Half-year Financial Report

About this update from Firstgroup Plc

[{"type":"text","content":"\n \n \n FIRSTGROUP PLC \n HALF-YEARLY REPORT FOR THE 26 WEEKS TO 27 September 2025 \n \n Positive earnings trajectory underpinned by further portfolio growth and improving quality and diversification of earnings in a period of transition; on course to deliver modest growth in adjusted EPS for the full year, with H2 2026 set to benefit from completed business restructuring \n   \n \n \n \n \n • \n   \n \n \n Adjusted revenue up 30% to £833.6m (H1 2025 £639.6m) reflecting growth in bus revenues, the contribution of First Bus London and progress in First Rail open access and Rail services \n \n \n \n \n • \n \n \n Group adjusted operating profit of £103.6m (H1 2025: £100.8m) with growth from recent acquisitions and some cost efficiencies in H1 2026 offset by higher employers' National Insurance contributions and conclusion of SWR NRC \n \n \n \n \n • \n \n \n Good progress on business restructuring with savings of c.£6m of £15m target delivered in H1 2026 \n \n \n \n \n • \n \n \n Adjusted EPS increased by 16% to 9.9p (H1 2025: 8.5p) with growth supported by the repurchase of 22m shares during H1 2026 \n \n \n \n \n • \n \n \n c.£10m growth investment and H1 weighted net capex of c.£105m, principally on electrification in bus \n \n \n \n \n • \n \n \n c.£76m returned to shareholders; includes £49m through the £50m buyback programme completed in October 2025 and the FY 2025 final dividend paid during the period \n \n \n \n \n • \n \n \n Free cash outflow of £(35.6)m before acquisitions and returns due to accelerated First Bus investment \n \n \n \n \n • \n \n \n Adjusted net debt at period end of £207.6m; FY 2026 year end adjusted net debt forecast to be £125m-135m, before deployment of any growth capital \n \n \n \n \n • \n \n \n Interim dividend of 2.2p per share (H1 2025: 1.7p per share) in line with progressive policy \n \n \n \n \n • \n \n \n Completion of Bus Section pension scheme valuation with £20m cash returned to the Group in November. c.£65m remains in escrow, with the outcome to be reviewed with the 2030 valuation \n \n \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n H1 2026 \n (£m) \n \n \n \n \n \n \n \n \n H1 2025 (£m) \n \n \n   \n \n \n \n \n   \n \n \n Cont. \n \n \n Disc. \n \n \n   \n \n \n Cont. \n \n \n Disc. \n \n \n Total \n \n \n   \n \n \n \n \n Adjusted revenue 1 \n \n \n 833.6 \n \n \n - \n \n \n 833.6 \n \n \n 639.6 \n \n \n - \n \n \n 639.6 \n \n \n \n \n \n \n \n Adjusted operating profit/(loss) 2 \n \n \n 103.6 \n \n \n (0.2) \n \n \n 103.4 \n \n \n 100.8 \n \n \n - \n \n \n 100.8 \n \n \n \n \n \n \n \n Adjusted operating profit margin \n \n \n 12.4% \n \n \n   \n \n \n 12.4% \n \n \n 15.8% \n \n \n \n \n \n 15.8% \n \n \n \n \n \n \n \n Adjusted profit/(loss) before tax 2 \n \n \n 76.3 \n \n \n (0.2) \n \n \n 76.1 \n \n \n 70.8 \n \n \n (0.1) \n \n \n 70.7 \n \n \n \n \n \n \n \n Adjusted EPS 3,4 \n \n \n 9.9p \n \n \n   \n \n \n 9.9p \n \n \n 8.5p \n \n \n - \n \n \n 8.5p \n \n \n \n \n \n \n \n Dividend per share \n \n \n   \n \n \n   \n \n \n 2.2p \n \n \n \n \n \n \n \n \n 1.7p \n \n \n \n \n \n \n \n Adjusted net debt 5 \n \n \n   \n \n \n   \n \n \n 207.6 \n \n \n \n \n \n \n \n \n 0.2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n H1 2026 \n (£m) \n \n \n \n \n \n \n \n \n H1 2025 (£m) \n \n \n \n \n \n \n \n Statutory \n \n \n Cont. \n \n \n Disc. \n \n \n   \n \n \n Cont. \n \n \n Disc. \n \n \n Total \n \n \n \n \n \n \n \n Revenue \n \n \n 2,297.6 \n \n \n - \n \n \n 2,297.6 \n \n \n 2,373.5 \n \n \n - \n \n \n 2,373.5 \n \n \n \n \n \n \n \n Operating profit/(loss) \n \n \n 103.6 \n \n \n (0.2) \n \n \n 103.4 \n \n \n 100.3 \n \n \n 5.9 \n \n \n 106.2 \n \n \n \n \n \n \n \n Profit/(loss) before tax \n \n \n 76.3 \n \n \n (0.2) \n \n \n 76.1 \n \n \n 70.3 \n \n \n 5.8 \n \n \n 76.1 \n \n \n \n \n \n \n \n EPS 4 \n \n \n   \n \n \n   \n \n \n 9.9p \n \n \n \n \n \n \n \n \n 9.2p \n \n \n \n \n \n \n \n Net debt \n \n \n   \n \n \n   \n \n \n 992.0 \n \n \n \n \n \n \n \n \n 977.1 \n \n \n \n \n \n \n \n - Bonds, bank and other debt net of (cash) \n \n \n   \n \n \n   \n \n \n (25.2) \n \n \n   \n \n \n   \n \n \n (274.7) \n \n \n   \n \n \n \n \n - IFRS 16 lease liabilities \n \n \n   \n \n \n   \n \n \n 1,017.2 \n \n \n   \n \n \n   \n \n \n 1,251.8 \n \n \n   \n \n \n \n \n 'Cont.' refers to the Continuing operations comprising First Bus, First Rail, and Group items, including Greyhound Canada. 'Disc.' refers to discontinued operations, being First Student, First Transit and Greyhound US. \n   \n Key developments \n   \n First Bus: \n \n \n \n \n • \n \n \n Adjusted operating profit up 4% to £42.7m (H1 2025: £41.1m) in a challenging economic and policy environment; pricing actions, operational and network efficiencies, Business and Coach growth and the contribution of First Bus London offset the impact of lower commercial volumes, cost inflation and higher National Insurance contributions \n \n \n \n \n • \n \n \n Underlying 6 passenger volumes decreased by 4% vs. H1 2025; concessions growth of 4% offset a 7% fall in commercial volumes, reflecting the transition to the £3 fare cap, lower consumer confidence and some modal shift to other transport modes, including active travel \n \n \n \n \n • \n \n \n Revenue growth in regional bus of 3.5%, with revenue per mile improving to £5.60 (H1 2025: £5.46) \n \n \n \n \n • \n \n \n Total revenue up 37% to £702.9m with further operational, network efficiencies and yield improvements delivered in H1 2026; includes revenue of £150.2m from First Bus London following the completion of the acquisition in February 2025 \n \n \n \n \n • \n \n \n Continued focus on improved service delivery; 24% decrease in lost mileage, to 1.3% and NPS score up from 13.0 to 14.9 \n \n \n \n \n • \n \n \n Business and Coach revenue increased to £105.4m, (H1 2025: £80.9m), primarily due to contract wins and extensions and contribution of recently acquired businesses \n \n \n \n \n • \n \n \n The Group is at the forefront of fleet and infrastructure electrification and unlocking future potential revenue streams: \n \n \n \n \n \n \n \n - \n \n \n net investment of £105m on electrification alongside co-funding of c.£5m received in H1 2026 and £7m in FY 2025 for FY 2026 bus deliveries, with the balance of ZEBRA funding due in H2 2026  \n \n \n   \n \n \n \n \n \n \n \n - \n \n \n c.1,280 zero emission buses at end of September (c.23% of the fleet) including in London, with 3 fully and 17 partially electrified depots across the UK \n \n \n   \n \n \n \n \n \n \n \n - \n \n \n 40 diesel to electric 'repowers' now in operation \n \n \n   \n \n \n \n \n \n \n \n - \n \n \n investment in Palmer Energy Technology to bring battery energy storage units to First Bus depots \n \n \n   \n \n \n \n \n • \n \n \n Launch of five-year Flixbus contract, subsequent extension of Flixbus operations and acquisition of Tetley's Coaches have bolstered our Business and Coach business \n \n \n \n \n • \n \n \n Active participation in upcoming regional franchising opportunities in England and continued evaluation of strong pipeline of strategic, value-accretive UK bolt-on acquisitions \n \n \n \n \n   \n First Rail: \n \n \n \n \n • \n \n \n 1.43m open access passenger journeys in H1 2026 (H1 2025: 1.40m), an increase of 2% \n \n \n \n \n • \n \n \n Open access revenue of £53.2m (H1 2025: £51.9m); industry data continues to show passenger volume growth on the East Coast Mainline, supported by open access, with c.30% more long-distance journeys in the year ending 30 June 2025 vs. 2019 \n \n \n \n \n • \n   \n \n \n Rail Services (Mistral, FCC and First Rail Consultancy) revenue of £53.6m (H1 2025: £48.1m); provision of services to TPE and SWR continues as well as new customers; almost a third of current contracted revenues are now external customers \n \n \n \n \n • \n \n \n DfT TOCs financial performance in line with expectations; SWR transferred to DfTO in May 2025 \n \n \n \n \n • \n \n \n First London Cableway receives 'Excellence' accreditation in Mayor of London's 'Good Work Standard' scheme \n \n \n \n \n • \n \n \n On course to more than double existing open access capacity in the next 2-3 years: \n \n \n \n \n \n \n \n - \n \n \n rolling stock secured for London to Stirling service; full service anticipated from mid CY 2026 \n \n \n \n \n \n \n \n - \n \n \n London to Carmarthen service track access commences in December 2027 \n \n \n \n \n \n \n \n - \n \n \n award of Lumo Edinburgh-Glasgow extension and additional paths on Lumo and Hull Trains from December 2025 \n \n \n \n \n • \n \n \n Applications submitted to ORR for an extension to the Stirling service, a new service from Cardiff to York and a revised application for a new Rochdale to London service - in addition to ongoing applications for extensions of Carmarthen track access rights, from Paignton and Hereford to London \n \n \n \n \n \n \n \n \n \n \n   \n Outlook \n \n \n \n \n • \n \n \n The Group anticipates modest growth in adjusted EPS in FY 2026 and to then at least maintain adjusted EPS in FY 2027, with continued investment in portfolio diversification \n \n \n \n \n • \n   \n \n \n Adjusted net debt is expected to be £125m-135m at the end of FY 2026, reflecting continued strong cash generation, accelerated net cash capex of c.£180m in First Bus, including new zero emission buses in London, and before the deployment of any capital on acquisitions \n \n \n \n \n • \n   \n \n \n The Group continues to evaluate a strong pipeline of strategic growth opportunities in bus and rail in line with our UK focused growth strategy \n \n \n \n \n   \n Commenting, Chief Executive Officer Graham Sutherland said: \n \"We have delivered a robust performance in H1 2026, made further progress in growing and diversifying the business and maintained our positive earnings trajectory. In the second half, we will benefit from the actions we have taken to restructure the business as well as the contribution of our recent acquisitions and expect modest growth in our adjusted earnings per share for the full year. \n   \n \"Our focus remains on the delivery of our commitments, including the successful execution of our UK focused growth strategy. Underpinned by our strong balance sheet and disciplined capital allocation policy, we are well placed to deliver further benefits for all our stakeholders.\" \n   \n   \n   \n   \n   \n Results presentation and webcast \n A presentation and webcast for investors and analysts will be held at 09:00 (GMT) today in London. To register to join in person or to request the webcast details, please email [email protected]. To access the presentation to be discussed on the webcast, together with a pdf copy of this announcement, go to www.firstgroupplc.com/investors. A playback facility will also be available there in due course. \n   \n   \n   \n \n \n \n \n Contacts at FirstGroup: \n \n \n Contacts at Brunswick Group: \n \n \n \n \n Marianna Bowes, Head of Investor Relations \n Stephen Bethel, Director of Brand & Communications \n [email protected] \n Tel: +44 (0) 20 7725 3354 \n \n \n Simone Selzer / Charlotte Millington \n Tel: +44 (0) 20 7404 5959 \n \n \n \n \n \n \n \n \n \n \n \n \n Contacts at Panmure Liberum: \n \n \n Contacts at RBC Capital Markets: \n \n \n \n \n Nicholas How / Satbir Kler \n Tel: +44 (0) 20 3100 2000 \n \n \n James Agnew / Elliott Thomas \n Tel: +44 (0) 20 7653 4000 \n \n \n \n \n   \n   \n   \n Notes \n 1 '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. Following further review of the components of the Adjusted revenue measure, the H1 2025 comparative data has been re-presented to reflect a £10m reduction (H1 2025 as reported: £649.6m). \n 2 'Adjusted operating profit/(loss)' and 'Adjusted profit/(loss) before tax' are before adjusting items as set out in note 3 to the financial statements \n 3 '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 the definitions section on pages 20-21. \n 4 ' Adjusted EPS' and EPS based on weighted average number of shares in the period of 559.7m (H1 2025: 608.5m) reflecting the current year and prior year share buybacks. \n 5 ' Adjusted net debt/(cash)' is bonds, bank and other debt net of free cash (i.e. excludes IFRS 16 lease liabilities and ring-fenced cash). \n 6 'Underlying' adjusts for certain items which distort period-on-period trends in our commercial bus business. H1 2026 underlying bus passenger volumes exclude London and other acquisitions completed since H1 2025 \n   \n Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. \n   \n About FirstGroup \n FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public transport services. With around 29,000 employees, we reported revenue of £5.1 billion and transported almost 2m passengers a day in FY 2025. 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 pr ovide are critical to delivering wider economic, social and environmental goals. Each of our divisions is a leader in its field: First Bus is one of the largest bus operators in the UK, serving more than 25% of the population in the UK with a fleet of c.6,000 buses and coaches, and carrying more than a million passengers a day. First Rail is one of the UK's most experienced rail operators, with many years of experience running long-distance, commuter, regional and sleeper rail services. We operate a fleet of c.1,800 locomotives and rail carriages through two DfT contracted train operating companies: WCP (incorporating Avanti West Coast and West Coast Partnership Development) and GWR, and two open access routes (Hull Trains and Lumo). We are formally committed to operating a zero emission First Bus commercial fleet by 2035, and Firs t Rail will help support the UK Government's goal to remove all diesel-only trains from service by 2040. During FY 2025 FirstGroup received MSCI's highest possible ESG rating of AAA, was named one of the world's cleanest 200 public companies for the sixth consecutive year and holds an Industry Top-Rated status with Sustainalytics and Sustainability Yearbook membership with S&P Global. We provide easy and convenient mobility, improving quality of life by connecting people and communities. Visit our website at www.firstgroupplc.com and follow us on LinkedIn at http://www.linkedin.com/company/first-group . \n   \n   \n CEO review \n   \n Introduction \n I am pleased to report another strong set of results for the first half of our financial year, despite a challenging operating environment in UK bus and the transfer of SWR in May. Our focus on strategic execution has driven further progress in earnings, portfolio growth and diversification and returns to our shareholders. The Group is on course to deliver modest growth in adjusted earnings per share in FY 2026. \n In the second half of FY 2026 we anticipate further progress in both First Bus and First Rail open access, supported by the full benefit of the measures we have taken to restructure our business as our industries evolve, and we work to mitigate the c.£16m impact of increased employers' National Insurance contributions on the Group. \n Driving efficiencies in First Bus in a period of transition The work we have done over the last few years has made First Bus a more agile and efficient business. This enabled us to respond quickly in H1 2026, to drive efficiencies and manage yield as the industry transitioned from the £2 to the £3 fare cap in January and absorbed increased National Insurance contributions, ongoing inflationary pressures and softer commercial passenger demand. \n In Regional Bus, revenue grew by 3.5% despite these headwinds and the division reported adjusted operating profit of £42.7m, up from £41.1m in H1 2025. This was driven by the yield actions as well as operational and network efficiencies, further contract wins and extensions in Business and Coach and the contribution of our new businesses. These businesses, including First Bus London, are integrating well and trading in line with or ahead of expectations. \n Service delivery remains core to our strategy in Bus. It continues to encourage modal shift from cars, create efficiencies, and in franchised operations, to drive client satisfaction and contract performance incentives through enhanced operational delivery. In regional bus we have seen improvements in our lost mileage, punctuality and customer metrics during H1 2026, with our businesses in London and Rochdale consistently ranking highly in the operator league tables. Together with our industry-leading decarbonisation credentials, this positions us strongly for upcoming franchising and partnership opportunities as the market evolves. \n   \n A pivotal period in our open access rail growth journey \n Our two open access operations Hull Trains and Lumo, where we bear all commercial risk and opportunity, continue to perform well. In H1 2026 focus remained on effective asset utilisation, yield optimisation and strong service delivery. Continued passenger revenue growth was partially offset by mobilisation costs for our new Stirling operation which we expect to enter service next year.  \n Growing our open access business is a key strategic priority for the Group. We continue to see opportunities to grow our open access footprint across the UK, where we can deploy further material investment and make use of our proven expertise to connect underserved communities, enable growth for all operators and create jobs and economic growth for local communities. \n   \n Thanks to the acquisition of track access rights for two new services, between London Paddington and Carmarthen and between London Euston and Stirling, and the award of additional paths and extensions to our existing services, we are set to more than double our current capacity in the next two to three years. This growth is underpinned by the c.£500m lease agreement we entered into in December, for fourteen new trains that are being manufactured by Hitachi in County Durham, securing the skills base and jobs in the local area. \n In addition to the applications we submitted to the Office of Rail and Road (ORR) last year, for extensions of our new Carmarthen service to Paignton and Hereford, we have recently submitted applications for an extension of our new Stirling service to December 2038, replacing diesel trains with new battery electric trains, a new service between Cardiff and York and a revised application for a Rochdale to London service.  Should the ongoing applications referenced above be successful, the Group will make use of its option to commit further investment in new Hitachi trains, representing continued investment in UK manufacturing of c.£300m. \n   \n Hull Trains and Lumo have demonstrated what open access services can achieve for the UK rail industry. They can connect previously under-served communities and provide additional capacity and passenger choice, helping to drive more people towards rail and away from less sustainable forms of transport at a substantial benefit to the taxpayer. Open access operators operate without government subsidy and are highly productive. Lumo contributes more per train mile to infrastructure investment than any other long-distance operator. Open access operators also bring private investment into the sector, create jobs and support economic growth in the areas they serve, with Hull Trains and Lumo on track to deliver £1.4bn in economic benefits by the end of their current track access agreements. \n As Great British Railways takes shape over the next few years, we firmly believe that there is a continued role for the private sector operators in the future railway, with competition on a level playing field bringing significant benefits to passengers in terms of affordable fares and greater choice. Competition raises standards for all; for example, Lumo's arrival on the East Coast Mainline also made LNER drive improvements, with the operator's customer satisfaction jumping 7%.   \n An experienced partner in rail, focused on delivery \n In the First Rail DfT TOCs we are focused on delivering on our National Rail Contracts ahead of their transfer to public ownership. Financial performance in H1 2026 was in line with our expectations, with the transfer of SWR offset by higher variable fee income. \n   \n During our eight-year stewardship of SWR, improving the infrastructure, customer experience and rolling stock across the service enabled us to efficiently deliver high quality services for our passengers, who made more than 150 million journeys each year. I would again like to thank our teams for their hard work to ensure a successful transition, including the roll out of the new fleet of 90 Arterio trains which the DfTO continues to deliver in line with the plans we set out in our handover. \n   \n In our Rail Services businesses (First Customer Contact, Mistral and First Rail Consultancy) we have seen further growth and are working to secure new and longer contracts, including with other industry participants. Nearly a third of the current contracted revenues from the Rail Services businesses are now with external customers. \n   \n Investing in our asset base to strengthen our business and unlock future growth \n Alongside the transformation of our businesses, our strong cash conversion and balance sheet have allowed us to invest to modernise and strengthen our asset base. \n   \n In First Bus, we have accelerated our investment in the electrification of our fleet and depot infrastructure over the last few years, alongside available government co-funding, helping to drive forward the Government's decarbonisation agenda. Our average fleet age has come down from 10.1 years in FY 2022 to 8.8 years in H1 2026 and, as we standardise our fleet and reduce the size of our spare fleet, we are driving efficiencies and lowering engineering costs. It also positions us well to unlock future electrification adjacent revenue streams. \n   \n In First Rail, our open access businesses remain capital light. Rolling stock leases, including our recent c.£500m lease agreement mentioned above, are agreed for the duration of the track access agreement. \n   \n Looking ahead, the significant investment we have committed to our fleets and infrastructure not only advances the Group's decarbonisation ambitions but also provides a platform to leverage our strong asset base as our industries transition. \n   \n Our capital allocation policy remains unchanged \n We have a strong balance sheet and a disciplined capital allocation policy incorporating investment in future growth, progressive shareholder dividends and the Board's commitment to return surplus cash to shareholders. \n   \n We have reported a period-end adjusted net debt of £207.6m, having invested £83.4m in decarbonisation and £9.5m on acquisitions and returned £76m to shareholders via dividends and our buyback programmes during H1 2026. In light of the Group's performance in H1 2026, the Board has proposed an interim dividend of 2.2p per share (H1 2025: 1.7p per share) in line with the current policy of around three times adjusted EPS cover ratio. This will result in a dividend payment of c.£12.0m, to be paid on 30 December to shareholders on the register on 28 November.  \n   \n The 2024 triennial valuation of the Bus section of the Group's pension scheme has now been completed and £20m of cash was returned to the Group in November, with £20m paid to the Bus Section. c.£65m is now held in escrow for the Bus and Group Schemes until the completion of the respective 2030 valuations and we are evaluating further derisking options of the Group section. \n   \n On course to maintain our positive earnings trajectory \n We expect modest growth in our Group adjusted earnings per share in FY 2026 and to then at least maintain adjusted EPS in FY 2027, from a more robust and diversified earnings base.   \n   \n In First Bus, we continue to anticipate revenue of c.£1.4bn in FY 2026, including c.£300m from First Bus London. Adjusted operating profit in H2 2026 will benefit from further efficiencies and annualised cost savings from the business restructure completed in H1 offsetting the partial impact of continued inflationary pressure and the c.£15m annualised National Insurance impact on the division. The adjusted operating profit margin in regional bus is expected to normalise to c.10% in H2 2026. \n   \n In First Rail, the open access operations and Rail Services will see revenue growth offset by mobilisation costs of c.£6m in the new open access services. In the DfT TOCs, FY 2026 adjusted revenue and adjusted operating profit is expected to be lower than the prior year, reflecting the transfer of SWR to public ownership and a normalised level of variable fees. \n   \n The Government's announced policy is to bring the National Rail Contracts into public ownership at the earliest possible opportunity, with SWR having transferred on 25 May 2025, c2c on 20 July 2025 and Greater Anglia on 12 October 2025. West Midlands is expected to transfer on 1 February 2026 and GTR on 31 May 2026, with the five remaining contracts anticipated to transfer at intervals of approximately three months in the order that their current core contractual terms expire. \n   \n As the contracts transition, we anticipate a cash inflow of c.£125m from the DfT TOCs, after any further reorganisation cash costs the Group may incur, over a three-year period from October 2025 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. \n   \n We anticipate net capital expenditure of c.£180m in FY 2026 in line with our accelerated investment in First Bus decarbonisation, supported by c.£20m of government co-funding. This includes c.£30m for electric buses in London, where we are trialling the ownership model on a specific large route that was bid for using the operating lease model. Looking ahead, in the short to medium term, we expect annual net capital expenditure in First Bus to be c.£100m, unless further government co-funding becomes available. \n   \n We are forecasting a year-end adjusted net debt position of £125m-135m reflecting our strong cash generation, partially offset by the accelerated decarbonisation spend and before the deployment of any growth capital. \n   \n A strong foundation for sustainable value-accretive growth \n We have a strong balance sheet and a clear, UK-focused growth strategy. As the UK bus and rail industries transition, we continue to evaluate a strong pipeline of value accretive growth opportunities in bus and rail and will deploy capital to ensure we have a diverse, high quality and sustainable earnings base, less affected by changes in public policy.   \n   \n In First Bus, we are working to develop our existing commercial bus business, to grow our Business and Coach market share, with attractive, longer-term contracts and to leverage electrification efficiencies and generate new revenue streams in the energy sector. As the regional bus industry transitions, our focus on service delivery, well-capitalised, owned fleet and large network of depots across the UK will enable us to capitalise on considerable opportunities, driving future cash generation. \n   \n In First Rail, we are focused on growing our successful open access business, identifying where we can scale our Rail Services businesses, bidding for new contracts and identifying new open access opportunities in the UK. \n   \n As a leading UK bus and rail operator, we have a critical role to play in the delivery of the country's wider economic, social and environmental goals. We will continue to take a proactive approach, demonstrating our strengths as a trusted, experienced partner for the delivery of public transport services, underpinned by our significant capital commitment in decarbonisation and open access rail. \n   \n Graham Sutherland \n Chief Executive Officer \n 17 November 2025 \n   \n   \n Business Review \n \n First Bus \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n £m \n \n \n £m \n \n \n   \n \n \n \n \n \n \n \n H1 2026 \n \n \n H1 2025 \n \n \n Change \n \n \n \n \n Revenue \n \n \n 702.9 \n \n \n 513.7 \n \n \n +189.2 \n \n \n \n \n Adjusted operating profit \n \n \n 42.7 \n \n \n 41.1 \n \n \n +1.6 \n \n \n \n \n Adjusted operating margin \n \n \n 6.1% \n \n \n 8.0% \n \n \n (190)bps \n \n \n \n \n EBITDA \n \n \n 91.7 \n \n \n 72.7 \n \n \n +19.0 \n \n \n \n \n Revenue - Regional Bus \n \n \n 442.1 \n \n \n 427.1 \n \n \n +15.0 \n \n \n \n \n Revenue - Business and Coach \n \n \n 105.4 \n \n \n 80.9 \n \n \n +24.5 \n \n \n \n \n Revenue - Franchising \n \n \n 155.4 \n \n \n 5.7 \n \n \n +149.7 \n \n \n \n \n Passenger volumes (m) 1 \n \n \n 196 \n \n \n 204 \n \n \n (8) \n \n \n \n \n Operational mileage (m) 2 \n \n \n 109 \n \n \n 83 \n \n \n +26 \n \n \n \n \n Revenue per mile (£) \n \n \n 6.44 \n \n \n 6.19 \n \n \n +0.25 \n \n \n \n \n Net operating assets \n \n \n 867.0 \n \n \n 658.3 \n \n \n +208.7 \n \n \n \n \n Net capital expenditure \n \n \n 110.6 \n \n \n 52.4 \n \n \n +58.2 \n \n \n \n \n Return on capital employed 3 \n \n \n 9.4% \n \n \n 11.4% \n \n \n (200)bps \n \n \n \n \n 1 Excludes First Bus London \n 2 H1 2026 includes mileage of 16m miles from First Bus London and 3m from other acquisitions, and 6m from Somerset Passenger Solutions ('SPS') and York Pullman which were not reported in H1 2025. \n 3 Return on capital employed is a measure of capital efficiency and is calculated by dividing adjusted operating profit after tax by average year- end assets and liabilities excluding debt items \n   \n First Bus revenue increased to £702.9m in H1 2026 from £513.7m in H1 2025. This was driven by yield and operational efficiencies in regional bus, Business and Coach contract wins and extensions and the contribution of the recently acquired businesses including First Bus London (£150.2m). Total passenger revenue increased to £398.4m (H1 2025: £385.8m), with revenue per mile increasing from £6.19 in the prior period, to £6.44; in regional Bus revenue per mile rose to £5.60 from £5.46. \n   \n Adjusted operating profit of £42.7m in H1 2026 was slightly ahead of H1 2025 (£41.1m).  A yield increase of c.10% and further network and operational efficiencies in regional bus, growth in the Business and Coach division and the contribution of First Bus London offset a c.£7m increase in employer National Insurance costs, continued inflationary pressures and lower commercial passenger volumes. \n   \n Concessionary passenger volumes continue to grow, offsetting softer commercial volumes \n The £3 fare cap in England came into effect in January 2025, replacing the £2 fare cap. To manage the transition, we acted quickly to introduce a new fare structure, making use of our 'Tap On, Tap Off' technology to introduce simple, distance-based fares. \n   \n Underlying passenger volumes decreased by 4% compared to H1 2025. A 4% growth in concessionary volumes was offset by a 7% decline in commercial volumes, resulting from the transition to the £3 fare cap, fewer discretionary journeys due to lower consumer confidence and some modal shift to other transport modes, including active travel. \n   \n The free travel for under-22s scheme in Scotland has driven volumes and in Wales, a pilot scheme offering £1 bus fares for young people saw our child and student volumes grow by over 20% against the previous summer. In Bristol, free travel for children over the summer period led to a 50% increase during the weeks when free travel was available, 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. \n   \n Strong focus on service delivery, efficiencies and yield management   \n We are working hard to deliver the best possible services for our customers and to drive efficiencies in a challenging operating environment.   \n   \n Our continued focus on the delivery of incremental performance improvements through our 'Everyday Actions' and 'Brilliant Basics' programmes have supported a 24% improvement in lost mileage in regional bus, to 1.3% (H1 2025: 1.7%) and our Net Promoter Score has also improved, to 14.9 (H1 2025: 13.0). Looking ahead, the roll out of new ticket machines across our regional bus operations will allow us to increase our number of transactions thanks to greater reliability and to further improve customer experience. \n   \n In addition to the new fare structure introduced in regional bus as we transitioned to the £3 fare cap in England, we have delivered further network efficiencies, working with our local authority partners to ensure there is the necessary coverage for local communities. Looking ahead, we are using our granular passenger data to monitor volumes and will continue to review fares in line with our pricing strategy. We have also restructured our network planning and marketing teams from several local units into two central teams. This will allow us to formulate and implement data-led pricing strategies, network efficiencies and marketing campaigns with greater consistency and commercial control across all business units. \n   \n Our recruitment and employee initiatives have supported increased driver productivity during H1 2026, as we recruit and train more drivers. This has also resulted in a 16% decrease in the number of agency drivers in regional bus during the period, against H1 2025. We are also benefitting from our newer electric fleet, with an average fleet age in H1 2026 of 8.8 years, including London (H1 2025: 9.0 years) and we have fuel and electricity hedging programmes in place to mitigate in-year cost inflation and overall volatility of fuel and energy costs. These programmes continue to evolve as we transition the First Bus commercial fleet to zero emission. \n   \n Industry-wide inflationary pressures remained in H1 2026. Costs increased due to inflation by c.3%, mainly in wages, where there was a 4% average increase in driver pay awards. During the period, there was increased industrial action across the UK bus industry. Industrial action in some of our bargaining units resulted in a minor impact on the division's adjusted operating profit. The majority of our largest bargaining units have now settled new pay awards, with two year awards in regional bus, in line with our focus on staggered, multi-year pay award settlements. \n   \n A material earnings contribution from First Bus London in H1 2026 \n Having completed the acquisition of First Bus London at the end of February 2025, the business contributed revenue of £150.2m in H1 2026. The integration of the business into First Bus is progressing well and it is performing ahead of our acquisition assumptions. \n   \n We continue to bid for route contracts in line with our investment case and securing our routes as planned. We now have c.94% of our contracted revenues secured for FY 2027. As the route contracts evolve over the next five years, we now anticipate annual revenues of £340m-370m, with operating margins in line with historical London levels of 6-7%. \n   \n In our franchised operations, service is core to our strategy, to drive client satisfaction, contract performance incentives, and modal shift through enhanced operational delivery. Both First Bus London and our Rochdale operation in Manchester consistently rank highly in the operator league tables. \n   \n Further growth in Business and Coach as we strengthen our contract base and benefit from new businesses \n Revenue in Business and Coach increased by c.30%, to £105.4m. This reflects further contract extensions and wins, the launch of our Flixbus services and the contribution of our recently acquired businesses that we are successfully integrating into the business, with trading in line or ahead of their investment cases.   \n   \n In July, we announced that we had acquired Tetley's Coaches, a Leeds-based coach and bus operator that has been in operation for over 75 years. Tetley's operates from a large, owned depot in Central Leeds, adjacent to our Hunslet Park depot. Tetley's has a fleet of 55 coaches and buses and a diverse portfolio of high-capacity contracts including for schools, universities, workplace shuttles and private hire in Central Leeds and throughout the West Yorkshire Combined Authority Area. The integration of the business is progressing well. \n   \n The B2B and coach market is an attractive market. It offers longer-term, high value contracts and we continue to evaluate a strong pipeline of growth opportunities that will allow us to leverage our extensive depot footprint and asset base to grow our market share across the UK, as the bus market transitions. \n   \n At the forefront of electrification \n We continue to make good progress towards our target of a zero emission commercial bus fleet by 2035. In H1 2026 our accelerated investment in decarbonisation continued, with investment of £105m during the period alongside government co-funding of c.£5m received in the period and c.£7m in the prior year for FY 2026 bus deliveries, with the balance of ZEBRA co-funding anticipated in H2 2026.  At the end of September 2025, we had c.1,280 zero emission buses in operation, c.23% of our fleet, including in London, and three fully and 17 partially electrified depots across the UK. Electrification construction works are currently underway at four further depots. \n   \n We have also continued to invest in repowered vehicles (mid-life diesel or hybrid vehicles that are repowered with an electric drivetrain, powered by batteries) and are now operating 40 repowers from NewPower, an entity of UK manufacturer Wrightbus. Repowers benefit from reduced emissions and lower operating costs and are cheaper than new electric buses and are undertaken at the point of the major diesel engine overhaul. Investing in repowers can extend the lifespan of buses and avoids the emissions of manufacturing new vehicles, forming an important strand of our decarbonisation strategy. \n   \n Depot and fleet electrification allows us to standardise our fleet and reduce the size of our spare fleet to drive efficiency and lower engineering costs and also enables us to unlock future adjacent revenue streams.  \n   \n We now have more than 1,300 charging outlets at our depots across the UK and continue to secure third-party charging contracts. In H1 2026 we launched the 'First Charge' brand at fifteen depots in Scotland and England, providing third parties with access to our ultra rapid charging infrastructure at competitive rates. \n   \n In August we invested in a minority stake in Palmer Energy Technology, to bring battery storage units to our sites. Bus batteries can typically be used for eight to ten 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. \n   \n We installed a one megawatt battery energy storage facility at our Hoeford depot in Hampshire in August, with a second storage facility due to be installed in Aberdeen early next year, and we are exploring opportunities to create more battery sites across the UK over time to drive further cost efficiencies and provide a potential platform for second life use of bus batteries. \n   \n A strong partner in franchising and partnerships \n With a number of Mayoral Authorities outside London choosing franchising as their preferred future option for bus delivery, the regional bus market will see considerable change over the next few years. This includes some areas where we currently operate, and others where we do not, representing an opportunity for us to enter new markets. \n   \n We are a leading, highly experienced operator with a track record of delivering quality bus operations under contract in London and Greater Manchester, well positioned to actively take part in franchising opportunities as they commence. Authorities progressing with the development and procurement of bus franchise schemes include those covering Liverpool City Region, West Yorkshire, South Yorkshire, Wales, and the West Midlands. \n   \n We have good experience of both the franchise and Enhanced Partnership models. In Leicester and Portsmouth, for example, investments of c.£100m and £76m respectively in their enhanced partnerships between 2022 and 2025 have resulted in passenger growth of 26% and 41% since the start of the period.  In Rochdale's franchised Bee Network for Transport for Greater Manchester our punctuality has improved by more than 10%, and in London, where we operate routes under contract to Transport for London, we lead performance tables. \n   \n Regardless of the bus service delivery model, close partnerships with local government stakeholders are essential for the thriving local bus networks we all want to see, and we are committed to working with our partners locally and nationally to achieve this. Our aim is to drive modal shift and encourage more people to use the bus, and we will continue to adapt our business to deliver great value, to shape networks to suit where and when people want to travel, to serve communities and grow local economies in a sustainable way.  \n   \n Looking ahead \n H2 2026 will benefit from further efficiencies and the actions we have taken to mitigate the transition from the £2 to the £3 fare cap, continued inflationary pressure and the c.£15m annualised increase in employers' National Insurance contributions. We anticipate full year revenue of c.£1.4bn, including c.£300m from First Bus London, with the regional bus division's adjusted operating profit margin to normalise to c.10% in H2 2026, further progress in profitability in First Bus London and the Business and Coach segment to contribute double digit margins. \n   \n We expect accelerated net capital expenditure of c.£180m, principally on decarbonisation, including c.£30m on electric buses in London, where we are assessing the potential benefits of the vehicle ownership model on a specific large route. \n   \n Looking further ahead, as the UK bus market transitions, we are well placed to further grow our earnings, leveraging our expertise, strong asset base 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 to c.£340m-370m from FY 2028 onwards, continue to grow our Business and Coach earnings and market share, and we have a strong pipeline of growth opportunities in existing and new areas across the UK. \n   \n   \n First Rail \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n \n \n \n \n \n \n \n \n H1 2026 \n \n \n H1 2025 \n \n \n Change \n \n \n \n \n Adjusted revenue from DfT TOCs 1 \n \n \n 24.1 \n \n \n 26.0 \n \n \n (1.9) \n \n \n \n \n Revenue from open access and Rail Services 2 \n \n \n 106.8 \n \n \n 100.0 \n \n \n +6.8 \n \n \n \n \n First Rail Adjusted Revenue \n \n \n 130.9 \n \n \n 126.0 \n \n \n +4.9 \n \n \n \n \n Adjusted operating profit from DfT TOCs \n \n \n 39.7 \n \n \n 44.1 \n \n \n (4.4) \n \n \n \n \n Adjusted operating profit from open access and Rail Services \n \n \n 26.9 \n \n \n 23.8 \n \n \n +3.1 \n \n \n \n \n First Rail adjusted operating profit \n \n \n 66.6 \n \n \n 67.9 \n \n \n (1.3) \n \n \n \n \n Passenger journeys (m) - open access operations \n \n \n 1.43 \n \n \n 1.40 \n \n \n +0.03 \n \n \n \n \n   \n 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 3 on page 36 for further detail \n 2      Includes intra divisional eliminations related to affiliated trading with the open access operations \n   \n The First Rail division reported total adjusted revenue of £130.9m in H1 2026 (H1 2025: £126.0m). The division's open access operations contributed £53.2m in revenue for the period, up from £51.9m in the prior year. The division's Rail Services businesses delivered revenue of £53.6m (H1 2025: £48.1m) and adjusted operating profit of £10.6m (H1 2025: £5.7m). \n   \n The division's two open access operations Hull Trains and Lumo, where we bear all revenue and cost risk and opportunity, delivered adjusted operating profit of £16.3m (H1 2025: £18.1m), with c.£1.3m of mobilisation costs for the new Stirling service and a small impact on Hull Trains from industrial action during the period. Passenger journeys increased to 1.43m (H1 2025: 1.40m), with softer leisure passenger volumes at Hull Trains during the summer offset by a strong ramp up in business travellers from September. Hull Trains continue to operate ten car operations where appropriate to maximise seat availability. Lumo continued to see strong passenger demand during the period. \n   \n The Department for Transport Contracted Train Operating Companies (DfT TOCs) operate National Rail Contacts (NRCs), under which the DfT retains substantially all revenue and cost risk (including for fuel, energy and wage increases). There is a fixed management fee, and the opportunity to earn an additional variable fee, which includes various operational targets designed to incentivise service delivery for customers. \n   \n The DfT TOCs' financial performance was in line with expectations in H1 2026. Reported adjusted operating profit for the period totalled £39.7m (H1 2025: £44.1m), with SWR transferring to the DfT Operator Limited (DfTO) in May 2025 offset by higher variable fees. \n   \n Rail attributable net income from the DfT TOCs - being the Group's share of the management fee income available for distribution from the GWR, SWR and WCP DfT contracts - was £15.3m (H1 2025: £14.0m).    \n   \n In H1 2026 SWR reported revenue of £176.0m and adjusted operating profit of £5.2m. The IFRS 16 impact, which the Group excludes from adjusted earnings, comprises operating profit of £0.6m and interest cost of £0.1m. Net attributable fees earned by the Group were £2.4m after the non-controlling interest of £1.0m. No IFRS 16 leases were recognised on the balance sheet at the end of H1 2026 (FY 2025: £23.1m), and SWR had £64.1m of ring-fenced cash (FY 2025: £88.1m), which is anticipated to be returned in due course. \n   \n Significant growth to come in open access \n Growing our highly successful open access business is a key component of the Group's strategy, to grow and diversify in attractive markets and to help drive a modal shift to bus and rail. We have continued to make good progress in this regard during H1 2026, with the award of extensions to our existing services which together with the new Stirling and Carmarthen services, will more than double our existing capacity in the next two to three years. \n   \n In May 2025 we entered into rolling stock leases for our new London to Stirling service with Eversholt Rail, for the duration of the current track access agreement to 2030. This includes five Class 222 six car diesel trains with a total seat capacity of c.340 standard class seats per service, representing c.447m annual seat miles when fully operational. We expect the service to be fully operational from mid CY 2026 following the delivery of the trains and staff training. \n   \n In July, we announced that the ORR had approved applications for additional paths and an extension to our existing open access services from December 2025, representing an additional c.118m seat miles (+13%). These include the extension of two existing northbound and one existing southbound Lumo service between Edinburgh and Glasgow on weekdays and one extension in each direction on Sundays. The extended service will call at Glasgow Queen Street, Falkirk High and Edinburgh Haymarket. We were also granted an additional daily return service on Lumo between Newcastle and London and one additional Hull Trains service between London and Hull on weekdays and Saturdays. We will use existing rolling stock to deliver these extended services. \n   \n We were disappointed that the ORR did not approve the application for a new Hull Trains service between London and Sheffield and we will continue to explore further potential opportunities for the route. The proposed route would have provided Sheffield with the first regular service from London King's Cross since 1968 and an estimated 350,000 people in the Worksop and Woodhouse catchment areas would have had direct rail access to London, with all of the economic benefit this would have brought. \n   \n Looking ahead, we have applications in with the ORR for an extension of our existing track access rights for the new Carmarthen service, from Paignton to London and Hereford to London, and we have recently submitted three further applications. These include 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.   \n   \n We have committed significant investment to facilitate the growth of our open access services, including our c.£500m ten-year lease and maintenance agreement for 14 new five-car class 80X Hitachi electric, battery or bi-mode trains. The trains are being manufactured by Hitachi in County Durham, securing the skills base and jobs in the local area. Should the ongoing applications referenced above be successful, the Group will make use of its option to commit further investment in new Hitachi trains, representing a further investment in UK manufacturing of c.£300m. \n   \n Further growth in Rail Services \n Our Rail Services businesses - First Customer Contact (FCC), Mistral Data and First Rail Consultancy, generated revenues of £53.6m in H1 2026, up from £48.1m in H1 2025. We continue to provide services to TPE and SWR and, during the period, FCC continued to extend contracts and First Rail Consultancy further diversified its client portfolio beyond passenger rail, with clients now including a strategically important freight programme for Network Rail. Almost a third of current contracted revenues are now with third parties. Looking ahead, we believe that private sector ancillary services providers will continue to be vital to the success of the rail industry, bringing experience, expertise and benefits to the sector. \n   \n Focus on delivery in our National Rail Contracts \n In the DfT TOCs we remained focused on operational delivery and making use of our experience and expertise to enhance the service offering and create innovative solutions for the rail industry. \n   \n In July, GWR received official confirmation that following an extensive period of trials in various weather conditions, its industry-first battery-electric train had achieved a world record distance of 200.5 miles on a single charge. Investment in battery technology could support the decarbonisation of rail travel in the future, as whilst overhead lines will remain the first choice to power electric trains, where that is not possible or desirable, battery technology offers a reliable and efficient alternative. \n   \n Avanti West Coast has continued to improve customer experience which in H1 2026 included the delivery of a key investment programme at Wigan North Western station. Redesigned and refurbished station areas have created more welcoming environments, and the addition of eight new 'Welcome Hosts' will help customers travelling to and from the station. \n   \n London Cableway \n We have now operated the London Cableway for more than a year and are delighted that First London Cableway has been recognised with an 'excellence' accreditation under the Mayor of London's 'Good Work Standard' scheme. Administered by City Hall, the accreditation is awarded to employers who demonstrate a strong commitment to their workforce across several key areas, including fair pay through measures such as the London Living Wage, fostering staff wellbeing and engagement and promoting both skills development and inclusive recruitment practices. To celebrate this achievement, a specially designed cable car was unveiled by Howard Dawber, Deputy Mayor for Business and Growth. \n   \n A period of significant change in UK Rail \n As the National Rail Contracts are transferred to public ownership and Great British Railways (GBR) is established the UK rail industry will be transformed. \n   \n As GBR takes shape, we believe that there is a continued role for the private sector operators, with competition on a level playing field bringing significant benefits to passengers in terms of affordable fares and greater choice. Competition raises standards for all - for example, Lumo's arrival on the East Coast Mainline also made LNER drive improvements, with the operator's customer satisfaction jumping 7%. An additional six million journeys have been made on the London to Edinburgh route since the commencement of Lumo four years ago, with total rail passengers from long distance operators up 7.1m per year since 2019. \n   \n Hull Trains and Lumo have demonstrated what open access services can achieve for the UK rail industry. They can connect previously under-served communities, and provide additional capacity, helping to drive more people towards rail and away from less sustainable forms of transport at a substantial benefit to the taxpayer. Open access operators operate without government subsidy and are highly productive for the wider UK economy. Lumo also contributes more per train mile to infrastructure investment than any other long- distance operator, which represents a material benefit to the taxpayer. Hull Trains and Lumo are on track to deliver £1.4bn in economic benefits by the end of their current track access agreements. \n   \n Open access operators bring significant private investment to both the rail sector and UK manufacturing. Despite accounting for less than 1% of the railway, open access has accounted for over a quarter of all new rolling stock investment during the last five years, creating jobs and supporting local supply chains. \n   \n Having been one of the largest rail operators in the UK for more than 25 years, we are well positioned to work with GBR to add value and improve services. Enhancing rail connections is critical to boosting economic growth in the UK and we believe that, delivered effectively, rail 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. \n   \n Outlook \n For FY 2026, we anticipate First Rail's adjusted revenue and adjusted operating profit will be marginally lower than FY 2025, with lower fees following the transfer of SWR to public ownership, a lower impact from IFRS 16 reflecting lease terms and a normalised level of DfT TOC performance fees. In open access, further progress will be partially offset by mobilisation costs of c.£6m for the new open access operations. \n   \n The Government's announced policy is to bring the NRCs into public ownership at the earliest possible opportunity, with SWR transferring on 25 May 2025, c2c on 20 July 2025 and Greater Anglia on 12 October 2025. West Midlands is expected to transfer on 1 February 2026 and GTR on 31 May 2026, with subsequent contracts anticipated to transfer at intervals of approximately three months in the order that their current core contractual terms expire. \n   \n As the contracts transfer, we anticipate a cash inflow of c.£125m from the DfT TOCs, including any further reorganisation cash costs the Group may incur, over a three-year period from October 2025 with cash received from the management fees a year in arrears. This cash receipt includes the earnings from the division's Rail Services businesses that are expected to continue supporting the DfT TOCs for a year or more after the NRCs end. \n   \n We expect our new London to Stirling service to be fully operational from mid CY 2026, and following a period of mobilisation, to deliver annual revenues of c.£50m with a low double digit adjusted operating profit margin, post IFRS 16. Our London to Carmarthen service is expected to begin operations in December 2027 and following a c.two-year mobilisation period, we anticipate annual revenues of c.£50m, again with a low double digit post IFRS 16 adjusted operating profit margin. \n   \n As the rail industry transitions, we are focused on growing in open access, identifying where we can scale our Rail Services businesses, bidding for new contracts, and identifying new open access opportunities in the UK. \n   \n \n \n Financial review \n   \n   \n Adjusted revenue from continuing operations increased to £833.6m (H1 2025: £639.6m). First Bus revenue increased by 37% to £702.9m, principally reflecting the impact of the First Bus London acquisition which added £150.2m, underlying passenger revenue growth of 2.3%, and other First Bus revenue growth, partly offset by marginally softer commercial volumes with concessionary volumes higher. First Rail saw a 6.8% increase in revenue across its open access and Rail Services businesses. DfT TOC variable fees were marginally lower, mainly as a result of the expiry of the South Western Railway National Rail Contract (NRC) in May 2025. \n   \n Operating performance \n Adjusted operating performance by division is as follows: \n   \n \n \n \n \n \n \n \n 26 weeks to 27 September 20 25 \n \n \n 26 weeks to 28 September 2024 \n \n \n 52 weeks to 29 March 2025 \n \n \n \n \n \n \n \n Adjusted Revenue 1 £m \n \n \n Adjusted operating profit 2 £m \n \n \n Adjusted operating margin 2 % \n \n \n Adjusted \n Revenue 1 £m \n \n \n Adjusted operating profit 2 £m \n \n \n Adjusted operating margin 2 % \n \n \n Adjusted Revenue 1 £m \n \n \n Adjusted operating profit 2 £m \n \n \n Adjusted operating margin 2 % \n \n \n \n \n First Bus \n \n \n 702.9 \n \n \n 42.7 \n \n \n 6.1 \n \n \n 513.7 \n \n \n 41.1 \n \n \n 8.0 \n \n \n 1,081.5 \n \n \n 96.0 \n \n \n 8.9 \n \n \n \n \n First Rail \n \n \n 130.9 \n \n \n 66.6 \n \n \n 50.9 \n \n \n 126.0 \n \n \n 67.9 \n \n \n 53.9 \n \n \n 288.8 \n \n \n 148.8 \n \n \n 51.5 \n \n \n \n \n Group items/ eliminations 3 \n \n \n (0.2) \n \n \n (5.7) \n \n \n n/a \n \n \n (0.1) \n \n \n (8.2) \n \n \n n/a \n \n \n (0.3) \n \n \n (22.0) \n \n \n n/a \n \n \n \n \n Continuing operations \n \n \n 833.6 \n \n \n 103.6 \n \n \n 12.4 \n \n \n 639.6 \n \n \n 100.8 \n \n \n 15.8 \n \n \n 1,370.0 \n \n \n 222.8 \n \n \n 16.3 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Discontinued operations 4 \n \n \n - \n \n \n (0.2) \n \n \n n/a \n \n \n - \n \n \n - \n \n \n n/a \n \n \n - \n \n \n (0.6) \n \n \n n/a \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total \n \n \n 833.6 \n \n \n 103.4 \n \n \n 12.4 \n \n \n 639.6 \n \n \n 100.8 \n \n \n 15.8 \n \n \n 1,370.0 \n \n \n 222.2 \n \n \n 16.2 \n \n \n \n \n   \n Statutory operating performance by division is as follows: \n   \n \n \n \n \n \n \n \n 26 weeks to 27 September 2025 \n \n \n 26 weeks to 28 September 2024 \n restated 5 \n \n \n 52 weeks to 29 March 2025 \n restated 5 \n \n \n \n \n \n \n \n Revenue £m \n \n \n Operating profit £m \n \n \n Operating margin % \n \n \n Revenue £m \n \n \n Operating profit £m \n \n \n Operating margin% \n \n \n Revenue £m \n \n \n Operating profit £m \n \n \n Operating margin % \n \n \n \n \n First Bus \n \n \n 702.9 \n \n \n 42.7 \n \n \n 6.1 \n \n \n 513.7 \n \n \n 41.1 \n \n \n 8.0 \n \n \n 1,081.5 \n \n \n 96.0 \n \n \n 8.9 \n \n \n \n \n First Rail \n \n \n 1,604.8 \n \n \n 66.6 \n \n \n 4.2 \n \n \n 1,872.4 \n \n \n 67.9 \n \n \n 3.6 \n \n \n 4,180.7 \n \n \n 148.8 \n \n \n 3.6 \n \n \n \n \n Group items 3 \n \n \n (10.1) \n \n \n (5.7) \n \n \n n/a \n \n \n (12.6) \n \n \n (8.7) \n \n \n n/a \n \n \n (28.3) \n \n \n (22.2) \n \n \n n/a \n \n \n \n \n Continuing operations \n \n \n 2,297.6 \n \n \n 103.6 \n \n \n 4.5 \n \n \n 2,373.5 \n \n \n 100.3 \n \n \n 4.2 \n \n \n 5,233.9 \n \n \n 222.6 \n \n \n 4.3 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Discontinued operations 4 \n \n \n - \n \n \n (0.2) \n \n \n n/a \n \n \n - \n \n \n 5.9 \n \n \n n/a \n \n \n - \n \n \n 4.9 \n \n \n n/a \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total \n \n \n 2,297.6 \n \n \n 103.4 \n \n \n 4.5 \n \n \n 2,373.5 \n \n \n 106.2 \n \n \n 4.5 \n \n \n 5,233.9 \n \n \n 227.5 \n \n \n 4.3 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n 1     ' Adjusted revenue' is revenue excluding DfT TOC revenue, and related intercompany eliminations, where the Group takes substantially no revenue risk. Following further review of the components of the Adjusted revenue measure, the H1 2025 comparative data has been re-presented to reflect a £10m reduction (H1 2025 as reported: £649.6m). \n 2        ' Adjusted operating profit' and \"Adjusted operating margin\" are before adjusting and certain other items as set out in note 3 to the interim financial statements. \n 3        Includes elimination of intra-group trading between Bus and Rail divisions, and charges relating to central management and other items. \n 4        Discontinued operations relates to the Group's residual Greyhound US activities. \n 5      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. \n   \n Adjusted operating profit from continuing operations was £103.6m (H1 2025: £100.8m), with growth from recent acquisitions and some cost efficiencies delivered during H1 2026, offset by £7m higher employers' National Insurance contributions, and the conclusion of the South Western Railway National Rail Contract. First Bus adjusted operating profit was up 3.9%, with pricing actions, operational and network efficiencies, Business and Coach growth and the contribution of First Bus London offsetting the impact of marginally lower volumes, cost inflation and higher National Insurance contributions. First Rail adjusted operating profit was marginally lower than the prior year, reflecting the transfer of SWR to the DfTO in May 2025, partially offset by higher variable fees in the DfT TOCs. Adjusted operating profit from open access and Rail Services was higher than the prior year, with growth in Lumo and Hull Trains and provision releases offset by mobilisation costs for the new Stirling route. Central costs were £5.7m with the decrease mainly due to cost efficiencies realised following the business restructure. The Group has delivered business restructuring savings of £6m in H1 2026, in line with the annualised run rate target of £15m for the year. \n   \n The Group's EBITDA measure, adjusted for First Rail management fees performance, was higher year-on-year driven mostly by better performance in First Bus driven by acquisitions, and enhanced variable fee recognition in H1 2026 (partially offset by the SWR contract ending) and strong performance in Rail Services businesses. \n   \n \n \n \n \n   \n \n \n 26 weeks to 27 September 2025 £m \n \n \n 26 weeks to 28 September 2024 £m \n \n \n 52 weeks to 29 March 2025 £m \n \n \n \n \n First Bus EBITDA 1 \n \n \n 73.3 \n \n \n 63.9 \n \n \n 144.0 \n \n \n \n \n Attributable net income from First Rail DfT contracted TOCs 2 \n \n \n 15.3 \n \n \n 14.0 \n \n \n 39.0 \n \n \n \n \n First Rail - open access and Additional Services EBITDA 1 \n \n \n 28.9 \n \n \n 22.6 \n \n \n 40.8 \n \n \n \n \n Group central costs (EBITDA basis 1 ) \n \n \n (5.7) \n \n \n (8.0) \n \n \n (21.4) \n \n \n \n \n Group EBITDA adjusted for First Rail DfT contracted TOCs' management fees \n \n \n 111.8 \n \n \n 92.5 \n \n \n 202.4 \n \n \n \n \n 1      Pre-IFRS 16 basis. \n 2      A reconciliation to the segmental disclosures is set out in note 3. \n   \n Adjusted earnings were £55.5m (H1 2025: £51.8m), primarily driven by the increase in adjusted operating profit. \n   \n \n \n \n \n   \n \n \n 26 weeks to 27 September 2025 £m \n \n \n 26 weeks to 28 September 2024 £m \n \n \n 52 weeks to 29 March 2025 £m \n \n \n \n \n First Bus adjusted operating profit \n \n \n 42.7 \n \n \n 41.1 \n \n \n 96.0 \n \n \n \n \n First Rail adjusted operating profit \n \n \n 66.6 \n \n \n 67.9 \n \n \n 148.8 \n \n \n \n \n Group central costs (operating profit basis) \n \n \n (5.7) \n \n \n (8.2) \n \n \n (22.0) \n \n \n \n \n Group adjusted operating profit \n \n \n 103.6 \n \n \n 100.8 \n \n \n 222.8 \n \n \n \n \n Interest \n \n \n (27.3) \n \n \n (30.0) \n \n \n (57.7) \n \n \n \n \n Profit before tax \n \n \n 76.3 \n \n \n 70.8 \n \n \n 165.1 \n \n \n \n \n IFRS 16 DfT contracted TOCs adjustment \n \n \n 0.6 \n \n \n 1.3 \n \n \n (1.1) \n \n \n \n \n Taxation \n \n \n (19.1) \n \n \n (17.8) \n \n \n (41.1) \n \n \n \n \n Non-controlling interest \n \n \n (2.3) \n \n \n (2.5) \n \n \n (7.1) \n \n \n \n \n Group adjusted earnings \n \n \n 55.5 \n \n \n 51.8 \n \n \n 115.8 \n \n \n \n \n   \n   \n Reconciliation to non-GAAP measures and performance \n Note 3 to the financial statements sets out the reconciliations of operating profit and profit before tax to their adjusted equivalents. \n   \n There were no adjusting items in H1 2026. \n   \n The principal adjusting items in H1 2025 were as follows: \n   \n Greyhound Canada \n A net £0.5m charge was incurred in the period relating to the continued winding down of Greyhound Canada operations. \n   \n The principal H1 2025 adjusting items in relation to the operating profit adjustments - discontinued operations were as follows: \n   \n CARES receipt \n A credit of £0.4m was recognised in the prior period on receipt of CARES funding in relation to the discontinued North American operations. \n   \n Legacy US pensions scheme buy out \n 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 £5.5m in the income statement as an adjusting item. \n   \n Group statutory operating profit \n Statutory operating profit (continuing basis) was £103.6m (H1 2025: £100.3m). \n   \n Finance costs and investment income \n Net finance costs were £27.3m (H1 2025: £30.0m) with the decrease principally due to lower IFRS 16 interest charges in the DfT TOCs, and the impact of the bond maturing in the prior year. This was partly offset by interest charges on the higher net debt in the period following the acquisition of First Bus London in February 2025, and lower interest receivable on deposits. \n   \n Profit before tax \n Statutory profit before tax (continuing basis) was £76.3m (H1 2025: £70.3m). Adjusted profit before tax (continuing basis) as set out in note 3 to the financial statements was £76.3m (H1 2025: £70.8m). \n   \n Tax \n The tax charge on adjusted profit before tax on continuing operations was £19.1m (H1 2025: £17.8m), representing an effective tax rate of 25.0% (H1 2025: 25.1%). The effective rate remains broadly in line with the UK rate. The total tax charge, including tax on discontinued operations, was £19.1m (H1 2025: £17.8m). The actual cash tax during the period was a receipt of £1.9m as a result of a tax refund for the carry back of tax losses within the DfT TOCs, and current year cash tax benefitting from the accelerated allowances on the investment in the Bus fleet (H1 2025: £0.8m tax paid). \n   \n The ongoing Group's effective tax rate is expected to be broadly in line with UK corporation tax levels (currently 25%) with future cash taxes benefitting in the short to medium term from brought forward losses and accelerated capital allowances. \n   \n EPS \n Adjusted continuing EPS was 9.9p (H1 2025: 8.5p). Basic continuing EPS was 9.9p (H1 2025: 8.2p). \n   \n Shares in issue \n As at 27 September 2025 there were 543.8m shares in issue (H1 2025: 598.6m), excluding treasury shares and own shares held in trust for employees of 206.9m (H1 2025: 152.1m). The Company's £50m share buyback programme completed on 3 October 2025 having repurchased 22,439,652 shares. 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 period was 559.7m (H1 2025: 608.5m). \n   \n Capital allocation framework    \n The Group's capital allocation framework can be summarised as follows:   \n   \n \n \n \n \n Investment   \n \n \n ·           First Bus: £180m accelerated net cash capex for FY 2026, mostly on electrification alongside             government co-funding; includes c.£30m for London buses where ownership model is being                      assessed  \n ·              First Rail: continues to be cash capital-light, with any capital expenditure required by the                          management fee-based operations fully funded under the new contracts and open                                   access rolling stock operating leases in line with the track access agreements  \n \n \n \n \n Growth   \n \n \n ·              Actively reviewing strong pipeline of UK bus and rail opportunities where this creates value for                 shareholders and exceeds the Group's post-tax WACC (c.9%)  \n \n \n \n \n Returns for shareholders   \n \n \n ·              Progressive dividend policy currently around 3x cover of Group adjusted earnings; paid c.1/3                   interim and 2/3 final dividend   \n ·              Interim dividend of 2.2p per share proposed  \n ·              The Board remains committed to returning surplus cash to shareholders  \n \n \n \n \n Balance sheet  \n \n \n ·              Less than 2.0x Adjusted Net Debt: Adjusted EBITDA target in the medium term   \n \n \n \n \n   \n Dividend \n The Board has proposed an interim dividend of 2.2p per share (c.£12.0m in aggregate), to be paid on 30 December 2025 to shareholders on the register at 28 November 2025. \n   \n Adjusted cash flow \n The Group's adjusted cash outflow of £(212.2)m (H1 2025: outflow of £(7.8)m) in the period reflects strong underlying cash generated by operations offset by higher capital outflows relating to investment in First Bus fleet and infrastructure decarbonisation, the impact of the share buyback programme, lease payments and movement in First Rail ring-fenced cash (£85.9m working capital outflow since FY 2025). The adjusted cash flow is set out below: \n   \n \n \n \n \n \n \n \n \n \n \n 26 weeks to 27 September 2025 £m \n \n \n 26 weeks to 28 September 2024 £m \n \n \n   \n 52 weeks to 29 March 2025 \n £m \n \n \n \n \n Adjusted EBITDA \n \n \n \n \n \n 341.6 \n \n \n 362.0 \n \n \n 779.8 \n \n \n \n \n Other non-cash income statement charges \n \n \n \n \n \n 4.0 \n \n \n 6.4 \n \n \n 10.3 \n \n \n \n \n Working capital \n \n \n \n \n \n (91.9) \n \n \n 19.1 \n \n \n 75.7 \n \n \n \n \n Movement in other provisions \n \n \n \n \n \n (25.9) \n \n \n (31.3) \n \n \n (27.9) \n \n \n \n \n Movement in financial assets/contingent consideration receivable \n \n \n \n \n \n (0.3) \n \n \n (1.0) \n \n \n (1.0) \n \n \n \n \n Pension payments lower than income statement charge \n \n \n \n \n \n (1.1) \n \n \n (4.7) \n \n \n (8.7) \n \n \n \n \n Cash generated by operations \n \n \n \n \n \n 226.4 \n \n \n 350.5 \n \n \n 828.2 \n \n \n \n \n Capital expenditure  \n \n \n \n \n \n (136.4) \n \n \n (72.5) \n \n \n (156.4) \n \n \n \n \n Acquisitions and strategic growth investments \n \n \n \n \n \n (9.5) \n \n \n (1.5) \n \n \n (86.5) \n \n \n \n \n Proceeds from disposal of property, plant and equipment \n \n \n \n \n \n 11.4 \n \n \n 10.1 \n \n \n 17.9 \n \n \n \n \n Proceeds from capital grant funding \n \n \n \n \n \n 38.3 \n \n \n 23.8 \n \n \n 66.4 \n \n \n \n \n Interest and tax \n \n \n \n \n \n (25.6) \n \n \n (31.6) \n \n \n (66.3) \n \n \n \n \n Shares purchased for Employee Benefit Trust \n \n \n \n \n \n (20.3) \n \n \n (9.3) \n \n \n (16.1) \n \n \n \n \n Share repurchases from buyback programmes, including costs \n \n \n \n \n \n (48.7) \n \n \n (41.4) \n \n \n (91.8) \n \n \n \n \n External dividends paid \n \n \n \n \n \n (26.9) \n \n \n (24.0) \n \n \n (34.2) \n \n \n \n \n Dividends paid to non-controlling interests \n \n \n \n \n \n - \n \n \n - \n \n \n (3.4) \n \n \n \n \n Lease payments in debt \n \n \n \n \n \n (220.9) \n \n \n (211.9) \n \n \n (476.6) \n \n \n \n \n Adjusted cash flow \n \n \n \n \n \n (212.2) \n \n \n (7.8) \n \n \n (18.8) \n \n \n \n \n Foreign exchange movements \n \n \n \n \n \n - \n \n \n 1.5 \n \n \n 0.2 \n \n \n \n \n Net inception of leases \n \n \n \n \n \n (25.9) \n \n \n (37.9) \n \n \n (288.0) \n \n \n \n \n Lease payments in debt \n \n \n \n \n \n 220.9 \n \n \n 211.9 \n \n \n 476.6 \n \n \n \n \n Movement in net debt in the period \n \n \n \n \n \n (17.2) \n \n \n 167.7 \n \n \n 170.0 \n \n \n \n \n Reconciliation to movement in adjusted net debt \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Ring-fenced cash \n \n \n \n \n \n 82.9 \n \n \n (25.3) \n \n \n (66.1) \n \n \n \n \n IFRS 16 lease liabilities \n \n \n \n \n \n (186.4) \n \n \n (206.7) \n \n \n (254.9) \n \n \n \n \n Movement in adjusted net debt \n \n \n \n \n \n (120.7) \n \n \n (64.3) \n \n \n (151.0) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Reconciliation to free cash flow \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Add back: Acquisitions and strategic growth \n \n \n \n \n \n 9.5 \n \n \n 1.5 \n \n \n 138.5 \n \n \n \n \n Add back: Dividends \n \n \n \n \n \n 26.9 \n \n \n 24.0 \n \n \n 34.2 \n \n \n \n \n Add back: Share buyback \n \n \n \n \n \n 48.7 \n \n \n 41.4 \n \n \n 91.8 \n \n \n \n \n Free cash flow \n \n \n \n \n \n (35.6) \n \n \n 2.6 \n \n \n 113.5 \n \n \n \n \n   \n Free cash flow for the 26 weeks ended 27 September 2025 is as follows: \n   \n \n \n \n \n \n \n \n Open Access & Other Rail \n £m \n \n \n DfT TOCs \n £m \n \n \n First Bus \n £m \n \n \n Group Items \n £m \n \n \n Total Group \n £m \n \n \n \n \n EBITDA \n \n \n 28.9 \n \n \n - \n \n \n 73.3 \n \n \n (5.7) \n \n \n 96.5 \n \n \n \n \n DfT TOC management fees \n \n \n - \n \n \n 9.2 \n \n \n - \n \n \n - \n \n \n 9.2 \n \n \n \n \n Working capital \n \n \n (5.0) \n \n \n - \n \n \n (11.7) \n \n \n (0.6) \n \n \n (17.3) \n \n \n \n \n Cash flow from operations \n \n \n 23.9 \n \n \n 9.2 \n \n \n 61.6 \n \n \n (6.3) \n \n \n 88.4 \n \n \n \n \n Capital expenditure \n \n \n (0.4) \n \n \n - \n \n \n (114.8) \n \n \n - \n \n \n (115.2) \n \n \n \n \n Disposal proceeds \n \n \n 0.3 \n \n \n - \n \n \n 11.0 \n \n \n 0.1 \n \n \n 11.4 \n \n \n \n \n DB pension higher than Income Statement \n \n \n (0.6) \n \n \n - \n \n \n (0.7) \n \n \n 0.2 \n \n \n (1.1) \n \n \n \n \n Interest and tax \n \n \n (0.1) \n \n \n - \n \n \n (3.3) \n \n \n (0.6) \n \n \n (4.0) \n \n \n \n \n Other movements \n \n \n 2.4 \n \n \n - \n \n \n 1.6 \n \n \n (19.1) \n \n \n (15.1) \n \n \n \n \n Free cash flow \n \n \n 25.5 \n \n \n 9.2 \n \n \n (44.6) \n \n \n (25.7) \n \n \n (35.6) \n \n \n \n \n   \n Free cash flow for the 26 weeks to 28 September 2024 was as follows: \n   \n   \n \n \n \n \n \n \n \n Open Access & Other Rail \n £m \n \n \n DfT TOCs \n £m \n \n \n First Bus \n £m \n \n \n Group Items \n £m \n \n \n Total Group \n £m \n \n \n \n \n EBITDA \n \n \n 22.5 \n \n \n - \n \n \n 63.9 \n \n \n (7.9) \n \n \n 78.5 \n \n \n \n \n DfT TOC management fees \n \n \n - \n \n \n 9.2 \n \n \n - \n \n \n - \n \n \n 9.2 \n \n \n \n \n Working capital \n \n \n 5.5 \n \n \n - \n \n \n (20.4) \n \n \n (0.7) \n \n \n (15.6) \n \n \n \n \n Cash flow from operations \n \n \n 28.0 \n \n \n 9.2 \n \n \n 43.5 \n \n \n (8.6) \n \n \n 72.1 \n \n \n \n \n Capital expenditure \n \n \n (8.4) \n \n \n - \n \n \n (51.5) \n \n \n (0.4) \n \n \n (60.3) \n \n \n \n \n Disposal proceeds \n \n \n - \n \n \n - \n \n \n 9.8 \n \n \n 0.7 \n \n \n 10.5 \n \n \n \n \n DB pension higher than Income Statement \n \n \n (3.0) \n \n \n - \n \n \n (2.0) \n \n \n (4.5) \n \n \n (9.5) \n \n \n \n \n Interest and tax \n \n \n 0.2 \n \n \n - \n \n \n (2.9) \n \n \n (4.3) \n \n \n (7.0) \n \n \n \n \n Other movements \n \n \n - \n \n \n - \n \n \n - \n \n \n (3.2) \n \n \n (3.2) \n \n \n \n \n Free cash flow \n \n \n 16.8 \n \n \n 9.2 \n \n \n (3.1) \n \n \n (20.3) \n \n \n 2.6 \n \n \n \n \n   \n First Bus London \n The Group is currently undertaking the purchase price allocation exercise for First Bus London, and this has identified a number of adjustments to reflect the fair value of the assets and liabilities acquired. IFRS 3 Business Combinations allows the Group 12 months from the date of acquisition to finalise this exercise, and the standard acknowledges that it will be necessary to estimate certain acquisition adjustments and fair values. The purchase price allocation exercise is not yet complete and the acquisition adjustments and closing fair values are therefore disclosed in the interim financial statements as provisional and as reported at FY 2025. These will be finalised within the timeframe permitted by IFRS 3. \n   \n Capital expenditure \n Non-First Rail cash capital expenditure was £114.7m, which related to First Bus and Group items (H1 2025: £60.1m). First Rail cash capital expenditure was £21.7m (H1 2025: £12.4m) and is typically matched by receipts from the DfT under current contractual arrangements or other funding. \n   \n During the period leases in the non-First Rail divisions were entered into with capital values in First Bus of £23.1m and Group items of £0.8m (H1 2025: Bus £9.2m and Group items £0.7m). First Rail entered into leases with a capital value of £5.0m (H1 2025: £21.8m). During the period asset backed financial liabilities were entered into in First Bus of £40.5m (H1 2025: £35.1m). \n   \n Non-First Rail gross capital investment (fixed asset and software additions, plus the capital value of new leases) was £111.4m and comprised First Bus £110.6m and Group items £0.8m (H1 2025: £53.1m, comprising First Bus £52.4m, Group items £0.7m). First Rail gross capital investment was £25.0m (H1 2025: £35.8m). 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 period. \n   \n Funding \n As at the period end, the Group had £453.9m of undrawn committed headroom and free cash (FY 2025: £628.3m), being £270.0m (FY 2025: £295.0m) of committed undrawn headroom on the RCF, £59.9m (FY 2025: £92.4m) committed undrawn headroom on the Husk Financer Facility, £33.6m (FY 2025: £40.9m) committed undrawn headroom on the NextGen battery finance facility, £nil (FY 2025: £85.0m) under the term loan facility, and £90.4m (FY 2025: £115.0m) of net free cash after offsetting overdraft positions. \n   \n Net debt \n As at 27 September 2025 the Group's adjusted net debt, which excludes IFRS 16 lease liabilities and ring-fenced cash, was £(207.6)m (FY 2025: £(86.9)m). Reported net debt was £(992.0)m (FY 2025: £(974.8)m) after IFRS 16 and including ring-fenced cash of £232.8m (FY 2025: £315.7m), as follows: \n   \n \n \n \n \n Analysis of net debt \n \n \n \n \n \n 27 September 2025 £m \n \n \n 28 September 2024 £m \n \n \n 29 March 2025 £m \n \n \n \n \n Bank loans and overdrafts \n \n \n \n \n \n 97.8 \n \n \n 70.6 \n \n \n 56.4 \n \n \n \n \n Lease liabilities \n \n \n \n \n \n 1,017.2 \n \n \n 1,251.8 \n \n \n 1,203.6 \n \n \n \n \n Asset backed financial liabilities \n \n \n \n \n \n 147.2 \n \n \n 72.1 \n \n \n 115.3 \n \n \n \n \n NextGen (Hitachi JV) facility \n \n \n \n \n \n 23.6 \n \n \n 19.4 \n \n \n 19.9 \n \n \n \n \n Bank loans \n \n \n \n \n \n 127.2 \n \n \n - \n \n \n 66.7 \n \n \n \n \n Gross debt excluding accrued interest \n \n \n \n \n \n 1,413.0 \n \n \n 1,413.9 \n \n \n 1,461.9 \n \n \n \n \n Cash \n \n \n \n \n \n (188.2) \n \n \n (161.9) \n \n \n (171.4) \n \n \n \n \n First Rail ring-fenced cash and deposits \n \n \n \n \n \n (226.4) \n \n \n (271.2) \n \n \n (308.8) \n \n \n \n \n Other ring-fenced cash and deposits \n \n \n \n \n \n (6.4) \n \n \n (3.7) \n \n \n (6.9) \n \n \n \n \n Net debt excluding accrued interest \n \n \n \n \n \n 992.0 \n \n \n 977.1 \n \n \n 974.8 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n IFRS 16 lease liabilities - rail \n \n \n \n \n \n 877.7 \n \n \n 1,198.7 \n \n \n 1,074.4 \n \n \n \n \n IFRS 16 lease liabilities - non-rail \n \n \n \n \n \n 139.5 \n \n \n 53.1 \n \n \n 129.2 \n \n \n \n \n IFRS 16 lease liabilities - total \n \n \n \n \n \n 1,017.2 \n \n \n 1,251.8 \n \n \n 1,203.6 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net cash excluding accrued interest (pre-IFRS 16) \n \n \n \n \n \n (25.2) \n \n \n (274.7) \n \n \n (228.8) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Adjusted net debt (pre-IFRS 16 and excluding ring-fenced cash) \n \n \n \n \n \n 207.6 \n \n \n 0.2 \n \n \n 86.9 \n \n \n \n \n   \n Under the terms of the First Rail contractual agreements with the DfT, cash can only be distributed by the TOCs either up to the lower amount of their retained profits or the amount determined by prescribed liquidity ratios. The ring-fenced cash represents that which is not yet approved for distribution while prior year fees are being finalised, or the amount required to satisfy the liquidity ratios at the balance sheet date. \n   \n Interest rate risk \n Exposure to floating interest rates is managed to ensure that at least 50% (but at no time more than 100%) of the Group's pre-IFRS 16 gross debt is fixed rate for the medium term. \n   \n Fuel and electricity price risk \n We use a progressive forward hedging programme to manage commodity risk. As at November 2025, 90% of our 'at risk' First Bus diesel requirements for H2 2026 was hedged at an average rate of 46p per litre, 77% of our requirements for the year to the end of March 2027 at 43p per litre, and 25% 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 68% of our consumption (based on current consumption forecasts) hedged for H2 2026 at £80/MWh, 63% for FY 2027 at £73/MWh and 23% for FY 2028 at £69/MWh. \n   \n Foreign currency risk \n '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 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. \n   \n \n \n   \n Foreign exchange \n The most significant exchange rates to pounds Sterling for the Group are as follows: \n   \n \n \n \n \n \n \n \n 27 September 2025 \n \n \n 28 September 2024 \n \n \n 29 March 2025 \n \n \n \n \n \n \n \n Closing rate \n \n \n Effective rate \n \n \n Closing rate \n \n \n Effective rate \n \n \n Closing rate \n \n \n Effective rate \n \n \n \n \n US Dollar \n \n \n 1.34 \n \n \n 1.35 \n \n \n 1.34 \n \n \n 1.32 \n \n \n 1.29 \n \n \n 1.25 \n \n \n \n \n Canadian Dollar \n \n \n 1.87 \n \n \n 1.87 \n \n \n 1.81 \n \n \n 1.80 \n \n \n 1.85 \n \n \n 1.93 \n \n \n \n \n   \n Pensions \n We have updated our pension assumptions for the defined benefit schemes in the UK and Canada. The net pension surplus of £22.8m at the beginning of the reporting period moved to a net deficit of £29.0m as at 27 September 2025, with the movement principally due to experience and demographic factors in the 2024 triennial valuation, and reduced valuations. The main factors that influence the balance sheet position for pensions and the principal sensitivities to their movement at 27 September 2025 are set out below: \n   \n \n \n \n \n \n \n \n Movement \n \n \n Impact \n \n \n \n \n Discount rate \n \n \n -0.1% \n \n \n Increase deficit by £12.7m \n \n \n \n \n Inflation \n \n \n +0.1% \n \n \n Increase deficit by £9.1m \n \n \n \n \n Life expectancy \n \n \n +1 year \n \n \n  Increase deficit by £36.9m \n \n \n \n \n   \n Legacy Greyhound pension obligations in the USA were fully discharged in the prior year. An adjusting net settlement gain after related costs of £5.5m was recognised in the H1 2025 income statement. \n   \n Balance sheet \n Net assets have decreased by £72.5m since 29 March 2025. \n   \n \n \n \n \n Balance sheets - net assets/(liabilities) \n \n \n \n \n \n As at 27 September 2025 £m \n \n \n As at 28 September 2024 £m \n \n \n As at 29 March 2025 £m \n \n \n \n \n First Bus \n \n \n \n \n \n 867.0 \n \n \n 658.3 \n \n \n 813.3 \n \n \n \n \n First Rail \n \n \n \n \n \n 685.2 \n \n \n 968.3 \n \n \n 798.4 \n \n \n \n \n Divisional net assets \n \n \n \n \n \n 1,552.2 \n \n \n 1,626.6 \n \n \n 1,611.7 \n \n \n \n \n Group items (including Greyhound Canada) \n \n \n \n \n \n 94.5 \n \n \n 90.2 \n \n \n 80.6 \n \n \n \n \n Borrowings and cash \n \n \n \n \n \n (992.0) \n \n \n (977.1) \n \n \n (974.8) \n \n \n \n \n Taxation \n \n \n \n \n \n (14.7) \n \n \n (38.5) \n \n \n (5.0) \n \n \n \n \n Held for sale assets \n \n \n \n \n \n - \n \n \n 0.1 \n \n \n - \n \n \n \n \n Total \n \n \n \n \n \n 640.0 \n \n \n 701.3 \n \n \n 712.5 \n \n \n \n \n   \n Events after the reporting period \n In November, the 2024 triennial valuation of the Bus section of the Group's pension scheme was completed and £20m of cash has been returned to the Group post the balance sheet date, with £20m paid to the Bus Section. Approximately £65m will be held in escrow for the Bus and Group schemes until the completion of the respective 2030 valuations where certain illiquid assets and liability assumptions are better known. \n   \n Going concern \n The Board carried out a review of the Group's financial projections for the 18 months to 31 March 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 the foreseeable future. Accordingly, the condensed consolidated financial statements in the half-yearly report have been prepared on the going concern basis. \n   \n Definitions \n Unless otherwise stated, all financial figures for the 26 weeks to 27 September 2025 (the 'first half', the 'period' or 'H1 2026') include the results and financial position of the First Rail business for the period ended 13 September 2025 and the results of all other businesses for the 26 weeks ended 27 September 2025. The figures for the 26 weeks to 28 September 2024 (the 'prior period' or 'H1 2025') include the results and financial position of the First Rail business for the period ended 14 September 2024 and the results of all other businesses for the 26 weeks ended 28 September 2024. Figures for the 52 weeks to 29 March 2025 ('FY 2025') include the results and financial position of the First Rail business for the year ended 31 March 2025 and the results of all other businesses for the 52 weeks ended 29 March 2025. \n   \n 'Cont.' or the 'Continuing operations' refer to First Bus, First Rail and Group items including Greyhound Canada. \n   \n 'Disc.' or the 'Discontinued operations' refer to First Student, First Transit and Greyhound US. \n   \n References to 'adjusted operating profit', 'adjusted profit before tax', 'adjusted earnings' and 'adjusted EPS' throughout this document are before the adjusting items as set out in note 3 to the financial statements, and in the case of 'adjusted earnings' and 'adjusted EPS', excluding the impact of IFRS 16 for the Group's management fee-based Rail operations. \n   \n 'EBITDA' is adjusted operating profit less capital grant amortisation plus depreciation. \n   \n The Group's 'EBITDA adjusted for First Rail management fees' is First Bus and First Rail EBITDA from open access and Additional Services on a pre-IFRS 16 basis, plus First Rail attributable net income from management fee-based operations, minus central costs. \n   \n '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. \n   \n 'Adjusted earnings' is the Group's statutory profit for the period attributable to equity holders of the parent, excluding adjusting items as detailed in note 3, and also excluding the impact of IFRS 16 for the Group's management fee-based Rail operations. \n   \n 'Net debt/(cash)' is the value of Group external borrowings, excluding accrued interest, less cash balances. \n   \n 'Adjusted net debt/(cash)' excludes ring-fenced cash and IFRS 16 lease liabilities from net debt/(cash). \n   \n Forward-looking statements \n Certain statements included or incorporated by reference within this document may constitute 'forward-looking statements' with respect to the business, strategy and plans of the Group and our current goals, assumptions and expectations relating to our future financial condition, performance and results. By their nature, forward-looking statements involve known and unknown risks, assumptions, uncertainties and other factors that cause actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. No statement in this document should be construed as a profit forecast for any period. Shareholders are cautioned not to place undue reliance on the forward-looking statements. \n   \n Except as required by the UK Listing Rules and applicable law, the Group does not undertake any obligation to update or change any forward-looking statements to reflect events occurring after the date of this document. \n   \n Principal risks and uncertainties    \n The Board has conducted a thorough assessment of the principal risks and uncertainties facing the Group for the remainder of the financial year, including those that would threaten the successful and timely delivery of its strategic priorities, future performance solvency and liquidity.     \n     \n There are a number of risks and uncertainties facing the Group in the remaining six months of the financial year in addition to those mentioned in the Business and Financial Reviews. The underlying principal risks and uncertainties in our operating businesses remain broadly consistent with those set out in detail on pages 61 to 68 of the Annual Report and Accounts 2025 , with the exception of pension scheme funding that is now removed following the completion of the 2024 valuations. \n     \n Several of the principal risks remain more elevated currently given the wider geopolitical and related economic backdrop. The Principal Risks are:   \n     \n • Economic conditions   \n • Geopolitical     \n • Climate     \n • Growth and Diversification   \n • Financial resources     \n • Safety     \n • Regulatory compliance     \n • Information Security, including cyber and resilience   \n • People     \n     \n Risks that are of particular focus to monitor in the second half of the year and going forwards include the  anticipated  changes in the UK bus and rail sectors as a result of the Government's announced transport policies, and developments in the wider geopolitical backdrop which may affect the UK economy.    \n     \n For a full summary of the Principal Risks and Uncertainties facing the Group, please refer to the Annual Report and Accounts 2025 at  Annual Report 2025 - FirstGroup plc \n   \n Graham Sutherland                                                  Ryan Mangold \n   \n Chief Executive Officer                                              Chief Financial Officer \n 17 November 2025                                                     17 November 2025 \n   \n \n \n   \n   \n Condensed consolidated income statement \n   \n \n \n \n \n   \n \n \n Notes \n \n \n   \n \n \n Unaudited \n26 weeks to \n27 September 2025 \n£m \n \n \n Unaudited \n26 weeks to \n28 September 2024 (restated) \n£m \n \n \n \n \n Revenue \n \n \n 2, 4 \n \n \n   \n \n \n 2,297.6 \n \n \n 2,373.5 \n \n \n \n \n Operating costs \n \n \n \n \n \n   \n \n \n (2,194.0) \n \n \n (2,273.2) \n \n \n \n \n Operating profit \n \n \n \n \n \n   \n \n \n 103.6 \n \n \n 100.3 \n \n \n \n \n Investment income \n \n \n 5 \n \n \n   \n \n \n 3.6 \n \n \n 4.7 \n \n \n \n \n Finance costs \n \n \n 5 \n \n \n   \n \n \n (30.9) \n \n \n (34.7) \n \n \n \n \n Profit before tax \n \n \n \n \n \n   \n \n \n 76.3 \n \n \n 70.3 \n \n \n \n \n Tax \n \n \n 6 \n \n \n   \n \n \n (19.1) \n \n \n (17.8) \n \n \n \n \n Profit from continuing operations \n \n \n \n \n \n   \n \n \n 57.2 \n \n \n 52.5 \n \n \n \n \n (Loss)/profit from discontinued operations \n \n \n 4 \n \n \n   \n \n \n (0.2) \n \n \n 5.8 \n \n \n \n \n Profit for the period \n \n \n \n \n \n   \n \n \n 57.0 \n \n \n 58.3 \n \n \n \n \n Attributable to: \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Equity holders of the parent \n \n \n \n \n \n   \n \n \n 55.5 \n \n \n 55.8 \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n   \n \n \n 1.5 \n \n \n 2.5 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n 57.0 \n \n \n 58.3 \n \n \n \n \n   \n Earnings per share \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company \n \n \n \n \n \n...

View stock analysis, news, and events for Firstgroup Plc