FIRSTGROUP PLC
results FOR THE 53 WEEKS TO 30 march
2024
Material
increase in Group profit driven by continued progress in both First
Bus and First Rail further underpinning the Group’s strong balance
sheet:
•
|
Significant
increase in Group adjusted operating profit to £204.3m (FY 2023:
£161.0m) includes extra week of trading and receipt of higher than
accrued FY 2023 variable fees in First Rail (c.£13m)
|
•
|
Adjusted
EPS of 16.7p (FY 2023: 11.6p) enhanced by repurchases of 80.6m
shares during FY 2024
|
•
|
Final
dividend of 4.0p per share recommended; FY 2024 total: 5.5p, a 45%
increase vs. FY 2023
|
•
|
c.£118m
returned to shareholders via buyback programmes in FY
2024
|
•
|
Strong
balance sheet position, with adjusted year-end net cash of
£64.1m
|
Successful
execution of the Group’s refreshed strategy:
•
|
Continued
focus on operational delivery and driving modal shift:
|
|
-
First Bus
on track to achieve 10% adjusted operating profit margin having
grown to 9.4% in H2 2024
|
|
-
West Coast
Partnership awarded National Rail Contract to October 2032 with
core three-year term
|
|
-
Lumo has
now carried more than 2.5m passengers since launch and Hull Trains
has added 14% more capacity over the last year, creating growth
opportunity
|
•
|
Enhancing
the Group’s sustainability credentials and progressing
decarbonisation in First Bus:
|
|
-
landmark
strategic joint venture with Hitachi, Green Hire Purchase Finance
Facility and successful applications for £16m of Zero Emission Bus
Regional Area (ZEBRA) 2 scheme co-funding
-
c.300
electric buses delivered in FY 2024 and more than 300 charger
outlets installed
|
|
-
Great
Western Railway conducting industry-first fast-charge battery-only
train trial
|
|
-
joined
United Nations Global Compact and First Bus achieved Real Living
Wage employer status
|
•
|
Further
growth and diversification of the Group’s portfolio:
|
|
-
York
Pullman acquisition and new Adjacent Services contracts in First
Bus
|
|
-
formal
applications submitted for two new open access operations, the
extension of some of Lumo’s services to Glasgow, and for additional
return services on both Hull Trains and Lumo, to more than double
capacity, subject to approval
|
|
-
First Rail
awarded London Cable Car contract and qualified to bid for
Elizabeth Line contract
|
|
|
|
FY
2024 (£m)
|
|
|
|
FY
2023
(£m)
|
|
Cont.
|
Disc.
|
Total
|
|
Cont.
|
Disc.
|
Total
|
Revenue
|
4,715.1
|
-
|
4,715.1
|
|
4,755.0
|
4.0
|
4,759.0
|
Adjusted1
operating
profit/(loss)
|
204.3
|
(1.9)
|
202.4
|
|
161.0
|
(6.6)
|
154.4
|
Adjusted
operating profit margin
|
4.3%
|
|
4.3%
|
|
3.4%
|
|
3.2%
|
Adjusted
profit/(loss) before tax
|
139.0
|
(2.2)
|
136.8
|
|
104.2
|
(6.3)
|
97.9
|
Adjusted
EPS
2
|
16.7p
|
(0.3)p
|
16.4p
|
|
11.6p
|
(0.9)p
|
10.7p
|
Dividend
per share
|
|
|
5.5p
|
|
|
|
3.8p
|
Adjusted
net cash3
|
|
|
64.1
|
|
|
|
109.9
|
|
|
|
|
|
|
|
|
|
|
|
FY
2024 (£m)
|
|
|
|
FY 2023
(£m)
|
Statutory
|
Cont.
|
Disc.
|
Total
|
|
Cont.
|
Disc.
|
Total
|
Revenue
|
4,715.1
|
–
|
4,715.1
|
|
4,755.0
|
4.0
|
4,759.0
|
LGPS
pension settlement and related charges
|
(146.9)
|
–
|
(146.9)
|
|
–
|
–
|
–
|
Other
operating (costs)/income
|
(4,521.7)
|
(5.3)
|
(4,527.0)
|
|
(4,601.1)
|
27.3
|
(4,573.8)
|
Operating
profit/(loss)
|
46.5
|
(5.3)
|
41.2
|
|
153.9
|
31.3
|
185.2
|
(Loss)/profit
before tax
|
|
|
(24.4)
|
|
|
|
128.7
|
Total
comprehensive income/(loss) for the year
|
|
|
49.0
|
|
|
|
(7.4)
|
EPS2
|
|
|
(2.4)p
|
|
|
|
11.8p
|
Net
debt
|
|
|
1,144.8
|
|
|
|
1,269.1
|
-
Bonds, bank and other debt net of (cash)
|
|
|
(313.7)
|
|
|
|
(479.5)
|
-
IFRS 16 lease liabilities
|
|
|
1,458.5
|
|
|
|
1,748.6
|
|
|
|
|
|
|
|
|
|
|
'Cont.'
refers to the Continuing operations comprising First Bus, First
Rail, and Group items. 'Disc.' refers to discontinued operations,
being First Student, First Transit and Greyhound
US.
FY 2024
statutory loss before tax of £(24.4)m includes predominantly
non-cash charges of £146.9m relating to the Group’s termination of
its participation in two Local Government Pension Schemes during
the year with an offsetting £161.0m gain in the Condensed
Consolidated Statement of Comprehensive Income.
Key
developments
First
Bus:
•
|
1.14m
passenger journeys a day (FY 2023: 1.07m); 167m service miles
operated (FY 2023: 168m)
|
|
•
|
Passenger
volumes (excluding extra week in FY 2024) increased 7% vs. FY 2023
supported by £2 fare cap in England and free travel for under-22s
in Scotland
|
|
•
|
Total
revenue of £1,012.2m (FY 2023: £902.5m):
|
|
|
- total
passenger revenue increased 16.5% to £769.1m (FY 2023:
£660.0m)
|
|
|
- Adjacent
Services revenue increased to £219.8m (FY 2023: £175.1m) driven by
First Travel Solutions, new contract wins and the contribution of
Airporter and Ensignbus acquired in FY 2023
|
|
•
|
Adjusted
operating profit margin increased to 9.4% in H2 2024 and 8.3% for
the full year (FY 2023: 6.5%) with increased passenger volumes,
improved driver availability and data-led operational and
commercial improvements more than offsetting ongoing inflationary
pressures and lower funding
|
|
•
|
Acquisition
of York Pullman Bus Company, a high-performing business with five
well-established coach services brands, completed in February
2024
|
|
•
|
Awarded
Transport for Greater Manchester (TfGM) Rochdale franchise
contracts in July 2023; unsuccessful in other TfGM bids
|
|
•
|
Further
progress in electrification of fleet and infrastructure:
|
|
|
-
|
c.300
electric buses delivered in FY 2024 and more than 300 charger
outlets installed; we now have c.600 electric buses (c.13% of our
fleet), over 600 charging outlets, three fully electric depots in
England with six further depots across the UK partially
electrified
|
|
-
|
third-party
B2B charging underway at four depots and B2C charging recently
launched at Cornwall depot
|
|
-
|
solar
panels now installed at 24 depots to reduce costs and demands on
local grids
|
|
-
|
successfully
converted Oldham depot to electric infrastructure on behalf of
TfGM, demonstrating our leading capabilities in fleet and
infrastructure electrification
|
|
-
|
worked
with Local Authorities in four of our regions to secure £16m of
ZEBRA 2 co-funding for FY 2025, to support bus and fleet
decarbonisation
|
|
|
|
|
First
Rail:
•
|
274m
passenger journeys in FY 2024 (FY 2023: 263m); DfT-contracted Train
Operating Companies (DfT TOCs): 272m and open access 3m
|
•
|
Open
access operations performed ahead of expectations underpinned by
strong demand and effective yield management; Lumo has now carried
more than 2.5m passengers since its launch in October
2021
|
•
|
DfT TOCs
financial performance was ahead of expectations due to higher than
accrued final variable fee awards for FY 2023; focus remains on
operational delivery for passengers across all our
services
|
•
|
Nine-year
National Rail Contract awarded to West Coast Partnership
(incorporating Avanti West Coast) with a minimum core three-year
term to 18 October 2026, with a further six years to 17 October
2032 subject to DfT approval; the Avanti team, and everyone
connected with the TOC, are all working hard with an emphasis on
delivering the service that customers expect
|
•
|
Open
access applications to more than double capacity submitted to
Office of Rail and Road for a new Hull Trains service between
London King’s Cross and Sheffield, a new Lumo Rochdale-London
service, for the extension of some of Lumo’s services to Glasgow,
for an additional London-Hull service on Hull Trains and an
additional London-Newcastle Lumo return service, all subject to
approval
|
•
|
First Rail
awarded eight-year London Cable Car contract by Transport for
London and selected as one of four bidders, alongside partner
Keolis SA, to bid for upcoming Elizabeth Line
contract
|
•
|
Great
Western Railway successfully commenced innovative fast-charge
battery-only train trial
|
Corporate:
•
|
up to £10m
investment committed to landmark £100m strategic joint venture with
Hitachi and pioneering £150m Green Hire Purchase Finance Facility
signed with syndicate of three banks to support electrification of
First Bus fleet
|
•
|
Remaining
First Transit earnout proceeds of £65.3m received
|
•
|
£75m
on-market share buyback programme completed and subsequent £115m
programme launched in August 2023; £19.3m outstanding as at 10 June
2024
|
•
|
£88.0m of
the Group’s September 2024 6.875% bonds repurchased (£96.2m remain
outstanding as at 10 June 2024)
|
•
|
Gross
pension liabilities (excluding contract rail which revert to
government at contract end) reduced to £1.4bn, (£2.3bn at the start
of the period), reflecting removal of obligations in Local
Government Pension Schemes, resulting in cash inflow of c.£17m net
of costs, and partial buyout of legacy Greyhound pension
obligations in the USA;
|
FY
2025 outlook
•
|
Current
trading and the Group’s outlook for FY 2025 remain in line with the
Group’s expectations
|
•
|
First Bus:
we expect to achieve progressive growth in FY 2025 vs. FY 2024,
with steady progression towards a 10% adjusted operating profit
margin that we anticipate in H2 2025 driven by:
|
|
-
|
management
actions delivering further productivity improvements
|
|
-
|
lower
operating costs as a result of smart efficiency initiatives,
electrification benefits and the division’s newer fleet
|
|
-
|
further
Adjacent Services contract wins and extensions
|
|
-
|
government
policies and demographics driving demand
|
•
|
First
Rail: the division’s financial performance in FY 2025 is
anticipated to be in line with our expectations, including growth
in open access and a normal level of variable fee awards in the DfT
TOCs (c.two thirds of the maximum available)
|
•
|
Adjusted
net cash position expected to be in the range of £40-50m at the end
of FY 2025 reflecting strong cash generation, investment in
decarbonisation, completion of the current share buyback programme
and before any deployment of growth capital
|
•
|
We
continue to evaluate a pipeline of value-accretive inorganic growth
opportunities in line with the Group’s disciplined capital
allocation policy
|
Commenting,
Chief Executive Officer Graham
Sutherland said:
“We have
made considerable progress in our financial and operational
performance in FY 2024 as we continue to transform and grow our
leading First Bus and First Rail businesses. This is testament to
the resilience and capability of our people across the Group and
leaves us well positioned to grow and create further value for all
our stakeholders.”
“Our focus
remains on working with government and all our stakeholders to
deliver for our customers and drive modal shift. We will continue
to lead in environmental and social sustainability, including
building out our adjacent electrification opportunities in First
Bus, and investing to grow and diversify our portfolio to ensure
our business remains profitable and resilient in the
long-term.”
Contacts
at FirstGroup:
|
Contacts
at Brunswick Group:
|
Marianna
Bowes, Head of Investor Relations
Stuart
Butchers, Head of Corporate Communications
corporate.comms@firstgroup.co.uk
Tel: +44
(0) 20 7725 3354
|
Andrew
Porter / Simone Selzer
Tel: +44
(0) 20 7404 5959
|
|
|
Contacts
at Liberum Capital Limited:
|
Contacts
at RBC Capital Markets:
|
Nicholas
How / John Fishley
Tel: +44
(0) 20 3100 2000
|
James Agnew
/ Jack Wood
Tel: +44
(0) 20 7653 4000
|
A
presentation and webcast for investors and analysts will be held at
09:00 (BST) today in London. To
register to join in person or to request the webcast details,
please email
corporate.comms@firstgroup.co.uk. 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.
Notes
1 ‘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 24-25
2 ‘Adjusted
EPS’ and EPS based on weighted average number of shares in the
period of 662.9m (FY 2023:
739.5m) reflecting the current year
and prior year share buybacks.
3 ‘Adjusted
net cash' is bonds, bank and other debt net of free cash
(i.e.excludes IFRS 16 lease liabilities and ring-fenced
cash).
Legal
Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as
per DTR 6 Annex 1R: 1.1.
About FirstGroup
FirstGroup
plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With £4.7 billion in revenue and around 30,000
employees, we transported almost 2m
passengers a day in FY 2024. We create solutions that reduce
complexity, making travel smoother and life easier. Our businesses
are at the heart of our communities and the essential services we
provide are critical to delivering wider economic, social and
environmental goals. Each of our divisions is a leader in its
field: First Bus is one of the largest regional bus operators in
the UK, serving more than 20% of the population in the UK with a
fleet of around c.4,800 buses, and carrying more than a million
passengers a day. First Rail is one of the UK’s largest rail
operators, with many years of experience running long-distance,
commuter, regional and sleeper rail services. We operate a fleet of
c.3,700 locomotives and rail carriages through three DfT contracted
train operating companies: WCP (incorporating Avanti West Coast and
West Coast Partnership Development), GWR and SWR) and two open
access routes (Hull Trains and Lumo). We are formally committed to
operating a zero-emission First Bus fleet by 2035, and First Rail
will help support the UK Government’s goal to remove all
diesel-only trains from service by 2040. During FY 2024 FirstGroup
was named as one of the world’s cleanest 200 public companies for
the fifth consecutive year and
achieved Industry Top-Rated status for the first time with
Sustainalytics. 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 @firstgroupplc on
X.
Chief Executive Officer review
Four
Strategic Pillars to drive growth
I am
extremely proud of what has been achieved during my first two years
as Chief Executive Officer, as we continue to transform our
businesses and deliver for our stakeholders. We have maintained our
strong balance sheet, and have considerable scope to grow further
in First Bus and First Rail open access. To achieve this, we have
set out four key strategic pillars that will drive the Group
forward. These are:
1)
Deliver
day in day out
2)
Drive
modal shift
3)
Lead in
environmental and social sustainability
4)
Grow and
diversify our portfolio.
Looking
first at delivery, operational excellence is at the heart of our
strategy. We must continue to strive to ensure the best possible
customer experience, consistently deliver reliability and cost
efficiency and implement price strategies to enhance customer
value, drive demand and improve yield. This will enable us to
continue to win key contracts in both First Bus and First Rail to
maintain our positive earnings trajectory and encourage more people
to use our services.
To drive a
step change from car and air travel to bus and rail we plan to add
capacity in First Rail’s open access operations, continue to
position the First Bus customer proposition to drive demand, with a
focus on encouraging people to make the switch from private
cars.
Leading in
environmental and social sustainability has long been a priority
for the Group. We are committed to the safety of our customers, our
employees and all third parties in contact with our businesses. We
are
delivering
on our decarbonisation commitments, and we will always seek to
support prosperity, growth and green jobs in the communities that
we serve. We see this as a key differentiator of FirstGroup’s
proposition and increasingly a driver of growth going
forward.
Finally,
the Group’s considerable balance sheet capacity provides us with
flexibility to take advantage of value accretive opportunities to
further grow and diversify our portfolio. In First Bus, we will
pursue franchising and partnership opportunities, expand our
Adjacent Services businesses and continue to evaluate a pipeline of
complementary inorganic growth opportunities. In First Rail, we are
actively working to grow our open access businesses, scale our
Additional Services businesses, bidding for non-DfT contracts and
monitoring opportunities for new open access contracts.
We have a
huge wealth of experience and expertise within our divisions, and I
believe FirstGroup has a very exciting future.
FY
2024 financial highlights
Looking
now at our financial performance, I am pleased to report another
excellent set of results for our 2024 financial year despite
continued economic and industrial relations challenges.
Our
divisions have performed well during the year which together with
the positive impact of the extra week of trading in FY 2024 and the
receipt of higher than accrued final FY 2023 variable fee awards in
the DfT TOCs has resulted in a significant increase in our Adjusted
Earnings per share, from 11.6p in FY 2023 to 16.7p in FY
2024.
We have
also maintained our strong balance sheet, ending the year with
adjusted net cash of £64.1m, having committed investment of over
£100m to the electrification of our bus fleet and infrastructure,
invested into our landmark strategic decarbonisation joint venture
with Hitachi, acquired York Pullman and returned almost £118m to
shareholders via our buyback programmes.
First
Bus highlights
First Bus
has continued to grow its revenues and profit in FY 2024 as a
result of further growth in passenger volumes, improvements in our
operational and cost performance, lower lost mileage and an
increased contribution from our Adjacent Services businesses,
leaving us on track to reach our 10% adjusted operating profit
margin target in H2 2025. Total revenue for the year was £1,012.2m
(FY 2023: £902.5m) reflecting strong growth across the
business.
In February 2024 we completed the
acquisition of York Pullman, a high-performing operator of coaches
and buses. The integration
of the York Pullman into First Bus is progressing well and its
addition to the First Bus portfolio will
enhance our operational footprint in the North Yorkshire region and provide profitable
growth opportunities in the contracted and commercial services
markets. The adjacent bus services market in the UK is
considerable, and we are actively reviewing a pipeline of
opportunities to grow the business and win further
contracts.
First
Bus decarbonisation
Aided by
our strong balance sheet we are committing significant investment
in decarbonisation as we
progress towards our target of a zero emission fleet by
2035. The
electrification of our fleet and infrastructure will further
transform our business and provide a number of value accretive
adjacent revenue streams.
We now
have almost 600 electric buses, about 13% of our fleet, three fully
electric bus depots in England
with six further depots across the UK partially
electrified.
We have
over 600 charger outlets and are making use of smart charging
software to optimise our energy use and increase battery efficiency
and potentially extend battery life. We are also making our
charging infrastructure available to third parties, with successful
arrangements underway with DPD, Openreach and public services
providers at four of our depots. We have also recently opened a
purpose-built hub at our Summercourt depot in Cornwall, providing direct access for the
public to eight rapid chargers.
Whilst electric vehicles result in operational improvements that
lower the service delivery costs relative to diesel, the initial
capital investment for electrification is still considerable. In
addition to working with our local authority partners to secure
government co-funding and committing Group capital, we are forming
strategic partnerships and securing innovative financing. This is
allowing us to purchase electric buses and batteries with increased
efficiency and greater visibility of our financial commitment and
our strategic joint venture with Hitachi will also allow us to
retain much of the residual value in the batteries as they are
replaced.
Looking
ahead, in March 2024 we announced
that we had worked successfully with our local authority partners
to secure £16m through the UK Government’s ZEBRA 2 co-funding
scheme to support bus and fleet decarbonisation across four of our
regions.
Following
the completion of our latest ongoing electrification projects, we
will operate more than 800 zero-emissions vehicles, c.18% of our
fleet. We have also bought power connections to another 15 of our
depots and construction works are underway. This is a remarkable
achievement and is establishing us as leaders in bus fleet and
infrastructure decarbonisation.
First
Bus - partnerships and franchising
We have
decades worth of expertise and knowledge in delivering transport
solutions for our customers across the public transport sector and
work closely with local authorities across the UK in partnerships
that are delivering change for customers quickly and
effectively.
We have
seen this to full effect in Leicester where, in partnership with Leicester
City Council and the city’s other bus operators, in under a year we
have achieved multi-operator ticketing, streamlined timetabling of
services for all operators, improved real time information for
passengers, increased reliability, and introduced electric bus
fleets and infrastructure.
A number
of cities outside London have
expressed an interest in franchising, including some where we do
not currently have operations. In areas where authorities choose to
progress with franchising, we are confident that we will be able to
use our extensive experience to support them. Despite not winning
any of the larger contracts, we are pleased to be working with
Transport for Greater Manchester
(TfGM) as the selected operator of their new Bee Network in
Rochdale, maintaining our overall
position in Manchester. We have
also supported TfGM with the electrification of their Oldham depot due to our expertise in this
field.
Our
landscape is always evolving and getting more people to use the bus
is a key part of the modal shift pillar of our strategy. We will
continue to adapt our business to deliver great value, shape
networks to suit where and when people want to travel, to serve
communities and grow local economies in a sustainable
way.
Regardless
of the 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.
First
Rail highlights
In First
Rail, we continue to demonstrate our capabilities and deep sector
knowledge to bring value to our passengers and to the taxpayer, as
we strive to improve customer experience and to reduce the level of
rail subsidies.
Despite
continued industrial relations challenges during the year, our DfT
TOCs have reported an increase in adjusted operating profit, to
£105.6m (FY 2023: £93.3m) which included an uplift of c.£13m as a
result of the variable fee payments agreed with the DfT for FY 2023
being ahead of the amounts accrued in the Group’s FY 2023 financial
statements. This achievement demonstrates how hard our teams are
working to deliver day in day out, in a challenging
environment.
In
May 2023 the DfT announced its
decision not to exercise its option to extend TPE’s National Rail
Contract (‘NRC’). The loss of the contract was a huge
disappointment for our team who all worked extremely hard to
improve services and to successfully recruit and train more drivers
than ever before. We supported the DfT’s Operator of Last Resort in
ensuring a smooth transition for passengers, partners and
employees. We anticipate that we will receive all remaining amounts
due to be paid to the Group in FY 2025, and our First Rail
affiliate services also continue to support TPE.
We were
very pleased to have been awarded a nine-year National Rail
Contract for the West Coast Partnership (‘WCP’) in September 2023. The NRC has a minimum three-year
core term to October 2026.
Our open
access operations have outperformed expectations again in FY 2024
and have consistently recorded some of the lowest levels of
operator related cancellations in the industry. Lumo continues to
offer competitive fares and value to customers and has now carried
more than two and a half million customers since its launch, many
of whom would otherwise have flown between London and Newcastle or Edinburgh at a far greater environmental cost.
Its revenues increased by 42% in FY 2024, driven by effective yield
and demand management, and seat capacity utilisation has grown from
71% to 75%.
Hull
Trains also had a very strong year, with revenues up 40%, thanks to
increased leisure demand and significantly improving business
customer volumes. In response to increasing demand, the team has
added 14% more capacity since December
2022, running ten-car trains (typically a five-car service)
at peak demand times. Seat capacity utilisation improved from 59%
in FY 2023 to 69% in FY 2024.
First
Rail portfolio diversification and growth
The huge
success of our open access operations has provided further evidence
that we have the experience and entrepreneurial spirit to resolve
challenges and innovate in the rail sector for the future, adding
capacity and encouraging passengers back to the railway.
We are
actively pursuing opportunities to build on the success of Hull
Trains and Lumo through rolling stock efficiency improvements,
adding capacity to existing services and identifying new routes,
opportunities and markets where there is capacity and demand. We
recently submitted applications to the Office of Rail and Road
(‘ORR’) for a new Hull Trains London-Sheffield service, a new Lumo
Rochdale-London service, for the extension of a number of Lumo’s
daily services to and from Glasgow, for an additional, eighth return
service on Hull Trains between London and Hull and for an additional, sixth return Lumo
service between London and
Newcastle. These applications, if
successful, will more than double our open access
capacity.
We also
continue to make use of our in-house expertise to grow our First
Rail Additional Services businesses and GWR are conducting an
industry-first trial of a fast-charge battery-only train, which
included setting a UK distance record for a battery train without
recharging earlier this year.
Our
Additional Services businesses include First Rail Consultancy, our
bespoke contact centre First Customer Contact, Mistral Data and
evo-rail. They delivered an 11% increase in gross revenue, to
£133.5m in FY 2024, compared to £120.0m in FY 2023.
We are
also identifying and participating in other UK opportunities. In
March 2024 we announced that we have
been awarded the contract to operate the London Cable Car by
Transport for London and we have
been shortlisted with our bid partner Keolis SA to bid for the
Elizabeth Line contract. We look forward to submitting a compelling
bid that demonstrates our collective experience and breadth of
capabilities.
Corporate
activity and dividends
We have
now received final First Transit earnout proceeds of £65.3m and
have continued to opportunistically repurchase the Group’s
September 2024 6.875% bonds, of which
£96.2m remains outstanding as at 10 June
2024. We have also significantly reduced or insured the
Group’s gross pension liabilities (excluding contract rail which
reverts to government at contract end), from £2.3bn at the start of
the year, to £1.4bn.
In light
of the Group’s financial performance in FY 2024 and in line with
our progressive dividend policy, the Board has proposed a final
dividend of 4.0p per share. Subject to shareholder approval at the
Company’s 2024 AGM, a final dividend payment of c.£24.3m, will be
paid on 23 August 2024 to
shareholders on the register at 19 July
2024. The total dividend for the year paid and proposed is
5.5p per share (FY 2023: 3.8p per share), an increase of
45%.
Leading
in environmental and social sustainability
I am
pleased to report that we have seen further recognition of the
Group’s sustainability credentials in FY 2024. In addition to
joining the UN Global Compact, we were once again included in the
S&P Global Sustainability Yearbook, were one of only eight UK
companies to be included in the 2024 Clean200 list of top publicly
listed companies worldwide by clean revenue and were included in
Sustainalytics’ 2024 ESG Top-Rated Companies List.
Our
employees and customers remain at the heart of everything we do. In
FY 2024 we successfully launched First Connections, a personal
development programme aimed at female and ethnically diverse
employees and First Bus became the UK’s largest national bus
operator to become an accredited Real Living Wage employer. In FY
2024, the Group raised c.£200,000 for its charity partners,
Samaritans, Railway Children, and Macmillan, while our DfT TOCs
supported almost 100 community funding projects, worth over £2
million.
Looking
ahead
Current
trading and the Group’s outlook for FY 2025 is in line with our
expectations.
Positive
free cash generation after c.£120m of net cash capital expenditure
in First Bus is expected to result in a year-end adjusted net cash
position in the range of £40-50m.
This includes the anticipated capex saving resulting from the
Hitachi joint venture, the completion of the current share buyback
programme and is before investing in any potential inorganic growth
opportunities.
In First
Bus, we expect to achieve progressive growth in FY 2025 against FY
2024. We will continue to benefit from the actions we have taken to
transform the business and drive further growth in Adjacent
Services, making steady progression towards a 10% adjusted
operating profit margin, which we anticipate we will achieve in H2
2025.
The
transformation of the First Bus business is delivering stronger
foundations with a simplified, more efficient operating model. We
are set to benefit from electrification efficiencies and adjacent
revenue streams, and from potential franchising, partnership and
inorganic growth opportunities. This provides scope for sustained
earnings growth. Underpinning this, we believe that despite
short-term economic challenges, government policy, favourable
demographics and environmental and societal trends will support
growth in the regional bus sector.
In First
Rail, we expect the division’s financial performance to be broadly
in line with our expectations in FY 2025, including growth in open
access and a normal level of variable fee awards in the DfT TOCs
(c.two thirds of the maximum available).
Looking
beyond FY 2025, despite political uncertainty surrounding National
Rail Contracts, we will maintain our focus on delivery and will
capitalise on opportunities to make use of our extensive experience
and expertise to grow our UK open access business, scale our
Additional Services businesses and participate in other UK
opportunities.
If
approved, the applications we have recently submitted for new and
extended open access services could more than double our open
access capacity over the next three to five years. If our
application for the new Hull Trains service between London King’s
Cross and Sheffield is successful,
we anticipate that services could commence in calendar year 2026,
subject to stakeholder agreement, and for the Lumo Rochdale-London
service, we currently anticipate a start date in calendar year
2027.
Both
Conservative and Labour parties have put forward proposals for the
future of the UK rail industry. Although there are significant
differences, both parties are promoting the development of a
‘guiding mind’ industry body, named as Great British Railways in
the Government’s Plan for Rail.
Labour have said that if elected they will “fold existing private
passenger rail contracts into the new body as they expire.”
Looking at
the industry as a whole, the huge growth in passengers and
significant improvements to stations and rolling stocks that
private train companies delivered under franchise agreements before
the pandemic, including those under our stewardship, demonstrates
that the UK rail industry works best as a public-private
partnership. Furthermore, companies such as ours bring private
investment and focus on cost control to an industry that needs it;
our businesses have saved more than £230m for the DfT in the last
two years alone.
We have
been one of the largest UK rail operators for more than 25 years,
during which we have worked successfully with a wide range of
partners under various forms of contract types and delivered a
number of significant rail infrastructure and fleet upgrade
projects. We know that growth and innovation are key for the future
of the railway and are committed to working with our government
partners to provide competitive, sustainable and improved services
for all passengers and communities.
We will
also continue to monitor developments in the European rail market
where, as the market opens up for competition, there are
opportunities for new open access entrants with similar regulatory
models to the UK.
When
assessing any opportunity for the Group, we have a disciplined
capital allocation policy and a strict set of criteria. We will
always seek to ensure that any opportunities we explore are
complementary to our existing portfolio and the Group’s strategy,
thoroughly assessed for risks and opportunities and operated with a
familiar contractual, political and regulatory environment with an
appropriate balance of risk and reward.
Conclusion
FY 2024
has been another very successful year for the Group, reinforcing
our leading positions and deep expertise in bus and rail. Our
strong results for the year are also great testament to the
dedication, expertise and resilience of our employees at all levels
across the Group and I am extremely proud and grateful to all of
our colleagues for their continued hard work in support of our
customers and communities.
Looking
ahead, we have much more to do. We will continue to transform our
businesses, build out adjacent electrification efficiencies and
revenue streams in First Bus and grow and diversify our portfolio
to deliver further sustainable growth and support the UK’s social,
economic and environmental ambitions.
The
Group’s strong balance sheet and cash generative businesses provide
considerable flexibility and optionality for growth and potential
further capital returns to shareholders, which will continue to be
kept under review by the Board.
Graham Sutherland
Chief
Executive Officer
11 June 2024
Business Review
First
Bus
|
|
£m
|
|
|
|
FY
2024
|
FY
2023
|
|
Change
|
Revenue
|
1,012.2
|
902.5
|
|
109.7
|
Adjusted
operating profit
|
83.6
|
58.4
|
|
25.2
|
Adjusted
operating margin
|
8.3%
|
6.5%
|
|
180bps
|
EBITDA
|
148.1
|
120.9
|
|
27.2
|
Adjacent
Services revenue
|
219.8
|
175.1
|
|
44.7
|
Passenger
volumes (m)
|
424.4
|
390.0
|
|
+9%
|
Operational
mileage (m)
|
166.5
|
168.2
|
|
(1%)
|
Revenue per
mile (£)
|
6.08
|
5.36
|
|
+13%
|
Net
operating assets
|
580.2
|
511.9
|
|
68.3
|
Net capital
expenditure
|
129.4
|
121.8
|
|
7.6
|
Return on
Capital Employed1
|
11.5%
|
8.3%
|
|
320bps
|
1
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.
First Bus
revenue increased by 12% to £1,012.2m (FY 2023: £902.5m), mainly
due to higher passenger volumes, further performance improvements
and increased driver numbers resulting in lower lost mileage. This
offsets a c.£40m reduction in funding. Total passenger revenue
increased to £769.1m (FY 2023: £660.0m), with revenue per mile up
by 13%.
Despite
ongoing inflationary pressures, adjusted operating profit increased
by £25.2m to £83.6m (FY 2023: £58.4m), achieving an adjusted
operating profit margin of 9.4% in H2 2024, and 8.3% for the full
year (FY 2023: 6.5%). The division’s financial results for FY 2024
include an extra week which added c.£1.4m of adjusted operating
profit.
Revenue
from Adjacent Services increased to £219.8m in FY 2024 (FY 2023:
£175.1m), reflecting a number of contract extensions and the
contribution of Airporter and Ensignbus which were acquired by the
Group in FY 2023.
Excluding
the extra week in FY 2024, passenger volumes increased by 7%
compared with the prior period, with total mileage down 2.9%.
Volumes in FY 2024 benefited from improvements in service
reliability, the free travel for under-22s scheme in Scotland and the £2 fare cap in England which has grown patronage, mostly in
markets with longer journey fares that were typically much more
expensive previously.
The £2
fare cap in England was extended
until 31 December 2024 to provide
further support for customers and encourage more people to travel
by bus. Under the scheme, operators agree a reimbursement schedule
in advance with the DfT based on the projected cost to the operator
for charging a flat £2 fare for journeys that would otherwise have
cost more. Under the Scottish Government’s under-22s scheme,
operators are reimbursed a proportion of the cost of a full adult
fare.
The return
on capital employed increased to 11.5% in the year (FY23: 8.3%).
This reflects improvement in adjusted operating profit, partially
offset by the accelerated investment in the decarbonisation of the
fleet that is anticipated to increase future profitability due to
lower operating costs and the benefits of adjacent revenue
streams.
Operational
delivery
Our focus
in FY 2024 has remained on using our industry-leading data tools to
deliver better quality mileage by aligning services to demand,
implement smarter fares and drive operational and cost efficiencies
to offset lower government funding and the high inflationary
environment.
During the
year we continued our efforts to widen and enhance our recruitment
reach and training processes, launching various apprenticeship
schemes including our first ever such scheme for bus drivers, and
we continue to invest in our workforce to improve working
conditions and provide enhanced benefits. We are also making
significant investment in upskilling and developing our engineers
to maintain our zero emission fleet and infrastructure. We
recruited c.600 new drivers during the year (a net increase of just
over 6% compared to last year) which contributed to us running an
improved 98.6% of our scheduled mileage (FY 2023:
97.4%).
Inflationary
pressures continued in FY 2024. Costs increased due to inflation by
c.6%, principally in wages where there was an 8% average increase
in driver pay awards, but these cost increases were more than
offset by fare pricing changes of c.£53m and network and
operational efficiencies of c.£21m. We were proud to be the UK’s
largest national bus operator to become an accredited Real Living
Wage employer in April 2024, meaning
that more than a thousand employees across the UK will benefit from
a rise in wages.
We have
fuel and electricity hedging programmes in place to mitigate
in-year cost inflation and overall volatility of fuel and energy
costs and these programmes continue to evolve as we transition the
First Bus fleet to zero emissions.
Using
industry-leading data and tools to transform our service delivery
and customer offering
Using
real-time, granular data, we are now able to better understand our
customers and their journeys. As a result, we can make commercial
decisions which continuously improve our networks and timetables
and to introduce new ticketing options that better match demand and
customer preferences. First Bus was also the first nationwide
operator to offer contactless, Tap On Tap Off payment on all our
buses and c.80% of our ticket transactions are now
digital.
We are
also using data and software tools to improve our service delivery.
During FY 2024 we rolled out Prospective, an AI platform, to all of
our local business units. The platform enables automated, data-led
timetables, allowing us to accurately predict congestion and
journey times and plan reliable timetables based on granular data.
Drivers and the control centre teams can also communicate in real
time to rectify and address issues as they unfold before
implementing contingencies to alleviate pinch points around the
network in certain scenarios. We have prioritised routes where
improvements would have the greatest effects, and where we have
made use of the platform, customers are seeing an immediate
increase in punctuality and reliability, with the added benefit of
reduced lost mileage with fewer journeys needing to be
adjusted.
In
addition to Prospective, we are using Optibus to optimise our bus
schedules and driver rosters. Alongside our on-bus technology, data
feeds into our operational systems, our customer apps and real time
screens, informs our drivers and provides tracking information that
allows us to analyse and improve performance. In addition, with
Optibus, we have developed a module that allows us to optimise our
schedules when we have a mixed fleet of diesel and electric
vehicles, further reducing diesel mileage.
More
people are using the bus than ever before. Our aim is to encourage
these new customers to make more trips by bus, whilst also
increasing bus use overall, and we will continue to develop our
insight-driven customer centric strategy to achieve
this.
Growing
our share of the Adjacent Services market
Our
Adjacent Services business provides services including supported
local bus services, workplace shuttles for large infrastructure
projects, manufacturers and distribution companies, airport and
airline contracts and rail replacement services. Revenue from
Adjacent Services grew further in FY 2024, to £219.8m from £175.1m
in the prior year.
Our
central sales and bidding team is focused on maximising commercial
return through longer term, higher value contracts and in FY 2024
we successfully extended a number of our key contracts and won new
contracts. The business has also been bolstered by the acquisition
of Ensignbus and Airporter in FY 2023 and York Pullman in FY
2024.
The
adjacent bus and coach services market in the UK is considerable,
and we continue to review a number of opportunities to grow the
business and win further contracts leveraging our national
footprint and successful track record in managing large customers
effectively. We are also increasingly bidding for contracts with
businesses focused on lowering carbon emissions where we are very
well placed to compete, given our leading capabilities in bus fleet
and infrastructure decarbonisation.
Partnerships
and franchising
A number
of cities outside London where we
operate have expressed an interest in franchising, including some
where we do not currently have operations. In areas where
authorities choose to progress with franchising, we are confident
that we will be able to use our extensive experience of delivering
high quality bus services to support them.
We are
pleased to be working with Transport for Greater Manchester (TfGM) as one of the
operators within their new Bee Network. In June 2023 we were awarded two contracts in
Rochdale as part of the second
tranche of TfGM’s franchise programme and were subsequently awarded
contracts to operate services for six schools as part of this
franchise operation. We have also supported TfGM with the
electrification of their Oldham
depot due to our expertise in this field.
The
majority of the local authorities in the areas in which we operate
currently have enhanced partnerships in place, where the local
transport authority commits to measures and facilities and all
operators are then bound to meet certain standards of service.
Under these partnerships, all parties work together to achieve bus
reform quickly and effectively.
We have
seen this to full effect in Leicester, where in partnership with Leicester
City Council and the city’s other bus operators, we have achieved
multi-operator ticketing, streamlined timetabling of services for
all operators, increased reliability and improved real time
information for passengers. Alongside this, First Bus has delivered
a fully electric bus fleet and operation in the city having worked
together with the council to secure ZEBRA co-funding.
Our
landscape is always evolving and getting more people to use the bus
is a key part of the modal shift pillar of the Group’s strategy. We
will continue to adapt our business to deliver great value, shape
networks to suit where and when people want to travel, to serve
communities and grow local economies in a sustainable
way.
Regardless
of the 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.
Leading
in bus fleet and infrastructure decarbonisation
We are
rapidly establishing ourselves as a leader in decarbonisation as we
progress towards our commitment of a 100% zero emission bus fleet
by 2035, underpinned by our strong balance sheet and the ownership
of our depots.
We
invested over £100m in decarbonisation in FY 2024 and now have
almost 600 zero emission buses, c.13% of our fleet, and three fully
electric depots in England and six
further depots across the UK partially electrified.
We have
now installed solar panels at 24 of our depots to power lighting,
heating and engineering bays, reducing costs and demands on the
local grid. We are also making good progress securing power for our
sites and are identifying a number of ways to optimise our overall
energy use. These include reducing our energy consumption at
certain times to avoid spikes in consumption, scheduling our
charging in cheaper hours and depending on the next day’s route
requirements as well as energy trading / grid support
services.
We now have
more than 600 charging outlets across our sites and have successful
third-party charging arrangements underway with DPD, Openreach and
various public services providers at four of our depots. We have
also recently opened a purpose-built hub at our Summercourt depot
in Cornwall, providing direct
access for the public to eight rapid chargers.
In November 2023 we announced our
landmark £100m strategic joint venture with Hitachi to finance up
to 1,000 electric bus batteries, and in January 2024 we announced that we had signed an
innovative £150m Green Hire Purchase Finance Facility with a
syndicate of three UK banks to support
the purchase of up to 1,000 electric bus bodies.
These initiatives allow
us to purchase electric buses and batteries targeting increased
battery efficiency, potentially extend battery life with the use of
smart charging software, and
under the terms of the Hitachi joint venture we will retain much of
the residual value in the batteries as they are
replaced,
with material second-life value.
Looking
ahead, through our option to participate in a small non-controlling
interest in Hitachi ZeroCarbon (‘HZC’), we will have the
opportunity to create future value, leveraging our experience in
significant fleet electrification as HZC delivers market-leading
decarbonisation solutions to transport operators worldwide,
applying our joint experience.
Through
the Hitachi joint venture, to date, c.400 electric bus batteries
have been acquired for First Bus and we are working in partnership
with HZC to mobilise various depots to make use of their battery
and charging and management services. HZC have also recently
announced that they have been chosen as a principal partner in
Gridserve’s Electric Freightway project, which will see at least
140 electric Heavy Goods Vehicles integrated into a charging
network across key motorway charging sites and more than ten
commercial depot charging locations.
In
March 2024 we announced that we had
worked successfully with our local authority partners to secure
£16m through the UK Government’s ZEBRA 2 co-funding scheme to
support bus and fleet decarbonisation across four of our
regions.
Following
the completion of our latest ongoing electrification projects, we
will operate more than 800 zero-emissions vehicles, c.18% of our
fleet. We have also bought power connections to another 15 of our
depots and construction works are underway. In addition, we are
working with two of our vehicle manufacturers on diesel re-power
projects to convert diesel vehicles to electric at the point of the
diesel engine change (generally midway through the life of the
bus), which if successful will be an incremental part of our
decarbonisation strategy.
We are now
seeing the benefits of operating fully electric bus depots and have
no doubt that the electrification of our fleet and infrastructure
will further transform our business and provide a number of value
accretive adjacent revenue streams. It will allow us to standardise
and reduce the size of our fleet to drive efficiency and lower
engineering costs whilst delivering the same mileage, and by making
use of smart charging software we will be able to optimise our
energy use, increase battery efficiency and potentially extend
battery life.
Looking
ahead
In FY 2025
we expect to achieve progressive growth in FY 2025 against FY 2024.
We will continue to benefit from the actions we have taken to
transform the business and drive further growth in Adjacent
Services, making steady progression towards a 10% adjusted
operating profit margin, which we anticipate we will achieve in H2
2025.
Looking
further ahead, the transformation of the First Bus business is
delivering stronger foundations with a simplified, more efficient
operating model. We are also set to benefit from electrification
efficiencies and adjacent revenue streams, and from potential
franchising, partnership and inorganic growth opportunities. This
provides scope for revenue and earnings growth. Underpinning this,
we believe that despite short-term economic challenges, government
policy, favourable demographics and environmental and societal
trends will support growth in the regional bus sector.
First
Rail
|
|
£m
|
|
|
|
FY
2024
|
FY
2023
|
|
Change
|
Revenue
from DfT TOCs
|
3,609.2
|
3,805.6
|
|
(196.4)
|
Revenue
from open access and additional services
|
233.2
|
190.8
|
|
+42.4
|
Intra-divisional
eliminations
|
(104.0)
|
(103.2)
|
|
(0.8)
|
First Rail
Revenue
|
3,738.4
|
3,893.2
|
|
(154.8)
|
Adjusted
operating profit from DfT TOCs
|
105.6
|
93.3
|
|
+12.3
|
Adjusted
operating profit from open access and additional
services
|
37.7
|
31.5
|
|
+6.2
|
First Rail
adjusted operating profit
|
143.3
|
124.8
|
|
+18.5
|
Passenger
journeys (m) – DfT TOCs
|
271.6
|
261.2
|
|
+10.4
|
Passenger
journeys (m) – open access operations
|
2.7
|
2.2
|
|
+0.5
|
Passenger
journeys (m) – Total
|
274.3
|
263.4
|
|
+10.9
|
The First
Rail division reported total revenue of £3,738.4m in FY 2024 (FY
2023: £3,893.2m). The division’s open access operations contributed
£99.8m in revenue for the period, an increase of 41% against the
prior year (FY 2023: £70.8m). The division’s Additional Services
businesses delivered gross revenue of £133.4m (FY 2023: £120.0m)
before intra-divisional eliminations and adjusted operating profit
of £7.7m (FY 2023: £11.9m).
During H1
2024 the final variable fee payments due for the FY 2023 fiscal
year from the DfT-contracted Train Operating Companies (‘DfT TOCs’)
were agreed with the DfT at a rate ahead of the amounts accrued in
the Group’s FY 2023 financial statements (c.£13m). As a result, the
DfT TOCs reported an increase in adjusted operating profit for the
full year, to £105.6m (FY 2023: £93.3m). The division’s statutory
operating profit for FY 2024 rose to £143.3m (FY 2023:
£124.8m).
At the
beginning of FY 2024, the variable fees metrics were updated to
place a greater weighting on quantified measures, rather than
qualitative measures that rely on a subjective assessment of an
operator’s performance, and these are now assessed on a bi-annual
basis by the DfT. The Group does not anticipate a material impact
on overall, final variable fee awards and net income as a result of
these changes.
Rail
attributable net income from the DfT TOCs – being the Group’s share
of the post-tax management fee income available for distribution
from the GWR, SWR and WCP contracts with the DfT – was £39.5m (FY
2023: £38.7m). The Group receives an annual inter-company
remittance from the DfT TOCs reflecting the post-tax net management
and performance fees from the prior year. These become payable up
to the Group in the second half of the financial year following
completion of the management fee-based operations’ audited accounts
for the period to which the fee relates.
As a
result of high passenger booking volumes and positive yield
management, including inflationary increases in fares that were
partially offset by inflationary cost pressures, the division’s
open access operations - Hull Trains and Lumo - delivered a further
increase in adjusted operating profit, to £30.0m (FY 2023:
£19.6m).
To address
energy cost inflation and mitigate the long-term impact of
electricity costs, our train operating companies are members of
industry buying groups. For our open access operations, electricity
costs represent a material proportion of their total costs, and
these have increased by c.71% in FY 2024 to £13.2m. Electricity
costs are expected to decrease from these peak levels with recent
reductions in energy prices.
Continued
focus on delivery in our DfT TOCs
Our three
DfT TOCs operate under National Rail Contacts (‘NRC’s), 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. The
punctuality and other operational targets required to achieve the
maximum level of variable fee under the contracts are designed to
incentivise service delivery for customers. During FY 2024 the DfT
introduced some revenue upside potential for operators, with a
Revenue Outturn Mechanism (‘ROM’) within the quantitative variable
fee metrics. The ROM represents an incremental fee opportunity for
the Group if we are able to grow the revenues of the NRC contracts
within certain thresholds.
In
September 2023 we were awarded an NRC
for the West Coast Partnership which is a partnership between
FirstGroup (70%) and Trenitalia UK Ltd (30%). WCP comprises Avanti
West Coast and West Coast Partnership Development (WCPD), the
shadow operator for the HS2 programme, which involves the
development, mobilisation and eventual operation of high-speed
services under Phase 1 of the HS2 programme. The NRC is for nine
years, to October 2032, with a
minimum three-year core term to 18 October
2026.
Our team
at Avanti West Coast, and everyone connected with the train
operator, are all working hard with a singular focus on delivering
the service that customers expect. We have reached an agreement
with trade unions on the incremental use of rest day working, which
helps to support operational resilience. We also continue working
with government and other stakeholders on our plans to deliver
long-term improvements in customer experience and resilience, and a
new fleet of trains backed by £350m of private sector investment
entered passenger service on 2 June
2024. We are also continuing to undertake unprecedented
levels of driver recruitment and training to help sustain good
performance.
Continued
outperformance in open access
First
Rail’s two open access operations, where we bear all revenue and
cost risk and opportunity, have continued to outperform
expectations in FY 2024 due to strong leisure demand and effective
yield management. Hull Trains and Lumo were also two of the best
performing operators in England
with operator –related cancellations below 1%.
Hull
Trains was launched in September 2000
and following three contract extensions, has a track access
agreement in place until December
2032. Following a successful targeted marketing campaign,
Hull Trains saw an increase in business travellers during the year
and increased capacity (by 14% since December 2022) to match demand, running a ten-car
operation at peak demand times (typically a five-car service). Seat
capacity utilisation has also continued to grow, from 59% in FY
2023, to 69% in FY 2024 and Hull Trains reported a 40% increase in
revenue in FY 2024, to £45.1m (FY 2023: £32.1m).
By year
end, Lumo has now carried more than two and a half million
passengers since its launch in October
2021 and has a track access agreement in place to
May 2033. Lumo has contributed to
increased demand for all operators on the East Coast Mainline and
has continued to see strong demand for its services during FY 2024.
Profit growth has been driven predominantly by improving demand and
effective yield management, whilst still offering competitive
prices. Revenue increased by 42% to £54.7m in FY 2024 (FY 2023:
£38.6m) and seat capacity utilisation has risen to 75% from 71% in
the prior year.
Our open
access businesses are successfully delivering good value, reliable,
environmentally friendly services for customers and contributing to
their local economies. Travelling by Hull Trains has been shown to
reduce carbon emissions by 90% compared to travelling the same
distance by car and a recent independent study has forecast that
Hull Trains will have delivered £185-380m of economic benefits since its launch.
Independent research has shown that a London to Edinburgh journey on Lumo’s fully electric
train fleet results in 95% fewer carbon emissions than flying and
emits 21 times fewer emissions than a petrol car. Lumo has also
been forecast to contribute £470-740m
to the UK economy between 2021 and 2033 including £21-43m from direct employment, £130-365m from environmental modal shift benefits and
fare savings of c.£185m.
Expanding
our open access operations
We are
growing our open access business by adding capacity, driving
operational efficiencies, enhancing timetables and applying for new
and complementary routes where there is proven demand and capacity.
As mentioned above, since December
2022 we have added 14% more capacity to our existing Hull
Trains service, and we launched an enhanced Sunday service with the
launch of the December 2023
timetable.
In
January 2024, we submitted an
application to the Office of Rail and Road (ORR) for two new Hull
Trains London-Sheffield daily return services. This would be a
competitively priced service which will stimulate modal shift from
road to rail, as almost three-quarters of trips between
London and Sheffield are currently made by car. If our
application is successful, we anticipate that services could
commence in calendar year 2026, subject to stakeholder
agreement,
In
May 2024 we submitted an application
to the ORR for six new Lumo daily return services between
Rochdale and London which would restore a direct link from
Rochdale to London, via Manchester Victoria which last ran
in 2000. It is estimated that this new service would provide
1.6m people in the North West with a
convenient and competitively priced direct rail service to
London from stations that are more
local to them. If the application is approved, it is anticipated
that services could begin in calendar year 2027.
In
addition, following successful discussions with Network Rail
Scotland and Transport Scotland, we have also now submitted a
formal application to the ORR for the extension of a number of
Lumo’s daily services to and from Glasgow. We have also submitted applications
for an additional, eighth return service on Hull Trains between
London King’s Cross and Hull and
for an additional, sixth return Lumo service between London King’s
Cross and Newcastle.
Scaling
our Additional Services businesses
During the
year we continued to make use of our in-house expertise to develop,
market and deploy our affiliate services. These services were
initially developed to strengthen our offering to passengers on our
large passenger rail operations, but they are now being marketed
to, and used by, third party operators.
Our
analytics business Mistral Data was launched in 2021 and now has 14
software systems in operation built on native cloud technology,
allowing them to be quickly deployed whilst also ensuring security
and scalability. Mistral’s product focus areas include rail
operations, staff communications, customers (single view of
customer transactions with personalised marketing and train running
messages), revenue management, remote asset management and business
intelligence. In FY 2024, product releases have included an email
alert service for customers and a personalised messaging service
for front-line staff that sends operational messages including the
location of passengers who may require assistance whilst the train
is moving, and any other relevant information. Mistral also sold a
first product to a major train manufacturer.
Our First
Customer Contact passenger service centre was established in 2019
as a bespoke contact centre providing efficient and effective
customer services for train operators. The shared passenger service
centre operates at a lower cost than our previous outsourcing
arrangements and provides a single service for customer queries
across several rail operations, and like Mistral, offers potential
third-party opportunities. During the year, the team continued to
support our train operating companies, as well as TransPennine
Express, processing delay repay claims and passenger assistance
bookings with quick turnaround times.
Our First
Rail Consultancy team has experience built up over three decades.
In FY 2024 the team continued to support WCPD on HS2 and other key
projects in other train operating companies. First Rail Consultancy
also recently one of a small number of consultants appointed by the
DfT to its £600m STARThree framework to advise on the delivery of
key rail, road and aviation projects and we were very pleased to
have been selected to support a high-quality consortium bid for the
design, build and operation of a new high frequency electrified
intercity rail service, a major infrastructure rail project between
Quebec City and Toronto.
The
installation of our evo-rail track-to-train superfast rail 5G
technology on a section of the SWR network between Basingstoke and Earlsfield is near completion.
We undertook a strategic review of evo-rail’s future earlier this
year, and while we are fully committed to installing, commissioning
and maintaining evo-rail’s current projects, including the SWR
installation, we will not be actively developing any further
evo-rail projects.
Improving
customer experience
Our train
companies continue to work collaboratively with industry partners
and stakeholders to enhance our service offering.
During FY
2024, Avanti teamed up with tech innovator Signalbox to create a
customised live train app for travellers, and their innovative
low-cost, flexible Superfare has continued to see strong demand and
has recently been extended to more destinations. Lumo have also
introduced a new, flexible ticket option, LumoFlex, a digital-only
ticket with benefits that include reserved seating and a fee-free
change of journey. Both GWR and SWR have also successfully
introduced smartcards and digital ticketing in parts of their
networks.
Our DfT
TOCs also delivered a number of station improvement programmes in
partnership with the DfT, Network Rail and local authority
partners. GWR is helping to deliver the MetroWest project in
Bristol to generate more than a
million new rail journeys and give 80,000 more people access to
train services in the greater Bristol area, including the new Portway Park
& Ride station. GWR have also worked with their partners to
deliver new stations in Reading
and Exeter as well as a number of
accessibility improvements, including a £1m package at Chippenham
station. SWR’s
Island Line fully reopened in 2023 following a £26m investment
programme to re-connect the service with ferries.
Fleet
upgrades
First Rail
has an important role in meeting the challenges of climate change,
and we are working with our partners to reduce carbon emissions
through initiatives including the introduction of electric trains
to replace diesel where possible.
Avanti
took delivery of the first of its new train fleet following an
investment of £350m in ten electric-only trains and 13 bi-mode
trains that can run under both electric and diesel power. These
will replace Avanti’s diesel-only Voyager trains, leading to a 61%
reduction in carbon emissions as well as providing a quieter and
roomier service, more reliable Wi-Fi, wireless charging and a
real-time customer information system. The programme to refurbish
Avanti’s electric Pendolino fleet through a £117m investment
programme has also continued and is delivering a step change in
onboard customer experience. In H1 2024 SWR started its phased
introduction of a new fleet of 90 Alstom Class 701 trains and will
continue to introduce the trains into service during FY
2025.
Finally,
earlier this year GWR began a trial of a fast-charge battery-only
train, part of which included setting a UK distance record for a
battery train without recharging.
TfL
Contracts
As part of
our drive to grow and diversify our First Rail portfolio, we are
identifying non-DfT contract opportunities. Building on our
existing relationship with Transport for London (‘TfL’), having operated trams in
Croydon for a number of years, in March
2024 we announced that we had been awarded the contract to
operate the London Cable Car by TfL. The contract commences on
28 June 2024, and we estimate
revenues of c.£60m over the eight-year contract period. We look
forward to supporting TfL in its vision to promote the cable car as
a leader in London’s leisure market and to make use of the
opportunity to demonstrate our expertise. First Rail has also been
shortlisted with our bid partner Keolis SA to bid for the Elizabeth
Line contract and we look forward to submitting a compelling bid
that demonstrates our collective experience and breadth of
capabilities.
Rail
policy
Both
Conservative and Labour parties have put forward proposals for the
future of the UK rail industry. Although there are significant
differences, both parties are promoting the development of a
‘guiding mind’ industry body, named as Great British Railways in
the Government’s Plan for Rail document.
Labour have said that if elected they will “fold existing private
passenger rail contracts into the new body as they expire.”
Looking at
the industry as a whole, the huge growth in passengers and
significant improvements to stations and rolling stock that train
companies delivered under franchise agreements before the pandemic,
including those under our stewardship, demonstrates that the UK
rail industry works best as a public-private partnership.
Furthermore, companies such as ours bring private investment and
focus on cost control to an industry that needs it; our businesses
have saved more than £230m for the DfT in the last two years
alone.
We have
been one of the largest UK rail operators for more than 25 years,
during which we have worked successfully with a wide range of
partners under various forms of contract types and delivered a
number of significant rail infrastructure projects. We know that
growth and innovation are key for the future of the railway and are
committed to working with our government partners to provide
competitive, sustainable and improved services for all passengers
and communities.
Looking
ahead
In First
Rail, we expect the division’s financial performance to be broadly
in line with our expectations in FY 2025, including growth in open
access and a normal level of variable fee awards in the DfT TOCs,
(c.two thirds of the maximum available).
Looking
beyond FY 2025, despite political uncertainty surrounding National
Rail Contracts, we will maintain our focus on delivery and will
capitalise on opportunities to make use of our extensive experience
and expertise to grow our UK open access business, scale our
Additional Services businesses and participate in other UK
opportunities. We will also continue to monitor opportunities for
new open access entrants in the European rail market where there
are similar regulatory frameworks and commercial models to the
UK.
If
approved, the applications we have recently submitted for new and
extended open access services could more than double our open
access capacity over the next three to five years. If our
application for the new Hull Trains London-Sheffield service is
successful, we anticipate that services could commence in calendar
2026, subject to stakeholder agreement, and for the Lumo
Rochdale-London service, we currently anticipate a start date in
calendar year 2027.
Financial review
Capital
allocation guidance
Investment
|
•
Group:
interest of £50-55m, includes DfT TOCs interest of
c.£40m
•
First Bus:
c.£120m net cash capex for FY 2025, mostly on electrification;
includes estimated capex saving of c.£15m from the Hitachi joint
venture; we continue to evaluate a pipeline of inorganic growth,
franchising and partnership opportunities
•
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; business development and open access costs of
£5-10m are anticipated in FY 2025
|
Growth
|
•
Actively
reviewing adjacent organic and inorganic opportunities where this
creates value for shareholders and exceeds the Group’s cost of
capital
|
Returns for
shareholders
|
•
Progressive
dividend policy c.3x cover of Group adjusted earnings; paid c.1/3
interim and 2/3 final dividend
•
Final
dividend of 4.0p per share proposed, subject to shareholder
approval
•
Subject to
growth investment, balance sheet flexibility may allow for
additional shareholder returns
|
Balance
sheet
|
•
Less than
2.0x Adjusted Net Debt: rail management fee-adjusted EBITDA target
in the medium term
•
FY 2025
year-end adjusted net cash of £40-50m before any inorganic growth
capital deployment
|
|
53
weeks to 30 March 2024
|
|
52 weeks to
25 March 2023
|
|
Revenue
£m
|
Adjusted
operating
profit1
£m
|
Adjusted
operating
margin1
%
|
|
Revenue
£m
|
Adjusted
operating
profit1
£m
|
Adjusted
operating
margin1
%
|
First
Bus
|
1,012.2
|
83.6
|
8.3
|
|
902.5
|
58.4
|
6.5
|
First
Rail
|
3,738.4
|
143.3
|
3.8
|
|
3,893.2
|
124.8
|
3.2
|
Group
items/eliminations2
|
(35.5)
|
(22.6)
|
|
|
(40.7)
|
(22.2)
|
|
Continuing
operations
|
4,715.1
|
204.3
|
4.3
|
|
4,755.0
|
161.0
|
3.4
|
Discontinued
operations3
|
–
|
(1.9)
|
n/a
|
|
4.0
|
(6.6)
|
n/a
|
Total
|
4,715.1
|
202.4
|
4.3
|
|
4,759.0
|
154.4
|
3.2
|
-
‘Adjusted’
figures throughout this document are before adjusting items as set
out in note 4 to the financial statements. The statutory operating
profit including discontinued operations for the year was £41.2m
(FY 2023: £185.2m) as set out in note 5.
-
Includes
elimination of intra-group
trading between Bus and Rail divisions, central management and
other items.
-
Discontinued
operations relates to the Group’s residual Greyhound US
activities.
Revenue
Revenue
from continuing operations decreased marginally to £4,715.1m (FY
2023: £4,755.0m). The Group saw strong performance in First Bus and
the open access Rail business, as well as growth in the DfT TOCs
although this was offset by the impact of the non-renewal of the
TransPennine Express NRC at the end of May
2023. The Group also benefited from an extra week of trading
in FY 2024 at First Bus.
Adjusted
operating performance
Adjusted
operating profit from continuing operations was £204.3m (FY 2023:
£161.0m). First Bus benefited from increased passenger volumes,
improved driver availability and data-led operational and
commercial improvements, which more than offset ongoing
inflationary pressures and lower funding levels. In First Rail,
open access operations performed strongly underpinned by strong
demand and effective yield management more than offsetting
inflationary pressures. The DfT TOC business was ahead of
expectations owing to higher than accrued final variable fee awards
for FY 2023.
Central
costs were in line with the prior year at £(22.6)m. The net impact
to operating profit of IFRS 16 in the year was £47.7m (FY 2023:
£41.9m), with the increase driven mainly by the award of the GWR
NRC and the related rolling stock leases.
Adjusted
earnings from continuing operations were £110.7m (FY 2023: £85.6m),
driven by stronger adjusted operating profit performance across the
business, partly offset by a higher taxation charge as a result of
the increase in the corporation tax rate.
|
|
|
|
|
|
|
|
|
|
53
weeks to 30 March 2024
Adjusted
earnings
£m
|
52 weeks to
25 March 2023
Adjusted
earnings
£m
|
First Bus
adjusted operating profit
|
|
|
|
83.6
|
58.4
|
First Rail
adjusted operating profit
|
|
|
|
143.3
|
124.8
|
Group
central costs (operating profit basis)
|
|
|
|
(22.6)
|
(22.2)
|
Group
adjusted operating profit
|
|
|
|
204.3
|
161.0
|
Interest
|
|
|
|
(65.3)
|
(56.8)
|
Profit
before tax
|
|
|
|
139.0
|
104.2
|
IFRS 16 DfT
contracted TOCs adjustment1
|
|
|
|
10.2
|
6.9
|
Taxation
|
|
|
|
(32.0)
|
(20.4)
|
Non-controlling
interest
|
|
|
|
(6.5)
|
(5.1)
|
Group
adjusted earnings1
|
|
|
|
110.7
|
85.6
|
-
The Group
has revised its definition of adjusted earnings, to also exclude
the impact of IFRS 16 depreciation and interest charges in relation
to its First Rail – DfT contracted TOC operations, given the Group
takes no cost risk on these rolling stock leases. The prior year
comparatives have also been updated for the revised definition.
There has been no other change to the calculation, or to the
Group’s policy regarding adjusting items.
The
Group’s EBITDA adjusted for First Rail management fees performance
measure also increased materially year-on-year
and is calculated as follows:
|
53
weeks to
30
March
2024
£m
|
52 weeks
to
25
March
2023
£m
|
First Bus
EBITDA1
|
132.5
|
105.0
|
Attributable
net income from First Rail DfT contracted TOCs2
|
39.5
|
38.7
|
First Rail
– Open Access and Additional Services EBITDA1
|
37.6
|
32.5
|
Group
central costs (EBITDA basis1)
|
(21.8)
|
(21.2)
|
Group
EBITDA adjusted for First Rail DfT contracted TOCs’ management
fees
|
187.8
|
155.0
|
-
IAS 17
basis.
-
A
reconciliation to the segmental disclosures is set out in note
4.
Reconciliation
to non-GAAP
measures and performance
Note 4 to
the financial statements sets out the reconciliations of operating
profit/(loss) and profit/(loss) before tax to their adjusted
equivalents.
The
principal adjusting items in the year are as follows:
First
Bus pension settlement charge and related items
In
September 2023, First Bus concluded a
period of consultation with regards to its two Local Government
Pension Schemes and subsequently terminated its participation in
these funds on 31 October 2023, with
affected employees enrolled into the First Bus Retirement Savings
Plan. Adjusting charges of £146.9m were recognised in the period
for the settlement charge and related termination costs. A gain of
£161.0m was recognised in Other comprehensive income in relation to
the restricted accounting surplus.
Legal
claims in North America and the
UK
The Group
has recognised legal provisions relating to claims in North America and the UK, for cases with
marginal probability.
Adjusting
items – discontinued operations
First
Transit earnout
The final
valuation of the First Transit earnout contingent consideration
receivable was agreed and settled during the year, with the Group
receiving cash of $83.8m (£65.3m).
The Group incurred an adjusting charge of £2.3m, reflecting the
hedging of the cash receipt, translation of the US dollar asset
into pounds sterling before settlement, partially offsetting the
write-off of the residual asset on settlement.
In the
prior year, the principal adjusting items in relation to the
continuing business were as follows:
First
Bus restructuring
As part of
the restructuring of the First Bus division to exit
loss-making
markets and to align networks with post-pandemic
demand, the Group completed the sale of its First Scotland East
business in September 2022, realising
a loss on disposal of £(3.7)m, and closed the Southampton depot resulting in closure costs
and a release of prior impairment for a net credit of £2.3m. In
line with this transition plan, the Group also incurred costs of
£(5.6)m relating to surplus vehicle write-downs
and other reorganisation charges in the division.
Strategic
items
A final
net credit of £1.4m was recognised, being costs incurred in
relation to the Group’s central functions as part of its ongoing
cost efficiency initiatives following the exit from North America, offset by the release of
accruals following the disposal of North
America and the execution of the strategy.
Greyhound
Canada
Net
restructuring and closure costs of £(1.5)m relating to the
continued winding down of Greyhound Canada operations were incurred
during the prior year.
Adjusting
items – discontinued operations
First
Transit earnout
Following
the announcement on 26 October 2022
of EQT Infrastructure’s agreement to sell First Transit to Transdev
North America, Inc., in the prior year the Group estimated its
earnout consideration to be around $88.5m (£72.3m) based on the information received
on the sale by EQT. This gave rise to a non-cash,
adjusting charge of £33.8m relative to the carrying value of the
earnout of £106.1m as at 26 March
2022.
Gain
on disposal of properties
A gain of
£71.4m arose on the completion of the sale of the majority of the
remaining Greyhound US properties in December 2022.
Group
statutory operating profit
Statutory
operating profit from continuing operations was £46.5m (FY 2023:
£153.9m) with the positive underlying business performance being
offset by the £146.9m charge recognised as a result of the
termination of participation of the Local Government Pension
Schemes at First Bus with an offsetting £161.0m gain in the
Condensed Consolidated Statement of Comprehensive
Income.
Finance
costs and investment income
Net
finance costs from continuing operations were £65.3m (FY 2023:
£56.8m) with the increase principally due to IFRS 16 interest costs
which were £62.1m (FY 2023: £50.6m), mainly arising in First
Rail.
Profit
before tax
Statutory
loss before tax was £(18.8)m (FY 2023: profit before tax of
£97.1m), after the Local Government Pension Scheme (LGPS) pension
settlement and related charges. Adjusted profit before tax as set
out in note 4 to the financial statements was £136.8m (FY 2023:
£97.9m) including discontinued operations.
Tax
The tax
charge, on adjusted profit before tax on continuing operations for
the year was £32.0m (FY 2023: £20.4m), representing an effective
tax rate of 23.0% (FY 2023: 19.6%). The rate has increased in the
current year because of an increase in the underlying corporation
tax rate in the UK. There was a tax credit of £47.1m on adjusting
items and remeasurement of tax losses. The total tax credit,
including tax on discontinued operations, was £15.0m (FY 2023:
charge of £33.4m). The actual tax paid during the year was £2.2m
(FY 2023: £1.0m).
The
ongoing Group’s effective tax rate is expected to be broadly in
line with UK corporation tax levels being 25%.
Adjusted
cash flow
The
Group’s adjusted cash flow of £(167.7)m (FY 2023: £28.0m) in the
year reflects positive cash flow from operations of £626.6m (FY
2023: £644.8m) including the net receipt from terminating
participation in the Local Government Pension Schemes in First Bus,
First Transit earnout proceeds and proceeds from the disposal of
property, plant and equipment. This is offset by net capital
invested in the business, mainly in decarbonisation in First Bus
and acquisitions, as well as the repayment of lease liabilities,
dividends paid and purchases of shares under the share buyback
programme. The adjusted cash flow is set out below:
|
53
weeks to
30
March
2024
£m
|
52 weeks
to
25
March
2023
£m
|
EBITDA
|
585.6
|
755.8
|
Other
non-cash
income statement charges
|
13.7
|
10.9
|
Working
capital
|
(106.1)
|
(101.3)
|
Movement in
other provisions
|
(27.9)
|
(33.0)
|
Increase in
financial assets/contingent consideration receivable
|
23.7
|
–
|
Settlement
of foreign exchange hedge
|
(1.1)
|
(1.2)
|
Pension
inflow in excess of income statement charge/LGPS refund
|
138.7
|
13.6
|
Cash
generated by operations
|
626.6
|
644.8
|
Capital
expenditure and acquisitions
|
(236.0)
|
(208.5)
|
Proceeds
from disposal of property, plant and equipment
|
42.8
|
147.8
|
Proceeds
from capital grant funding
|
94.8
|
144.2
|
Proceeds
from contingent consideration
|
65.3
|
–
|
Net
proceeds from disposal of businesses
|
-
|
2.0
|
Interest
and tax
|
(67.6)
|
(64.6)
|
Shares
purchased for Employee Benefit Trust
|
(16.5)
|
(15.3)
|
Share
repurchases from buyback programme including costs
|
(117.6)
|
(31.6)
|
External
dividends paid
|
(29.5)
|
(14.7)
|
Dividends
paid to non-controlling
shareholders
|
(6.5)
|
(6.1)
|
Settlement
of foreign exchange hedge
|
4.1
|
(12.5)
|
Lease
payments now in debt
|
(526.2)
|
(557.5)
|
Fees for
finance facilities
|
(1.4)
|
-
|
Adjusted
cash flow
|
(167.7)
|
28.0
|
Foreign
exchange movements
|
3.4
|
(4.0)
|
Net
(inception)/termination of leases
|
(237.5)
|
(1,231.8)
|
Lease
payments now in debt
|
526.2
|
557.5
|
Other
non-cash
movements
|
(0.1)
|
0.2
|
Movement
in net debt in the period
|
124.3
|
(650.1)
|
EPS
Total
adjusted EPS from continuing operations was 16.7p (FY 2023: 11.6p).
Basic EPS was (2.4)p (FY 2023: 11.8p).
Shares
in issue
As at
30 March 2024, there were
625.4m shares in issue (FY 2023:
707.8m), excluding treasury shares
and own shares held in trust for employees of 125.3m (FY 2023: 42.8m).
The
weighted average number of shares in issue for the purpose of basic
EPS calculations (excluding treasury shares and own shares held in
trust for employees) in the year was 662.9m (FY 2023: 739.5m).
Dividend
The Board
is proposing that a final dividend of 4.0p per share, resulting in
a total dividend payment of c.£24.3m, be paid on 23 August 2024 to shareholders on the register at
19 July 2024, subject to approval of
shareholders at the 2024 AGM.
Capital
expenditure
Non-First
Rail capital expenditure was £201.1m (FY 2023: £151.2m), comprising
First Bus £200.8m and Group items £0.3m (FY 2023: First Bus £120.3m
and Group items £1.0m). In the year, the First Bus average fleet
age was 9.0 years (FY 2023: 9.1 years) reflecting continued
investment in the fleet, mainly on electric vehicles and related
infrastructure. First Rail capital expenditure was £45.5m (FY 2023:
£56.7m) and is typically matched by receipts from the DfT under
current contractual arrangements or other funding.
During the
year asset-backed
financial liabilities were entered into leases in First Bus of
£22.1m (FY 2023: £19.3m). Through the investment in the strategic
joint venture with Hitachi Zero Carbon, £13.2m of battery leases
have been recognised through the sale and leaseback arrangements
for 257 batteries.
In
addition, during the year the Group entered into leases with a
right of use value of £222.5m comprising First Rail £192.6m, First
Bus £27.2m and Group items £2.7m (FY 2023: £1,219.0m, comprising
First Rail £1,213.8m, First Bus £4.2m and Group items
£1.0m)).
Gross
capital investment (fixed asset and software additions plus right
of use asset additions) was £443.5m (FY 2023: £1,426.9m) and
comprised First Bus £208.2m, First Rail £232.6m and Group items
£2.7m (FY 2023: First Bus £154.3m, First Rail £1,270.5m and Group
items £2.1m). The balance between cash capital expenditure and
gross capital investment represents new leases, creditor movements
and the recognition of additional right of use assets in the
year.
Net
cash/(debt)
The
Group’s adjusted net cash as at 30 March
2024, which excludes IFRS 16 lease liabilities and
ring-fenced
cash was £64.1m (FY 2023: adjusted net cash of £109.9m). Reported
net debt was £(1,144.8)m (FY 2023: reported net debt of
£(1,269.1)m) after IFRS 16 and including ring-fenced
cash of £249.6m (FY 2023: £369.6m), as follows:
|
30
March
2024
|
25
March
2023
|
Analysis
of net (cash)/debt
|
Total
Group
£m
|
Total
Group
£m
|
Sterling
bond (2024)
|
96.2
|
184.2
|
Bank loans
and overdrafts
|
27.8
|
82.9
|
Lease
liabilities
|
1,458.5
|
1,748.6
|
Asset
backed financial liabilities
|
45.6
|
44.2
|
NextGen
(Hitachi JV) facility
|
13.2
|
–
|
Loan
notes
|
–
|
0.6
|
Gross
debt excluding accrued interest
|
1,641.3
|
2,060.5
|
Cash
|
(246.9)
|
(421.8)
|
First Rail
ring-fenced
cash and deposits
|
(245.6)
|
(364.2)
|
Other
ring-fenced
cash and deposits
|
(4.0)
|
(5.4)
|
Net
debt excluding accrued interest
|
1,144.8
|
1,269.1
|
|
|
|
IFRS 16
lease liabilities – rail
|
1,408.9
|
1,711.2
|
IFRS 16
lease liabilities – non-rail
|
49.6
|
37.4
|
IFRS
16 lease liabilities – total
|
1,458.5
|
1,748.6
|
|
|
|
Net
cash excluding accrued interest (pre-IFRS
16)
|
(313.7)
|
(479.5)
|
|
|
|
Adjusted
net cash (pre-IFRS
16 and excluding ring-fenced
cash)
|
(64.1)
|
(109.9)
|
Funding
As at the
year end, the Group had £300.0m of undrawn committed borrowing
available under its Revolving Credit Facility (‘RCF’). In addition,
there was £129.8m (FY 2023: £nil) of committed headroom available
under the Green Hire Purchase Finance Facility and £54.9m available
under the NextGen Battery (Hitachi JV) facility. Total undrawn bank
borrowing facilities at year end stood at £501.0m (FY 2023:
£316.5m) of which £484.7m (FY 2023: £300.0m) was committed and
£16.3m (FY 2023: £16.5m) was uncommitted over and above the £246.9m
of cash balances.
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. £38.2m has been paid in dividends from the TOCs
after finalisation of their FY 2023 statutory accounts to the Group
during the year. The ring-fenced
cash represents that which is not available for distribution, or
the amount required to satisfy the liquidity ratio at the balance
sheet date.
Interest
rate risk
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.
Based on
the current adjusted net debt profile, the variable rate RCF is
undrawn with only finance leases and the 2024 6.875% £96.2m fixed
rate bond outstanding.
Fuel
and electricity price risk
We use a
progressive forward hedging programme to manage commodity risk. As
at June 2024, 76% of our ‘at risk’ UK
crude requirement for FY 2025 (73.3m
litres, which is all in First Bus) was hedged at an average rate of
51p per litre, and 41% of our requirements for the year to the end
of March 2026 at 50p per litre. We
also have an electricity hedge programme in place, with 78% of our
consumption (based on current consumption forecasts) hedged for FY
2025 at £129/MWh and 55% for FY 2026 at £91/MWh.
Foreign
currency risk
‘Certain’
and ‘highly probable’ foreign currency transaction exposures
(including fuel purchases for the UK divisions) may be hedged at
the time the exposure arises for up to two years at specified
levels, or longer if there is a very high degree of certainty. The
Group does not hedge the translation of earnings into the Group
reporting currency (pounds Sterling) but accepts that reported
Group earnings will fluctuate as exchange rates against pounds
Sterling fluctuate for the currencies in which the Group does
business, although this exposure is materially reduced following
the sales of the North American divisions. During the year, the net
cash generated in each currency may be converted by Group Treasury
into pounds Sterling by way of spot transactions in order to keep
the currency composition of net debt broadly constant.
Foreign
exchange
The most
significant exchange rates to pounds Sterling for the Group are as
follows:
|
30
March 2024
|
25 March
2023
|
|
Closing
rate
|
Effective
rate
|
Closing
rate
|
Effective
rate
|
US
Dollar
|
1.26
|
1.26
|
1.22
|
1.11
|
Canadian
Dollar
|
1.71
|
1.77
|
1.68
|
1.76
|
Pensions
We have
updated our pension assumptions as at 30
March 2024 for the defined benefit schemes in the UK and
North America. The net pension
surplus of £27.8m at the beginning of the year moved to a net
deficit of £25.3m at the end of the year.
At the
beginning of the year, the balance sheet included an asset of
£21.7m relating to the payment expected from the LGPS in
Scotland. That payment, which in
practice amounted to £23.1m, was duly received over the financial
year. The remaining movement arose from asset performance that was
insufficient to offset an increase in the value of liabilities due
to a reduction in the discount rate. The main factors that
influence the balance sheet liabilities for pensions (and the
principal sensitivities to their movement (excluding rail contracts
and insured liabilities) at 30 March
2024 are set out below:
|
Movement
|
Impact
|
Discount
rate
|
+1.0%
|
Decrease
liabilities by £150m
|
Inflation
|
+0.5%
|
Increase
liabilities by £59m
|
Life
expectancy
|
+1
year
|
Increase
liabilities by £38m
|
On
31 October 2023, following a
consultation with affected employees, the Group terminated the
participation of the relevant First Bus subsidiaries in the two
Local Government Pension Schemes in which they were admitted
bodies.
An expense
of £146.9m was recognised in the year as an adjusting income
statement item for the settlement charges and other related costs,
with gains of £5.0m recognised in income for curtailment gains and
£161.0m recognised in Other comprehensive income in relation to the
restricted accounting surplus. Terminating the LGPS participation
has resulted in an annualised saving of c.£2m included within the
First Bus adjusted operating profit going forwards.
During the
year, the Limited Partnership created following the sale of the
North American divisions returned £23.7m to the Bus Pension Scheme,
linked to the £500m capital return in December 2021. The amounts held by the Limited
Partnerships generated interest income of £5.7m during the period
which partially offset the reduction in the value of the related
financial asset on the Group’s balance sheet, to £99.6m (FY23:
£117.6m).
At legacy
Greyhound, the Group bought out and settled c.$75m (c.£62m) of Greyhound US pension
liabilities, and in addition £153m of pension liabilities in
Canada have been secured with an
annuity buy-in.
The merger
of the First Bus and First Group pension schemes was completed
after year end to drive further efficiencies. The Group Scheme
triennial funding valuation as at 5 April
2024 (now comprising legacy Group and Bus pension
obligations) has commenced and will be finalised in FY 2026. The
valuation outcome will determine how the £77m currently held in the
Bus Scheme Limited Partnership will be distributed, with the
balance of £23m relating to the Group scheme to be determined based
on the 2030 triennial valuation.
Balance
sheet
Net assets
have decreased by £109.1m since 25 March
2023. The principal reasons are the impact of the profit for
the year, which is more than offset by the reduction in the pension
surplus, as well as the share buyback programme.
Balance
sheets – Net assets/(liabilities)
|
As
at 30 March 2024
£m
|
As at 25
March 2023
£m
|
First
Bus
|
580.2
|
511.9
|
First
Rail
|
1,169.2
|
1,368.3
|
Greyhound
|
(24.7)
|
(21.8)
|
Divisional
net assets
|
1,724.7
|
1,858.4
|
Group
items
|
60.7
|
162.1
|
Net
debt
|
(1,148.3)
|
(1,275.6)
|
Taxation
|
4.0
|
5.3
|
Greyhound –
Held for sale
|
0.6
|
0.6
|
Total
|
641.7
|
750.8
|
Post-balance
sheet events
The merger
of the First Bus and First Group pension schemes was completed on
31 May 2024.
Going
concern
The Board
carried out a review of the Group’s financial projections for the
18 months to 30 September 2025 and
evaluated whether it was appropriate to prepare the full year
results on a going concern basis. In doing so the Board considered
whether any material uncertainties exist that cast doubt on the
Group’s and the Company’s ability to continue as a going concern
over the going concern period.
Consistent
with prior years, the Board’s going concern assessment is based on
a review of future trading projections, including whether banking
covenants are likely to be met and whether there is sufficient
committed facility headroom to accommodate future cash flows for
the going concern period.
Divisional
management teams prepared detailed, bottom-up
projections for their businesses, including assumptions on
passenger volumes and government support arrangements, and having
regard to the risks
and
uncertainties to which the Group is exposed.
Following
these reviews the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for at least the 12-month period from the date on which the
financial statements were approved. Accordingly, they continue to
adopt a going concern basis of accounting in preparing the
consolidated financial statements in this full year
report.
Definitions
Unless
otherwise stated, all financial figures for the 53 weeks ending
30 March 2024 (the 'year' or 'FY
2024') include the results and financial position of the First Rail
business for the year ended 31 March
2024 and the results of all other businesses for the 53
weeks ending 30 March 2024. The
figures for the 52 weeks to 25 March
2023 (the 'prior year' or 'FY 2023') include the results and
financial position of the First Rail business for the year ended
31 March 2023 and the results and
financial position of all other businesses for the 52 weeks to
25 March 2023. Results for the 52
weeks to 29 March 2025 ('FY 2025')
will include the results and financial position for First Rail for
the year ending 31 March 2025 and the
results and financial position of all the other businesses for the
52 weeks ending 29 March
2025.
'Cont.' or
the 'Continuing operations' refer to First Bus, First Rail and
Group items.
'Disc.' or
the 'Discontinued operations' refer to First Student, First Transit
and Greyhound US.
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 4 to the financial
statements, and in the case of ‘adjusted earnings’ and ‘adjusted
EPS’, exclude the impact of IFRS 16 for the Group’s management
fee-based Rail operations.
'EBITDA’
is adjusted operating profit less capital grant amortisation plus
depreciation.
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.
‘Adjusted
earnings' is the Group’s statutory profit for the year attributable
to equity holders of the parent, excluding adjusting items as
detailed in note 4, and also excluding the impact of IFRS 16 for
the Group’s management fee-based Rail operations.
'Net
debt/(cash)' is the value of Group external borrowings, excluding
accrued interest, less cash balances.
'Adjusted
net debt/(cash)' excludes ring-fenced cash and IFRS 16 lease
liabilities from net debt/(cash).
Forward-looking
statements
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.
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.
Principal
risks and uncertainties
The Board
has conducted a thorough assessment of the principal risks and
uncertainties facing the Group, including those that would threaten
the successful and timely delivery of its strategic priorities,
future financial performance, solvency and liquidity.
In
addition to the risk and uncertainties facing the Group as detailed
in the Business and Financial Reviews, the underlying principal
risks and uncertainties in our operating businesses will be set out
in detail in the Group’s 2024 Annual Report and Accounts. A number
of these risks remain elevated given the wider political
uncertainty and related impact on Government transport policies
including industrial action. The principal risks facing the Group
are:
• Economic
conditions
•
Geopolitical
•
Climate
•
Contracted business
• Growth
within the sector
•
Financial resources
•
Safety
• Pension
scheme funding
• Legal
& Regulatory compliance
•
Information security including cyber
• Human
resources
Whilst a
number of risks facing the business have reduced during the year
including an improved inflationary outlook and progress in the
First Rail business, industrial relations challenges still persist.
Furthermore, a change of UK Government could lead to policy changes
resulting in the renationalisation of the National Rail Contracts
within the First Rail division as the expiry dates of our various
agreements with the DfT are reached.
For a full
summary of the Principal Risks and Uncertainties facing the Group,
please refer to the Annual Report and Accounts 2024 which will be
published on 26 June 2024 on the
Group’s website:
https://www.firstgroupplc.com/investors/reports-and-presentations.aspx.
Graham Sutherland
Ryan
Mangold
Chief
Executive Officer
Chief
Financial Officer
11 June 2024
11
June 2024
Consolidated
income statement
For the 53 weeks ended 30 March 2024
/ 52 weeks
ended 25 March
2023
Continuing
Operations
|
Notes
|
2024
£m
|
2023
£m
|
Revenue
|
2
|
4,715.1
|
4,755.0
|
Operating costs before LGPS pension settlement and related
charges
|
|
(4,521.7)
|
(4,601.1)
|
LGPS pension settlement and related charges
|
|
(146.9)
|
-
|
Total operating costs
|
|
(4,668.6)
|
(4,601.1)
|
Operating profit
|
|
46.5
|
153.9
|
Investment income
|
5
|
16.7
|
12.3
|
Finance costs
|
5
|
(82.0)
|
(69.1)
|
(Loss)/profit before tax
|
|
(18.8)
|
97.1
|
Tax
|
6
|
15.1
|
(10.4)
|
(Loss)/profit from continuing
operations
|
|
(3.7)
|
86.7
|
(Loss)/profit from discontinued operations
|
13
|
(5.7)
|
8.6
|
(Loss)/profit for the year
|
|
(9.4)
|
95.3
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
|
(15.9)
|
87.1
|
Non-controlling
interests
|
|
6.5
|
8.2
|
|
|
(9.4)
|
95.3
|
Earnings per share
|
|
|
|
Earnings per share for (loss)/profit from continuing
operations attributable to the
ordinary equity holders of the Company
|
|
|
|
Basic earnings per share
|
|
(1.5)p
|
10.6p
|
Diluted earnings per share
|
|
(1.5)p
|
10.3p
|
|
|
|
|
Earnings per share for (loss)/profit attributable to the
ordinary equity holders of the Company
|
|
|
|
Basic earnings per share
|
7
|
(2.4)p
|
11.8p
|
Diluted earnings per share
|
7
|
(2.4)p
|
11.4p
|
|
|
|
|
Adjusted results (from continuing
operations)1
|
|
|
|
Adjusted operating profit
|
3
|
204.3
|
161.0
|
Adjusted profit before tax
|
|
139.0
|
104.2
|
Adjusted EPS
|
7
|
16.7p
|
11.6p
|
Adjusted diluted EPS
|
|
16.1p
|
11.2p
|
1 Adjusted
for certain items as set out in note 4. The Group has revised its
definition of adjusted earnings/EPS during the year, to exclude
also the impact of IFRS 16 depreciation and interest charges in
relation to its rail management fee-based operations, given the
Group takes no cost risk on these rolling stock leases. The prior
year comparatives have also been updated for the revised
definition. There has been no other change to the calculation, or
to the Group’s policy regarding adjusting items.
The
accompanying notes form an integral part of this consolidated
income statement.
Consolidated
statement of comprehensive income
For the 53 weeks ended 30 March 2024
/ 52 weeks
ended 25 March
2023
|
|
2024
£m
|
2023
£m
|
(Loss)/profit for the year
|
|
(9.4)
|
95.3
|
|
|
|
|
Items that will not be reclassified subsequently to profit
or loss
|
|
|
|
Actuarial losses on defined benefit pension schemes
|
|
(77.7)
|
(150.9)
|
Gain on termination of LGPS participation from restricted
accounting surplus
|
|
161.0
|
-
|
Deferred tax on actuarial losses/(gains) on defined benefit pension
schemes
|
|
(20.2)
|
37.2
|
|
|
63.1
|
(113.7)
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
Hedging instrument movements
|
|
5.1
|
(6.3)
|
Deferred tax on hedging instrument movements
|
|
(0.5)
|
(1.3)
|
Cumulative (loss)/gain on hedging instruments reclassified to the
income statement
|
|
(2.7)
|
10.9
|
Exchange differences on translation of foreign operations –
continuing operations
|
|
–
|
0.9
|
Exchange differences on translation of foreign operations –
discontinued operations
|
|
(6.6)
|
6.8
|
|
|
(4.7)
|
11.0
|
|
|
|
|
Other comprehensive income/(loss) for the
year
|
|
58.4
|
(102.7)
|
|
|
|
|
Total comprehensive income/(loss) for the
year
|
|
49.0
|
(7.4)
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
|
42.5
|
(15.6)
|
Non-controlling
interests
|
|
6.5
|
8.2
|
|
|
49.0
|
(7.4)
|
|
|
|
|
Total comprehensive income/(loss) for the year attributable to
owners of FirstGroup plc arises from:
|
|
|
|
Attributable to:
|
|
|
|
Continuing operations
|
|
62.1
|
(22.6)
|
Discontinued operations
|
|
(13.1)
|
15.2
|
|
|
49.0
|
(7.4)
|
The
accompanying notes form an integral part of this consolidated
statement of comprehensive income.
Consolidated
balance sheet
As at 30 March 2024 / 25 March 2023
|
Notes
|
2024
£m
|
2023
£m
|
Non-current
assets
|
|
|
|
Goodwill
|
8
|
111.0
|
99.6
|
Other intangible assets
|
9
|
10.4
|
10.8
|
Property, plant and equipment
|
10
|
2,155.4
|
2,329.7
|
Deferred tax assets
|
17
|
39.6
|
47.0
|
Retirement benefit assets
|
|
6.4
|
44.6
|
Derivative financial instruments
|
16
|
0.4
|
0.1
|
Financial asset
|
16
|
99.6
|
117.6
|
Investments
|
|
2.6
|
2.5
|
|
|
2,425.4
|
2,651.9
|
Current assets
|
|
|
|
Inventories
|
|
25.9
|
26.0
|
Trade and other receivables
|
11
|
852.6
|
848.3
|
Contingent consideration receivable
|
11
|
–
|
72.3
|
Current tax assets
|
|
4.4
|
–
|
Cash and cash equivalents
|
|
496.5
|
791.4
|
Derivative financial instruments
|
16
|
2.0
|
7.4
|
|
|
1,381.4
|
1,745.4
|
|
|
|
|
Assets held for sale
|
|
0.6
|
8.9
|
Total assets
|
|
3,807.4
|
4,406.2
|
Current liabilities
|
|
|
|
Trade and other payables
|
12
|
1,258.6
|
1,314.4
|
Tax liabilities – Current tax liabilities
|
|
0.4
|
0.3
|
–
Other tax and social security
|
|
39.6
|
41.4
|
Borrowings
|
14
|
626.5
|
554.7
|
Derivative financial instruments
|
16
|
3.4
|
2.6
|
Provisions
|
18
|
74.6
|
85.9
|
Current liabilities
|
|
2,003.1
|
1,999.3
|
Net current liabilities
|
|
(621.7)
|
(253.9)
|
Non-current
liabilities
|
|
|
|
Borrowings
|
14
|
1,018.3
|
1,512.3
|
Derivative financial instruments
|
16
|
1.3
|
1.9
|
Retirement benefit liabilities
|
|
31.7
|
16.7
|
Provisions
|
18
|
111.3
|
125.2
|
|
|
1,162.6
|
1,656.1
|
Total liabilities
|
|
3,165.7
|
3,655.4
|
Net assets
|
|
641.7
|
750.8
|
Equity
|
|
|
|
Share capital
|
19
|
37.5
|
37.5
|
Share premium
|
|
693.3
|
693.2
|
Hedging reserve
|
|
(1.8)
|
(0.7)
|
Other reserves
|
|
22.4
|
22.4
|
Own shares
|
|
(20.4)
|
(15.4)
|
Translation reserve
|
|
(22.9)
|
(16.3)
|
Retained earnings
|
|
(74.8)
|
19.5
|
Equity attributable to equity holders of the
parent
|
|
633.3
|
740.2
|
Non-controlling
interests
|
|
8.4
|
10.6
|
Total equity
|
|
641.7
|
750.8
|
The
accompanying notes form an integral part of this consolidated
balance sheet.
Ryan
Mangold
11 June 2024
Consolidated
statement of changes in equity
For the 53 weeks ended 30 March 2024
/ 52 weeks
ended 25 March
2023
|
Share
capital
£m
|
Share
premium
£m
|
Hedging
reserve
£m
|
Other
reserves
£m
|
Own
shares
£m
|
Translation
reserve
£m
|
Retained
earnings
£m
|
Total
£m
|
Non-
controlling
interests
£m
|
Total
equity
£m
|
Balance at 27 March 2022
|
37.5
|
692.8
|
19.3
|
22.4
|
(9.0)
|
(24.0)
|
137.6
|
876.6
|
8.5
|
885.1
|
Profit for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
87.1
|
87.1
|
8.2
|
95.3
|
Other comprehensive income/(loss)
for the period
|
–
|
–
|
3.3
|
–
|
–
|
7.7
|
(113.7)
|
(102.7)
|
|
(102.7)
|
Total comprehensive income/(loss)
for the period
|
–
|
–
|
3.3
|
–
|
–
|
7.7
|
(26.6)
|
(15.6)
|
8.2
|
(7.4)
|
Hedging instrument movements transferred to balance sheet (net of
tax)
|
–
|
–
|
(23.3)
|
–
|
–
|
–
|
–
|
(23.3)
|
–
|
(23.3)
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
|
|
|
Shares issued
|
0.0
|
0.4
|
–
|
–
|
–
|
–
|
–
|
0.4
|
–
|
0.4
|
Shares bought back but not yet cancelled
|
–
|
–
|
–
|
–
|
–
|
–
|
(31.6)
|
(31.6)
|
–
|
(31.6)
|
Liability for shares not yet bought back
|
–
|
–
|
–
|
–
|
–
|
–
|
(43.9)
|
(43.9)
|
–
|
(43.9)
|
Dividends paid
|
–
|
–
|
–
|
–
|
–
|
–
|
(14.7)
|
(14.7)
|
(6.1)
|
(20.8)
|
Movement in EBT and treasury shares
|
–
|
–
|
–
|
–
|
(6.4)
|
–
|
(8.6)
|
(15.0)
|
–
|
(15.0)
|
Share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
6.4
|
6.4
|
–
|
6.4
|
Deferred tax on share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
0.9
|
0.9
|
–
|
0.9
|
Balance at 25 March 2023
|
37.5
|
693.2
|
(0.7)
|
22.4
|
(15.4)
|
(16.3)
|
19.5
|
740.2
|
10.6
|
750.8
|
Balance at 26 March 2023
|
37.5
|
693.2
|
(0.7)
|
22.4
|
(15.4)
|
(16.3)
|
19.5
|
740.2
|
10.6
|
750.8
|
(Loss)/profit for the period
|
–
|
–
|
–
|
–
|
–
|
–
|
(15.9)
|
(15.9)
|
6.5
|
(9.4)
|
Other comprehensive income/(loss)
for the period
|
–
|
–
|
1.9
|
–
|
–
|
(6.6)
|
63.1
|
58.4
|
|
58.4
|
Total comprehensive income/(loss)
for the period
|
–
|
–
|
1.9
|
–
|
–
|
(6.6)
|
47.2
|
42.5
|
6.5
|
49.0
|
Hedging instrument movements transferred to balance sheet (net of
tax)
|
–
|
–
|
(3.0)
|
–
|
–
|
–
|
–
|
(3.0)
|
–
|
(3.0)
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
|
|
|
Shares issued
|
–
|
0.1
|
–
|
–
|
–
|
–
|
–
|
0.1
|
–
|
0.1
|
Shares bought back but not yet cancelled
|
–
|
–
|
–
|
–
|
–
|
–
|
(74.7)
|
(74.7)
|
–
|
(74.7)
|
Liability for shares not yet bought back
|
–
|
–
|
–
|
–
|
–
|
–
|
(41.1)
|
(41.1)
|
–
|
(41.1)
|
Non-controlling interest buy-out
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(2.2)
|
(2.2)
|
Dividends paid
|
–
|
–
|
–
|
–
|
–
|
–
|
(29.5)
|
(29.5)
|
(6.5)
|
(36.0)
|
Movement in EBT and treasury shares
|
–
|
–
|
–
|
–
|
(5.0)
|
–
|
(11.5)
|
(16.5)
|
–
|
(16.5)
|
Share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
15.6
|
15.6
|
–
|
15.6
|
Deferred tax on share-based
payments
|
–
|
–
|
–
|
–
|
–
|
–
|
(0.3)
|
(0.3)
|
–
|
(0.3)
|
Balance at 30 March 2024
|
37.5
|
693.3
|
(1.8)
|
22.4
|
(20.4)
|
(22.9)
|
(74.8)
|
633.3
|
8.4
|
641.7
|
The
accompanying notes form an integral part of this consolidated
statement of changes in equity.
Consolidated
cash flow statement
For the 53
weeks ended 30 March 2024 /
52 weeks
ended 25 March
2023
|
Notes
|
2024
£m
|
2023
£m
|
Cash generated by operations
|
21
|
626.6
|
644.8
|
Tax paid
|
|
(2.2)
|
(1.0)
|
Interest paid
|
|
(81.1)
|
(70.0)
|
Net cash from operating activities
|
21
|
543.3
|
573.8
|
|
|
|
|
Investing activities
|
|
|
|
Interest received
|
|
15.7
|
6.4
|
Proceeds from disposal of property, plant and equipment
|
|
42.8
|
147.8
|
Purchases of property, plant and equipment
|
|
(216.9)
|
(173.7)
|
Purchases of software
|
|
(2.4)
|
(4.2)
|
Proceeds from capital grant funding
|
|
94.8
|
144.2
|
Proceeds from contingent consideration
|
|
65.3
|
–
|
Net proceeds from disposal of subsidiaries (net of cash
disposed)
|
|
–
|
2.0
|
Settlement of foreign exchange hedge
|
|
4.1
|
(12.5)
|
Acquisition of businesses (net of cash acquired)
|
20
|
(13.6)
|
(30.6)
|
Net cash (used in)/generated from investing
activities
|
|
(10.2)
|
79.4
|
Financing activities
|
|
|
|
Shares purchased by Employee Benefit Trust
|
|
(16.5)
|
(15.3)
|
Treasury shares purchased via share buyback scheme and directly
associated costs
|
|
(117.6)
|
(31.6)
|
External dividends paid
|
|
(29.5)
|
(14.7)
|
Dividends paid to non-controlling
shareholders
|
|
(6.5)
|
(6.1)
|
Buy-out of non-controlling interest
|
|
(3.1)
|
–
|
Shares issued
|
|
–
|
–
|
Repayment of bond issues
|
|
(88.0)
|
(15.7)
|
Repayment of lease liabilities
|
|
(506.9)
|
(546.9)
|
Repayment of asset backed financial liabilities
|
|
(19.3)
|
(10.6)
|
Repayment of loan notes
|
|
(0.6)
|
–
|
NextGen facility drawdown
|
|
13.1
|
–
|
Fees for finance facilities
|
|
(1.4)
|
–
|
Net cash flow used in financing
activities
|
|
(776.3)
|
(640.9)
|
Net (decrease)/increase in cash and cash equivalents before
foreign exchange movements
|
|
(243.2)
|
12.3
|
Cash and cash equivalents at beginning of
year
|
|
708.5
|
700.2
|
Foreign exchange movements
|
|
3.4
|
(4.0)
|
Cash and cash equivalents at end of
year
|
|
468.7
|
708.5
|
Cash flows
of discontinued operations are shown in note 13.
|
|
2024
£m
|
2023
£m
|
Reconciliation to cash flow statement
|
|
|
|
Cash and cash equivalents – balance sheet
|
|
496.5
|
791.4
|
Bank overdraft
|
|
(27.8)
|
(82.9)
|
Cash and cash equivalents at end of year per consolidated
balance sheet
|
|
468.7
|
708.5
|
Note
to the consolidated cash flow statement – reconciliation of net
cash flow to movement in net debt
|
|
2024
£m
|
2023
£m
|
Net (decrease)/increase in cash and cash equivalents in
year
|
|
(243.2)
|
12.3
|
Decrease in debt excluding leases
|
|
75.5
|
15.7
|
Adjusted cash flow
|
|
(167.7)
|
28.0
|
Repayment of lease liabilities and asset backed financial
liabilities
|
|
526.2
|
557.5
|
(Inception)/termination of leases and asset backed financial
liabilities
|
|
(237.5)
|
(1,231.8)
|
Foreign exchange movements
|
|
3.4
|
(4.0)
|
Other non-cash
movements
|
|
(0.1)
|
0.2
|
Movement in net debt in year
|
|
124.3
|
(650.1)
|
Net debt at beginning of year
|
|
(1,269.1)
|
(619.0)
|
Net debt at end of year
|
|
(1,144.8)
|
(1,269.1)
|
Management
considers that adjusted cash flow is an appropriate measure for
assessing the Group cash flow as it is the measure that is used to
assess both Group and divisional cash performance against budgets
and forecasts. Adjusted cash flow is stated prior to cash flows in
relation to debt excluding leases.
The
accompanying notes form an integral part of this consolidated cash
flow statement.
Notes
to the consolidated financial statements
1 General
information
The
financial information set out above does not constitute the
Company’s Statutory Accounts for the 53 weeks ended 30 March 2024 or 25 March
2023, but is derived from those accounts. Statutory Accounts
for 2023 have been delivered to the Registrar of Companies and
those for 2024 will be delivered following the Company’s Annual
General Meeting. The auditors have reported on both sets of
account; their reports were unqualified and did not contain
statements under section 498 (2) or (3) of the Companies Act
2006.
Whilst the
financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting
Standards (IFRSs), this announcement does not in itself contain
sufficient information to comply with IFRSs. The Company expects to
publish full financial statements that comply with IFRSs in
June 2024. Copies of the Statutory
Accounts for the 53 weeks ended 30 March
2024 will be available to all shareholders in June and will
also be available thereafter at the Registered Office of the
Company at 395 King Street, Aberdeen, AB24 5RP.
Basis of
accounting
The
financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) in conformity
with the requirements of the Companies Act 2006
(IFRS) and the applicable legal requirements of the Companies
Act 2006,
in addition to complying with international accounting standards in
conformity with requirements of the Companies
Act 2006.
The
consolidated financial statements of FirstGroup plc comply with
UK-adopted
international accounting standards and with the requirements of the
Companies Act 2006.
These financial statements are also prepared in accordance with
IFRSs as issued by the IASB, including interpretations issued by
the IFRS Interpretations
Committee, as there are no applicable differences from IFRSs as
issued by the IASB for the periods presented. There were no
unendorsed standards effective for the period ended
30 March 2024
affecting these consolidated and separate financial
statements.
The
financial statements have been prepared on the historical cost
basis, except for the revaluation of certain financial instruments,
and on a going concern basis.
The Group
has undertaken detailed reviews of a range of severe but plausible
financial and operational scenarios using financial outlook
modelling. Based on their review of the financial forecasts and
having regard to the risks and uncertainties to which the Group is
exposed, the Directors believe that the Company and the Group have
adequate resources to continue in operational existence for at
least a 12-month period from the date on which the financial
statements were approved. Accordingly, the financial statements
have been prepared on a going concern basis.
The
financial statements for the 53 weeks
ended 30 March 2024
include the results and financial position of the First Rail
businesses for the year ended 31 March 2024
and the results and financial position of all the other businesses
for the 53 weeks
ended 30 March 2024.
The financial statements for the 52 weeks
ended 25 March 2023
include the results and financial position of the First Rail
businesses for the year ended 31 March 2023
and the results and financial position of all the other businesses
for the 52 weeks
ended 25 March 2023.
Adoption of
new and revised standards
The
accounting policies adopted are consistent with those of the
previous financial year except for the changes arising from new
standards and amendments to existing standards which have been
adopted in the current year.
The
following amended standards and interpretations were adopted by the
Group during the year:
IFRS 17
Insurance contracts
Narrow
scope amendments to IAS 1, Practice statement 2 and IAS
8
Amendment
to IAS 12 – deferred tax relating to assets and liabilities arising
from a single transaction
Amendment
to IAS 12 – international tax reform, which grants a temporary
exemption from applying IAS 12 to the International Tax Reform:
Pillar Two Model Rules
There has
been no material change as a result of applying these amendments
and no significant impact is expected from any of the future
standards and amendments that are visible.
2 Revenue
|
|
2024
£m
|
2023
£m
|
Services
rendered
|
|
3,952.1
|
3,483.0
|
First Rail
– contract subsidy receipts
|
|
456.8
|
893.0
|
Other
revenues
|
|
306.2
|
379.0
|
Revenue
from continuing operations
|
|
4,715.1
|
4,755.0
|
Discontinued
operations
|
|
–
|
4.0
|
Revenue
|
|
4,715.1
|
4,759.0
|
3 Business
segments and geographical information
For
management purposes, the Group is organised into four operating
divisions – First Bus, First Rail and Greyhound.
The
divisions are managed separately in line with the differing
services that they provide and the geographical markets in which
they operate. There is a clear distinction between each division
and no judgement is required to identify each reportable segment.
With regard to prior year comparative data, the properties related
to the retained Greyhound US business were classified as held for
sale and treated as discontinued up to their disposal in
December 2022.
Greyhound Canada was retained and
was categorised as a Continuing Operation, although trading
operations have ceased.
The segment
results for the 53 weeks ended 30 March
2024 are as follows:
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
|
|
First
Bus
£m
|
First
Rail
£m
|
Greyhound
£m
|
Group
Items/
eliminations1
£m
|
Continuing
Operations
£m
|
|
Greyhound
£m
|
Group
items1
£m
|
|
Total
£m
|
Passenger
revenue
|
769.1
|
3,030.1
|
–
|
–
|
3,799.2
|
|
–
|
–
|
|
3,799.2
|
Contract
revenue
|
188.4
|
–
|
–
|
(35.5)
|
152.9
|
|
–
|
–
|
|
152.9
|
Rail
contract subsidy receipts
|
–
|
456.8
|
–
|
–
|
456.8
|
|
–
|
–
|
|
456.8
|
Other
revenues
|
54.7
|
251.5
|
–
|
–
|
306.2
|
|
–
|
–
|
|
306.2
|
Revenue
|
1,012.2
|
3,738.4
|
–
|
(35.5)
|
4,715.1
|
|
–
|
–
|
|
4,715.1
|
EBITDA2
|
148.1
|
620.5
|
–
|
(20.0)
|
748.6
|
|
(1.8)
|
–
|
|
746.8
|
Depreciation
|
(73.9)
|
(513.8)
|
–
|
(2.0)
|
(589.7)
|
|
(0.1)
|
–
|
|
(589.8)
|
Software
amortisation
|
(1.0)
|
(1.7)
|
–
|
(0.6)
|
(3.3)
|
|
–
|
–
|
|
(3.3)
|
Capital
grant amortisation
|
10.4
|
38.3
|
–
|
–
|
48.7
|
|
–
|
–
|
|
48.7
|
Segment
results
|
83.6
|
143.3
|
–
|
(22.6)
|
204.3
|
|
(1.9)
|
–
|
|
202.4
|
Other
adjustments (note 4)
|
(146.9)
|
–
|
(0.4)
|
(10.5)
|
(157.8)
|
|
(1.1)
|
(2.3)
|
|
(161.2)
|
Operating
profit/(loss)3
|
(63.3)
|
143.3
|
(0.4)
|
(33.1)
|
46.5
|
|
(3.0)
|
(2.3)
|
|
41.2
|
Investment
income
|
1.7
|
1.6
|
–
|
13.4
|
16.7
|
|
0.1
|
–
|
|
16.8
|
Finance
costs
|
(4.2)
|
(61.5)
|
–
|
(16.3)
|
(82.0)
|
|
(0.4)
|
–
|
|
(82.4)
|
Profit/(loss)
before tax
|
(65.8)
|
83.4
|
(0.4)
|
(36.0)
|
(18.8)
|
|
(3.3)
|
(2.3)
|
|
(24.4)
|
Tax
|
|
|
|
|
|
|
|
|
|
15.0
|
Loss
after tax
|
|
|
|
|
|
|
|
|
|
(9.4)
|
-
Group items
comprise central management and other items.
-
EBITDA is
adjusted operating profit less capital grant amortisation plus
depreciation plus software amortisation.
-
Although
the segment results are used by management to measure performance,
statutory operating profit by operating division is also disclosed
for completeness.
The segment
results for the 52 weeks
ended 25 March 2023
were as follows:
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
|
|
First
Bus
£m
|
First
Rail
£m
|
Greyhound
£m
|
Group
items/
eliminations1
£m
|
Continuing
Operations
£m
|
|
Greyhound
£m
|
Group
items1
£m
|
|
Total
£m
|
Passenger
revenue
|
660.0
|
2,713.8
|
–
|
–
|
3,373.8
|
|
–
|
–
|
|
3,373.8
|
Contract
revenue
|
149.9
|
–
|
–
|
(40.7)
|
109.2
|
|
–
|
–
|
|
109.2
|
Rail
contract subsidy receipts
|
–
|
893.0
|
–
|
–
|
893.0
|
|
–
|
–
|
|
893.0
|
Other
revenues
|
92.6
|
286.4
|
–
|
–
|
379.0
|
|
4.0
|
–
|
|
383.0
|
Revenue
|
902.5
|
3,893.2
|
–
|
(40.7)
|
4,755.0
|
|
4.0
|
–
|
|
4,759.0
|
EBITDA2
|
120.9
|
661.0
|
–
|
(19.5)
|
762.4
|
|
(6.6)
|
–
|
|
755.8
|
Depreciation
|
(68.6)
|
(651.2)
|
–
|
(2.1)
|
(721.9)
|
|
–
|
–
|
|
(721.9)
|
Software
amortisation
|
(1.7)
|
(6.3)
|
–
|
(0.6)
|
(8.6)
|
|
–
|
–
|
|
(8.6)
|
Capital
grant amortisation
|
7.8
|
121.3
|
–
|
–
|
129.1
|
|
–
|
–
|
|
129.1
|
Segment
results
|
58.4
|
124.8
|
–
|
(22.2)
|
161.0
|
|
(6.6)
|
–
|
|
154.4
|
Other
adjustments (note 4)
|
(7.0)
|
–
|
(1.5)
|
1.4
|
(7.1)
|
|
71.7
|
(33.8)
|
|
30.8
|
Operating
profit/(loss)3
|
51.4
|
124.8
|
(1.5)
|
(20.8)
|
153.9
|
|
65.1
|
(33.8)
|
|
185.2
|
Investment
income
|
–
|
2.0
|
–
|
10.3
|
12.3
|
|
0.5
|
–
|
|
12.8
|
Finance
costs
|
(2.5)
|
(49.4)
|
–
|
(17.2)
|
(69.1)
|
|
(0.2)
|
–
|
|
(69.3)
|
Profit
before tax
|
48.9
|
77.4
|
(1.5)
|
(27.7)
|
97.1
|
|
65.4
|
(33.8)
|
|
128.7
|
Tax
|
|
|
|
|
|
|
|
|
|
(33.4)
|
Profit
after tax
|
|
|
|
|
|
|
|
|
|
95.3
|
-
Group items
comprise central management and other items.
-
EBITDA is
adjusted operating profit less capital grant amortisation plus
depreciation plus software amortisation.
-
Although
the segment results are used by management to measure performance,
statutory operating profit by operating division is also disclosed
for completeness.
4 Reconciliation
to non-GAAP
measures and performance
In
measuring the Group and divisional adjusted operating performance,
additional financial measures derived from the reported results
have been used by management in order to eliminate factors which
distort year-on-year
comparisons, and to enable the like-for-like monitoring of the
Group’s recurring operations over time. The Group’s adjusted
performance is used to explain year-on-year
changes when the effect of certain items is significant, including
strategic items (including material M&A and group restructuring
projects), costs of acquisitions including aborted acquisitions,
and impairment of assets. Other items below £5.0m would not
normally be considered as adjusting items unless part of a larger
strategic project, but items which distort year-on-year
comparisons that exceed this amount could potentially be classified
as an adjusting item and are assessed on a case-by-case
basis. Such potential adjusting other items may
include: restructuring
and reorganisation costs; property gains or losses; aged legal and
self-insurance
claims; movements on insurance discount rates; onerous contract
provisions; pension settlement gains or losses; and other items
which management has determined as not being relevant to an
understanding of the Group’s underlying business performance.
Subsequent remeasurements of adjusting items are also recognised as
an adjusting item in the future period in which the remeasurement
occurs.
Reconciliation
of operating profit to adjusted operating profit on a continuing
basis
|
2024
£m
|
2023
£m
|
Operating profit on a continuing basis
|
46.5
|
153.9
|
Adjustments for:
|
|
|
LGPS pension settlement and related charges
|
146.9
|
–
|
Legal claims in North America and the UK
|
10.5
|
–
|
First Bus divisional restructuring costs
|
–
|
7.0
|
Strategic items
|
–
|
(1.4)
|
Greyhound Canada
|
0.4
|
1.5
|
Total operating profit adjustments on a continuing basis
|
157.8
|
7.1
|
Adjusted operating profit on a continuing basis
(note 3)
|
204.3
|
161.0
|
Reconciliation
of operating profit/(loss) to adjusted operating profit on a
discontinued basis
|
2024
£m
|
2023
£m
|
Operating (loss)/profit from discontinued operations
|
(5.3)
|
31.3
|
Adjustments
for:
|
|
|
Transit
earnout charge
|
2.3
|
33.8
|
Pension
settlement and related charges
|
1.1
|
–
|
Gain on
disposal of Greyhound properties
|
–
|
(71.4)
|
Strategy
costs
|
–
|
(0.3)
|
Total operating profit adjustments from discontinued
operations
|
3.4
|
(37.9)
|
Adjusted operating loss from discontinued
operations
|
(1.9)
|
(6.6)
|
Reconciliation
of profit/(loss) before tax to adjusted profit before tax and
adjusted earnings
|
2024
£m
|
2023
£m
|
(Loss)/profit
before tax (including discontinued operations)
|
(24.4)
|
128.7
|
Adjusting
operating profit items – continuing operations
|
157.8
|
7.1
|
Adjusting
operating profit items – discontinued operations
|
3.4
|
(37.9)
|
Adjusted
operating profit items – total operations
|
161.2
|
(30.8)
|
Adjusted
profit before tax including discontinued
operations
|
136.8
|
97.9
|
Rail
management fee-based operations – IFRS 16 adjustment
|
10.2
|
6.9
|
Adjusted
tax charge
|
(32.1)
|
(20.7)
|
Non-controlling
interests1
|
(6.5)
|
(5.1)
|
Adjusted
earnings including discontinued operations
|
108.4
|
79.0
|
-
Statutory
non-controlling
interests in 2024
and 2023
principally reflect Avanti West Coast and South Western
Railway.
Reconciliation
of tax charge to adjusted tax charge
|
2024
£m
|
2023
£m
|
Tax
(credit)/charge (note 6)
|
(15.0)
|
33.4
|
Tax effect
of adjusting items (note 7)
|
42.5
|
(12.7)
|
Adjustments
attributable to changes in tax rates and laws
|
–
|
1.4
|
Write-back
of previously unrecognised deferred tax assets
(note 7)
|
5.3
|
–
|
Write-down
of previously recognised deferred tax assets
(note 7)
|
(0.7)
|
(1.4)
|
Adjusted
tax charge (including discontinued)
|
32.1
|
20.7
|
|
|
|
Adjusted
tax charge – continuing operations
|
32.0
|
20.4
|
Adjusted
tax charge – discontinued operations
|
0.1
|
0.3
|
4 Reconciliation
to non-GAAP
measures and performance
continued
The Group
has revised its definition of adjusted earnings during the year, to
exclude also the impact of IFRS 16 depreciation and interest
charges in relation to its rail management fee-based operations,
given the Group takes no cost risk on these rolling stock leases.
The prior year comparatives have also been updated for the revised
definition. There has been no other change to the calculation, or
to the Group’s policy regarding adjusting items.
Adjusting
items – 2024
The
principal adjusting items in the year for the continuing business
are as follows:
First Bus
pension settlement charge and related items
In
September 2023, First Bus concluded a
period of consultation with regards to its two Local Government
Pension Schemes and subsequently terminated its participation in
these funds on 31 October 2023, with
affected employees enrolled into the First Bus Retirement Savings
Plan. Adjusting charges of £146.9m relating to the settlement
charge and other costs relating to the termination were recognised
during the period. A gain of £161.0m was recognised in Other
comprehensive income in relation to the restricted accounting
surplus.
Legal
claims in North America and the UK
The Group
has recognised legal provisions relating to claims in North America and the UK.
Adjusting
items – discontinued operations First
Transit earnout
The final
valuation of the First Transit earnout contingent consideration
receivable was agreed and settled during the year, with the Group
receiving cash of $83.8m (£65.3m).
The Group incurred an adjusting charge of £2.3m, reflecting the
hedging of the cash receipt, translation of the US dollar asset
into pounds sterling before settlement, offsetting the small
write-off of the residual asset on settlement.
Adjusting
items – 2023
The
principal adjusting items in the prior year were as
follows:
First Bus
restructuring
As part of
the restructuring of the First Bus division to exit
loss-making
markets and to align networks with post-pandemic
demand, the Group completed the sale of its First Scotland East
business in September 2022,
realising a loss on disposal of £(3.7)m, and closed the
Southampton depot resulting in
closure costs and a release of prior impairment for a net credit of
£2.3m. In line with this transition plan, the Group also incurred
costs of £(5.6)m relating to surplus vehicle
write-downs
and other reorganisation charges in the division.
Strategic
items
A final net
credit of £1.4m was recognised, being costs incurred in relation to
the Group’s central functions as part of its ongoing cost
efficiency initiatives following the exit from North America, offset by the release of
accruals following the disposal of North
America and the execution of the strategy.
Greyhound
Canada
Net restructuring
and closure costs of £(1.5)m relating to the continued winding down
of Greyhound Canada operations were incurred during the
year.
Adjusting
items – discontinued operations
First
Transit earnout
Following
the announcement on 26 October 2022
of EQT Infrastructure’s agreement to sell First Transit to Transdev
North America, Inc., the Group estimated its earnout consideration
to be around $88.5m (£72.3m) based on
the information received on the sale by EQT. This gave rise to a
non-cash,
adjusting charge of £33.8m relative to the carrying value of the
earnout of £106.1m as at 26 March 2022.
Gain on
disposal of properties
A gain of
£71.4m arose on the completion of the sale of the majority of the
remaining Greyhound US properties in December 2022.
Other
measures
First
Bus EBITDA comprises:
|
2024
£m
|
2023
£m
|
Pre-IFRS 16
EBITDA
|
132.5
|
105.0
|
IFRS 16
adjustments1
|
15.6
|
15.9
|
First Bus
adjusted EBITDA per segmental results table (note 3)
|
148.1
|
120.9
|
First Rail
EBITDA comprises:
|
|
|
Non-management
fee-based TOCs pre-IFRS 16 EBITDA
|
37.6
|
32.5
|
Group’s
share of management fee income available for dividends (net of tax
and non-controlling interest)
|
39.5
|
38.7
|
Tax on
management fee income
|
15.0
|
10.2
|
Non-controlling
interest
|
6.5
|
5.1
|
Other
adjustments
|
–
|
–
|
IFRS 16
adjustments1
|
521.9
|
574.5
|
First Rail
adjusted EBITDA per note 3
|
620.5
|
661.0
|
4 Reconciliation
to non-GAAP
measures and performance
continued
Group
items EBITDA comprises:
|
|
|
Pre-IFRS 16
EBITDA
|
(21.8)
|
(21.2)
|
IFRS 16
adjustments1
|
1.9
|
1.7
|
Group items
adjusted EBITDA per note 3
|
(19.9)
|
(19.5)
|
|
|
|
First
Rail adjusted operating profit
|
|
|
Non-management
fee-based TOCs
|
36.4
|
31.5
|
Group’s
share of management fee income available for dividends (net of tax
and non-controlling interest)
|
39.5
|
38.7
|
Tax on
management fee income
|
15.0
|
10.2
|
Non-controlling
interest
|
6.5
|
5.1
|
IFRS 16
adjustments1
|
45.9
|
39.3
|
First Rail
adjusted operating profit per note 3
|
143.3
|
124.8
|
Reconciliation
of pre-IFRS 16 adjusted EBIT to post-IFRS 16 adjusted
EBIT
|
|
|
Pre-IFRS 16
adjusted EBIT
|
156.6
|
119.1
|
IFRS 16
adjustments1
|
47.7
|
41.9
|
Post-IFRS
16 adjusted EBIT
|
204.3
|
161.0
|
|
|
|
1
IFRS 16
adjustments to EBITDA principally reflect the add back of operating
lease rental costs charged to the income statement before the
adoption of IFRS 16.
IFRS 16
adjustments to operating profit reflect operating lease rental
costs less depreciation charges on right of use assets.
5 Investment
income and finance costs
|
2024
£m
|
2023
£m
|
Investment
income
|
|
|
Bank
interest receivable
|
(14.7)
|
(6.3)
|
Interest on
pensions
|
(2.1)
|
(6.5)
|
Total
investment income (including discontinued
operations)
|
(16.8)
|
(12.8)
|
Finance
costs
|
|
|
Bonds
|
11.9
|
13.5
|
Bank
interest and facility fees
|
5.8
|
3.5
|
Finance
charges payable in respect of lease liabilities
|
62.1
|
50.6
|
Finance
charges payable in respect of asset backed financial
liabilities
|
1.4
|
1.5
|
Interest on
long-term
provisions
|
0.8
|
0.2
|
Interest on
pensions
|
0.4
|
–
|
Total
finance costs (including discontinued
operations)
|
82.4
|
69.3
|
|
|
|
Finance
costs are stated after charging fee expenses of £0.7m
(2023: £0.6m).
There was no interest capitalised into qualifying assets in either
the current or prior period.
Investment
income of £0.1m (2023: £0.5m)
and finance costs of £0.4m (2023: £0.2m)
relate to discontinued operations (note 13).
6 Tax
on profit/(loss) on ordinary activities
|
2024
£m
|
2023
£m
|
Current tax charge
|
1.3
|
1.1
|
Adjustments with respect to prior years
|
(3.0)
|
1.7
|
Total current tax (credit)/charge (including discontinued
operations)
|
(1.7)
|
2.8
|
|
|
|
Origination and reversal of temporary differences
|
(11.0)
|
40.9
|
Adjustment in respect of prior years
|
2.3
|
(10.3)
|
Adjustments attributable to changes in tax rates and
laws
|
–
|
(1.4)
|
Writing-down of previously recognised deferred tax
assets
|
0.7
|
1.4
|
Write-back of previously unrecognised deferred tax
assets
|
(5.3)
|
–
|
Total deferred tax (credit)/charge (note 17)
|
(13.3)
|
30.6
|
Total tax (credit)/charge (including discontinued
operations)
|
(15.0)
|
33.4
|
|
|
|
Tax (credit)/charge attributable to:
|
|
|
Profit from continuing operations
|
(15.1)
|
10.4
|
Profit from discontinued operations
|
0.1
|
23.0
|
7 Earnings
per share (EPS)
EPS is
calculated by dividing the loss/profit attributable to equity
shareholders of £(15.9)m (2023: profit
of £87.1m) by the weighted average number of ordinary shares of
662.9m (2023: 739.5m).
The number of ordinary shares used for the basic and diluted
calculations are shown in the table below.
The
difference in the number of shares between the basic calculation
and the diluted calculation represents the weighted average number
of potentially dilutive ordinary share options.
|
2024
Number
m
|
2023
Number
m
|
Weighted average number of shares used in basic
calculation
|
662.9
|
739.5
|
Executive share options
|
26.2
|
24.0
|
Weighted average number of shares used in the diluted
calculation
|
689.1
|
763.5
|
The
adjusted EPS is intended to highlight the recurring operating
results of the Group before certain other adjustments as set out in
note 4,
and before IFRS 16 charges relating to the Group’s management
fee-based Rail operations. A reconciliation is set out
below:
|
|
2024
|
|
2023
|
|
£m
|
EPS
(pence)
|
£m
|
EPS
(pence)
|
Basic (loss)profit/EPS
|
(15.9)
|
(2.4)
|
87.1
|
11.8
|
Management fee-based Rail operations - IFRS 16
adjustments
|
10.2
|
1.5
|
6.9
|
1.0
|
Other adjustments (note 4)
|
161.2
|
24.3
|
(30.8)
|
(4.2)
|
Non-controlling
interest
|
–
|
–
|
3.1
|
0.4
|
Tax effect of other adjustments
|
(42.5)
|
(6.3)
|
12.7
|
1.7
|
Adjustments attributable to changes in tax rates and
laws
|
–
|
–
|
(1.4)
|
(0.2)
|
Write-down of previously recognised deferred tax assets
|
0.7
|
0.1
|
1.4
|
0.2
|
Write-back of previously unrecognised deferred tax
assets
|
(5.3)
|
(0.8)
|
–
|
–
|
Adjusted profit and EPS attributable to the ordinary equity holders
of the Company
|
108.4
|
16.4
|
79.0
|
10.7
|
Adjusted loss EPS from discontinued operations
|
(2.3)
|
(0.3)
|
(6.6)
|
(0.9)
|
Adjusted profit/EPS from continuing
operations
|
110.7
|
16.7
|
85.6
|
11.6
|
|
2024
pence
|
2023
pence
|
Diluted
EPS
|
(2.4)
|
11.4
|
Adjusted
diluted EPS
|
15.7
|
10.3
|
7 Earnings
per share (EPS)
continued
The
adjusted EPS on a continuing basis is set out below:
|
|
2024
|
|
2023
|
|
£m
|
EPS
(pence)
|
£m
|
EPS
(pence)
|
Basic (loss)/profit/EPS
|
(10.2)
|
(1.5)
|
78.5
|
10.6
|
Management fee-based Rail operations – IFRS 16
adjustments
|
10.2
|
1.5
|
6.9
|
1.0
|
Other adjustments (note 4)
|
157.8
|
23.7
|
7.1
|
1.0
|
Non-controlling interest
|
–
|
–
|
3.1
|
0.4
|
Tax effect of other adjustments
|
(42.5)
|
(6.3)
|
(10.0)
|
(1.4)
|
Adjustments attributable to changes in tax rates and
laws
|
–
|
–
|
(1.4)
|
(0.2)
|
Write-down of previously recognised deferred tax assets
|
0.7
|
0.1
|
|
|
Write-back of previously unrecognised deferred tax
assets
|
(5.3)
|
(0.8)
|
1.4
|
0.2
|
Adjusted profit/(loss)/EPS from continuing
operations
|
110.7
|
16.7
|
85.6
|
11.6
|
|
2024
pence
|
2023
pence
|
Diluted EPS
|
(1.5)
|
10.3
|
Adjusted diluted EPS
|
16.1
|
11.2
|
8 Goodwill
|
2024
£m
|
Cost
|
|
At 26 March 2023
|
99.6
|
Additions1
|
11.4
|
At 30 March 2024
|
111.0
|
Accumulated impairment losses
|
|
At 26 March 2023
|
–
|
At 30 March 2024
|
–
|
|
|
Carrying amount
|
|
At 30 March 2024
|
111.0
|
At 26 March 2023
|
99.6
|
1 Additions
of £11.4m relate mainly to goodwill on the acquisition of York
Pullman Bus Company Limited.
Goodwill in
the above table primarily relates to First Bus.
9 Other
intangible assets
|
|
Software
£m
|
Total
£m
|
Cost
|
|
|
|
At 27 March 2022
|
|
32.0
|
32.0
|
Additions
|
|
4.2
|
4.2
|
Transfers from property, plant and equipment
|
|
3.6
|
3.6
|
At 25 March 2023
|
|
39.8
|
39.8
|
|
|
|
|
At 26 March 2023
|
|
39.8
|
39.8
|
Additions
|
|
2.4
|
2.4
|
Disposals
|
|
(5.2)
|
(5.2)
|
Transfers
|
|
4.0
|
4.0
|
At 30 March 2024
|
|
41.0
|
41.0
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
At 27 March 2022
|
|
19.6
|
19.6
|
Charge for year
|
|
8.6
|
8.6
|
Transfers from property, plant and equipment
|
|
0.8
|
0.8
|
At 25 March 2023
|
|
29.0
|
29.0
|
|
|
|
|
At 26 March 2023
|
|
29.0
|
29.0
|
Charge for year
|
|
3.3
|
3.3
|
Disposals
|
|
(4.2)
|
(4.2)
|
Transfers
|
|
2.5
|
2.5
|
At 30 March 2024
|
|
30.6
|
30.6
|
|
|
|
|
Carrying amount
|
|
|
|
At 30 March 2024
|
|
10.4
|
10.4
|
At 25 March 2023
|
|
10.8
|
10.8
|
10 Property,
plant and equipment
Owned assets
|
Land
and
buildings
£m
|
Passenger
carrying
vehicle
fleet
£m
|
Other
plant
and
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
At 27 March 2022
|
203.6
|
799.1
|
662.8
|
1,665.5
|
Acquisitions2
|
20.2
|
7.6
|
0.5
|
28.3
|
Additions
|
16.1
|
80.1
|
79.2
|
175.4
|
Disposals
|
(8.2)
|
(134.0)
|
(23.8)
|
(166.0)
|
Reclassified as assets held for sale
|
(18.4)
|
–
|
(2.7)
|
(21.1)
|
Transfers
|
(0.2)
|
0.7
|
(4.4)
|
(3.9)
|
At 25 March 2023
|
213.1
|
753.5
|
711.6
|
1,678.2
|
|
|
|
|
|
At 26 March 2023
|
213.1
|
753.5
|
711.6
|
1,678.2
|
Acquisitions2
|
–
|
3.1
|
0.1
|
3.2
|
Additions
|
31.1
|
135.5
|
74.4
|
241.0
|
Disposals
|
(7.3)
|
(74.5)
|
(76.1)
|
(157.9)
|
Reclassifications
|
(1.8)
|
13.4
|
(5.7)
|
5.9
|
Transfers to right of use assets
|
–
|
(2.7)
|
(14.7)
|
(17.4)
|
At 30 March 2024
|
235.1
|
828.3
|
689.6
|
1,753.0
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
At 27 March 2022
|
76.9
|
484.2
|
448.0
|
1,009.1
|
Charge for year
|
3.6
|
48.3
|
119.5
|
171.4
|
Disposals
|
(2.4)
|
(104.1)
|
(22.9)
|
(129.4)
|
Impairment1
|
(4.3)
|
4.5
|
2.0
|
2.2
|
Reclassified as assets held for sale
|
(11.3)
|
–
|
(1.6)
|
(12.9)
|
Transfers
|
(2.0)
|
–
|
1.1
|
(0.9)
|
At 25 March 2023
|
60.5
|
432.9
|
546.1
|
1,039.5
|
|
|
|
|
|
At 26 March 2023
|
60.5
|
432.9
|
546.1
|
1,039.5
|
Charge for year
|
11.5
|
53.2
|
33.9
|
98.6
|
Disposals
|
(3.2)
|
(67.6)
|
(59.7)
|
(130.5)
|
Impairment1
|
–
|
–
|
2.6
|
2.6
|
Reclassifications
|
(5.9)
|
8.3
|
(7.7)
|
(5.3)
|
At 30 March 2024
|
62.9
|
426.8
|
515.2
|
1,004.9
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
At 30 March 2024
|
172.2
|
401.5
|
174.4
|
748.1
|
At 25 March 2023
|
152.6
|
320.6
|
165.5
|
638.7
|
1 The
impairment charge in the current year of £2.6m relates to Rail
contracts. The impairment reversal in the prior year of £4.3m
relates to Southampton properties,
which were subsequently transferred to assets held for sale. The
impairment charge in the prior year of £6.5m primarily relates to
the write-down of passenger carrying vehicles as a result of fleet
resizing.
2 Acquisitions
of £3.2m (2023 £28.3m) relate to continuing operations (see
note 20).
10 Property,
plant and equipment
continued
An amount
of £0.8m (2023: £0.8m)
in respect of assets under construction is included in the carrying
amount of land and buildings, plant and equipment.
At
30 March 2024
the Group had entered into contractual capital commitments
amounting to £61.8m (2023: £125.0m),
principally representing purchase of passenger carrying vehicles,
electrical infrastructure and TOC commitments.
Right of use assets
|
Rolling
stock
£m
|
Land
and
buildings
£m
|
Passenger
carrying
vehicle
fleet
£m
|
Other
plant
and
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
|
At 27 March 2022
|
2,585.6
|
55.9
|
60.2
|
7.5
|
2,709.2
|
Additions
|
1,200.2
|
16.2
|
1.3
|
1.3
|
1,219.0
|
Disposals
|
(4.1)
|
(0.9)
|
(9.8)
|
(0.3)
|
(15.1)
|
Foreign exchange movements
|
–
|
0.2
|
–
|
–
|
0.2
|
At 25 March 2023
|
3,781.7
|
71.4
|
51.7
|
8.5
|
3,913.3
|
|
|
|
|
|
|
At 26 March 2023
|
3,781.7
|
71.4
|
51.7
|
8.5
|
3,913.3
|
Additions
|
183.3
|
4.3
|
6.5
|
2.8
|
196.9
|
Disposals
|
(221.6)
|
(10.6)
|
(0.5)
|
(0.4)
|
(233.1)
|
Transfers from owned assets
|
–
|
–
|
2.7
|
14.7
|
17.4
|
At 30 March 2024
|
3,743.4
|
65.1
|
60.4
|
25.6
|
3,894.5
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
At 27 March 2022
|
1,609.7
|
22.5
|
35.6
|
5.1
|
1,672.9
|
Charge for period
|
528.7
|
8.5
|
11.8
|
1.5
|
550.5
|
Lease impairment3
|
7.1
|
–
|
–
|
–
|
7.1
|
Disposals
|
(0.8)
|
(0.3)
|
(7.1)
|
(0.2)
|
(8.4)
|
Foreign exchange movements
|
–
|
0.2
|
–
|
–
|
0.2
|
At 25 March 2023
|
2,144.7
|
30.9
|
40.3
|
6.4
|
2,222.3
|
|
|
|
|
|
|
At 26 March 2023
|
2,144.7
|
30.9
|
40.3
|
6.4
|
2,222.3
|
Charge for period
|
470.3
|
8.7
|
10.2
|
1.9
|
491.1
|
Lease impairment3
|
1.2
|
–
|
–
|
–
|
1.2
|
Disposals
|
(220.6)
|
(6.4)
|
(0.3)
|
(0.1)
|
(227.4)
|
At 30 March 2024
|
2,395.6
|
33.2
|
50.2
|
8.2
|
2,487.2
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
|
At 30 March 2024
|
1,347.8
|
31.9
|
10.2
|
17.4
|
1,407.3
|
At 25 March 2023
|
1,637.0
|
40.5
|
11.4
|
2.1
|
1,691.0
|
3The
impairment of £1.2m in the current year and £7.1m in the prior year
both relates to GWR.
The
discounted lease liability relating to the right of use assets
included above is shown in note 15.
10 Property,
plant and equipment
continued
Owned
assets and right of use assets
|
Rolling
stock
£m
|
Land
and
buildings
£m
|
Passenger
carrying
vehicle
fleet
£m
|
Other
plant
and
equipment
£m
|
Total
£m
|
Carrying amount
|
|
|
|
|
|
At 30 March 2024
|
1,347.8
|
204.1
|
411.7
|
191.8
|
2,155.4
|
At 25 March 2023
|
1,637.0
|
193.1
|
332.0
|
167.6
|
2,329.7
|
The
maturity analysis of lease liabilities is presented in
note 15.
Amounts
recognised in income statement (including discontinued
operations)
|
2024
£m
|
2023
£m
|
Depreciation expense on right of use assets
|
491.1
|
550.5
|
Interest expense on lease liabilities
|
62.1
|
50.6
|
Impairment charge
|
1.2
|
7.1
|
Expense relating to short-term
leases
|
–
|
2.0
|
Expense relating to leases of low-value assets
|
0.1
|
2.1
|
|
554.5
|
612.3
|
11 Trade
and other receivables
Amounts due
within one year (from discontinued operations)
|
2024
£m
|
2023
£m
|
Contingent
consideration receivable
|
–
|
72.3
|
Amounts due
within one year (from continuing operations)
|
2024
£m
|
2023
£m
|
Trade receivables
|
400.1
|
386.1
|
Loss allowance
|
(41.7)
|
(49.0)
|
Trade receivables net
|
358.4
|
337.1
|
Other receivables
|
187.6
|
210.3
|
Amounts recoverable on contracts
|
38.9
|
22.5
|
Prepayments
|
38.7
|
90.8
|
Accrued income
|
229.0
|
187.6
|
|
852.6
|
848.3
|
12 Trade
and other payables
Amounts
falling due within one year (from continuing operations)
|
2024
£m
|
2023
£m
|
Trade
payables
|
277.4
|
338.8
|
Other
payables
|
291.2
|
210.8
|
Accruals
|
539.9
|
621.6
|
Deferred
income
|
129.0
|
125.5
|
Season
ticket deferred income – Rail
|
21.1
|
17.7
|
|
1,258.6
|
1,314.4
|
13 Discontinued
operations
Discontinued
operations
|
2024
£m
|
2023
£m
|
Revenue
|
–
|
4.0
|
Operating (costs)/income
|
(5.3)
|
27.3
|
Operating (loss)/profit
|
(5.3)
|
31.3
|
Investment income
|
0.1
|
0.5
|
Finance costs
|
(0.4)
|
(0.2)
|
(Loss)/profit before tax
|
(5.6)
|
31.6
|
Tax
|
(0.1)
|
(23.0)
|
(Loss)/profit for the year after tax
|
(5.7)
|
8.6
|
Attributable to:
|
|
|
Equity holders of the parent
|
(5.7)
|
8.6
|
Non-controlling
interests
|
–
|
–
|
|
(5.7)
|
8.6
|
EPS
|
2024
pence
|
2023
pence
|
Basic EPS
|
(0.9)
|
1.2
|
Diluted EPS
|
(0.9)
|
1.1
|
Cash
flow
|
2024
£m
|
2023
£m
|
Net cash outflow from operating activities
|
(4.2)
|
(139.7)
|
Net cash inflow from investing activities
|
74.7
|
126.9
|
Net cash flow from financing activities
|
–
|
–
|
Net increase/(decrease) in cash
generated
|
70.5
|
(12.8)
|
Other
comprehensive income/loss
|
2024
£m
|
2023
£m
|
Actuarial (loss)/gain on defined benefit pension schemes
|
(1.2)
|
0.2
|
Hedging instrument movements
|
0.4
|
(0.4)
|
Exchange differences on translation of discontinued
operations
|
(6.6)
|
6.8
|
Total
|
(7.4)
|
6.6
|
14 Borrowings
|
2024
£m
|
2023
£m
|
On demand or within one year
|
|
|
Lease liabilities (note 15)2,3
|
492.8
|
447.4
|
Asset backed financial liabilities (note 15)3
|
6.2
|
17.3
|
Bank overdraft
|
27.8
|
82.9
|
Loan notes
|
–
|
0.6
|
Bond 6.875% (repayable 2024)1
|
99.7
|
6.5
|
Total current liabilities
|
626.5
|
554.7
|
Within one to two years
|
|
|
Lease liabilities (note 15)2,3
|
385.0
|
381.6
|
Asset backed financial liabilities (note 15)3
|
7.9
|
5.9
|
Bond 6.875% (repayable 2024)
|
–
|
184.2
|
|
392.9
|
571.7
|
Within two to five years
|
|
|
Lease liabilities (note 15)2,3
|
546.2
|
825.9
|
NextGen battery debt
|
3.0
|
-
|
Asset backed financial liabilities (note 15)3
|
13.6
|
12.1
|
|
562.8
|
838.0
|
Over five years
|
|
|
Lease liabilities (note 15)2,3
|
34.5
|
93.7
|
NextGen battery debt
|
10.2
|
-
|
Asset backed financial liabilities (note 15)3
|
17.9
|
8.9
|
|
62.6
|
102.6
|
Total non-current
liabilities at amortised cost
|
1,018.3
|
1,512.3
|
1 Prior
year includes accrued interest only.
2 The
right of use assets relating to lease liabilities are shown in
note 10.
3 The
maturity analysis of lease liabilities and asset backed financial
liabilities is presented in note 15.
15 Lease
liabilities and asset backed financial liabilities
The Group
had the following lease liabilities and asset backed financial
liabilities at the balance sheet dates, excluding liabilities
relating to the discontinued operations:
|
Lease
liabilities
|
Asset
backed
financial
liabilities
|
Maturity analysis
|
2024
£m
|
2023
£m
|
2024
£m
|
2023
£m
|
Due in less
than one year
|
539.4
|
503.1
|
6.5
|
17.9
|
Due in more
than one year but not more than two years
|
414.1
|
421.5
|
8.5
|
6.3
|
Due in more
than two years but not more than five years
|
574.6
|
878.8
|
16.2
|
13.7
|
Due in more
than five years
|
44.9
|
105.0
|
23.7
|
10.9
|
|
1,573.0
|
1,908.4
|
54.9
|
48.8
|
Less future
financing charges
|
(114.5)
|
(159.8)
|
(9.3)
|
(4.6)
|
|
1,458.5
|
1,748.6
|
45.6
|
44.2
|
Lease
liabilities have a fair value of £1,458.5m and asset backed
financial liabilities have a fair value of £49.3m
(2023: lease
liabilities £1,748.6m, asset backed financial liabilities
£43.3m).
The total
cash outflow for the lease liabilities and asset backed financial
liabilities recorded on the balance sheet amounted to £506.9m and
£19.3m respectively (2023: £546.9m
and £10.6m).
The right
of use assets related to the lease liabilities is presented in
note 10.
16 Financial
instrumentsNon-derivative
financial instruments
|
2024
£m
|
2023
£m
|
Total
non-derivatives
|
|
|
Total
non-current
assets
|
99.6
|
117.6
|
Total
assets
|
99.6
|
117.6
|
Certain
pension partnership structures were implemented
during 2022.
These structures involved the creation of special purpose vehicles
(SPVs) to hold cash to fund the Bus and Group pension schemes if
required based on a designated funding mechanism. Management have
concluded that these amounts represent financial assets under IAS
32.
Derivative
financial instruments
|
2024
£m
|
2023
£m
|
Total
derivatives
|
|
|
Total
non-current
assets
|
0.4
|
0.1
|
Total
current assets
|
2.0
|
7.4
|
Total
assets from continuing operations
|
2.4
|
7.5
|
Total
current liabilities
|
3.4
|
2.6
|
Total
non-current
liabilities
|
1.3
|
1.9
|
Total
liabilities from continuing operations
|
4.7
|
4.5
|
|
|
|
Derivatives designated and effective as hedging instruments
carried at fair value
|
|
|
Non-current
assets
|
|
|
Fuel derivatives (cash flow hedge)
|
0.4
|
–
|
Currency forwards (cash flow hedge)
|
–
|
0.1
|
|
0.4
|
0.1
|
Current assets
|
|
|
Fuel derivatives (cash flow hedge)
|
2.0
|
3.3
|
Currency forwards (cash flow hedge)
|
–
|
4.1
|
|
2.0
|
7.4
|
Current liabilities
|
|
|
Fuel derivatives (cash flow hedge)
|
2.7
|
2.6
|
Currency forwards (cash flow hedge)
|
0.7
|
–
|
|
3.4
|
2.6
|
Non-current
liabilities
|
|
|
Currency forwards (cash flow hedge)
|
0.2
|
0.1
|
Interest rate swaps (NextGen)
|
0.5
|
–
|
Fuel derivatives (cash flow hedge)
|
0.6
|
1.8
|
|
1.3
|
1.9
|
|
|
|
The Group
enters into derivative transactions under International Swaps and
Derivatives Association Master Agreements that allow for the
related amounts to be set-off
in certain circumstances. The amounts set out as Fuel derivatives
and Currency forwards in the table above represent the derivative
financial assets and liabilities of the Group that may be subject
to the above arrangements and are presented on a gross basis.
Derivative liabilities of £nil (2023: £nil)
were subject to netting arrangements.
Total cash
flow hedges are a liability of £2.3m (2023: £3.0m
asset).
17 Deferred
tax
The major
deferred tax (assets)/liabilities recognised by the Group and
movements thereon during the current and prior reporting periods
are as follows:
|
Accelerated
tax
depreciation
£m
|
Retirement
benefit
schemes
£m
|
Other
temporary
differences
£m
|
Tax
losses
£m
|
Total
£m
|
At
26 March 2022
|
(6.1)
|
48.6
|
(44.9)
|
(33.7)
|
(36.1)
|
Charge/(credit)
to income statement
|
28.0
|
(2.8)
|
10.6
|
(5.2)
|
30.6
|
Credit to
other comprehensive income and equity
|
–
|
(37.2)
|
(7.4)
|
–
|
(44.6)
|
Acquisitions
and disposals of subsidiaries
|
4.7
|
–
|
0.3
|
–
|
5.0
|
Foreign
exchange and other movements
|
(1.9)
|
–
|
–
|
–
|
(1.9)
|
At
25 March 2023
|
24.7
|
8.6
|
(41.4)
|
(38.9)
|
(47.0)
|
Charge/(credit)
to income statement
|
7.0
|
(33.4)
|
14.2
|
(1.1)
|
(13.3)
|
Credit to
other comprehensive income and equity
|
–
|
20.2
|
(0.2)
|
–
|
20.0
|
Acquisitions
and disposals of subsidiaries
|
0.7
|
–
|
–
|
–
|
0.7
|
At
30 March 2024
|
32.4
|
(4.6)
|
(27.4)
|
(40.0)
|
(39.6)
|
With
respect to the total net deferred tax asset of £39.6m, UK net
deferred tax assets of £38.7m have been recognised as the Group
forecasts sufficient taxable profits in future periods and a
deferred tax asset of £0.9m relating to the US is recognised
because it is probable that book gains will arise on the remaining
US property portfolio.
No deferred
tax has been recognised on tax losses of £457.9m
(2023: tax
losses of £460.8m) as there are insufficient future profits
forecast in North America and some
UK entities may cease to trade before their tax losses can be
utilised.
18 Provisions
|
|
Insurance
claims
£m
|
Legal
and
other
£m
|
Total
£m
|
At
25 March 2023
|
|
129.9
|
81.2
|
211.1
|
Charged to
the income statement
|
|
8.9
|
25.3
|
34.2
|
Utilised in
the year
|
|
(37.0)
|
(20.5)
|
(57.5)
|
Notional
interest
|
|
0.8
|
–
|
0.8
|
Foreign
exchange movements
|
|
(2.4)
|
(0.3)
|
(2.7)
|
At
30 March 2024
|
|
100.2
|
85.7
|
185.9
|
|
|
|
|
|
Current
liabilities
|
|
35.7
|
38.9
|
74.6
|
Non-current
liabilities
|
|
64.5
|
46.8
|
111.3
|
At
30 March 2024
|
|
100.2
|
85.7
|
185.9
|
|
|
|
|
|
Current
liabilities
|
|
45.5
|
40.4
|
85.9
|
Non-current
liabilities
|
|
84.4
|
40.8
|
125.2
|
At
25 March 2023
|
|
129.9
|
81.2
|
211.1
|
The
insurance claims provision arises from estimated exposures for
incidents occurring prior to the balance sheet date. It is
anticipated that the majority of such claims will be settled within
the next four years although certain liabilities in respect of
lifetime obligations of £1.1m (2023: £1.3m)
can extend for more than 25 years. The utilisation of £37.0m
(2023: £37.1m)
represents payments made against the current liability of the
preceding year as well as the settlement of claims resulting from
incidents occurring in the current financial year.
The
insurance claims provisions, of which £55.7m
(2023: £78.6m)
relates to legacy Greyhound claims, includes £50.8m
(2023: £73.3m)
which is recoverable from insurance companies and a receivable is
included within other receivables in note 11.
Legal and
other provisions relate to estimated exposures for cases filed or
thought highly likely to be filed for incidents that occurred prior
to the balance sheet date. It is anticipated that most of these
items will be settled within ten years. Also included are
provisions in respect of costs anticipated on the exit of surplus
properties which are expected to be settled over the remaining
terms of the respective leases and dilapidation, other provisions
in respect of contractual obligations under rail franchises and
restructuring costs. The dilapidation provisions are expected to be
settled at the end of the respective franchise.
19 Called
up share capital
|
Number
of
shares
million
|
£m
|
Allotted,
called up and fully paid (ordinary shares of 5p
each)
|
|
|
Balance as
at 26 March 2023
|
750.6
|
37.5
|
SAYE/BAYE
exercises
|
0.1
|
–
|
Balance
as at 30 March 2024
(ordinary shares of 5p each)
|
750.7
|
37.5
|
The Company
has one class of ordinary shares which carries no right to fixed
income.
On 16
December 2022,
the Company announced a share buyback programme to purchase up to
£75m of ordinary shares. This programme completed on 3 August 2023 having repurchased 63,868,786
shares for a total consideration of £75.5m including transaction
costs.
On
8 June 2023, the Company announced a
share buyback programme to purchase up to £115m of ordinary shares.
At 30 March 2024, the Company had
repurchased 46,854,557 shares for a total consideration of £74.7m,
including transaction costs. As at 30 March
2024, a total of £115.8m has been deducted from retained
earnings in respect of the shares already repurchased, directly
associated transaction costs, and the remaining commitment to
purchase up to £115m of ordinary shares.
During the
year, 0.1m shares were issued to
satisfy principally SAYE and BAYE exercises.
20 Acquisition
of businesses and subsidiary undertakings
|
2024
£m
|
2023
£m
|
Provisional
fair value of net assets acquired:
|
|
|
Property,
plant and equipment
|
3.2
|
28.3
|
Current
assets
|
2.5
|
11.8
|
Other
liabilities
|
(1.5)
|
(8.0)
|
|
4.2
|
32.1
|
Goodwill
|
11.3
|
6.1
|
Satisfied
by cash paid and payable
|
15.5
|
38.2
|
Acquisitions
in 53 weeks to 30 March 2024
On
23 February 2024, the Group completed
the acquisition of York Pullman Bus Company Ltd, which operates
five coach services brands providing home-to-school and college
contracted services, private hire operations including rail
replacement services, and a small number of local bus routes on
behalf of several local authorities.
The total
consideration of £15.5m represents £15.0m paid during the period
and £0.5m to be paid in future periods. This includes cash acquired
of £1.5m included in current assets.
The
business acquired during the year contributed £1.2m to Group
revenue from continuing operations and £0.3m profit to Group
operating profit from continuing operations from the date of
acquisition.
If the
acquisition of the business had been completed on the first day of
the financial year, revenue from the acquisition for the year would
have been £11.2m and operating profit from the acquisition would
have been £2.8m.
21 Net
cash from operating activities
|
2024
£m
|
2023
£m
|
Operating
profit from:
|
|
|
Continuing
operations
|
46.5
|
153.9
|
Discontinued
operations
|
(5.3)
|
31.3
|
Total
operations
|
41.2
|
185.2
|
Adjustments
for:
|
|
|
Depreciation
charges
|
589.7
|
721.9
|
Capital
grant amortisation
|
(48.7)
|
(129.1)
|
Software
amortisation charges
|
3.4
|
8.6
|
Loss on
disposal of subsidiaries and businesses
|
–
|
3.7
|
Impairment
|
3.8
|
13.6
|
Reversal of
impairment
|
–
|
(4.3)
|
Share-based
payments
|
15.6
|
6.4
|
Profit on
disposal of property, plant and equipment
|
(5.7)
|
(71.7)
|
Operating
cash flows before working capital and pensions
|
599.3
|
734.3
|
Decrease in
inventories
|
0.1
|
2.9
|
Decrease/(increase)
in receivables
|
(3.1)
|
(159.4)
|
(Decrease)/increase
in payables due within one year
|
(103.1)
|
53.8
|
Decrease in
financial assets
|
23.7
|
–
|
Decrease in
contingent consideration receivable
|
–
|
33.8
|
(Decrease)/increase
in provisions due within one year
|
(12.4)
|
(31.8)
|
(Decrease)/increase
in provisions due over one year
|
(15.5)
|
(1.2)
|
Settlement
of foreign exchange hedge
|
(1.1)
|
(1.2)
|
Local
Government Pension Scheme refund
|
23.1
|
11.8
|
Defined
benefit pension payments lower than/(greater than) income statement
charge
|
115.6
|
1.8
|
Cash
generated by operations
|
626.6
|
644.8
|
Tax
paid
|
(2.2)
|
(1.0)
|
Interest
paid¹
|
(81.1)
|
(70.0)
|
Net
cash from operating activities2
|
543.3
|
573.8
|
1 Interest
paid includes £62.1m relating to lease liabilities
(2023: £50.6m).
2 Net
cash from operating activities is stated after an inflow of £5.1m
(2023: inflow
of £35.1m) in relation to financial derivative
settlements.