FIRSTGROUP PLC
fourteen new trains to drive First Rail open access
growth
FirstGroup
plc (the ‘Group’) is pleased to announce that it has entered into a
Lease Agreement with Angel Trains Limited (‘Angel Trains’) and
Hitachi Rail Limited (‘Hitachi’) for the lease of 14 new
trains.
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The Group
has signed an agreement with Angel Trains and Hitachi to lease 14
new five-car class 80X Hitachi electric, battery electric or
bi-mode trains (70 cars in total) at a cost of c.£500m including
maintenance, over a ten year lease period
-
The trains
will be manufactured by Hitachi in County
Durham, securing the skills base and jobs in the local
area
-
The new
trains will enable FirstGroup to significantly expand its open
access portfolio and will be used on the newly announced
London-Carmarthen route and to increase the number of cars on the
existing Lumo and Hull Trains services
-
The
agreement also contains an option for FirstGroup to lease up to an
additional 13 trains on the same terms if the Group’s open access
applications are granted by the Office of Rail and Road
(‘ORR’)
Prime
Minister Sir Keir Starmer is
visiting Newton Aycliffe, County
Durham, today to celebrate a significant agreement for the
Hitachi factory which has secured an order to manufacture 70 new
rail cars for FirstGroup’s growing open access business, creating
certainty for the manufacturing skills base, and the factory’s
future.
The Lease
Agreement will deliver 14 new trains, which will not only give the
Group a homogenous fleet across its open access operations,
ensuring flexibility and reliability for customers, but also
facilitates the Group’s strategic objective of materially
increasing its open access capacity. Delivery of the new trains is
expected to commence in late 2027. The lease will be financed by
Angel Trains, adding to their portfolio of Hitachi assets. The
trains will be maintained by Hitachi at their facilities around the
country.
The trains
will be used on the Group’s open access rail services, including
the Carmarthen-London route announced on 5 December, and the
existing Hull Trains and Lumo services on the East Coast
Mainline.
In
addition, the agreement provides the Group the option to invest
another c.£460m, with options on a further 13 five-car trains,
should the recently submitted open access applications be
successful. These include for a new Lumo service between
London and Rochdale via Newton-le-Willows, Eccles and
Manchester Victoria, the extension of the Lumo service between
Glasgow and Edinburgh, the expansion of the new
London-Carmarthen Lumo service to introduce a new Lumo service
between London and Paignton, and a
new Hull Trains service between London and Sheffield via Retford and Worksop.
Open
access rail operators are set up with solely private investment and
take full commercial risk and opportunity. The successful open
access model, which is supported by Government and the independent
regulator ORR, connects under-served places, helping to drive
economic growth and providing additional capacity on core routes
which can push a modal shift away from carbon-intensive
travel.
Commenting,
FirstGroup Chief Executive Officer Graham
Sutherland said:
“The
introduction of our new service between London and Carmarthen, and the extra capacity
on Lumo and Hull Trains, will significantly increase our open
access portfolio over the next few years, with further expansion
possible should our recent applications be successful. The new
trains, to be manufactured for us in County Durham by Hitachi, will support UK
manufacturing and offer customers more choice as they consider
affordable, environmentally friendly modes of travel in the future,
and we are pleased to be taking them forward.
“We know
that growth and innovation are key for the future of the railway
sector and are committed to working with government and all our
partners to provide competitive, sustainable and improved services.
Successful open access services can provide new connections, add
capacity, support local businesses and suppliers, secure jobs and
help to drive social mobility and future economic
growth.”
Jim Brewin, Chief Director of UK & Ireland at Hitachi Rail,
stated:
“This
contract is a positive step forward, and just recognition for the
hard work and patience of our teams across the Hitachi Rail UK
business over recent years. We look forward to once again
delivering for Hull Trains and Lumo passengers who will benefit
further from our award-winning British built trains.
We owe a
lot to the innovation and creativity shown by our customers Angel
Trains and FirstGroup and are excited to work in collaboration to
deliver on our combined ambitions.
Equally,
we owe a debt of thanks to the Northeast Mayor Kim McGuiness and other local MPs who have
worked tirelessly in support of this private sector
investment.”
Malcolm Brown, CEO of Angel Trains,
said:
“This is a
major milestone for the UK rail industry. In less than three months
we have delivered c.£250m of investment that will bring millions
more passengers onto the rail network, connect key regional centres
across the UK, secure crucial manufacturing jobs and breathe new
life into local economies.
“This is
the first announcement of its kind in six years but our ambitions
don’t stop here - this milestone represents the beginning of a new
and exciting journey, which will see Angel Trains play a leading
role in the green transition of our rail
infrastructure.”
Contacts
at FirstGroup:
Marianna
Bowes, Head of Investor Relations
Stuart
Butchers, Group Head of Communications
corporate.comms@firstgroup.co.uk
Tel: +44
(0) 20 7725 3354
|
Contacts
at Brunswick Group:
Simone
Selzer
Tel: +44
(0) 20 7404 5959
|
Contacts
at Panmure Liberum:
Nicholas
How / John More
Tel: +44
(0) 20 3100 2000
|
Contacts
at RBC Europe Limited: James
Agnew / Jack Wood
Tel: +44
(0) 20 7653 4000
|
Forward-looking statements
Certain
statements included or incorporated by reference within this
document may constitute ‘forward-looking statements’ with respect
to the business, strategy and plans of the Group and our current
goals, assumptions and expectations relating to our future
financial condition, performance and results. By their nature,
forward-looking statements involve known and unknown risks,
assumptions, uncertainties and other factors that cause actual
results, performance or achievements of the Group to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. No
statement in this document should be construed as a profit forecast
for any period. Shareholders are cautioned not to place undue
reliance on the forward-looking statements. Except as required by
the UK Listing Rules and applicable law, the Group does not
undertake any obligation to update or change any forward-looking
statements to reflect events occurring after the date of this
document.
Legal
Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as
per DTR 6 Annex 1R: 3.1.
About First Rail Open Access
FirstGroup
owns two open access operators, Hull Trains and Lumo, and also
operates Heathrow Express on behalf of Heathrow Airport
Ltd.
Hull
Trains has provided an open access service between Hull and London for 24 years. It runs seven services
each day between Hull and
London and saw the introduction of
a new fleet of bi-mode trains in 2019, that have reduced
CO2
emissions
by 65% compared to its previous fleet. Since
Covid-19 it has experienced a 32% increase in customers (bucking
national trends) and recent research shows using the service from
Hull to London King’s Cross
produces 12 times less CO2
than
driving. Hull
Trains have increased seat capacity by 500% thanks to FirstGroup’s
investment in new and longer trains.
Lumo
has carried more than 3 million customers, on over 8,500 journeys
between London and Edinburgh since its launch in October 2021. Its entirely electric fleet means
that journeys on Lumo emit 95% less CO2
than
flying, 21 times less than a petrol car and six times less than
electric vehicles.
Both
Lumo and Hull Trains have collectively benefited from a £160m
investment from FirstGroup.
Market
liberalisation in the EU, with open access competing with state
operators has proven popular. Seven of the ten busiest rail routes
in Europe have competition between
operators. On-Rail competition in a number of EU countries has led
to more services, increased efficiency and passenger demand, lower
fares, newer trains, better use of assets and reduced
subsidy.
Open
access businesses have demonstrated the innovation which private
operators can bring to the network – they have demonstrably proven
additive to rail market (often through modal shift away from less
sustainable modes), rather than abstractive of contracted
operations. The East Coast Mainline has recovered post-pandemic
quicker than any other line of route and is the only route in the
UK where passenger numbers have grown; with open access operators
playing a key role in this.
About FirstGroup
FirstGroup
plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With £4.7 billion in revenue and around 30,000
employees, we transported almost 2m
passengers a day in FY 2024. We create solutions that reduce
complexity, making travel smoother and life easier. Our businesses
are at the heart of our communities and the essential services we
provide are critical to delivering wider economic, social and
environmental goals. Each of our divisions is a leader in its
field: First Bus is one of the largest regional bus operators in
the UK, serving more than 20% of the population in the UK with a
fleet of around c.4,800 buses, and carrying more than a million
passengers a day. First Rail is one of the UK’s largest rail
operators, with many years of experience running long-distance,
commuter, regional and sleeper rail services. We operate a fleet of
c.3,700 locomotives and rail carriages through three DfT contracted
train operating companies: WCP (incorporating Avanti West Coast and
West Coast Partnership Development), GWR and SWR) and two open
access routes (Hull Trains and Lumo). We are formally committed to
operating a zero-emission First Bus fleet by 2035, and First Rail
will help support the UK Government’s goal to remove all
diesel-only trains from service by 2040. During FY 2024 FirstGroup
was named as one of the world’s cleanest 200 public companies for
the fifth consecutive year and
achieved Industry Top-Rated status for the first time with
Sustainalytics. We provide easy and convenient mobility, improving
quality of life by connecting people and communities.
Visit
our website at www.firstgroupplc.com and follow us @firstgroupplc
on X.