The directors present the strategic report for the year ended 31 December 2024.

On 28 February 2025, the controlling interest of the holding company was acquired by First Bus Holdings Limited. Since 28 February 2025, the company is considered to be wholly owned subsidiary of FirstGroup plc and part of

the Bus division of FirstGroup plc.

The primary activities of the Company are the provision of road passenger transport services in the Greater London area and the Company's principal customer is Transport for London (TfL).

2023 and 2024 have been challenging years for the Company, with the pressure of global inflation impacting significantly on the cost base. The London market remains highly competitive, and margins continue to erode as competition among operators increases within a contracting market. Operating activities are constantly reviewed to ensure they are both in line with government and TfL guidelines and are operating efficiently.

The Company is now running fully electric routes and is bidding for new routes on an electric basis where possible. Across all the operating companies in the UK group (the group headed by First Bus London Limited), six garages have electric charging infrastructure. TfL have accelerated their ambition for a 100% zero-emission bus fleet in London to 2030 and we continue to work closely with them in support of their strategic objective.

The Board measures, manages and monitors business performance across a number of financial and non-financial metrics and KPIs.

Principal risks and uncertainties

There are several potential risks and uncertainties that could have an impact on the company's long-term performance. The directors have established an ongoing process for identifying, evaluating and managing the significant risks and uncertainties faced by the company and continue to assess these on a regular basis in the light of internal and external events.

Specific business risks faced by the company include the following:

Competition risk

The company faces the risk of loss of customers through other bus companies providing improved services or more competitive pricing. Management mitigate the competitive pressure by monitoring competitors’ behaviour and strategies to ensure that the company acts appropriately under current market conditions.

Litigation and claims risk

The company has three main insurance risks: third party claims arising from vehicle and general operations; employee injuries; and property damage. FirstGroup plc has a very strong focus on safety, as one of its core values. The promotion of a ‘Safety First’ culture at all levels throughout the business minimises insurance premiums and other related claims.

Labour cost and employee relations and retention risk

Labour costs represent the most significant element of the company's operating costs. The directors continue to monitor employee recruitment, training, personal development and remuneration to ensure the company attracts and retains the right people. To retain the right people the company believes that good communication with employees is effected through regular briefing and negotiating meetings between the directors, the senior management and employee representatives on the central and depot negotiating committees. The briefing meetings enable senior management to consult employees and to ascertain their views on matters likely to affect their interests. The company recognises its obligations to give disabled people full and fair consideration for all vacancies within the statutory medical requirements for certain grades of staff. Wherever reasonable and practicable, the company will retain newly disabled employees and at the same time provide full and fair opportunities for the career development of disabled people. Details of the number of employees and related costs can be found in note 4 to the financial statements.

Fuel cost risk

Fuel cost represents a significant proportion of the company's cost base. Fuel prices are directly influenced by international, political and economic circumstances as well as natural disasters. Wherever possible, the group seeks to minimise the operational and financial impact of such events through fixed price forward contracts and other operational efficiency measures.

Environmental risk (including climate change)

FirstGroup plc recognises the importance of its environmental policies, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by the group’s activities. The company operates in accordance with group policies, which are described in the group’s Annual Report, which do not form part of this report. Initiatives designed to minimise the company’s impact on the environment include safe disposal of waste, recycling and reducing energy consumption.

Through our core business activities, we are committed to providing safe, good quality, reliable and cost effective public transport to all our customers. Our core business strategy is to increase customer numbers and encourage a greater move towards the use of bus transport. This will support the needs of society to achieve more sustainable travel. We recognise the environmental impacts arising from our business activities and are committed to reducing these through effective environmental management.

Economic risk

Economic risks to the business include increased costs due to inflation, changing customer needs, declining passenger demand, reduced operations due to industrial actions and reduced opportunities for growth. Whilst passenger demand has been stable, potential changes in passenger behaviours and the applicable economic conditions remain uncertain in the medium term. The company will prioritise a customer‑focused perspective and seek to provide innovative transport solutions, by adapting to market uncertainties and driving demand, and to focus on controlling costs to ensure it remains competitive.

For the 2024 financial year and up to 28 February 2025 the company followed the Corporate guidelines set out by RATP Group, the Company voluntarily complies with the Wates Corporate Governance Principles for large private companies as detailed below. From 1 March 2025 and for the next financial period the business will incorporate FirstGroup plc Corporate Governance principles.

In 2023 and 2024 the Board have continued to focus on the priorities set out last year on safeguarding the health and wellbeing of our colleagues, passengers and broader stakeholder groups across the wider community, while protecting our business has remained at the top of the Board’s agenda.

The Directors of the Company recognise their duty when making decisions, to act in the way they consider in good faith, which would be most likely to promote the success of the Company for the benefit of its members as a whole whilst having due regard to the matters set out in Section 172(1)(a-f) of the Companies Act 2006:

• the likely consequences of any decision in the long term;

• the interests of the Company's employees;

• the need to foster the Company's business relationships with suppliers, customers and others;

• the impact of the Company's operations on the community and the environment;

• the desirability of the Company in maintaining a reputation for high standards of business conduct; and

• the need to act fairly as between members of the Company.

In providing a leading passenger transport service, the Company works closely with a range of stakeholders, beyond our employee base, including TfL, Unions and suppliers without whom the operating business would not succeed. Meetings with stakeholders are held regularly at all levels of the Company’s organisation and decisions are taken with reference to their input and impact on the business operations and its sustainability. During the year, the Company electrified a number of garages to support its delivery of electric bus services that are contributing to TfL’s cleaner air agenda and long-term climate change mitigation in the community.

Suppliers

The Company engages with suppliers for the provision of services and products at all levels in the organisation and across all garages. Before COVID-19 restrictions, Board and management representatives would regularly attend supplier events to share ideas, build and develop relationships across the supplier network, this is now starting to slowly return as lockdown restrictions and social distancing measures eases. For key investments, such as electrification of the garage infrastructure, and financing of the vehicle fleet, competitive invitations to tender would be issued to the relevant suppliers in the market to source and select the most appropriate for the Company, before awarding contracts. TfL and relevant industry commissioning bodies would typically be consulted or engaged in the process of garage of electrification.

Decision-Making at the Board

All matters which under the Company’s governance arrangements are reserved for the decision by the Directors, are presented at board meetings. Directors are briefed on the background and reason for any proposal and the associated costs, benefits and risks, as well as any potential impacts and risks for our employees, partners and other stakeholders, including our suppliers, the community and environment and how they are to be managed. The Directors take these factors into account before making the final decision which together they believe is in the best interest of the Company and its member.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company are the provision of road passenger transport services in the Greater London area and the Company's principal customer is Transport for London (TfL).

The results for the year are set out on page 16.

No dividend were paid during the current or prior year. The Directors have not recommended payment of a final dividend (2023: £nil).

Future developments

In 2025, the Company aims to continue operating over 25% of its bus routes across its seven garages with an electric fleet of buses. The Company is operating in line with its business plan, with a continuing focus on electrification over the coming years as the Company supports the TfL ambition to have a 100% zero-emission bus fleet in London in the future by 2030. The Company is reviewing all activities and making changes as necessary to return to profitability, in particular by reviewing existing route performance and bidding sensibly for new routes as the opportunity arises.

On 28 February 2025, the controlling interest of the holding company was acquired by First Bus Holdings Limited. The senior management team joined the company over the last three years and have developed and implemented a comprehensive turnaround plan for the business. Good progress has been made since the implementation of the plan, both in enhanced bid discipline with c.30 routes rebid over the past two years across First Bus London, including the early termination of loss making routes at contract review dates as well as improved operational performance and cost control, and workforce stabilisation. This improvement in performance can be seen in the TfL Q2 FY 2025 Bus Operator League Tables, with the three subsidiaries occupying first, second and fourth place in the league table for “operated mileage before non-deductible losses”.

Supplier and customer engagement

As noted above in the Strategic Report, the terms of the Group Corporate Governance are consistent with section 172(1) of the Companies Act 2006 in that they say how the Company should operate and how it should conduct its relationships with its employees, suppliers, customers, members and other stakeholders, and the communities in which it operates.

In accordance with the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018), this section constitutes the Company’s statement on engagement with other key stakeholders.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Qualifying third party indemnity provision

The Company maintains Directors' and officers' liability insurance in respect of legal action that might be brought against its Directors. The Company has indemnified each of its Directors and other officers of the Company against certain liabilities that may be incurred as a result of their offices.

Strategic report

The Company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of:

• an indication of financial risk management objectives and policies required by paragraph 6(1)(a);

• an indication of exposure to price risk, credit risk, liquidity risk and cash flow risk required by paragraph 6(1)(b); and

• a statement describing the Company's policy regarding the hiring, continuing employment and training, and career development required by paragraph 10(3).

Financial instruments

The Company's activities expose it to certain financial risks. These include price risk related primarily to fuel prices, credit risk relating to trade receivables and liquidity risk. Management reviews financial risks regularly in accordance with Company policies. The Company uses a limited number of financial instruments to reduce exposure to commodity price risk but does not hold financial instruments for speculative reasons.

In response to the identified risks, the Company holds financial instruments to hedge financial risks associated with fuel purchases which are a major cost. Further details are given in note 17. The Directors have considered the credit and liquidity risks to be small, as the majority of trade receivables are from Transport for London and are settled on a regular basis in line with payment terms.

The Company's policy in respect of disabled persons is that their applications for employment are always fully and fairly considered, bearing in mind the aptitudes and abilities of the applicant concerned. In the event of a member of staff becoming disabled, every effort is made to ensure that employment with the Company continues and where necessary, appropriate training is arranged. It is the Company's policy that training, career development and promotion of disabled persons should, as far as possible, be identical with that of all other employees in similar position.

The Directors and managers of the Company place considerable value on consultative meetings with employees. Information on matters affecting employees and on various factors affecting the performance of the Company is disseminated through meetings, newsletters and training programmes. Employees' representatives are consulted regularly on a wide range of matters affecting employees' current and future interests.

Greenhouse gas emissions, energy consumption and energy efficiency action

In accordance with the disclosure requirements, the table below shows the Company’s greenhouse gas emissions during the financial year:

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.

Electrification plays a critical part of our business and partnership with Transport for London (TfL). In 2025, over 30% of our entire fleet will be fully electric, with six electric garages and one more planned to begin in 2026; this makes us the third largest operator of electric buses across London.

Elsewhere in our fleet we run a large number of hybrid diesel-electric buses, which are also much kinder to the environment than conventional diesel, as we work hand in hand with TfL to transition to a 100% zero-emission bus fleet by 2030 and continue to help London achieve its sustainability goals.

So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditor is unaware, and each Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

In preparing those financial statements, the Directors are required to:

•     select suitable accounting policies and then apply them consistently:

•     make judgements and accounting estimated that are reasonable and prudent:

•     state whether they have been prepared in accordance with UK-adopted International Accounting Standards:

•     Provide additional disclosure when compliance with specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance: and

•     Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business for the foreseeable future.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of London United Busways Limited (the ‘company’) for the year ended 31 December 2024 which comprise Income statement, the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity, the Statement of cash flows and notes to the financial statements, including material accounting policy information.

The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards.

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

•     have been properly prepared in accordance with UK adopted international accounting standards; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our audit procedures to evaluate the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included but were not limited to:

• Undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast significant doubt on the company’s ability to continue as a going concern;

• Reviewing the directors’ going concern assessment;

• Evaluating the key assumptions used and judgements applied by the directors, specifically to the ability to rely on the letter of support from the parent, in forming their conclusions on going concern;

• Review of the parent financial statements and ensuring they have the resources to provide the financial support to the company; and

• Reviewing the appropriateness of the directors’ disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors’ responsibilities statement set out on page 11, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation and anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:

• Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;

• Inspecting correspondence, if any, with relevant licensing or regulatory authorities;

• Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and

• Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation and the Companies Act 2006.

In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the accuracy and cut off assertions) and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:

• Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;

• Gaining an understanding of the internal controls established to mitigate risks related to fraud;

• Discussing amongst the engagement team the risks of fraud; and

• Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

The above results were derived from continuing operations.

The notes on pages 22 to 50 are an integral part of these financial statements.

The notes on pages 22 to 50 are an integral part of these financial statements.

The notes on pages 22 to 50 are an integral part of these financial statements.

London United Busways Limited ("the Company) is a private limited company by shares and is registered and incorporated in England and Wales. The registered office is Garrick House, Stamford Brook Garage, London, United Kingdom, W4 1SY.

The principal activity of the Company is the provision of road passenger transport services in Greater London.

The financial statements are presented in Pounds Sterling which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £1,000, unless otherwise indicated.

The financial statements have been prepared on a going concern basis in accordance with UK-adopted International Accounting Standards(IFRS). The financial statements have been prepared on the historical cost basis, except for the revaluation of certain properties and financial instruments that are measured at revalued amounts or fair value, as explained in the accounting policies below. The principal accounting policies adopted are set out below.

As at 31 December 2024, the Company has net liabilities of £26,261,000 (2023: £6,518,000). As the Company was loss making in the year, the ultimate parent company, FirstGroup plc, has given assurance to provide support to the Company for at least twelve months from the date of issuing this report.

The Directors are aware of the need to drive the Company back to profitability in the future outside the period covered by parental guarantee. During 2023, the Company evolved the management team to add experience and drive improvements in the underlying business. In 2024 and into 2025, the Company continues to invest in the modernisation of operating standards in the garages, investment in new technology and processes and further electrification of the garage infrastructure, with the expectation that these will reduce the operating loss in the short term and help drive the Company back to profitability in the future.

The Directors have therefore deemed it appropriate to prepare these financial statements on a going concern basis.

Revenue recognition is determined in accordance with IFRS 15 “Revenue from contracts with customers”. The standard prescribes a five-step model to account for revenue which includes: to identify the contract and its performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognise revenue when a performance obligation is satisfied.

Revenue is measured at an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods and services and represents amounts receivable from its customers and income from other commercial services, net of VAT. The majority of the Company’s revenue is generated from contracts with Transport for London (TfL). The Company together with other bus operators compete for TfL contracts, route by route, to provide specified services for up to seven years, and are rewarded for exceeding defined minimum performance standards, which are aimed at improving the service to passengers.

Other income that is incidental to the Company's principal activity of providing transport services is included within revenue and all such revenue relates to contracts with customers. This income is recognised as the income is earned and primarily relates to income from advertising.

All revenue is considered to represent the rendering of services in the United Kingdom.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Intangible assets consists of computer software and associated implementation costs of that software. None of the costs are internally generated. Intangible assets are stated at cost, less accumulated amortisation and any impairment losses.

Amortisation is charged to write off the cost over their useful lives using the straight-line method from 3 to 10 years.

Freehold land and buildings are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation, determined from market-based evidence by appraisal undertaken by professional valuers, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the reporting date. A revaluation was undertaken in December 2022 by an independent third party on a ‘fair value’ basis and the figures presented reflect this review.

Freehold land is not depreciated. Other classes of assets are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Right of use assets relates to long leasehold and buses which are depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the asset or the end of the lease.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

Assets under construction consists of the historical cost of assets under construction and not in use as at the reporting date. Depreciation is not charged against the asset until its completion and it has started to be utilised.

The Company assesses whether there are any indicators of impairment for all assets at each reporting date. The carrying values of property, plant and equipment, and investments are measured using a cost basis and intangible assets are reviewed for impairment only when events indicate the carrying value may be impaired.

In an impairment test, the recoverable amount of the cash-generating unit or asset is estimated to determine the extent of any impairment loss. The recoverable amount of the asset is quantified at the present value of expected future cash flows that will arise from the sale or use of the asset, and this is calculated as the greater of the fair value of the asset (reduced by any related selling costs), and value in the use of such assets. An impairment loss is recognised to the extent that the carrying value exceeds the recoverable amount.

In determining a cash-generating unit's or asset's value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the cash-generating unit or asset that have not already been included in the estimation of future cash flows.

Inventories consist of fuel as well as parts and materials required for the operation and maintenance of buses. These materials are valued at the lower of cost and net realisable value, being cost less due allowance for obsolete and slow moving items. Cost is based on the cost of purchase on a first in, first out basis.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial assets are classified as financial assets at fair value through profit or loss, fair value through other comprehensive income or amortised cost as appropriate. The Company determines the classification of its financial assets at initial recognition. All financial assets are recognised initially at fair value plus, in the case of instruments not at fair value through profit or loss, directly attributable transaction costs.

An impairment loss is recognised for the expected credit losses on financial assets where there is an increased probability that the counterparty will be unable to settle an instrument’s contractual cashflows on contractual due dates, a reduction in the amounts expected to be recovered, or both.

The probability of default and expected amounts recoverable are assessed using reasonable, and supportable past and forward-looking information that is available without undue cost or effort. The expected credit loss on trade receivables is a probability weighted amount determined from grouping the receivables based on days overdue and making assumptions based on historic information to allocate an overall expected credit loss rate for each group.

Trade and other receivables are initially recognised at fair value plus transaction costs, when the Company becomes party to the contractual provisions of the instrument. The Company recognises an allowance for expected credit losses for customers and other receivables and the impairment provision to be recognised on origination of the customer balance based on its estimated credit loss and assessed throughout the life of the balance. Any changes in their value through impairment or reversal of impairment is recognised in the statement of comprehensive income.

Trade payables are not interest bearing and are stated at their amortised cost.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

The Company's activities expose it to certain financial risks including changes in fuel prices. The Company uses forward contracts to hedge these exposures when considered appropriate, and only when the forecasted transaction which is being hedged is considered highly probable. The Company does not use derivative financial instruments for speculative purposes. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised in other comprehensive income and the ineffective portion is recognised immediately in the statement of comprehensive income. If the cash flow hedge of a forecasted transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in the statement of comprehensive income in the same period in which the hedged item affects net profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the statement of comprehensive income as they arise.

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted at the reporting date.

Deferred tax is recognised in respect of temporary timing differences that have originated but not reversed at the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the statement of financial position and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.

A provision is recognised in the statement of financial position when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the Directors' best estimate of the expenditure required to settle the Company's liability. No discount is applied due to the lack of certainty over the timing of settlement and it is not expected that any discounting would be material.

The Company also operates a defined contribution retirement scheme. The contributions of this scheme are recognised as an expense when they fall due. The scheme is open to employees to join, in accordance with the Pension Deed rules and the employee satisfying the scheme eligibility conditions. The scheme permits contributions from both the Company, which are accounted for as and when they fall due, and also contributions paid by the employee into the scheme, which are in general, subject to some exceptions, a deduction from the employees’ salary.

For any new contracts entered into, the Company considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. All leases entered into pre 1 January 2019, have been accounted for under IFRS 16.

At lease commencement date, the Company recognises a right-of-use asset and a lease liability. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.

On the statement of financial position, right-of-use assets have been included in property, plant and equipment.

Fair value measurement

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

In the current year, the following new and revised Standards and Interpretations have been adopted by the company and have an effect on the current period or a prior period or may have an effect on future periods:

Standard or Interpretation                        Effective for annual periods

commencing on or after

Classification of liabilities as current                 1 January 2024

or non-current (Amendments to IAS 1)

Lease Liability in a Sale and Leaseback                 1 January 2024

(Amendments to IFRS 16)

Non-current Liabilities with Covenants                 1 January 2024

(Amendments to IAS 1)

Supplier Finance Arrangements                     1 January 2024

(Amendments to IAS 7 and IFRS 7)

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:

Standard or Interpretation                        Effective for annual periods

commencing on or after

Lack of exchangeability                  1 January 2025

(Amendments to IAS 21)

IFRS 9 Financial Instruments and IFRS 7 1 January 2026

Financial Instruments: Disclosures (Amendment):

Classification and Measurement of Financial Instruments

IFRS 9 Financial Instruments and IFRS 7 1 January 2026

Financial Instruments: Disclosures (Amendment):

Contracts Referencing Nature-dependent Electricity

Annual Improvements to IFRS Accounting Standards - Volume 11 1 January 2026

IFRS 1, IFRS7, IFRS9, IFRS10, IAS7

None of the standards listed above are expected to have a material effect on the financial statements.

The preparation of the Financial Statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimation of the insurance claims provision is based on an assessment of the settlement of known claims. Given the varying factors that determine the cost of an incident, the Company makes assumptions based on past experience of similar incidents as well as the advice of its lawyers and insurers. The provision for insurance claims is sensitive to assumptions regarding the settlement value and timing of the claims. The estimate is based on historical claims experience, current legal advice and input from insurers. No material changes were made to the assumptions compared to the prior year and the estimation uncertainty remains unresolved due to the above combination of assumptions.

In determining the carrying value of assets, the Company estimates the residual value of buses and the useful life of assets. These estimates are based on past experience as well as an analysis of operational value in use and comparable rental values/investment yields provided by a third party. The Company estimates the fair value of land and buildings on an annual basis with the assistance of external valuation experts. The fair value of land and buildings is sensitive to market conditions and valuation inputs. These sensitivities reflect reliance on third-party valuations and observable market trends. The assumptions remain consistent with prior year methodology, however, market volatility continues to create estimation uncertainty.

The key judgements made by the Directors in the process of applying the Company’s accounting policies that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities, including those that are made using key sources of estimation uncertainty as at the reporting date, are set out below:

The Company recognises deferred tax assets where there is either a right of offset against a deferred tax liability or where there are expected to be sufficient taxable profits in the future to utilise any asset. The judgement on whether sufficient taxable profits will arise is made on the basis of the Company’s budgets and forecasts, which reflect assumptions made on how the business will perform going forward. The level of deferred tax currently recognised in the Financial Statements is based on the forecast level of future profits in the Company's budgets. Deferred tax asset recognition depends on forecasts for future taxable profits. The deferred tax asset recognised is therefore sensitive to these forecasts and any changes that might occur. No material changes were made to forecast methodology from prior year however, there continues to be a drive to increase the accuracy and detail of forecasting through ongoing analysis. Given the inherent uncertainty in long-term profit forecasts, the recoverability of deferred tax assets continues to be subject to estimation risk.

In determining the carrying value of assets, the Company makes a judgement as to whether any assets are no longer usable and, where that is deemed to be the case, the Directors make a judgement as to whether an impairment is appropriate. The recoverable amount of assets tested for impairment is sensitive to assumptions around future cash flows and discount rates. The key assumptions include projected EBITDA margins and growth rates which are based on internal budgets. Based on the above process, a judgement is made on whether in impairment is required and if so the amount of such an impairment. There were no significant changes in methodology from the prior year, and uncertainty remains due to macroeconomic conditions. There were no impairment indicators in the period.

All of the Company's revenue derives from the provision of road passenger transport services within the United Kingdom.

The charge for the year can be reconciled to the loss per the income statement as follows:

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

An amortisation charge of £200,000 (2023 £221,000) has been included within administrative expenses.

The Company leases some long leasehold land and buildings with an average lease term of 6.2 years (2023: 7.1 years) as well as buses with an average lease term of 3.5 years (2023: 2.9 years). The net book value of owned and leased assets included as “Property, plant and equipment” in the statement of financial position is as follows:

The net book value amount of £698k transferred out of buses relates to contractual refurbishment costs. These had been previously capitalised. The amounts have been transferred to contract costs recoverable within Trade and other receivables.

In December 2022, land and buildings were revalued by the Directors of the Company in line with market value increases as provided by an independent third party property consultancy. The external valuer has provided a ‘fair value’ valuation as at 31 December 2022. In December 2024 the Directors of the company assessed that no further revaluation was necessary in 2024.

At 31 December 2024, had the land and buildings of the Company been carried at historical cost less accumulated depreciation and accumulative impairment losses, their carrying amount would have been £10,648,000 (2023: £11,420,000).

The revaluation surplus is disclosed in the statement of changes in equity.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.

A deferred tax asset is recognised in respect of unused tax losses carried forward only to the extent that the Company considers it probable that there will be sufficient future taxable profit against which the loss can be utilised. The utilisation of the deferred tax asset recognised above is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences. These temporary differences relate to the super-deduction taken on qualifying special rate assets in the year.

The Company has an unrecognised deferred tax asset of £15,875,000 (2023 £20,238,000) relating to carried forward trading losses, due to uncertainty over the timing of future profits against which these could be offset.

There is no material difference between the carrying value of inventory and its replacement cost.

Trade receivables are primarily due from one counterparty, however the Directors do not consider the Company to be significantly exposed to credit risk because the debtor is a government body. Other receivables are linked to the services provided to the primary customer in relation to QIC (Quality Incentive Contracts) bonuses and settlements and provisions in relation to these balances are aligned with trade receivables.

The amounts owed to fellow group undertakings are unsecured, interest free and repayable on demand.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

Loan from parent undertaking of £75.650,000 (2023: £52,500,000) is charged interest at SONIA + 1.76% (2023: SONIA + 1.46%), is unsecured and repayable on demand.

Bank overdraft incurs interest at Bank of England Base Rate +4%.

Provision for claims against the Company, mainly for motor related incidents, are established when it is considered probable that the Company will be liable for the claim cost and that this can be reliably measured. Claims may relate to personal injury and / or vehicle damage and the Company is advised by 3rd party claims-handling agents on the likelihood of the claim outcome and the estimated monetary cost, both of which are monitored and updated over time.

The majority of claims are anticipated to be settled within five years of the balance sheet date, although the timing of any outflow is dependent on the settlement of each individual claim.

All categories of Ordinary shares hold one vote each. The shares in issue rank pari passu in all respects, except as-otherwise stated within the Company's articles. They entitle the holder to participate in dividends, and to share in the proceeds of winding up the Company in proportion to the number of and amounts paid of the shares held.

Accumulated losses are the cumulative losses of the Company after accounting for dividends.

The remuneration of directors, who are considered key management personnel is disclosed in note 9.

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

The sales to and purchases from related parties are made at terms equivalent to those that prevail in arm's length transactions. These include management charges from the parent undertaking and charges for shared services as well as management charges to fellow subsidiaries.

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.

The remuneration of Directors, who are considered key management personnel, is disclosed in note 9.

RATP Dev UK Ltd (RD UK) entered into futures for the purchase of fuel on behalf of RATP’s UK Group, then entered into back-to-back contracts with the relevant trading entities, including London United Busways Limited. Each of RD UK's trading companies are responsible for purchasing fuel on its own behalf. This ended on 28 February 2025 following change of ownership of First Bus London Limited.

The directors regard FirstGroup plc, a company incorporated in the United Kingdom and registered in Scotland, as the ultimate parent and controlling company, which is the smallest and largest group that includes the company's results and for which Group financial statements are prepared.

Copies of the financial statements of FirstGroup plc can be obtained on request from the registered address 395 King Street, Aberdeen, AB24 5RP.

The Company's immediate parent company is First Bus London Limited formerly known as RATP Dev Transit London Limited, a company registered in England and Wales.