TIDMFGP
11 August 2021
FirstGroup plc
LEI: 549300DEJZCPWA4HKM93
Annual Report and Financial Statements and Annual General Meeting
In accordance with LR 9.6.1R, FirstGroup plc (the "Company") has today
submitted copies of the documents listed below to the Financial Conduct
Authority's National Storage Mechanism. These documents will shortly be
available for inspection at https://data.fca.org.uk/#/nsm/
nationalstoragemechanism:
* 2021 Annual Report and Financial Statements (the "2021 Annual Report");
* Notice of the 2021 Annual General Meeting (the "2021 AGM Notice");
* Form of Proxy; and
* Notice of Availability.
As required by DGTR 6.3.5R (3), the 2021 Annual Report and the 2021 AGM Notice
are also available on the Company's website at www.firstgroupplc.com.
A condensed set of the FirstGroup plc financial statements, including
information on important events that have occurred during the year and their
impact on the financial statements, were included in the Company's announcement
of its full year results published on 27 July 2021 ("Final Results
Announcement." The Final Results Announcement is available for viewing on the
Company's website at www.firstgroupplc.com.
DGTR 6.3.5R requires that certain information relating to all listed companies'
financial results be communicated in unedited full text through a Regulatory
Information Service. The content of the Final Results Announcement, together
with the information set out below in the Appendix, which is extracted from the
2021 Annual Report, constitute the material required to satisfy the
requirements of DGTR 6.3.5R. Cross-references and page numbers in the Appendix
refer to sections in the 2021 Annual Report. This announcement is not a
substitute for reading the 2021 Annual Report.
Enquiries:
Seema Kamboj
Deputy Company Secretary
+44 (0) 7583 675724
APPIX
DIRECTORS' RESPONSIBILITY STATEMENT
Statement of Directors' responsibilities in respect of the Financial Statements
The Directors are responsible for preparing the Annual Report and the Financial
Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have prepared the Group Financial
Statements in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and the Company Financial
Statements in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced
Disclosure Framework", and applicable law). Additionally, the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules require the Directors to
prepare the Group Financial Statements in accordance with international
financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union.
Under Company law, Directors must not approve the Financial Statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Group and Company and of the profit or loss of the Group for that
period. In preparing the Financial Statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* state whether applicable international accounting standards in conformity
with the requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union have been followed for the Group Financial
Statements and United Kingdom Accounting Standards, comprising FRS 101 have
been followed for the Company Financial Statements, subject to any material
departures disclosed and explained in the Financial Statements;
* make judgements and accounting estimates that are reasonable and prudent;
and
* prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue in
business.
The Directors are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the Financial
Statements and the Directors' Remuneration Report comply with the Companies Act
2006.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of Financial Statements may differ from legislation in other
jurisdictions.
Directors' confirmations
The Directors consider that the Annual Report and Accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary for
shareholders to assess the Group's and
Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in Board of
Directors confirm that, to the best of their knowledge:
* the Group Financial Statements, which have been prepared in accordance with
international accounting standards in conformity with the requirements of
the Companies Act 2006 and international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union, give a true and fair view of the assets, liabilities,
financial position and profit of the Group;
* the Company Financial Statements, which have been prepared in accordance
with United Kingdom Accounting Standards, comprising FRS 101, give a true
and fair view of the assets, liabilities, financial position and loss of
the Company; and
* the Strategic Report includes a fair review of the development and
performance of the
business and the position of the Group and Company, together with a description
of the
principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors' report is
approved:
* so far as the Director is aware, there is no relevant audit information of
which the Group's and Company's auditors are unaware; and
* they have taken all the steps that they ought to have taken as a Director
in order to make themselves aware of any relevant audit information and to
establish that the Group's and Company's auditors are aware of that
information.
Ryan Mangold
Chief Financial Officer
RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Remuneration of key management personnel
The remuneration of the Directors, which comprise the plc Board who are the key
management personnel of the Group, is set out below in aggregate for each of
the categories specified in IAS 24 Related Party Disclosures. Further
information about the remuneration of individual Directors is provided in the
Directors' Remuneration Report on pages 108 to 131.
52 weeks 52 weeks
ending 27 ending 28
March 2021 £ March 2020
m £m
Basic salaries1 1.1 1.2
Benefits in kind 0.1 0.1
Fees 0.7 0.8
Share based payment 0.1 0.8
2.0 2.9
1 Basic salaries include cash emoluments in lieu of retirement benefits and car
allowance
PRINCIPAL RISKS
To deliver our strategy, it is important that we understand and manage the
risks that face the Group. The table below outlines our principal risks:
Impact of sale of
Impact of sale First Student and
of First Student First Transit, if
and First Comment on risk any, to the risk
Risk Transit to risk change change during the
description, description Mitigation during the year year
full Group
External Risks
Economic
conditions
The Group's With the sale of In order to adapt Although it is not The Group's First
success depends First Student to market yet clear the Rail division has
on adapting to and First uncertainties and lasting impacts entered into no
economic Transit, the continue to drive the pandemic will risk and low cost
fluctuations ongoing Group is demand, the Group have on commuting risk contracts to
which may less susceptible continues to be behaviours, lock protect the
negatively to changes in customer-focused down orders have remaining
impact economic and strives to begun to lift, business from
performance conditions. The provide innovative resulting in economic
through new transport increased travel fluctuations.
increased concession-based solutions. Whilst demands within the Further, if
costs, changing National Rail the Group has UK; First Bus saw lockdown
customer needs, Contracts have temporarily reduced volumes increase procedures or
reduced demand low revenue and certain capital to c.60% of shelter in place
and/or reduced contingent investments, pre-pandemic orders are
opportunities capital risk. we continue to levels during extended the
for growth. Additionally, focus on strategic the most recent ongoing Group will
Globally, the the Group has ventures to develop lockdown easement. be able to
economic capacity and new innovative We expect right-size bus
outlook is less demand planning service offerings increased demand schedules based on
certain, and processes in (e.g. electric over real-time demand
the Group place to fleet and the summer monitoring and
specifically efficiently autonomous holidays as we government support
has experienced adapt to vehicles, ticket anticipate arrangements
a change in changing initiatives) in travellers largely in First Bus are
travel economic and order to provide taking domestic expected to be
behaviour and demand our customers with trips instead of extended to allow
new policies conditions. As a transport solutions travelling for social
and procedures result, the that reduce internationally. distanced public
related to the Group's complexity and transport to
pandemic. All performance is retain customer continue.
these market less impacted by demand through
changes have economic unstable economic
the potential volatility. conditions.
to decrease the
Group's In 2020 the Group
available accelerated
financial implementation of
resources to real-time seating
invest capital capacity on our
in innovative First Bus app to
solutions that support social
drive demand. distancing
requirements as
Additionally, well as a number of
when these further customer
economic engagement actions
uncertainties through technology
are combined to provide greater
with lower fuel insight to manage
prices, operations. Through
they may this tracking the
further reduce Group is able to
demand for adapt bus schedules
public to real-time demand
transportation to better manage
particularly in operational costs.
our
Greyhound and
First Bus
divisions.
Climate change
Businesses The Group is The Group's The Group With the sale of
globally committed to strategic framework recognises the the US businesses,
continue to accelerating the for sustainability, continued the regulatory
come under transition to a Mobility Beyond pressure and environment on
increasing zero-carbon Today, sets out opportunity to climate
pressure from world, which the company's create a more change simplifies
all includes ambition to be the sustainable world for us as we will
stakeholders, responding to partner of choice and maintains our deal
particularly the clear for innovative and commitment to predominantly with
investors, to mandate and sustainable invest in new UK policy which is
demonstrate binding net-zero transport. technologies and well defined and
strong progress targets collaborate with which we are on
on their currently set In 2021, FirstGroup partners to create track to meet with
climate-related within the UK became the first a cleaner future. our current
performance. for greenhouse bus and rail The commitments we commitments.
Inadequate gas emissions. operator in the UK have made this The physical risks
attention to Although the US to formally year - of climate change
our government has commit to setting particularly our are also less
climate-related not yet an ambitious science-based variable and with
programmes announced the science-based target and zero less extreme
and emerging same binding target aligned with emission fleet weather events in
technologies targets, the limiting global target for First the UK than North
could current warming to 1.5°C Bus - and the America.
negatively administration's and reaching strategies we are
impact the position is net-zero emissions developing to meet
Group's clear and we by 2050 or earlier. them will ensure
performance, expect these to we are managing
reputation and/ result in coming Within First Bus we our climate
or result in years. However, have committed to transition risks
decreased we do not investing in only effectively.
demand. anticipate zero-emission
adverse impacts vehicles from
Within the UK, and/or changes December 2022, and
the government to these risks to have a 100%
has set a and/or zero-emission fleet
legally binding operations with by 2035. The
target for the sale of National Bus
net-zero First Student Strategy, announced
greenhouse and First on 15 March 2021,
gas emissions Transit. pledged £3bn for
by 2050. All buses in England
companies that outside London,
operate in the including a
UK or are owned commitment to
by support the
UK-based purchase of at
companies will least 4,000 new
be zero emission buses
substantially for the UK, from
impacted by which the Group is
decarbonisation well positioned to
policies benefit.
introduced to
meet this We also publicly
target. As a support the UK
result, the Government's
Group is under ambition to remove
increased diesel-only trains
pressure and from the network by
scrutiny from 2040. As outlined
both investors in the Government's
and government rail White Paper,
bodies to published in May
provide 2021,
evidence of our electrification of
strategic plans Britain's rail
in place to network will be
mitigate expanded, and
climate change alternative
risks. technologies such
as hydrogen and
There are also battery power will
physical risks help to achieve
resulting from zero emissions from
climate change trains. We look
(e.g. extreme forward to working
weather events) with the government
which could and industry
impact our partners in support
customers, of the government's
service investment plans to
reliability, decarbonise
and disrupt our Britain's rail
energy supply network.
and/or supply
chain. Our externally
assured carbon and
Delays in energy performance
implementing can be found in the
our strategic KPI section on
plans to pages 55-56 and in
mitigate our TCFD reporting
climate-related on pages 57-60,
risks, with a more
including detailed breakdown
transitioning in our 2021
our fleets to Environmental
zero emissions, Performance Report,
could result in available on our
lost business, website.
reduced
revenue and Business continuity
reduced plans are in place
profitability. for all areas of
our businesses in
case of extreme
weather or other
physical events.
Geopolitical
The political The sale of While the Group The UK government Although the new
landscape First Student collaborates with announced its contracts are
within which and First industry bodies to intention to bring expected
the Group Transit help anticipate the UK's current to be based on a
operates is constitutes the government rail franchising more appropriate
constantly majority of the policy or funding system to an end balance of risk
changing. Group's North regime changes in and replace it and reward, First
The Group's American order to adjust with a new rail Rail is a
operations business, as a operations, the contract model for proportionately
depend on result of which Group is an delivery of rail larger part of the
government there is a apolitical passenger Retained Group and
policy, funding reduction in the organization and service by private therefore the
regimes and operational and does not have the operators. See future
infrastructure geographical ability to control pages 22-24 for performance of the
initiatives diversity of the or substantially additional ongoing Group will
continuing to ongoing Group. influence information on be intrinsically
support private The ongoing government policy. the termination aligned with
company Group is sum agreements of successful
operators in therefore more The Group has been the pre-existing negotiations of
public dependent on the able to mitigate franchising new rail contracts
transportation. performance of, supply chain contracts and and continued
Inability to and revenue disruptions by details of the government
maintain rail from, its UK utilising newly negotiated support.
contracts and/ divisions (i.e. mechanical National
or leverage First Bus and parts from vehicles Rail Contracts
national First Rail). As not in use due to (NRC).
funding and a result, decreased demand Additionally, the
develop changes in levels as a result UK government also
government government of the pandemic. announced new
partnerships policies, infrastructure
may result in funding regimes investments,
the reduction and including c. £3bn
and/or an infrastructure to transform bus
elimination of initiatives in services across
rail contracts the UK have a the country
and/or an greater overall providing the
inability to impact on the Group with new
sustain and ongoing Group. opportunities to
develop new bus grow the First Bus
routes division.
resulting in
adverse
financial
impacts.
Group
operations are
also dependent
on obtaining
the necessary
mechanical
pieces to
maintain our
fleets. Changes
in the
political
landscape may
have supply
chain
implications
and decrease
the number of
vehicles
available to
support demand.
Strategic Risks
Contracted
business
The Group's With the sale of The new contract The transition With the sale of
contracted First Student structure will be from franchising First Student and
businesses are and First concession-based to contracts will First Transit,
dependent on Transit, the with performance lead to a better First Rail is a
the ability to ongoing Group incentives balance of risk proportionally
secure and has less resulting in a far and reward via greater part of
renew contracts geographic better balance of reduced revenue the ongoing Group.
on profitable diversity and risk and reward. As risk, Although this
terms, comply therefore is the largest minimal cost and results in a less
with contract more dependent incumbent with contingent capital diverse portfolio,
terms and avoid on the four UK rail risk, and will the new National
termination. performance of operations expected provide more Rail Contract
Additionally, the UK to be in place consistent cash structure provides
the ability of divisions; until at least generation each a strong base
the Group to however, the new 2023, we have the year. As the business for the
achieve National Rail extensive largest ongoing Group and
performance Contracts will operational incumbent the provides
targets is provide the expertise needed to Group has the opportunities to
dependent ongoing Group meet new contract operational build on that
on our ability with a performance structure and foundation with no
to exceed consistent incentives. expertise to revenue risk and
passenger single-digit We have dedicated exceed limited cost risk.
performance margin, more departments that passenger
metrics laid cash generation, focus on DfT performance
out in rail and overall negotiations and targets and to
contracts. greater ensure that build on our base
resilience. future commitments business with no
Failure to do These contracts to UK rail will revenue risk.
so would result have low cost, have an appropriate
in reduced contingent balance of
revenue and capital and potential risks and
profitability revenue risk. rewards for
and / or shareholders.
negative
impact on
delivering the
Group's
strategic
objectives.
Competition and
emerging
technologies
The Group's The sale of To meet our goal to Low fuel prices Due to the sale of
market share First Student be the partner of and changes in First Student and
and and First choice for our demand for public First Transit the
competitiveness Transit allows customers' transportation ongoing Group has
is dependent on the ongoing transport due to the increased
effectively Group to further solutions, pandemic have led capacity to
competing in focus we continue to to reduced strategically
areas of on our digital focus on service passenger volumes. focus innovation
pricing and innovation, quality and Although the efforts on markets
service enhance business delivery in order lasting impact to within the UK,
options. Our efficiency and to attract commuting particularly in
success is also flexibility, and passengers behaviours and left behind towns
dependent on target and other customers consumer travel and cities where
identifying and opportunities in to our portfolio of demand continues public
developing adjacent markets businesses. We are to be unknown, the transportation,
innovative and geographies. leaders in the Group saw specifically
offerings in operation and passenger buses, are
line with the maintenance of volumes reach c60% integral to
Group's goal to electric and of pre-pandemic meeting the UK
be the autonomous levels in some Government's
partner of vehicles, and we areas during the economic growth
choice for our continue to invest most recent agenda.
customers' in the technology lockdown easement.
transport and services to
solutions, support connected The Group has
accelerating and on-demand continued to
the transition travel, including invest in emerging
to a zero Mobility as a technologies this
carbon world. Service (MaaS). year, including
Our main autonomous and
competitors The Group also electric vehicles,
include the continues to have a and services to
private car and dedicated support connected
other cross-divisional and on-demand
transportation consumer experience travel, including
service team who help mobility as a
providers (e.g. implement service (MaaS).
ride share, innovative customer
price convenience We continue to
comparison solutions (e.g. increase the
websites, real-time seat number of low and
etc.). capacity, zero emission
Airline contactless and vehicles operating
competition capped ticketing, in our road and
also impacts smart tickets, 5G/ rail fleets, and
demand for bus Wi-Fi, data driven to focus on
and rail pricing) which providing easy and
travel, focus on improving convenient
especially in access to our mobility,
Greyhound's services and our encouraging the
long-haul overall service to switch from
business. Zero customers. private car
emission and journeys to our
emerging The Group has also services.
technologies identified
such expansion
as autonomous opportunities in
vehicles and adjacent markets
on-demand and new
schemes provide geographies to
opportunities support the
to grow and expansion of public
develop our transport
market throughout the UK.
segments. The
Group may also Wherever possible
begin to the Group works
experience more with local and
competitors for national bodies to
rail contracts promote
as a result of measures aimed at
the decreased increasing demand
contingent for public
capital transport and the
requirements of other services that
the National we offer.
Rail Contract
structure.
Failure to
effectively
compete in the
market and/or
develop new and
innovative
options could
result in
decreased
customer
retention,
decreased
demand and/or
adverse
financial and
reputational
impacts.
Operational
Risks
Financial
resources
As set out in The sale of The Group monitors As a result of The Group will
further detail First Student our leverage ratios varying passenger apply the net
in note 25 to and First and overall demand proceeds from the
the financial Transit allows liquidity throughout the sale to discharge
statements on us to consistently to fiscal year, the certain long-term
pages 192-197, significantly ensure we Group secured liabilities,
treasury risks reduce the level remain within our additional funding including the £
include of debt for the target range and to support 300m CCFF loan.
liquidity ongoing Group have adequate liquidity during Additionally, c£
risks, risks and also financial resources the pandemic. 100m pro
arising from includes a cash on a two to three Additionally, we forma net debt
changes to reserve to year look forward. secured covenant position to be
foreign provide adequate amendments for retained to
exchange financial Although the both our March and ensure the ongoing
and interest resources until completion of the September 2021 Group has adequate
rates and fuel end markets sale of First testing dates. The financial
price risk. begin to emerge Student and First Group has resources
from the Transit decreases continued with our available while UK
Liquidity risk pandemic. the ongoing Group's strategy to sell end markets begin
includes the revenue stream, S&P First Student and to emerge from the
risk that the While the sale Global Ratings and First Transit in pandemic over and
Company is provides Fitch currently order to invest above the
unable to significant debt rate us as and focus on our estimated
refinance debt decreases and investment grade UK divisions which short-term capital
as it becomes working capital and we do not are less needs. As a
due. Foreign reserves, it anticipate a susceptible to result, the
currency and also decreases reduction in our impacts from ongoing Group has
interest rate the Group's ability to secure passenger demand a
movements may revenue streams credit, including and will provide significantly
impact the and may impact the targeted debt us strong cash de-risked balance
profits, the ongoing facilities. In the generation and sheet and strong
balance sheet Group's event the ongoing liquidity in financial position
and cash flows ability to Group did not future. to unlock growth
of the Group. obtain credit obtain the targeted in our target
Ineffective when the ongoing debt facilities we markets.
hedging Group targets have additional
arrangements new debt capacity within our
may not fully facilities. current financial
mitigate losses structures to
or may increase continue our strong
them. financial
positions, such as
The Group is extending our 2022
credit rated by bonds.
S&P Global
Ratings and
Fitch. A
downgrade in
the Group's
credit ratings
to below
current
investment
grade may lead
to increased
financing costs
and other
consequences
and affect the
Group's ability
to invest in
its operations
Pandemic
The pandemic The Group is To adapt our While the Group With the sale of
has altered the committed to the operations to has implemented First Student and
way in which health and impacts resulting safeguards across First Transit, the
the Group safety of our from the pandemic our fleet to ongoing Group is
operates and employees, the Group has prevent less susceptible
how we serve customers and implemented new further spread of to changes in
our others with policies and the pandemic, consumer
communities. which we do procedures across guidance regarding commuting
Our success business. With all vehicle fleets. the methods of behaviour and
depends on the sale of These policies and spread and demand.
continuing to First Student procedures include effective
anticipate and and First providing personal containment
adapt to Transit, the protective procedures
changes in ongoing Group is equipment to continue to
consumer less susceptible drivers and develop.
commuting and to changes in technicians,
travel consumer increased These methods and
behaviours, community sanitation and procedures are
implementing behaviour and appropriate social further impacted
safeguards to demand. The new distancing by the new
prevent spread National Rail requirements. The variants
and complying Contracts Group complies with of the coronavirus
with new laws include a all applicable developing
and regulations management fee public health throughout
relating to the that is not authority guidance, the world,
pandemic. dependent on include the use of including in the
demand and face coverings UK. This changing
Failure to within First Bus where mandated. knowledge could
balance we have the continue to
operational ability to Additionally, affect the ways in
changes whilst adjust and during 2020 the which we must
also change Group fast-tracked adjust our
implementing schedules in implementation of operations to
appropriate order to adapt real-time seating protect the safety
safeguards and to changing capacity on our Bus of our
procedures to demand patterns. app to support customers,
prevent social distancing employees and
additional requirements. third parties
spread of the who interact with
pandemic and Under the new our business.
promote National Rail
containment may Contracts First
result in Rail will not
adverse experience revenue
reputational or risk as a
financial result of decreased
impacts. demand, except for
in our Hull Trains
open access
service. Our other
divisions, have a
greater risk of
loss caused by
decreased demand.
While First Bus saw
passenger volumes
increase to c.60%
of pre-pandemic
levels during the
most recent
lockdown easement,
to adapt our
operations to
potential changes
in commuting and
travel behaviour,
the division has
dedicated teams to
assess and
monitor workforce
and route planning.
The dedicated teams
use advanced data
analytics that
provide an
efficient way to
adjust schedules.
Once end markets
have emerged from
the pandemic, the
Group also has
plans ready
to reshape routes
and timelines to
align with observed
demand. The actions
taken via
these plans will be
based on real-time
passenger flow data
now available
following digital
transformation
initiatives.
Safety
The Group is Safety is one of In order to promote Although the Group In relation to the
committed to the Group's core and maintain our continues to sale of First
fostering and values and the culture of safety, assess, update and Student and
maintaining a sale of First all divisions have implement safety First Transit, as
culture of Student and extensive safety procedures across previously stated
safety. First Transit plans and safety our businesses, the legal climate
However, public has no impact on training for our risk mitigation in in North America
transport our unwavering drivers and this area continues to
inherently commitment to employees. Points continues to be a deliver judgements
includes safety safety. Despite of access to focus. Even disproportionately
related risks, our commitment vehicles are with this in favour of
many of which to safety, we secured to prevent attention, the plaintiffs. While
are out of our recognise that, against malicious legal climate in the Group has
control. These regretably, access. Mechanical North America, legal claim risk
risks include incidents and safety controls particularly in in the UK, the
terrorism, legal claims do (speed monitoring, the US, continues ongoing Group's
adverse occur. As North cameras, etc.) are to deliver overall insurance
weather, human America has a implemented across judgements which risk has
error and higher degree of our fleet of are decreased.
increased litigious vehicles. disproportionately Although the
traffic / activity, the in favour of ongoing Group's
congestion on sale of First While the Group has plaintiffs, and at insurance risk has
public Student and implemented times decreased, the
roadways. A First preventative safety unpredictable. ongoing Group also
safety Transit reduces measures and has less
incident, or a the Group's procedures, we Additionally, the geographical
threat of an liability recognise that extent to which diversity to
incident, insurance risk incidents may be the claims offset
could lead to and associated caused by factors environment may be any decrease in
reduced public costs. Although that are ultimately impacted by demand following a
confidence in the ongoing out of our control the effects of the terrorist attack
public Group will and do at times pandemic is not and / or safety
transportation continue to result in legal yet clear. incident within
overall and operate in North claims. As a the UK.
potentially America via the result, the Group
reduce demand Greyhound has dedicated
for our division, a departments,
services. portion of the utilising third
sale proceeds party experts when
has been needed, to analyse
retained to and maintain
de-risk any effective insurance
remaining structures and
self-insurance levels.
requirements.
Whilst the sale
of First Student
and First
Transit reduces
the ongoing
Group's
insurance risk,
it also reduces
our geographical
diversity. In
the event of a
terrorist
attack and / or
safety incident
within the UK,
the Group may
experience a
decrease in
demand which
will not be
offset by stable
demand within
the US.
Pension scheme
funding
The Group Following the In order to The Group has Following the sale
sponsors or sale of First effectively monitor closed most of its of First Student
participates in Student and our funding defined benefit and First Transit,
several First Transit, requirements, all schemes in its a portion of the
significant the ongoing our cash models/ road divisions to net disposal
defined benefit Group continues forecasts future accrual. proceeds was used
pension to include significant This will lead to to materially
schemes, be responsible pension deficit the natural improve pension
primarily in for all pension funding. The Group reduction of the scheme funding and
the UK. Within plans other than also utilises third size and thereby
our North those relating party experts volatility of the decrease our
American to the sold to monitor pension funding overall funding
subsidiaries, divisions for movements in risk over time. risk.
we participate which the discount rates and
in several liability has inflation Through our
multi-employer transferred as expectations. membership of the
pension schemes part of the Rail Delivery
in which our sale. We continue to Group we are
contributions replace our defined engaged in an
are pooled with Although the benefit schemes industry-wide
the Group used some with defined project to
contributions of the net contribution consider the
of other disposal arrangements where long-term funding
contributing proceeds to possible. We are model for the
employers. improve pension also focusing on Railways Pension
In both schemes scheme funding, diversifying asset Scheme.
the Group's the ongoing classes and
future cash Group's ability reallocating
contributions to contribute to riskier investments
and funding the Pension to investments that
requirements Schemes on an better match the
are dependent ongoing basis characteristics of
on investment will be the liabilities as
performance, dependent on the funding levels
movements in profits of a improve.
discounts less diversified
rates, business with a Under the First
expectations of reduced Rail franchise
future operating cash arrangements, the
inflation and flow, in Group's train
life particular, in operating companies
expectancy. relation to the are not responsible
Within North First UK Bus for any residual
America, Pension Scheme. deficit at the end
funding of the of a franchise so
schemes is also there is only
reliant on the short-term cash
ongoing flow risk within
participation any particular
by the other franchise.
contributing
employers. The Group intends
to use £337m of the
In order to net disposal
maintain proceeds to
adequate cash contribute to the
funding and Bus and Group
prevent adverse pension schemes.
financial Additionally, the
impacts increase in funding
or reputational levels allows for
damage, the greater flexibility
Group must for the management
monitor the of the pension
performance of liabilities
our fund including buy-ins
investments and and further
movements in liability hedging.
other
contributing
factors (e.g.
discount rates,
life
expectancy,
etc.).
Data security
and consumer
privacy,
including
cyber-security
The Group The Group is To protect our Despite the The sale of First
continues to committed to customers' data and Group's continued Student and First
see an increase protecting the comply with all mitigation Transit has no
of mobile and privacy and data privacy efforts, the risk impact to the risk
internet sales personal data of regulations, IT of a cyber change during
across all our customers, infrastructure security attack the year.
divisions. employees and controls have been for all companies
These mobile others with implemented continues to
and internet which we do Group-wide. We also increase. This
channels gather business. The have dedicated risk has been
large amounts sale of First compliance officers additionally
of data which Student and in each division. impacted by the
require First Transit The Group also increase of a
safeguards in has no impact on administers a remote workforce
order to our commitment training during the
protect our to protect our programme to all pandemic.
customers' data consumers' data employees,
and to comply and our business communicating their
with the systems against role in protecting
General Data security and preventing
Protection breaches and / the unauthorised
Regulation or comply with access to sensitive
(GDPR) and all GDPR and data. Additionally,
California CCPA in order to comply
Consumer regulations. with user
Privacy Act preferences, the
(CCPA). Whilst Group is
this data implementing a
requires software solution
compliance with that makes it
consumer easier to record
privacy and update customer
regulations, it preferences.
also makes us a
target of data
security
attacks by
third parties.
In addition to
maintaining
infrastructures
that protect
our consumers'
data, our
operations rely
on information
technology
systems.
Cyber-attacks,
computer
malware,
viruses,
spamming and
phishing
attacks have
become more
prevalent and
may result in a
breach of our
systems. A
breach of our
facilities and
/ or network
could disrupt
our operations
and impair our
ability to
protect
consumer data,
and / or
compromise our
confidential
business
information.
A failure to
prevent,
mitigate or
detect security
breaches and /
or improper
access to our
business and /
or customer's
information and
/ or comply
with consumer
privacy
regulations
could result in
disruption to
our operations,
significant
penalties and
have an adverse
impact on
consumer
confidence in
the Group.
Regulatory
compliance
The Group's The Group is To help the Group Although our The sale of First
operations are dedicated to comply with all legislative and Student and First
subject to a maintaining legislation and regulatory Transit has no
wide range of compliance with regulations, we environment impact to the risk
legislation and the regulatory have dedicated continues to change during the
regulation. environment compliance change, the year.
Complying with within which it professionals who Group maintains
such works and the ensure applicable our commitment to
legislation and sale of First laws by locality assess and adapt
regulations may Student and and state are not only our
increase the First Transit followed. We also insurance
Group's has no impact on engage with third structure but also
operating our commitment party legal experts our policies and
costs, and to comply with when necessary to procedures to
non-compliance our regulatory advise on policies prevent
could lead to requirements. and procedures and non-compliance.
financial other related
penalties, compliance matters.
investigation We also provide a
expenses, hotline for
legal costs or employees and third
reputational parties to report
damage. The concerns.
Group's
corporate Whilst we strive to
governance, maintain compliance
which is within the
recognised by regulatory
external ESG environment, we
ratings as also maintain
strong and well insurance for third
aligned with party injury claims
stakeholder arising from
interests, vehicle and general
supports our operations,
ability to employee injuries
respond to, and and property
prepare for, damage.
financial and
ESG laws To help mitigate
and non-compliance risk
regulations. with anti-bribery
and anti-trust
The main regulations we
regulatory maintain robust
compliance policies and
risks specific procedures and our
to the Group employees receive
that are not regular training on
covered the policies. We
in other also complete
principal risks periodic audits of
include our training
workplace programmes to
compliance ensure consistent
(employee wage training and
and hour, meal participation.
and break
matters, etc.),
workplace
health and
safety and
anti-trust/
anti-bribery
regulations.
Human resources
Employee costs The attraction, In order to The lasting impact With the sale of
represent the development, increase retention the pandemic will First Student and
largest retention, and decrease have on the labour First Transit, the
component of reputation and employee costs, the market and ongoing Group has
the Group's succession of Group has enhanced employee reduced
operating senior recruitment work conditions in size and
costs. These management and practices, continues to includes a less
costs include individuals with including develop and will diverse portfolio
expenses key skills are leveraging online require the Group which, if combined
related to critical factors channels for all to assess and with any negative
recruitment, in the roles. The Group adapt our publicity
retention and successful also has operations in the associated with
talent execution of the implemented all future. the sale, may
development. Group's necessary Additionally, impact the ongoing
The costs are strategy, and coronavirus-related employee and Group's
impacted by operation of the safety protocols to community ability to attract
changes in Group's support the health expectations and retain
employment divisions. and safety of our continue to impact employees.
markets, new drivers and our recruitment,
regulatory The reduction in technicians. retention,
requirements size and diversity and
from Brexit and diversification In response to development
diversity and of the ongoing Brexit employment strategies.
inclusion Group following regulations, we
programmes. A the sale of have secured
failure to First Student Sponsorship Status
effectively and First and are in the
recruit and Transit may make process of
retain a it more implementing new
diverse and difficult for employment record
talented the Group to requirements to
workforce could attract and comply with
have adverse retain regulations.
financial, employees.
reputational To help prevent
and operational overall employee
impacts. turnover, we
continue to focus
Our driver and on improving
technician communication with
employment employees,
market has been investing in
affected by the employee
pandemic development and
which has diversity and
increased our inclusion, and
recruitment and providing market
retention costs competitive wages
and may impact and benefits.
operations
as consumer
travel demand
increases. Our
employee
turnover rate
may also be
impacted by
Brexit
employment
regulations and
the
announcement of
the intent to
sell the North
American
businesses.
END
(END) Dow Jones Newswires
August 11, 2021 10:10 ET (14:10 GMT)
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