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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Firstgroup Plc | LSE:FGP | London | Ordinary Share | GB0003452173 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 168.10 | 167.80 | 168.10 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Local And Suburban Transit | 4.92B | 87.1M | 0.1313 | 12.79 | 1.11B |
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
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