FirstGroup, the leading provider of transportation services in the UK and North
America, today reports its Interim Management Statement for the third quarter
period from 1 October 2007 to 31 December 2007.

The Group has continued to make good progress during the period and overall
trading is in line with management expectations.

In North America we are progressing well with the integration of Laidlaw since
we completed the acquisition in October 2007 and we are on course to achieve
our synergy target of $100m per annum. In our school bus business our priority
in the new bidding season, which is just beginning, is to continue our record
of customer retention through high quality service provision coupled with cost
control and productivity enhancements.

In our UK Bus Division a strong demand for public transport, together with our
focus on service and quality, is reflected in continued passenger revenue
growth of 5%. Our strategy to enhance service quality through investment in
people and vehicles has ensured that our operating performance continues to
improve. These initiatives together with a tight control of costs have
delivered an increase of over 1% in the operating margin in the year to date
and we are targeting further margin improvement within UK Bus.

A high demand for rail services has delivered a further period of growth with
passenger revenue increased by 10% across our rail business. Our focus is on
improving operating performance and customer service across all of our rail
franchises and in particular at First Great Western where we are working hard
to address some deep-rooted performance issues. We have successfully introduced
new services at First TransPennine Express and provided further capacity
through new timetables and a significant investment programme across all of our
rail franchises. At First Great Western our HST refurbishment is now almost
complete and we are making progress with the programme of improvements to the
West Country and Thames Valley fleet.

During the quarter we have continued to actively manage our fuel cost exposure
by increasing the Group's fuel hedge position for 2008/09. We are currently 87%
hedged at approximately $74 per barrel for our total UK requirement and 80%
hedged at approximately $83 per barrel for the `at risk' portion of our North
American requirement.

The Board is confident that the Group will continue to make good progress in
all markets in which it operates.

* Revenue growth figures used throughout this statement refer to growth
compared with the third quarter of 2006/07