Firstgroup Regulatory News (FGP)

8 October 2014 FIRSTGROUP PLC ("FirstGroup" or "The Group") STATEMENT RE: SCOTRAIL FRANCHISE FirstGroup, the leading transport operator in the UK and North America, hasbeen informed by Transport Scotland that it has not been awarded the newScotRail franchise. Commenting, Tim O'Toole, FirstGroup's Chief Executive, said: "We are very proud of our success in operating First ScotRail and our team wererecognised last week, once again, as Rail Operator of the Year. We have keptour promises and more for ten years, delivering record levels of serviceincluding during this extraordinary summer in Scotland with the CommonwealthGames and the Ryder Cup. Our bid would have delivered even greater levels ofservice and growth, and we are disappointed we will not have the opportunity toimplement the credible plans we submitted, building on our record ofimprovement across every measurable score, for the benefit of ScotRail'spassengers and employees. "We shall continue to operate First ScotRail until the new franchise commenceson 1 April 2015. Until that time we will deliver further enhancements to trainsand stations including further free Wi-Fi and continue important work to enablethe extension of smart ticketing across the whole country and the opening ofthe Borders Railway next year. "Today's news does not alter the Group's stated medium-term targets. As one ofthe largest and most experienced rail operators we are actively participatingin franchise competitions with the objective of achieving earnings on a parwith the last round of franchising, with an acceptable level of risk. We are innegotiations with the Department for Transport (DfT) to operate the FirstTransPennine Express franchise until February 2016, and continue discussionswith the DfT in respect of a potential longer direct award to operate FirstGreat Western, our largest franchise, over the period when a substantialprogramme of infrastructure upgrades and introduction of new trains will takeplace on the network." FirstGroup has operated the First ScotRail franchise since 2004 and during thattime has: * Provided more services and introduced new trains: Scotland now has its biggest ever timetable of 2,300 services each day, up by 300 since 2004. In addition 215 extra coaches have been introduced. This has helped to attract new passengers, with customer numbers rising to more than 86 million - an increase of 34% since 2004. * Improved service quality: Punctuality and reliability scores reached a record high this year of 95.3% - up from 84% in 2004, and customer satisfaction is at its highest ever level at 90% - eight points higher than the UK average and six points higher than in 2004. * Invested in Scotland's rail services: more than £82 million invested since 2004 including station improvements of £56m and improvements to rolling stock of £26.3m. More than 130 trains and 50 stations have been fitted with free Wi-Fi. * Invested in our people to deliver performance and customer service: Employee numbers increased from 3,500 to 4,900 including nearly 300 more drivers. We achieved Investors in People Gold status, the largest UK Company to do so, and we launched a Modern Apprenticeship in Customer Service - the first of its kind in the rail industry. * Awarded Rail Operator of the Year at the National Transport Awards on 2 October 2014 for the third time in six years and also current Rail Business of the Year. * Forged effective partnerships: First ScotRail was one of the first train operating companies to sign an alliance agreement with Network Rail, resulting in savings including the delivery of the industry-leading Paisley Canal line electrification project within 6 months whilst reducing the costs from £28m to £12m. * Delivered Scotland's successful year of events in 2014: First ScotRail carried more than 1.1 million people to the Commonwealth Games, and 50,000 to the Ryder Cup as well as Edinburgh Festivals and Bannockburn Live. Notes to Editors: About FirstGroup plc FirstGroup plc (LSE: FGP.L) is the leading transport operator in the UK andNorth America. With revenues of more than £6.7 billion and around 117,000employees in 2013/14, we transported around 2.5 billion passengers last year.Each of our five divisions is a leader in its field: First Student is thelargest provider of student transportation in North America with a fleet ofaround 49,000 yellow school buses, First Transit is one of the largestproviders of outsourced transit management and contracting services in the US,while Greyhound is the only national operator of scheduled intercity coachservices across North America. In the UK, FirstGroup is one of Britain'slargest bus operators running a fleet of some 6,400 buses, and we are one ofthe largest operators of passenger rail services in the UK, carrying more than330 million passengers last year, with experience of running all types of railnetwork. Our vision is to provide solutions for an increasingly congested world...keeping people moving and communities prospering. Visit our website at: www.firstgroupplc.com Contacts at FirstGroup:Rachael Borthwick, Group Corporate Communications DirectorFaisal Tabbah, Group Investor Relations ManagerStuart Butchers, Group Head of MediaTel: +44 20 7725 3354 Contacts at Brunswick PR:Michael Harrison/Andrew Porter, Tel: +44 20 7404 5959