N/A
– LTIP	3.0	3.0
– ESP	3.0	3.0
Rate of interest (%)
– DBS	N/A	N/A
– LTIP	–	–
– ESP	–	–
Expected dividend yield (%)
– DBS	3.0	3.3%
– LTIP	3.0	3.3%
– ESP	3.0	3.3%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the

previous five years. The expected life used in the model has been adjusted based on management’s best

estimate, for the effects of non‑transferability, exercise restrictions and behavioural considerations.

Allowances have been made for the SAYE schemes for the fact that, amongst a group of recipients some

are expected to leave before an entitlement vests. The accounting charge is then adjusted over the vesting

period to take account of actual forfeitures, so although the total charge is unaffected by the pre‑vesting

forfeiture assumption, the timing of the recognition of the expense will be sensitive to it. Fair values for the

SAYE include a 10% per annum pre‑vesting leaver assumption whereas the Executive, LTIP and deferred share

plans exclude any allowance for pre‑vesting forfeitures.

	2026	2025
	pence	pence
Weighted average fair value of options at grant date
– DBS	205.2	154.4
– LTIP	158.8	116.3
– ESP	172.1	154.3

34 Retirement benefit schemes

The Group supports defined contribution (DC) and defined benefit (DB) schemes for the benefit of employees

across the following business areas:

First Bus

DB schemes: The FirstGroup Pension Scheme.

DC schemes: The First Bus Retirement Savings Plan and the Enhanced Lifetime Savings Plan.

Employees in Group corporate functions participate in the First Bus pension arrangements.

First Rail

DB schemes: Railways Pension Scheme (RPS) Shared Cost Sections. As at the balance sheet date, the Group

sponsored two sections of the RPS in respect of TOCs operating under NRCs. Since the obligations to the TOC

arrangements are considered to be limited to contributions during the period of the contract, these are

fundamentally different to the obligations to the other pension arrangements. Additionally, the Group

sponsors a section for its open access Hull Trains business, which closed to new entrants in March 2024.

DC schemes: RPS Industry‑Wide Defined Contribution (IWDC) Section. Hull Trains employees who are not

eligible for the DB section, and Tram Operations employees, are enrolled into the IWDC Section.

North America

The Group is winding up legacy schemes from operations which have now been sold. During the year, the

liabilities of the Greyhound Canada Retirement Income Plan were bought out with an insurer, removing

obligations from the balance sheet. There remains a modest surplus, which will be distributed to Plan

participants before the Plan is fully wound up. During the prior year, the remaining liabilities in the US were

bought out, and winding up of the legacy Greyhound US pension plan was completed in December 2024.

Each of these groups of arrangements have therefore been shown separately.

Overall, the duration of the Company’s obligations is approximately 14 years although the durations of the

individual schemes tend to vary.

The pension schemes in the UK are operated independently of the Group by the relevant pension scheme’s

trustee. All pension scheme assets are held separately from FirstGroup’s assets. The managers or trustees

(as appropriate) of the pension schemes are responsible for the investment policy, although the sponsor

is consulted.

The market value of the assets as at 28 March 2026 for all DB schemes (excluding RPS in respect of DfT TOCs)

totalled £982m (2025: £1,135m). The present value of scheme liabilities for all non‑contract rail operation

defined benefit schemes totalled £963m (2025: £1,112m).

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34 Retirement benefit schemes

continued

(a) First Bus and Group (including open access rail operators)

DC plans (shown on a continuing basis)

Payments to DC plans are charged as an expense as they fall due. There is no further obligation to pay

contributions into a DC plan once the contributions specified in the plan rules have been paid. The total

expense recognised in the consolidated income statement of £48.6m (2025: £36.0m) represents

contributions payable to these plans by the Group at rates specified in the rules of the plans.

The Group operates DC plans for all Group and First Bus employees, and First Rail employees who are not

eligible to join a DB arrangement. They receive a company match to their contributions, which varies by

salary and/or service.

DB plans (shown on a continuing basis)

The Group has full responsibility for the retirement benefits for former and current employees of Group, First

Bus and Hull Trains who are members of the schemes described in the following paragraphs, bearing all the

risks and responsibilities of sponsorship of these schemes. These comprise two funded DB plans across its

First Bus and Group operations (including Hull Trains which, unlike the majority of First Rail operations, is

operated under open access), covering approximately 24,700 former and current employees. All of these

schemes are closed to new entrants.

Triennial valuations assess the cost of future service (where relevant) and the funding position. The employer

and trustees are required to agree on assumptions for the valuations and to agree the contributions that

result from these. Deficit recovery contributions may be required in addition to future service contributions.

In agreeing contribution rates, reference must be made to the affordability of contributions by the employer.

At their last valuations, the DB schemes had funding levels between 74% and 108% (2025: 74% and 94%).

Surplus after benefits have been paid/secured can be repaid to the employer, in line with the rules

of the schemes.

The FirstGroup Pension Scheme

The FirstGroup Pension Scheme is a legacy DB scheme that is closed to benefit accrual. It now comprises two

sections – a Group Section (members already of the FirstGroup Pension Scheme prior to merging with The First

UK Bus Pension Scheme) and a Bus Section (members transferring from The First UK Bus Pension Scheme).

The rules governing both these schemes grant the employer influence over the allocation of any residual

surplus once the beneficiaries’ rights have been secured. Accordingly, the net surplus/deficit is recognised

in full for these schemes.

The Hull Trains Shared Cost Section of the Railways Pension Scheme

Hull Trains participates in its own Section of the Railways Pension Scheme. This scheme closed to new

entrants in March 2024, but remains open to the accrual of salary‑related benefits for employees who

became members before March 2024. Costs relating to accrual and to any deficit are shared with members.

Any deficit is now fully borne by the sponsor – the impact of this currently has a negligible impact on the

accounting balance sheet.

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34 Retirement benefit schemes

continued

The table below is set out to show the movements in the fair value of schemes’ assets (Assets) along with the movements in the present value of Defined Benefit Obligations (DBO) (Liabilities) for the DB schemes described above:

	2026		2025
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
At beginning of period	992.5	970.1	1,147.8	1,161.8
Income statement
Operating
– Current service cost	–	4.1	–	5.9
– Settlement in relation to winding‑up lump sums	(3.9)	(4.2)	(21.3)	(24.1)
Total operating	(3.9)	(0.1)	(21.3)	(18.2)
Interest income/cost	55.7	53.7	54.8	53.8
Total income statement	51.8	53.6	33.5	35.6
Amounts paid to/(from) scheme
Employer contributions	25.9	–	8.6	–
Employee contributions	0.2	0.2	0.4	0.4
Benefits paid	(67.4)	(67.4)	(70.6)	(70.6)
Total	(41.3)	(67.2)	(61.6)	(70.2)
Expected closing position	1,003.0	956.5	1,119.7	1,127.2
Change in financial assumptions	–	(23.8)	–	(108.9)
Change in demographic assumptions	–	(8.7)	–	(2.5)
Employee share of changes	–	–	–	–
Return on assets in excess of discount rate	(25.1)	–	(127.2)	–
Experience	–	34.3	–	(45.7)
Total	(25.1)	1.8	(127.2)	(157.1)
At end of period	977.9	958.3	992.5	970.1

	2026		2025
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
Surplus in schemes	–	19.6	–	22.4
The amount is presented in the consolidated balance sheet as follows:	–		–
Non‑current assets	–	21.7	–	27.0
Non‑current liabilities	–	(2.1)	–	(4.6)

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34 Retirement benefit schemes

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Asset allocation

	Quoted	Unquoted	Total
At March 2026	£m	£m	£m
Equity	5.6	127.3	132.9
Other return seeking assets	–	4.5	4.5
Real estate	–	1.0	1.0
Fixed income/liability driven	537.1	228.1	765.2
Other income generating	–	26.2	26.2
Cash and cash equivalents	48.1	–	48.1
	590.8	387.1	977.9

	Quoted	Unquoted	Total
At March 2025	£m	£m	£m
Equity	17.0	159.3	176.3
Other return seeking assets	–	20.1	20.1
Real estate	–	1.6	1.6
Fixed income/liability driven	553.9	219.9	773.8
Other income generating	–	0.8	0.8
Cash and cash equivalents	19.9	–	19.9
	590.8	401.7	992.5

(b) North America

Greyhound pension arrangements

The Group has retained certain responsibilities for the provision of retirement benefits for some legacy schemes.

The Group no longer operates a pension plan in the US (2025: none), while in Canada, there is a legacy plan with a DB and a DC section that is currently being wound up – the majority of the benefits have been secured

through a buyout with an insurer, and all that remains is a modest surplus, which will be distributed to plan participants.

In the prior year, the Group agreed terms with an insurance company to buy out the remaining liabilities of the legacy Greyhound US pension plan, with the plan being terminated thereafter. Following a Group net

contribution of $5.3m, gross liabilities of $155m (£123m) at the FY 2024 year end were removed from the Group’s balance sheet and the Group recognised a net settlement gain after related costs of £5.1m in the Group’s

FY 2025 income statement as an adjusting item.

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34 Retirement benefit schemes

continued

The table below is set out to show the movements in the fair value of schemes’ assets (Assets) along with the movements in the present value of DBO (Liabilities) for the North American DB schemes:

	2026		2025
	Assets	Liabilities	Assets	Liabilities
	£m	£m	£m	£m
At beginning of period (including held for sale)	142.6	142.3	264.8	276.1
Income statement
Operating
– Current service cost	–	–	–	1.8
– Past service gain including curtailments and settlements	(132.8)	(132.8)	(106.7)	(113.2)
Total operating	(132.8)	(132.8)	(106.7)	(111.4)
Interest income/cost	3.7	3.7	8.4	8.6
Total income statement	(129.1)	(129.1)	(98.3)	(102.8)
Amounts paid to/(from) scheme
Employer contributions	–	–	4.1	–
Benefits paid	(7.6)	(7.6)	(23.4)	(23.4)
Total	(7.6)	(7.6)	(19.3)	(23.4)
Expected closing position	5.9	5.6	147.2	149.9
Change in financial assumptions	–	(0.3)	–	4.8
Change in demographic assumptions	–	(1.5)	–	2.0
Return on assets in excess of discount rate	(1.8)	–	9.8	–
Experience	–	–	–	0.3
Total	(1.8)	(1.8)	9.8	7.1
Currency gain/loss	0.9	0.9	(14.4)	(14.7)
At end of period	5.0	4.7	142.6	142.3

Asset allocation

	Quoted	Unquoted	Total
At March 2026	£m	£m	£m
Cash and cash equivalents	5.0	–	5.0
	5.0	–	5.0

	Quoted	Unquoted	Total
At March 2025	£m	£m	£m
Annuities	–	135.7	135.7
Cash and cash equivalents	6.9	–	6.9
	6.9	135.7	142.6

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34 Retirement benefit schemes

continued

The Railways Pension Scheme (RPS)

The Group is responsible for collecting and paying contributions for a number of sections of the RPS as

part of its obligations under the contracts which it holds for its TOCs. These responsibilities continue for the

periods of the TOCs and are passed to future contract holders when those TOCs terminate. Management

of the RPS is not the responsibility of the Group, nor is it liable to benefit from any future surplus or fund any

deficit of those funds. The RPS is managed by the Railways Pension Trustee Company Limited and is subject

to regulation from The Pensions Regulator and relevant UK legislation.

The RPS is a shared cost arrangement. All costs, and any deficit or surplus, are shared 60% by the employer

and 40% by the members.

As at the balance sheet date, the Group sponsored two sections of the RPS, relating to its contracting

obligations for its TOCs. In line with Government policy to take TOCs into public ownership, sponsorship

of these remaining sections is expected to transfer to new ownership in due course.

For the TOC sections, under the contractual arrangements with the DfT, the employer’s responsibility is to

pay the contributions following triennial funding valuations while it operates the contracted services. These

contributions are subject to change on consideration of future statutory valuations, though the Group is fully

protected from any such changes through its contracts with the DfT. At the end of the contract, any deficit or

surplus in the scheme section passes to the subsequent TOC with no compensating payments from or to

the outgoing TOC.

The statutory funding valuations of the various Rail Pension Scheme sections in which the Group is involved

(last finalised with an effective date of 31 December 2022) and the IAS 19 actuarial valuations are carried out

for different purposes and may result in materially different results. The IAS 19 valuation is set out in the

disclosures below.

The accounting treatment for the time‑based risk‑sharing feature of the Group’s participation in the RPS

is not explicitly considered by IAS 19 Employee Benefits (Revised). The contributions currently committed to

being paid to each TOC section are lower than the share of the service cost (for current and future service)

that would normally be calculated under IAS 19 (Revised) and the Group does not account for uncommitted

contributions towards the sections’ current or expected future deficits. Therefore, the Group does not need

to reflect any deficit on its balance sheet. A TOC adjustment (asset) exists that exactly offsets any section

deficit that would otherwise remain after reflecting the cost sharing with the members. This reflects the legal

position that some of the existing deficit and some of the service costs in the current year will be funded in

future years beyond the term of the current contract and committed contributions. The TOC adjustment on

the balance sheet date reflects the extent to which the Group is not currently committed to fund the deficit.

Movements in the TOC contract adjustment in a period arise from and are accounted for as follows:

Any service costs for the period for which the contribution schedule requires no contributions from the entity

are reflected as an adjustment to the service cost in the income statement, which is considered to be in line

with paragraphs 92‑94 of IAS 19 (Revised).

Under circumstances where contributions are renegotiated, such as following a statutory valuation, any

adjustment necessary to reflect an obligation to fund past service cost will be recognised in the income

statement.

The disclosed information has been set out to illustrate the effect of this on the costs borne by FirstGroup.

In particular, 40% of the costs, gains or losses and any deficit are attributed to the members. In addition, the

total surplus or deficit is adjusted by way of a ‘contract adjustment’ which includes an assessment of the

changes that will arise from contracted future contributions and which is the portion of the deficit or surplus

projected to exist at the end of the contract which the Group will not be required to fund or benefit from.

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Annual Report and Accounts 2026

183

Notes to the consolidated financial statements

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34 Retirement benefit schemes

continued

			Adjustment for
			employee share of	Contract
	Assets	Liabilities	RPS deficits (40%)	adjustment	Net
	£m	£m	£m	£m	£m
At 1 April 2025	3,658.0	(3,070.4)	(235.0)	(352.6)	–
Impact of expiry of SWR NRC	(1,277.4)	1,088.1	75.7	113.6	–
Revised opening position, excluding SWR	2,380.6	(1,982.3)	(159.3)	(239.0)	–
Income statement
Operating
– Service cost	–	(78.3)	31.3	12.3	(34.7)
– Admin cost	–	(2.5)	1.0	–	(1.5)
Total operating	–	(80.8)	32.3	12.3	(36.2)
Financing	137.7	(112.0)	(10.3)	(15.4)	–
Total income statement	137.7	(192.8)	22.0	(3.1)	(36.2)
Amounts paid to/(from) scheme
Employer contributions	36.2	–	(14.5)	14.5	36.2
Employee contributions	24.0	–	(9.6)	(14.4)	–
Benefits paid	(99.5)	99.5	–	–	–
Total	(39.3)	99.5	(24.1)	0.1	36.2
Expected closing position	2,479.0	(2,075.6)	(161.4)	(242.0)	–
Change in financial assumptions	–	45.3	(18.1)	(27.2)	–
Change in demographic assumptions	–	(12.6)	5.0	7.6	–
Return on assets in excess of discount rate	70.3	–	(28.1)	(42.2)	–
Experience	–	(11.2)	4.5	6.7	–
Total	70.3	21.5	(36.7)	(55.1)	–
At 31 March 2026	2,549.3	(2,054.1)	(198.1)	(297.1)	–

			Adjustment for
			employee share of	Contract
	Assets	Liabilities	RPS deficits (40%)	adjustment	Net
	£m	£m	£m	£m	£m
At 1 April 2024	3,722.4	(3,588.7)	(53.4)	(80.3)	–
Income statement
Operating
– Service cost	–	(135.2)	54.1	34.4	(46.7)
– Admin cost	–	(6.5)	2.6	–	(3.9)
Total operating	–	(141.7)	56.7	34.4	(50.6)
Financing	180.6	(169.6)	(4.4)	(6.6)	–
Total income statement	180.6	(311.3)	52.3	27.8	(50.6)
Amounts paid to/(from) scheme
Employer contributions	50.6	–	(20.2)	20.2	50.6
Employee contributions	33.4	–	(13.4)	(20.0)	–
Benefits paid	(157.1)	157.1	–	–	–
Total	(73.1)	157.1	(33.6)	0.2	50.6
Expected closing position	3,829.9	(3,742.9)	(34.7)	(52.3)	–
Change in financial assumptions	–	604.0	(241.6)	(362.4)	–
Change in demographic assumptions	–	9.7	(3.9)	(5.8)	–
Return on assets in excess of discount rate	(171.9)	–	68.7	103.2	–
Experience	–	58.8	(23.5)	(35.3)	–
Total	(171.9)	672.5	(200.3)	(300.3)	–
At 31 March 2025	3,658.0	(3,070.4)	(235.0)	(352.6)	–

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Notes to the consolidated financial statements

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34 Retirement benefit schemes

continued

During the year £2.5m (2025: £6.5m) of gross administrative expenses were incurred, included in benefits paid above.

Finance costs above include interest income of £82.6m (2025: £108.4m) and employee share of interest on assets of £55.1m (2025: £72.2m).

Income statement charges on liabilities above of £192.8m (2025: £311.3m) represent:

	2026	2025
	£m	£m
Current service costs	47.0	85.0
Interest costs	67.2	101.8
Employee share of change in DBO (not attributable to contract adjustment)	78.6	124.5
	192.8	311.3

Asset allocation

	Quoted	Unquoted	Total
At 28 March 2026/31 March 2026	£m	£m	£m
Equity	–	1,159.3	1,159.3
Other return seeking assets	–	696.3	696.3
Real estate	–	240.7	240.7
Fixed income/liability driven	–	442.9	442.9
Cash and cash equivalents	10.2	–	10.2
	10.2	2,539.2	2,549.4

	Quoted	Unquoted	Total
At 29 March 2025/31 March 2025	£m	£m	£m
Equity	–	1,630.1	1,630.1
Other return seeking assets	–	1,027.2	1,027.2
Real estate	–	335.0	335.0
Fixed income/liability driven	–	654.1	654.1
Cash and cash equivalents	11.6	–	11.6
	11.6	3,646.4	3,658.0

The Rail contracts’ assets are invested in pooled funds created specifically for the Rail schemes. As such, these assets have been categorised as unquoted.

(d) Valuation assumptions

The valuation assumptions used for accounting purposes have been made uniform to Group standards, as appropriate, when each scheme is actuarially valued.

	First Bus	First Rail	North America	First Bus	First Rail	North America
	2026	2026	2026	2025	2025	2025
At 28 March 2026/29 March 2025	%	%	%	%	%	%
Key assumptions used:
Discount rate	6.22 – 6.30	6.26	N/A	5.78 – 5.83	5.87	4.50
Expected rate of salary increases	N/A	3.07 – 3.32	N/A	N/A	2.83 – 3.12	N/A
Inflation – CPI	2.84 – 2.85	2.86	N/A	2.61 – 2.62	2.60	2.00
Future pension increases	2.51 2	2.86	N/A	2.37 2	2.60	N/A
Post‑retirement mortality (life expectancy in years) 1
Current pensioners at 65:	19.7	20.5	N/A	19.3	20.1	21.7
Future pensioners at 65 aged 45 now:	20.5	21.9	N/A	19.7	21.5	22.7

Life expectancies reflect the largest underlying plans in each region.

Weighted average for principal scheme.

The Group reviews its longevity assumptions for each scheme following completion of funding valuations. The assumptions adopted reflect recent scheme experience and views on future longevity which may include

industry‑specific adjustment where appropriate. The Group obtains specialist actuarial advice before agreeing longevity assumptions.

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Annual Report and Accounts 2026

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34 Retirement benefit schemes

continued

(e) Sensitivity of retirement benefit obligations to changes in assumptions (excluding Rail Pension Scheme)

The method used to derive the sensitivities is the same as that used to calculate the main disclosures. The exception is longevity where we have instead applied a general rule that one year’s extra life expectancy adds

c.3% to the DBO (with resultant impacts on rail and irrecoverable surplus adjustments). This is consistent with the method applied to deriving last year’s sensitivities.

A 1.0% movement in the discount rate would impact the DBO balance sheet position by approximately £10m. A 1.0% movement in the inflation rate would impact the DBO balance sheet position by approximately £6m.

A one‑year movement in life expectancy would impact the DBO balance sheet position by approximately £29m.

Management considers that the figures provide a suitable indication of the potential impact of reasonably possible changes in the financial assumptions and one‑year change in the mortality assumption. No allowance

has been made for any consequent change in the value of assets held. Sensitivities do not include the Rail Pension Scheme owing to the contract adjustment mechanism detailed above.

(f) Consolidated statement of comprehensive income

Amounts presented in the consolidated statement of comprehensive income comprise:


	2026	2025
	£m	£m
Actuarial gain on DBO	30.5	822.9
Actuarial gain/(loss) on assets	30.1	(289.6)
Actuarial (loss) on contract adjustments	(87.5)	(500.4)
Actuarial gains/(losses) on defined benefit schemes	(26.9)	32.9

(g) Cash contributions

The estimated amounts of employer contributions expected to be paid to the DB schemes during the 52 weeks ending 27 March 2027 is £33.8m based on current contributions schedules in force (28 March 2026: £64.6m).

(h) Risks associated with DB plans

Other than for the First Rail TOCs, the number of employees in defined benefit plans is reducing rapidly, as these plans are closed to new entrants, and plans are being terminated. This will serve to limit the risks associated

with DB pension provision by the Group.

Despite remaining open to new entrants and future accrual, the risks posed by the RPS are limited, as under the contractual arrangements with DfT, the First Rail TOCs are not responsible for any residual deficit at the end of

a contract. Furthermore, under these contractual arrangements with the DfT, the First Rail TOCs are indemnified against any short‑term cash flow risks arising from future triennial valuations.

The key risks relating to the other DB pension arrangements and the steps taken by the Group to mitigate them are as follows:


Risk	Description	Mitigation
Asset volatility	The liabilities are calculated using a discount rate set with reference to corporate bond	Asset liability modelling has been undertaken to ensure that any risks taken are expected
	yields; if assets underperform this yield, this will create a deficit. The assets held in the	to be rewarded and, in relation to the Company’s largest pension exposures, further work is
	DB arrangements are intended to meet the long‑term funding objectives of those	being undertaken to ensure that the investment strategy remains the most appropriate.
	arrangements, and therefore results in some risk in the short term and has the potential for
	material adverse movements relative to the liabilities as valued for accounting purposes.
Inflation risk	A significant proportion of the UK benefit obligations are linked to inflation and higher	Investment strategy reviews have led to increased inflation hedging, mainly through swaps
	inflation will lead to higher liabilities.	or holding Index Linked Gilts in the UK schemes.
Uncertainty over level of future	Contributions to DB schemes can be unpredictable and volatile as a result of changes	The Group engages with the trustees to consider how contribution requirements can be
contributions	in the funding level revealed at each valuation.	made more stable. The level of volatility and the Group’s ability to control contribution
		levels varies between arrangements.
Life expectancy	The majority of the scheme’s obligations are to provide benefits for the life of the	Linking retirement age to State Pension Age (as in The FirstGroup Pension Scheme) has
	member, so increases in life expectancy will result in an increase in the liabilities.	mitigated this risk to some extent.
Legislative risk	Future legislative changes are uncertain. In the past these have led to increases in	The Group receives professional advice on the impact of legislative changes.
	obligations, through introducing pension increases, vesting of deferred pensions,
	equalisation of certain benefits for men and women or reduced investment return
	through the ability to reclaim advance corporation tax.

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Annual Report and Accounts 2026

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Notes to the consolidated financial statements

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35 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated

on consolidation and are not disclosed in this note.

Remuneration of key management personnel

The remuneration of the Directors, which comprise the plc Board who are the key management personnel

of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party

Disclosures. Further information about the remuneration of individual Directors is provided in the Annual

report on remuneration on pages 97 to 108.


	2026	2025
	£m	£m
Basic salaries 1	1.7	1.8
Fees	0.7	0.6
Post‑employment benefits	0.1	0.1
Share‑based payment	3.5	3.6
	6.0	6.1

Basic salaries include cash emoluments in lieu of retirement benefits, bonuses and car allowances.

36 Events after the reporting period

On 2 April 2026, the Group announced its acquisition of Eagle Coaches, a coaching business based in Bristol

with a fleet of 19 vehicles, operating private hire, school transport and group travel services.

On 10 April 2026, the Group announced its acquisition of Wilfreda Luxury Coaches Limited (Wilfreda Beehive),

a Doncaster‑based coaching business operating a fleet of 45 vehicles to provide private hire, school

contracts, contracted workplace shuttle services and holiday programmes.

Owing to the timing of these acquisitions, it has not been practical for the Group to yet undertake a detailed

assessment of the acquired assets and liabilities. A provisional assessment will be undertaken during the year.

On 3 May 2026, the Group’s First Rail London Limited (FRL) subsidiary commenced the operation of the

London Overground rail contract on behalf of Transport for London (TfL). FRL’s contract is for an initial

eight‑year period, with an option to extend for a further two years at TfL’s discretion. Under the terms

of the contract, TfL retains all revenue risk and will specify the service levels, with FRL responsible for

the delivery of train services, management of stations and customer service.

On 7 May 2026, First Greater Western Railway Ltd received notice from the DfT that its NRC would expire

on 13 December 2026, at which point GWR will hand over to the DfT Operator.

On 25 May 2026, the Group’s new Lumo West Coast open access rail operator commenced services between

London Euston and Stirling.

37 Information about related undertakings

In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries and equity accounted

investments as at 28 March 2026 is disclosed below. Unless otherwise stated, the Group’s shareholding

represents ordinary shares held indirectly by FirstGroup plc. The entities are unlisted, and have one type

of ordinary share capital. The year end is 28 March. The Group’s interest in the voting share capital is 100%

unless otherwise stated. No subsidiary undertakings have been excluded from the consolidation:

Subsidiaries – wholly owned and incorporated in the United Kingdom

Anderson Tours Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Tours Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Travel Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Anderson Travel Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Airporter Limited,

21 Arthur Street, Belfast, BT1 4GA

A.T. Brown (Coaches) Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Bath Bus Company Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

CCB Holdings Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

CentreWest Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

East Coast Trains Limited,

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Ensign Bus Company Limited,

3,7

The Rifle Range, Juliette Close, Purfleet Industrial Park, Aveley,

South Ockendon, Essex, RM15 4YF

Evolutionary Rail Limited,

3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FB Canada Holdings Limited,

395 King Street, Aberdeen, AB24 5RP

FG Canada Investments Limited,

395 King Street, Aberdeen, AB24 5RP

FG Properties Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FGI Canada Holdings Limited,

3,4

395 King Street, Aberdeen, AB24 5RP

First Aberdeen Limited,

3,7

395 King Street, Aberdeen, AB24 5RP

First Beeline Buses Limited,

3,7

Hoeford, Gosport Road, Fareham, Hampshire, PO16 0ST

First Bus Central Services Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Holdings Limited,

1,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus London Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Pension GP Limited,

4,5

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Bus Retirement Savings Plan Trustee Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Capital Connect Limited,

5,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Capital East Limited,

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

First Customer Contact Limited,

8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

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Annual Report and Accounts 2026

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Notes to the consolidated financial statements

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37 Information about related undertakings

continued

First Cymru Buses Limited,

3,7

Heol Gwyrosydd, Penlan, Swansea, SA5 7BN

First Eastern Counties Buses Limited,

3,7

Davey House, 7b Castle Meadow, Norwich, Norfolk, NR1 3DE

First Essex Buses Limited,

3,7

Bus Depot, Westway, Chelmsford, Essex, CM1 3AR

First Glasgow (No.1) Limited,

100 Cathcart Road, Glasgow, G42 7BH

First Glasgow (No.2) Limited,

3,7

100 Cathcart Road, Glasgow, G42 7BH

First Greater Western Limited,

7,9

Milford House, 1 Milford Street, Swindon, Wiltshire SN1 1HL

First Hampshire & Dorset Limited,

3,7

Hoeford, Gosport Road, Fareham, Hampshire, PO16 0ST

First International (Holdings) Limited),

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First International No.1 Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First London Cableway Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Manchester Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Midland Red Buses Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First North West Limited,

3,4

Wallshaw Street, Oldham, OL1 3TR

First Northern Ireland Limited,

3,7

21 Arthur Street, Belfast, BT1 4GA

First Potteries Limited,

3,7

Abbey Lane, Leicester, England, LE4 0DA

First Rail Holdings Limited,

1,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail London Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Open Access Holdings Limited,

1,3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Procurement Limited,

1,3,8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Stirling Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Stirling Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Rail Wales and Western Limited,

3,7

Heol Gwyrosydd, Penlan, Swansea SA5 7BN

First Rail Wales and Western Holdings Limited,

3,4

Heol Gwyrosydd, Penlan, Swansea SA5 7BN

First ScotRail Limited,

5,9

395 King Street, Aberdeen, AB24 5RP

First South West Limited,

3,7

Union Street, Camborne, Cornwall, TR14 8HF

First South Yorkshire Limited,

3,7

Olive Grove, Sheffield, South Yorkshire, S2 3GA

First Student UK Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First TransPennine Express Limited,

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Travel Solutions Limited,

Unit 5 Petre Court, Petre Road Clayton Business Park,

Clayton Le Moors, Accrington, BB5 5HY

First West of England Limited,

Enterprise House, Easton Road, Bristol, BS5 0DZ

First West Yorkshire Limited,

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

First York Limited,

3,7

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

FirstBus (North) Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstBus Investments Limited,

1,3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup American Investments,

3,4

395 King Street, Aberdeen, AB24 5RP

FirstGroup Canadian Finance Limited,

1,3,6

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Energy Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Holdings Limited,

1,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup Pension GP Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

FirstGroup US Finance Limited,

1,3,6

395 King Street, Aberdeen, AB24 5RP

FirstGroup US Holdings,

395 King Street, Aberdeen, AB24 5RP

GRT Bus Group Limited,

1,3,4

395 King Street, Aberdeen, AB24 5RP

Hall and Davies Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Hills Coaches Limited,

Canal Side Hordern Rd, Whitmore Reans, Wolverhampton, West Midlands, WV6 0HS

Hull Trains Company Limited,

7,9

The Point, 8th Floor, 37 North Wharf Road, London, England, W2 1AF

J & B Travel Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

JR Davies & Son Holdings Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Lakeside Coaches Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Lakeside Property Portfolio Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Leicester CityBus Limited,

3,7

Abbey Lane, Leicester, England, LE4 0DA

London Mini Coaches Limited,

3,7

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

London Mini Coaches Holdings Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

London Sovereign Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

London Transit Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

London United Busways Limited,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

Mistral Data Limited,

8,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Rider Holdings Limited,

3,4

Hunslet Park Depot, Donisthorpe Street, Leeds, West Yorkshire, LS10 1PL

Scott’s Hospitality Limited,

3,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Southampton CityBus Limited,

3,4

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Specialist Passenger Solutions Ltd,

3,7

J24 Hinkley Point C, Park and Ride, Huntworth Business Park, Bridgwater, TA6 6TS

The FirstGroup Pension Scheme Trustee Limited,

5,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

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Notes to the consolidated financial statements

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37 Information about related undertakings

continued

The First UK Bus Pension Scheme Trustee Limited,

5,8

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

The Original Tour London,

Garrick House, Stamford Brook Bus Garage, 74 Chiswick High Road, London W4 1SY

Tetley’s Motor Services Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Totaljourney Limited,

1,3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Tram Operations Limited,

3,7,9

Tramlink Depot, Coomber Way, Croydon, CR0 4TQ

Transportation Claims Limited,

Aquis House, 49‑51 Blagrave Street, Reading, RG1 1PL

Truronian Limited,

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

York Pullman Bus Company Limited,

3,7

2 Clifton Moor Business Village, York, North Yorkshire, YO30 4XG

YPBC Limited,

3,4

2 Clifton Moor Business Village, York, North Yorkshire, YO30 4XG

Subsidiaries – wholly owned and incorporated in the United States of America

FirstGroup Management,

Inc. 112 S French Street Suite 105, Wilmington, Delaware 19801

FirstGroup Services,

Inc. 112 S French Street Suite 105, Wilmington, Delaware 19801

Laidlaw Transportation Holdings,

Inc. 112 S French Street Suite 105, Wilmington, Delaware 19801

Transportation Realty Income Partners LP (50%),

600 Vine Street Suite 1400, Cincinnati, Ohio 45202

Subsidiaries – wholly owned and incorporated in Ireland

Aeroporto Limited,

25‑28 North Wall Quay, Dublin

First Bus Ireland Limited,

25–28 North Wall Quay, Dublin

Matthews Coach Hire Limited,

Callenberg, Inniskeen, Co. Monaghan, Monaghan

Subsidiaries – wholly owned and incorporated in Panama

First Transit de Panama, Inc.

Morgan & Morgan, Costa del Este, MMG Tower, 23rd Floor, Panama City

Subsidiaries – wholly owned and incorporated in Canada

GCT Holdings Ltd,4 Blake, Cassels & Graydon LLP, 3500, 855 – 2 Street SW, Calgary, Alberta, T2P 4J8

GCT Investment Limited Partnership,4 Blake, Cassels & Graydon LLP, 3500, 855 – 2 Street SW, Calgary, Alberta,

T2P 4J8

Greyhound Canada Transportation ULC,7 Blake, Cassels & Graydon LLP, 855 – 2 Street SW, Calgary, Alberta, T2P 4J8

Other entities – not wholly owned but incorporated in the United Kingdom

First/Keolis Holdings Limited (55%),

1,3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First/Keolis TransPennine Holdings Limited (55%),

3,4,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First/Keolis TransPennine Limited (55%),

3,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First MTR South Western Trains Limited (70%),

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

First Trenitalia West Coast Rail Limited (70%),

7,9

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

NextGen AssetCo Limited (50%),

8,10

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

NextGen MidCo Limited (50%),

8th Floor, The Point, 37 North Wharf Road, London, W2 1AF

Palmer Energy Technology Limited (20%), 2 Pavilion Court, 600 Pavilion Drive, Northampton, United Kingdom,

NN4 7SL

Directly owned by FirstGroup plc.

All shares held in subsidiary undertakings are ordinary shares.

For the year ending 28 March 2026 these subsidiaries are exempt from audit of individual accounts under S479A of the UK Companies

Act 2006.

Primary business is a holding company.

Primary business is a dormant company.

Primary business is an intra‑group financing company.

Primary business is the provision of transportation services.

Primary business is an administrative or support services company.

Rail companies with 31 March year end.

The Group has assessed its arrangement with NextGen AssetCo Limited as a joint operation with Hitachi Zerocarbon Battery Holdings

Limited, to develop and finance an intelligent fleet decarbonisation business. The company is responsible for procuring and financing

batteries for use by First Bus operating companies. The key financial effects of the joint operation are the Group’s share of the company’s

leased assets and associated debt.

Certain pension partnership structures (FirstBus Pension Limited Partnership and FirstGroup Pension Limited

Partnership) were implemented during the 52 weeks ending 26 March 2022. These structures involved the

creation of special purpose vehicles (SPVs) to hold cash to fund the Bus and Group pension schemes if

required, based on a designated funding mechanism. The first accounting period end for these SPVs was

31 March 2023. The SPVs are consolidated into FirstGroup plc’s consolidated accounts, and therefore under

Partnership (Accounts) Regulations 2008, Regulation 7, the SPVs are exempt from the requirement to prepare

individual entity annual accounts.

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Annual Report and Accounts 2026

189

Group financial summary

Unaudited

Consolidated income statement (includes discontinued operations)

		2025
	2026	(restated 1 )	2024	2023	2022
	£m	£m	£m	£m	£m
Group revenue	4,751.9	5,233.9	4,715.1	4,759.0	5,588.0
Adjusted revenue	1,715.7	1,370.0	1,279.6	1,122.5	955.4
Operating profit before amortisation charges and other adjustments	221.5	222.2	202.4	154.4	226.8
Amortisation charges	–	–	–	–	(0.4)
Other adjustments	–	5.3	(161.2)	30.8	579.7
Operating profit	221.5	227.5	41.2	185.2	806.1
Finance costs	(69.8)	(65.7)	(82.4)	(69.3)	(153.5)
Investment income	7.1	7.8	16.8	12.8	1.5
Profit/(loss) before tax	158.8	169.6	(24.4)	128.7	654.1
Tax	(37.3)	(31.3)	15.0	(33.4)	(12.1)
Profit/(loss) for the year	121.5	138.3	(9.4)	95.3	642.0
EBITDA	702.9	779.8	746.8	755.8	862.1

Per share measures

	pence	pence	pence	pence	pence
Adjusted continuing EPS	20.3	19.4	16.7	11.6	1.6
Basic EPS	20.9	21.3	(2.4)	11.8	60.2
Dividend per share	7.2	6.5	5.5	3.8	1.1

Consolidated balance sheet

		(restated 2 )
	£m	£m	£m	£m	£m
Non‑current assets	2,027.5	2,377.6	2,425.4	2,651.9	2,267.2
Net current liabilities	(508.5)	(557.2)	(621.7)	(253.9)	(546.8)
Non‑current liabilities	(712.3)	(996.9)	(1,051.3)	(1,530.9)	(753.1)
Held for sale – continuing operations	–	–	–	8.3	–
Held for sale – discontinued operations	–	–	0.6	0.6	38.5
Non‑current provisions	(87.2)	(111.0)	(111.3)	(125.2)	(120.7)
Net assets	719.5	712.5	641.7	750.8	885.1

Share data
Number of shares in issue	millions	millions	millions	millions	millions
At year end	570.7	750.7	750.7	750.6	750.2
Average (excluding treasury shares and shares in trusts)	553.4	597.7	662.9	739.5	1,057.5

Share price	pence	pence	pence	pence	pence
At year end	169	164	180	101	107
High	233	183	188	140	107
Low	147	133	102	94	73

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Annual Report and Accounts 2026

190

Group financial summary

continued

Unaudited

	2026	2025	2024	2023	2022
Market capitalisation	£m	£m	£m	£m	£m
At year end	950	959	1,154	803	1,124

		(restated 1 )
Continuing operations	£m	£m	£m	£m	£m
Revenue	4,751.9	5,233.9	4,715.1	4,755.0	4,591.1
Adjusted revenue	1,715.7	1,370.0	1,279.6	1,122.5	955.4
Adjusted operating profit	219.4	222.8	204.3	161.0	106.7
Operating profit	219.4	222.6	46.5	153.9	122.8
Adjusted EBITDA	700.8	780.4	748.6	762.4	731.2

First Bus	£m	£m	£m	£m	£m
Revenue	1,443.6	1,081.5	1,012.2	902.5	789.9
Adjusted operating profit	102.8	96.0	83.6	58.4	45.2
Operating profit/(loss)	102.8	96.0	(63.3)	51.4	45.2
Adjusted EBITDA	200.8	160.1	148.1	120.9	104.4

		(restated 1 )
First Rail	£m	£m	£m	£m	£m
Revenue	3,327.6	4,180.7	3,738.4	3,893.2	3,801.2
Adjusted revenue	272.4	288.8	267.8	220.4	165.5
Adjusted operating profit	129.9	148.8	143.3	124.8	87.8
Operating profit	129.9	148.8	143.3	124.8	91.8
Adjusted EBITDA	510.7	639.7	620.5	661.0	649.9

See note 28 for details on the prior year restatement, which arises from the finalisation of the First Bus London acquisition accounting adjustments.

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Annual Report and Accounts 2026

191

Company balance sheet

As at 28 March 2026/29 March 2025

		2026	2025
	Notes	£m	£m
Non‑current assets
Trade and other receivables	3	434.0	425.4
Derivative financial instruments	4	0.1	–
Investments	5	873.5	759.3
		1,307.6	1,184.7
Current assets
Cash and cash equivalents		33.7	64.0
Trade and other receivables	3	0.5	1.8
Derivative financial instruments	4	0.3	–
		34.5	65.8
Total assets		1,342.1	1,250.5
Current liabilities
Trade and other payables	7	203.4	244.4
Derivative financial instruments	4	0.6	0.9
		204.0	245.3
Net current liabilities		(169.5)	(179.5)
Non‑current liabilities
Trade and other payables	7	101.6	65.7
Derivative financial instruments	4	–	0.3
		101.6	66.0
Total liabilities		305.6	311.3
Net assets		1,036.5	939.2
Equity
Share capital	8	28.5	37.5
Share premium		693.3	693.3
Other reserves		125.6	115.8
Own shares	9	(37.5)	(31.1)
Retained earnings		226.6	123.7
Total equity		1,036.5	939.2

The Company reported a profit for the 52 weeks ending 28 March 2026 of £202.0m (2025: profit of £14.4m).

Ryan Mangold

17 June 2026

Company number SC157176

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Annual Report and Accounts 2026

192

Company statement of changes in equity

For the 52 weeks ended 28 March 2026/29 March 2025

							Capital
	Share	Share	Own	Hedging reserve	Merger	Capital	redemption	Retained	Total
	capital	premium	shares		reserve	reserve	reserve	earnings	equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 31 March 2024	37.5	693.3	(20.4)	(11.5)	13.9	93.8	19.7	188.8	1,015.1
Profit for the year	–	–	–	–	–	–	–	14.4	14.4
Other comprehensive loss for the year	–	–	–	(0.1)	–	–	–	–	(0.1)
Total comprehensive gain/(loss) for the year	–	–	–	(0.1)	–	–	–	14.4	14.3
Transactions with owners in their capacity as owners
Shares bought back but not yet cancelled	–	–	–	–	–	–	–	(50.4)	(50.4)
Movement in EBT and treasury shares	–	–	(10.7)	–	–	–	–	(5.4)	(16.1)
Share‑based payments	–	–	–	–	–	–	–	10.5	10.5
Dividends paid	–	–	–	–	–	–	–	(34.2)	(34.2)
Balance at 29 March 2025	37.5	693.3	(31.1)	(11.6)	13.9	93.8	19.7	123.7	939.2
Balance at 30 March 2025	37.5	693.3	(31.1)	(11.6)	13.9	93.8	19.7	123.7	939.2
Profit for the year	–	–	–	–	–	–	–	202.0	202.0
Other comprehensive profit for the year	–	–	–	0.8	–	–	–	–	0.8
Total comprehensive gain for the year	–	–	–	0.8	–	–	–	202.0	202.8
Transactions with owners in their capacity as owners
Shares bought back but not yet cancelled	–	–	–	–	–	–	–	(50.4)	(50.4)
Cancellation of treasury shares	(9.0)	–	–	–	–	–	9.0	–	–
Movement in EBT and treasury shares	–	–	(6.4)	–	–	–	–	(20.2)	(26.6)
Share‑based payments	–	–	–	–	–	–	–	10.4	10.4
Dividends paid	–	–	–	–	–	–	–	(38.9)	(38.9)
Balance at 28 March 2026	28.5	693.3	(37.5)	(10.8)	13.9	93.8	28.7	226.6	1,036.5

Merger reserves relating to disposal of investments for qualifying consideration, and those relating to the extent related investments are impaired are considered realised and transferred to retained earnings.

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Annual Report and Accounts 2026

193

Notes to the Company financial statements

1 Material accounting policies

Basis of accounting

The separate financial statements of the Company are presented as required by the Companies Act 2006.

The financial statements have been prepared on a historical cost basis, except for the revaluation of certain

financial instruments and on a going concern basis as described in the Going concern statement within the

Strategic report on page 71.

The Company meets the definition of a qualifying entity under Financial Reporting Standard (FRS 101)

‘Reduced Disclosure Framework’ issued by the Financial Reporting Council. Accordingly, these financial

statements have been prepared in accordance with FRS 101.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available

under that standard in relation to share‑based payments, financial instruments, capital management,

presentation of a cash flow statement, certain related party transactions and the requirement to present

a statement of financial position as at the beginning of the preceding period when an entity applies an

accounting policy retrospectively or makes a retrospective restatement of its financial statements.

The financial statements for the current period include the results and financial position of the Company

for the 52 weeks ending 28 March 2026. The financial statements for the prior period include the results and

financial position of the Company for the 52 weeks ending 29 March 2025.

Where relevant, equivalent disclosures have been given in the consolidated financial statements. The

principal accounting policies adopted are the same as those set out in note 2 to the consolidated financial

statements except as noted below.

Investments

Investments in subsidiaries and associates are shown at cost less provision for impairment. For investments

in subsidiaries acquired for consideration in the form of shares, including the issue of shares qualifying for

merger relief, cost is measured by reference to the fair value only of the shares issued.

Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial

statements in the period in which the dividends are approved by the Company’s shareholders.

Dividends receivable from the Company’s subsidiaries are recognised only when they are approved

by shareholders.

Key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles

requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities

at the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period. Although these estimates are based on management’s best knowledge, actual results

may ultimately differ from those estimates. The estimates and underlying assumptions are reviewed on

an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate

is revised if the revision affects only that period, or in the period of revision and future periods if the revision

affects both current and future periods.

Investment in subsidiaries

Estimation is required in relation to the recoverability of the investments and is sensitive to changes in

cash flow forecasts supporting the recoverable amount, in particular for First Bus Holdings Limited (FBH)

which is the most significant entity holding the Group’s investments in the Bus division. There is a significant

risk that material adjustment to the carrying amounts of FBH’s investments could be required within the

next financial year, including the reversal of prior year impairments. The carrying value of investments

at 28 March 2026 is £873.5m (2025: £759.3m). See note 5 for more information.

2 Profit for the year

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own

income statement for the year. The Company reported a profit for the financial year ended 28 March 2026

of £202.0m (2025: profit of £14.4m).

Fees payable to the Company’s auditors for the audit of the Company’s annual financial statements are

disclosed in note 6 of the Group accounts. The Company had no employees in the current or preceding

financial year.

3 Trade and other receivables

2026

£m

2025

£m

Amounts due within one year

Prepayments

0.5

1.8

0.5

1.8

Amounts due after more than one year

Amounts due from subsidiary undertakings

406.9

397.4

Loss allowance

(0.8)

(0.7)

Net amounts due from subsidiary undertakings

406.1

396.7

Deferred tax asset (note 6)

27.9

28.7

434.0

425.4

4 Derivative financial instruments

2026

£m

2025

£m

Total derivatives

Total assets – due after more than one year

0.1

–

Total assets – due within one year

0.3

–

Total assets

0.4

–

Total creditors – amounts falling due within one year

0.6

0.9

Total creditors – amounts falling due after more than one year

–

0.3

Total creditors

0.6

1.2

Derivatives classified as held for trading

Non‑current assets

Currency forwards (cash flow hedge)

0.1

–

Current assets

Currency forwards (cash flow hedge)

0.3

–

Total assets

0.4

–

Current liabilities

Currency forwards (cash flow hedge)

0.6

0.9

Non‑current liabilities

Currency forwards (cash flow hedge)

–

0.3

Total liabilities

0.6

1.2

Full details of the Group’s financial risk management objectives and procedures can be found in note 22 of

the Group accounts. As the holding company for the Group, the Company faces similar risks over foreign

currency and interest rate movements.

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Annual Report and Accounts 2026

194

Notes to the Company financial statements

continued

5 Investments in subsidiary undertakings

Unlisted

subsidiary

undertakings

£m

Cost

At 29 March 2025

1,219.5

Additions

8.0

At 28 March 2026

1,227.5

Provision for impairment

At 29 March 2025

460.2

Impairment

28.4

Reversal of impairment

(134.6)

At 28 March 2026

354.0

Carrying amount

At 28 March 2026

873.5

At 29 March 2025

759.3

The carrying value of the investment in subsidiary undertakings is reviewed for impairment triggers on

an annual basis. The recoverable amount is the higher of fair value less cost of disposal or the net present

value of future cash flows which are estimated based on the continued use of the asset in the business. The

investments of £873.5m principally relate to an investment in the Group’s former North American divisions

and holding companies of £85.5m, FirstGroup Holdings Limited of £0.7m, and the First Bus business of

£787.3m, mainly through First Bus Holdings Limited.

The First Bus value in use requires the determination of appropriate assumptions (which are sources of

estimation uncertainty) in relation to the cash flow forecasts, the long‑term growth rate to be applied and

the discount rate used to discount the estimated cash flows to present value.

The reversal of impairment during the year relates primarily to the investments in the First Bus business, for

which the recoverable amount is £930m based on the Bus division’s value in use, and therefore the impact

of prior year impairments has been reversed by £128.0m. Key assumptions used for the future risk‑adjusted

cash flows over a five‑year period (incorporating the Board‑approved three‑year plan) include a 1.9%

long‑term growth rate assumption, a terminal operating margin of 9.4% and a discount rate of 11.7%.

Financial performance of the Bus division has consistently improved in recent years since the original

impairment was recognised during the COVID‑19 period. This is due to the increase in passenger volumes

which have now stabilised, as well as reduction in reliance on government funding which has resulted in

improved performance.

An impairment reversal of £6.6m was recognised in relation to the investment in the Group’s former North

American divisions, and an impairment charge of £18.0m was recognised in relation to the investment in

FirstGroup Holdings Limited. The impairment arose as no dividend generation is expected in FirstGroup

Holdings Limited and therefore the carrying value was reduced to the value of the net assets within the entity.

The additions in the year include IFRS 2 share‑based charges, which have subsequently been fully written down.

The investments in the First Bus business would break even using a discount rate of 12.4% or a reduction of

terminal margin to 7.7%.

A full list of subsidiaries and investments can be found in note 37 to the Group accounts.

6 Deferred tax

The deferred tax asset recognised by the Company and the movements thereon are as follows:

£m

At 29 March 2025

(28.7)

Charge to income statement

0.5

Charge to hedging reserve

0.3

At 28 March 2026

(27.9)

The following is the analysis of the deferred tax balances for financial reporting purposes:

2026

£m

2025

£m

Losses

(27.9)

(28.4)

Other timing difference

–

(0.3)

Deferred tax asset due after more than one year

(27.9)

(28.7)

7 Creditors

2026

£m

2025

£m

Amounts falling due within one year

Bank overdraft

25.5

56.4

Amounts due to subsidiary undertakings

172.7

185.8

Accruals and deferred income

5.2

2.2

203.4

244.4

Amounts falling due after more than one year

Syndicated loan facilities

101.6

65.7

101.6

65.7

Borrowing facilities

The maturity profile of the Company’s undrawn committed borrowing facilities is as follows:

2026

£m

2025

£m

Facilities maturing:

Revolving credit facility – due in more than two years

295.0

Green HP finance facility – due in more than two years

43.0

92.4

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Annual Report and Accounts 2026

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Notes to the Company financial statements

continued

8 Called up share capital

Allotted, called up and fully paid (ordinary shares of 5p each)

Number of

million

£m

Balance at 29 March 2025

750.7

37.5

Cancellation of treasury shares

(180.0)

(9.0)

Balance at 28 March 2026

570.7

28.5

On 10 June 2025, the Company announced a share buyback programme to purchase up to £50m of ordinary

shares. This buyback programme completed on 3 October 2025 having repurchased 22,439,652 shares for

a total consideration of £50.4m including transaction costs.

On 26 January 2026, the Company announced that 180,000,000 shares held in treasury were cancelled.

The nominal value of these shares was £9.0m.

The Board is proposing that a final dividend of 5.0p per share, resulting in a total dividend payment of

c.£27m, be paid on 7 August 2026 to shareholders on the register at 3 July 2026, subject to approval by

shareholders at the 2026 AGM.

The number of ordinary shares of 5p in issue, excluding treasury shares held in trust for employees, at

the end of the period was 542.6 million (2025: 565.6 million). At the end of the period 28.1 million shares

(2025: 185.1 million shares) were being held as treasury shares and own shares held in trust for employees.

9 Own shares

Own

£m

At 29 March 2025

31.1

Movement in EBT and treasury shares during the year

6.4

At 28 March 2026

37.5

The number of own shares held by the Group at the end of the year was 28,086,318 (2025: 185,125,956)

FirstGroup plc ordinary shares of 5p each. Of these, 19,922,152 (2025: 19,401,442) were held by the FirstGroup

plc Employee Benefit Trust and 157,229 (2025: 157,229) were held as treasury shares, with a further 8,006,937

(2025: 165,567,285) held as treasury shares as part of the share buyback programmes. Both trusts and

treasury shares have waived the rights to dividend income from the FirstGroup plc ordinary shares. The

market value of the shares at 28 March 2026 was £47.4m (2025: £303.6m).

10 Contingent liabilities

To support subsidiary undertakings in their normal course of business, FirstGroup plc and certain subsidiaries

have indemnified certain banks and insurance companies who have issued performance bonds for £58.4m

(2025: £47.2m) and letters of credit for £111.3m (2025: £123.3m). The performance bonds primarily relate to First

Rail franchise operations of £56.4m (2025: £47.1m), UK Bus operations of £2.0m (2025: £nil) and residual North

American obligations of £nil (2024: £0.1m). The letters of credit relate substantially to insurance arrangements

in the UK and North America. The parent company has committed further support facilities of up to £80.1m

to First Rail TOCs of which £64.5m remains undrawn. Letters of credit remain in place to provide collateral for

legacy Greyhound insurance and pension obligations.

The Group is party to certain unsecured guarantees granted to banks for overdraft and cash management

facilities provided to itself and subsidiary undertakings. The Company has given certain unsecured

guarantees for the liabilities of its subsidiary undertakings arising under certain operating arrangements,

HP contracts, finance leases, operating leases and certain pension scheme arrangements. It also provides

unsecured cross guarantees to certain subsidiary undertakings as required by VAT legislation. First Bus

subsidiaries have provided unsecured guarantees on a joint and several basis to the FirstGroup Pension

Scheme Trustee.

In its normal course of business the Group has ongoing contractual negotiations with government and

other organisations. The Group is party to legal proceedings and claims which arise in the normal course of

business, including but not limited to employment and safety claims. The Group takes legal advice as to the

likelihood of success of claims and counterclaims. No provision is made where due to inherent uncertainties,

no accurate quantification of any cost, or timing of such cost, which may arise from any of the legal

proceedings can be determined.

The Group’s operations are required to comply with a wide range of regulations, including environmental

and emissions regulations. Failure to comply with a particular regulation could result in a fine or penalty

being imposed on that business, as well as potential ancillary claims rooted in non‑compliance.

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Annual Report and Accounts 2026

196

Shareholder information

General Meeting

The AGM will be held on 30 July 2026 at Brewers’ Hall, Aldermanbury Square, Barbican, London, EC2V 7HR.

The Notice of AGM is available on the Company’s website and will have been posted to you if you have

chosen to receive hard copy communications from the Company. Either a Form of Proxy or online Voting

Card has been posted to all shareholders registered on the Company’s register of members.

The AGM will be a physical meeting. Any changes to the arrangements will be communicated to

shareholders before the meeting through our website and, where appropriate, by RIS announcement.

Shareholders are encouraged to submit proxies for the 2026 AGM electronically by logging into your

Shareview Portfolio at www.shareview.co.uk. If you have not yet registered for a Shareview Portfolio, go to

www.shareview.co.uk and enter the requested information. Electronic proxy appointments must be received

by the Company’s Registrar, Equiniti, no later than 48 hours before the time fixed for the AGM.

Shareholders who wish to ask questions relating to the business of the AGM are encouraged to do so by

submitting questions in advance of the AGM by email to companysecretariat@firstgroup.co.uk, or by post

for the attention of the Company Secretary (see addresses on the next page). We will consider all questions

received. For all other queries regarding the AGM, please contact the Company Secretary.

Website and shareholder communications

A wide range of information on FirstGroup is available at the Company’s website including:



financial information – annual and half‑yearly reports as well as trading updates;



share price information – current trading details and historical charts;



shareholder information – AGM results, details of the Company’s advisers and frequently asked questions;

and



news releases – current and historical.

FirstGroup uses its website as its primary means of communication with its shareholders provided that

the shareholder has agreed or is deemed to have agreed that communications may be sent or supplied

in that manner. Electronic communications allow shareholders to access information instantly as well as

helping FirstGroup to reduce its costs and its impact on the environment. Shareholders that have consented

or are deemed to have consented to electronic communications can revoke their consent at any time by

contacting Equiniti.

Shareholders can sign up for electronic communications online by registering with Shareview, the

internet‑based platform provided by Equiniti. In addition to enabling shareholders to register to receive

communications by email, Shareview provides a facility for shareholders to manage their shareholding

online by allowing them to:



receive trading updates by email;



view their shareholdings;



update their records, including change of address;



view payment and tax information; and



vote in advance of Company general meetings.

To find out more information about the services offered by Shareview, please visit www.shareview.co.uk.

Shareholder enquiries

The Company’s share register is maintained by Equiniti. Shareholders with queries relating to their

shareholding should contact Equiniti directly using one of the methods listed below:

Registrar

Equiniti Limited

Aspect House

Spencer Road

Lancing, West Sussex

BN99 6DA

Tel: +44 (0)371 384 2046*

Online: www.shareview.co.uk



Telephone lines are open from 8.30am to 5.30pm, Monday to Friday.

If you receive more than one copy of the Company’s mailings this may indicate that more than one account

is held in your name on the register. This happens when the registration details of separate transactions

differ slightly. If you believe more than one account exists in your name, please contact Equiniti to request

that the accounts are combined. There is no charge for this service.

Equiniti also offers a postal dealing facility for buying and selling FirstGroup plc ordinary shares; please write

to them at the address shown above or telephone 0371 384 2248. They also offer a telephone and internet

dealing service which provides a simple and convenient way of dealing in FirstGroup shares. For telephone

dealing call 0345 603 7037 between 8.30am and 4.30pm, Monday to Friday, and for internet dealing log on

to www.shareview.co.uk/dealing.

Shareholder information

continued

ShareGift

If shareholders have a small number of shares and the dealing costs or the minimum fee make it

uneconomical to sell them, it is possible to donate these to ShareGift, a registered charity, which provides

a free service to enable you to dispose charitably of such shares. More information on this service can be

found at www.sharegift.org or by calling +44 (0)20 7930 3737. A ShareGift transfer form can also be obtained

from Equiniti.

FirstGroup’s policy on discounts for shareholders

The Group does not offer travel or other discounts to shareholders.

Unsolicited advice on the Company’s shares

Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount, or offers of

free reports about the Company. These are typically from overseas‑based ‘brokers’ who target shareholders,

offering to sell them what often turn out to be worthless or high‑risk shares. These operations are commonly

known as ‘boiler rooms’ and the ‘brokers’ can be very persistent and extremely persuasive.

Shareholders are advised to deal only with financial services firms that are authorised by the FCA. You can

check a firm is properly authorised by the FCA before getting involved by visiting www.fca.org.uk/register.

If you do deal with an unauthorised firm, you will not be eligible to receive payment under the Financial

Services Compensation Scheme if anything goes wrong. For more detailed information on how you can

protect yourself from an investment scam, or to report a scam, go to www.fca.org.uk/consumers/report‑

scam or call 0800 111 6768.

Half‑yearly results

The half‑yearly results, normally announced to the market in November, will continue to be available on

the Company’s website in the form of a press release and not issued to shareholders in hard copy.

Contact information

Company Secretary

David Blizzard

Tel: +44 (0)20 7291 0505

Registered office

FirstGroup plc

395 King Street

Aberdeen AB24 5RP

Tel: +44 (0)1224 650 100

Corporate office

FirstGroup plc

8th Floor

The Point

37 North Wharf Road

London W2 1AF

Tel: +44 (0)20 7291 0505

Joint corporate brokers

RBC Europe Limited

(trading as RBC Capital Markets)

100 Bishopsgate

London

EC2N 4AA

Panmure Liberum Limited

Ropemaker Place

25 Ropemaker Street

London

EC2Y 9LY

External auditor

PricewaterhouseCoopers LLP

40 Clarendon Road

Watford WD17 1JJ

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Annual Report and Accounts 2026

197

Glossary

Direct current

DfT

Department for Transport (UK Government)

DfTO

DfT Operator to which DfT‑contracted train

operating companies will be transferred before

being absorbed into GBR

‘Disc’ or the Discontinued operations’

Refer to First Student, First Transit and Greyhound US

Dividend

Amount payable per ordinary share on an interim

and final basis

EABP

Executive Annual Bonus Plan

EBITDA

Earnings before interest, tax, depreciation and

amortisation, calculated as adjusted operating

profit less capital grant amortisation plus

depreciation

EBT

Employee benefit trust

ED&I

Equality, diversity and inclusion

EPS

Earnings per share

ESG

Environmental, social and governance

Electric vehicle

FCC

First Customer Contact – our customer

contact centre

FAME

Fatty acid methyl ester

FERA

Fuel and energy related activities

Set out below is a guide to commonly used financial,

industry and Group‑related terms in the Annual

Report and Accounts. These are not precise

definitions and are included to provide readers

with a guide to the general meaning of the terms.

Adjusted cash flow

Adjusted cash flow is described in the table shown

on page 27 of the Financial review

Adjusted measures (other)

References to ‘adjusted operating profit’, ‘adjusted

profit before tax’, ‘adjusted earnings’ and ‘adjusted

EPS’ throughout this document are before items

which management has determined as not being

relevant to an understanding of the Group’s

underlying business performance, as set out in note

4 to the financial statements. ‘Adjusted earnings’

and ‘adjusted EPS’ also exclude the impact of IFRS 16

depreciation and interest charges in relation to the

Group’s rail management fee‑based operations,

given the Group takes no cost risk on these rolling

stock leases

Adjusted net debt/(cash)

Net debt/(cash) excluding ring‑fenced cash and

IFRS 16 lease liabilities

Adjusted revenue

Adjusted revenue is defined as revenue excluding

that element of DfT TOC revenue, and related

intercompany eliminations, where the Group takes

substantially no revenue risk. The Adjusted revenue

measure includes management and performance

fee income earned by the Group from its DfT TOC

contracts

AGM

Annual General Meeting

Avanti

Avanti West Coast, a train operating company

B2B/B2C

Business to business/Business to customer

BAYE

Buy As You Earn

Bi‑mode train

A train that can be powered either by electricity

or by using an onboard diesel engine

GBR

Great British Railways – the organisation that

will oversee the operation of the DfT’s passenger

rail contracts

GHG

Greenhouse gas emissions

Group

FirstGroup plc and its subsidiaries

GWR

Great Western Railway, a train operating company

IAS

International Accounting Standards

IFRS

International Financial Reporting Standards

IOSH

Institution of Occupational Safety and Health

KPIs

Key performance indicators, financial and non‑

financial metrics used to define and measure

progress towards our strategic objectives

LBG

London Benchmarking Group, an organisation

that has created a framework for measuring

community impact

LGPS

Local Government Pension Scheme

Local authority

Local government organisations in the UK, including

unitary, metropolitan, district and county councils

BMS

Building management system

The Board

The Board of Directors of the Company

CDP

An international non‑profit organisation that

helps companies and cities disclose their

environmental impact

CEO

Chief Executive Officer

CFO

Chief Financial Officer

CGU

Cash generating unit

Company

FirstGroup plc, a company registered in Scotland

with number SC157176 whose registered office is

at 395 King Street, Aberdeen AB24 5RP

Commercial bus businesses

Regulated, open bus services for the general public,

provided without any dedicated financial support for

that discrete service

Commercial bus fleet

All operational single‑deck and double‑deck

buses certified to carry standing passengers,

deployed on the company’s commercial bus

network, operating on a mix of commercial,

supported and closed services

Commercial bus passengers

Passengers who travel on a commercially operated

bus service whose journey generates fare revenue

for First Bus. This includes journeys subject to the

£3 national fare cap in England, but excludes

concessionary travel and tendered service funding

‘Cont’ or the ‘Continuing operations’

Refer to First Bus, First Rail and Group items

CPI

Consumer price index, an inflation measure that

excludes certain housing‑related costs

CTP

Our Climate Transition Plan published in March 2025

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Annual Report and Accounts 2026

198

Glossary

continued

SWR

South Western Railway, a train operating company

S&P

S&P Global Rating Agency

TCFD

Task Force on Climate‑related Financial Disclosures

tCO

(e)

Tonnes of carbon dioxide equivalent, allowing

other volumes of greenhouse gas emissions to

be expressed in terms of carbon dioxide based

on their relative global warming potential.

Usually expressed as per kilometre or per

passenger kilometre

TfGM

Transport for Greater Manchester

TfL

Transport for London, the transport authority

responsible for most aspects of London’s

transport system

TOC

Train operating company

TOL

Tram Operations Ltd, the operator

of London Trams on behalf of TfL

TOTO

Tap on, Tap off payment technology

TSR

Total shareholder return, the growth in value

of a shareholding over a specified period

assuming that dividends are reinvested to

purchase additional shares

VAWG

Violence against women and girls

WCP

West Coast Partnership, a train operating

company that includes Avanti West Coast

ZEBRA

Zero Emission Bus Regional Areas funding scheme

LTIP

Long‑Term Incentive Plan

LTIR

Lost time injury rate, a measure of safety

performance

MAA

Moving annual average – used in rail

punctuality data

M&A

Mergers and acquisitions

NED

Non‑Executive Director

Net debt

The value of Group external borrowings excluding

the fair value adjustment for coupon swaps

designated against certain bonds, excluding

accrued interest, less cash balances

Network Rail

Owner and operator of Britain’s rail infrastructure,

a UK public sector company that operates as a

regulated monopoly

NPS

Net Promoter Score – a measure used to assess

customer loyalty, satisfaction and enthusiasm

NRC

National Rail Contract

Ordinary shares

FirstGroup plc ordinary shares of 5p each

Open access

Open access rail operators bear all commercial

risk and opportunity. They make all commercial

decisions including ticket pricing, and set working

terms and conditions on the lines for which they

have track access agreements. These agreements

are awarded by the ORR, typically for ten years

ORR

Office of Rail and Road

PETL

Palmer Energy Technology battery storage

PLC

Public limited company

PPM

The UK rail industry’s Public Performance Measure

(punctuality and reliability). Trains are punctual if

they arrive at their destination, having made all

timetabled stops, within five minutes of scheduled

time for London and South East and regional/

commuter services and ten minutes for long‑

distance trains

RATP London

A well‑established bus business with a strong

operational footprint in West and Central London.

Acquired in February 2025

RCF

Revolving credit facility

REGO

Renewable Energy Guarantees of Origin

RLW

Real Living Wage – an hourly wage amount

suggested by the UK Government to sufficiently

cover the cost of living

RSSB

Rail Safety and Standards Board

SAYE

Save As You Earn

SBT

Science‑based target for reducing greenhouse

gas emissions

SBTi

Science Based Targets initiative

SECR

Streamlined Energy and Carbon Reporting

regulations, which took effect on 1 April 2019

SID

Senior Independent Director

SPS

Specialist Passenger Solutions – the subsidiary

contracted to manage workforce transport at

Hinkley Point C and Sizewell C

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FirstGroup

Annual Report and Accounts 2026

199

Cautionary comment concerning forward looking statements

This Annual Report and Accounts includes forward looking statements with respect to the business, strategy

and plans of FirstGroup and its current goals, assumptions and expectations relating to its future financial

condition, performance and results. Generally, words such as ‘may’, ‘could’, ‘will’, ‘expect’, ‘intend’, ‘estimate’,

‘anticipate’, ‘aim’, ‘outlook’, ‘believe’, ‘plan’, ‘seek’, ‘continue’, ‘potential’, ‘reasonably possible’ or similar

expressions are intended to identify forward looking statements.

By their nature, forward looking statements involve known and unknown risks, assumptions, uncertainties

and other factors which may cause actual results, performance or achievements of FirstGroup to be

materially different from any future results, performance or achievements expressed or implied by such

forward looking statements.

Forward looking statements are not guarantees of future performance, and shareholders are cautioned

not to place undue reliance on them. Forward looking statements speak only as of the date they are made

and except as required by the UK Listing Rules and applicable law, FirstGroup does not undertake any

obligation to update or change any forward looking statements to reflect events occurring after the date

of this Annual Report and Accounts. Nothing in this Annual Report and Accounts is intended as a profit

forecast or estimate for any period.

Strategic report

Governance report

Financial

statements

Introduction

FirstGroup

Annual Report and Accounts 2026

200

This report was printed by Park Group, a

CarbonNeutral

printer, using vegetable based inks.

This report is printed on Revive 100, made from 100%

FSC

Recycled certified fibre sourced from de‑inked

post‑consumer waste. Revive 100 is a Carbon

balanced paper which means that the carbon

emissions from its manufacture have been offset.

The printer and the manufacturing mill are

both credited with ISO 14001 Environmental

Management Systems Standard and both

are FSC

certified. The mill also holds EMAS,

the EU Eco‑label.

Consultancy, design and production

www.luminous.co.uk

Registered office

FirstGroup plc

395 King Street, Aberdeen AB24 5RP

Tel. +44 (0)1224 650100

Registered in Scotland number SC157176

Corporate office

FirstGroup plc

8th floor, The Point, 37 North Wharf Road

Paddington, London W2 1AF

Tel. +44 (0)20 7291 0505