Author Topic: First to sell off 7 operations ?  (Read 16384 times)

Offline Jamie V (AO02RBX)

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Re: First to sell off 7 operations ?
« Reply #30 on: August 03, 2012, 11:21:07 AM »
Well theory blown apart seems First buying in secondhand for Yarmouth and Lowestoft I just read
Its a more cheaper const effective way of bring "newer" buses in, i mean they did the same at the Worecester operations by getting them Centro's which are sound pieces of kit.

Offline suffolkraider

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Re: First to sell off 7 operations ?
« Reply #31 on: August 03, 2012, 09:57:11 PM »
Ahh yes Centro's niiiice can we have some hmmm ???  Yes it does get newer stuff in but to be honest anything single decker  newer than 2000 is a bonus lol It just looks from the outside that there was no real investment this end of the world but lets cascade any non lez bus east perhaps I am jaded a bit looking at Anglian and how they have grown, used to deliver parts to them when they had their Ford R series because at the time all you had was National and I feel now looking back and today First have sort of reverted back to that run what ya brung mentality of a nationalised company but have now found that it's not all plain sailing Maybe I am simplifieing stuff to fit have a haulage background so do tend to get bleed over lol
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Offline RalphAdams1948

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Re: First to sell off 7 operations ?
« Reply #32 on: August 07, 2012, 08:33:16 PM »
No one has made any comments on the need to raise £100 million from the sale of group operations. This will not be achieved by selling Northampton, Great Yarmouth or other break even operations. First must sell at least one quality asset for the capital (I will not give an example as I have no inside knowledge and do not want to give unnecessary worry to anyone),  whilst also closing / disposing of operations that are not performing.

The problem is who has £100 miilion available and wants to buy a division that will not worry the competition authorities. So Arriva would be at risk trying for Leeds

Offline Steves

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Re: First to sell off 7 operations ?
« Reply #33 on: August 08, 2012, 09:16:15 AM »
The problem is who has £100 miilion available and wants to buy a division that will not worry the competition authorities. So Arriva would be at risk trying for Leeds

That has to be the problem for First (and for the staff).  If North Devon caused a referral to the Competition Commision, almost anything of significance would as well.  I wonder of the King's Lynn sale would get through without a referral in the current climate?

There are some possibilities that are likely to get through without a referral - Stagecoach in Southampton and Leeds come to mind.  However, in that situation, Stagecoach would be a the sole bidder which strengthens their bargaining power and reduces the value of the sale to First

The method adopted in North Devon and East Scotland stems the losses but it can't make as much for First who will have to pay redundancy pay for the staff unless they can offer them other jobs and then sell the premises separately. 

And a really off the wall idea, National Express have said that they would consider purchasing other bus and coach operations.  They could buy any or all of the First cast offs without a referral with the possible exception of West Midlands.  National Express is mainly run by ex-First people so they are likely to know where the skeletons are buried.  However, since the comment was made at least a year ago, National Express has not bought any UK operations.

Offline Jamie V (AO02RBX)

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Re: First to sell off 7 operations ?
« Reply #34 on: August 08, 2012, 04:42:29 PM »
Also remember area's such as Gt Yarmouth & Lowestoft depend on the tourists visiting the area's too to make a good return.
I give the current fleet some credit they have been hammered to death but i mean was anyone complaining when First were operating VR's 10-12 years ago which were of similar age which got replaced with newer stock such as the Olympians ??

Everything comes and goes and its now the time for the late 90's SLF's to be replaced but First don't have a vast number of LF single decks from the 2000's upwards hence i think they have got a twist with it.

They certainly got enough rigid singles & double decks but would you want them going around a local housing estate which once had Mercedes Benz 709's Beavers?

Offline SURREYMAN

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Re: First to sell off 7 operations ?
« Reply #35 on: August 12, 2012, 05:39:39 PM »
No one has made any comments on the need to raise £100 million from the sale of group operations. This will not be achieved by selling Northampton, Great Yarmouth or other break even operations. First must sell at least one quality asset for the capital (I will not give an example as I have no inside knowledge and do not want to give unnecessary worry to anyone),  whilst also closing / disposing of operations that are not performing.

The problem is who has £100 miilion available and wants to buy a division that will not worry the competition authorities. So Arriva would be at risk trying for Leeds
You make a very valid set of points.
 With ref to CC/Oft current issues, it would appear that the UK is in effect a 'Patchwork Quilt' i.e a company cannot buy another company that is, as it were, 'next door', without attracting the attention of the C.C.
I think First will have to sell rather more than one quality asset, I am personally hoping that First put a sizeable number of their more profitable bus subsidiaries on the for-sale block.
My guess is that Aberdeen, Glasgow no1, Manchester (excluding Wigan!) most of West & South Yorkshire, Bristol/Bath, Swansea/Port Talbot, Norwich & Eastern Essex, Southampton/Fareham/Portsmouth and West London are all 'Core' areas which would be retained.

As to who would buy, well Stagecoach/Go-Ahead/Arriva have access to the kind of funds needed, and I would include RATP & Transdev-Veolia.
Of course small peripheral operations i.e Haverfordwest could go to smaller independent bus companies or even management buyouts.

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Re: First to sell off 7 operations ?
« Reply #36 on: August 13, 2012, 07:15:12 AM »
Haverfordwest is quite a money maker and works very well in my eyes it the only place there services work.they may run ex glasgow 05 plate darts but it work and don't think sidcox is bothered by them to take over them

Offline SURREYMAN

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Re: First to sell off 7 operations ?
« Reply #37 on: August 13, 2012, 06:46:14 PM »
Haverfordwest is quite a money maker and works very well in my eyes it the only place there services work.they may run ex glasgow 05 plate darts but it work and don't think sidcox is bothered by them to take over them
Thats a good reason for First to sell it - If it makes money someone will actually consider buying it!
Also it's out on a limb and therefore has no long term strategic value.
If First are serious about raising £100m from disposals then they are going to have to auction some of their more sizeable companies.
Wouldn't it be nice if the only First presence in Norfolk/Suffolk was the Norwich operation!

Offline Dale

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Re: First to sell off 7 operations ?
« Reply #38 on: August 13, 2012, 07:35:11 PM »
Why should they keep Norwich ?

It's assumed to be a profitable operation but will probably become an 'outpost' - so no point in keeping it if someone [GoAhead ?] offered a sensible amount.

Dale


Offline SURREYMAN

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Re: First to sell off 7 operations ?
« Reply #39 on: August 17, 2012, 08:40:26 PM »
No one has made any comments on the need to raise £100 million from the sale of group operations. This will not be achieved by selling Northampton, Great Yarmouth or other break even operations. First must sell at least one quality asset for the capital (I will not give an example as I have no inside knowledge and do not want to give unnecessary worry to anyone),  whilst also closing / disposing of operations that are not performing.

The problem is who has £100 miilion available and wants to buy a division that will not worry the competition authorities. So Arriva would be at risk trying for Leeds

Rumour on another web site that Stagecoach has bought Chester - Please note this is a rumour and is not confirmed fact.
Same source indicates that some of Firsts Scottish operations/depots up for sale.

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Re: First to sell off 7 operations ?
« Reply #40 on: October 31, 2012, 01:27:04 PM »
First Wigan has now been sold to Stagecoach. Wonder if the OFT/CC will get involved with this after the happenings at Barnstaple?

http://otp.investis.com/clients/uk/stagecoach/rns/regulatory-story.aspx?cid=273&newsid=279930

Offline Suzy Scott

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Re: First to sell off 7 operations ?
« Reply #41 on: October 31, 2012, 03:24:11 PM »
ACQUISITION OF WIGAN BUS OPERATIONS FROM FIRST MANCHESTER LIMITED

31 Oct 2012

Stagecoach Group plc ("Stagecoach") is pleased to announce that Greater Manchester Buses East Limited, a wholly owned indirect subsidiary of Stagecoach, has agreed to acquire the Wigan bus business and assets from First Manchester Limited ("First") for a consideration of £12 million.

The business being acquired operates commercial bus services and a small number of school contracts, employing approximately 300 people.

In the 12 months to 31 March 2012, the business had revenues of £13.2 million, EBITDA of £2.2 million and an operating profit of £1.5 million.

The purchase includes the owned Locket Road depot in Wigan, as well as some leased premises in Wigan bus station, staff facilities and approximately 120 vehicles. Around 20 of the vehicles are owned by Transport for Greater Manchester, mostly as part of school contract operations.

The acquisition will allow Stagecoach to expand its successful bus operations in the Greater Manchester region, where it already operates around 630 buses and employs 1,850 staff.

The Wigan operations will become part of Stagecoach Manchester, which carries nearly 100 million passengers a year and is led by Managing Director Chris Bowles.

Staff will transfer to Stagecoach's Greater Manchester Buses East Limited business under TUPE arrangements.

Stagecoach expects the acquisition to be completed in early December 2012.

Les Warneford, Managing Director of Stagecoach UK Bus, said: "We have a strong track-record of attracting more people to bus travel and these new operations will expand our successful high-quality operations in other parts of Greater Manchester.

"We will continue to focus on providing customers with the best value fares of any major bus operator in the UK, investing in our networks and delivering punctual and reliable services.

"Our people are central to our growth plans and we look forward to welcoming our new employees to the company."
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Offline TCD813

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Re: First to sell off 7 operations ?
« Reply #42 on: October 31, 2012, 06:40:11 PM »
And I'd expect this one to go through without OfT/CC intervention, given the number of (potentially) competing operators in Wigan.

See: http://en.wikipedia.org/wiki/Wigan_bus_station
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Offline passenger933

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Re: First to sell off 7 operations ?
« Reply #43 on: October 31, 2012, 07:06:59 PM »
A challenge for Stagecoach given that Wigan was recently found to be one of the most car-dependent towns in the UK. (nothing to do with First's presence of course  ;)). The quoted financial results for the Wigan operation don't look too bad IMO - 1.5 m net profit on revenue of 13.2 m equates to 11.4 %. 

Offline TCD813

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Re: First to sell off 7 operations ?
« Reply #44 on: November 01, 2012, 08:20:42 AM »
A challenge for Stagecoach given that Wigan was recently found to be one of the most car-dependent towns in the UK. [...]

I was surprised about that, but, thinking about it, parts of the Borough are surprisingly rural.

Here is a link to the Which are the most car dependent cities? report from the Campaign for Better Transport.
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Offline grahamk48

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Re: First to sell off 7 operations ?
« Reply #45 on: December 01, 2012, 02:32:39 PM »
Today is the last day of First operating in Wigan, according to someone i've just been speaking to the change over is at 5am tomorrow morning. Birkenhead is expected to change over in 2 weeks time. Looking forward to many more last days of First operation especially in Northampton.
« Last Edit: December 01, 2012, 06:18:33 PM by grahamk48 »

Offline barryb

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Re: First to sell off 7 operations ?
« Reply #46 on: December 01, 2012, 09:09:30 PM »
A challenge for Stagecoach given that Wigan was recently found to be one of the most car-dependent towns in the UK. (nothing to do with First's presence of course  ;)). The quoted financial results for the Wigan operation don't look too bad IMO - 1.5 m net profit on revenue of 13.2 m equates to 11.4 %.


That's quite low for bus companies; Stagecoach hits over 18% on bus services outside London.

Offline Cheltonian

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Re: First to sell off 7 operations ?
« Reply #47 on: December 02, 2012, 09:25:01 AM »


That's quite low for bus companies; Stagecoach hits over 18% on bus services outside London.

That's why First is selling it off. Dont be surprised to see Wigan achieving the same level as other subsidaries under Stagecoach ownership.
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Offline barryb

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Re: First to sell off 7 operations ?
« Reply #48 on: December 02, 2012, 11:33:27 PM »
That's why First is selling it off. Dont be surprised to see Wigan achieving the same level as other subsidaries under Stagecoach ownership.

I won't be.  In financial terms First are awful; a comparatively debt ridden and unprofitable mess.  It's reassuring to see that being awful for customers turns into being awful for business too.
« Last Edit: December 02, 2012, 11:35:47 PM by barryb »

Offline dwarfer1979

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Re: First to sell off 7 operations ?
« Reply #49 on: December 03, 2012, 08:53:00 AM »

That's quite low for bus companies; Stagecoach hits over 18% on bus services outside London.
11.4% is actually quite good for a bus company, Stagecoach may hit 18% but that is only on the best operating areas and is not normal or average.  An 11.4% margin is a fairly acceptable average for the bus industry (as noted in Passenger Transport it is in the middle of the margins for Brighton & Hove (11.3%) & Lothian (11.5%), Stagecoach may aim for higher margins than those operators/groups but anything in double figures tends to be considered a good performer.  If you want bad margins look at the Chester & Wirral purchase which has a 600k profit on a similar size operation (which is why Stagecoach paid less than a quarter of what they paid for Wigan for a fleet with as many buses or the same as for Bluebird which runs about a quarter of the number of buses).

Offline barryb

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Re: First to sell off 7 operations ?
« Reply #50 on: December 03, 2012, 05:55:26 PM »
I'm not normally so sad as to actually have the figures... but I'm doing an accounting degree in my spare time and used Stagecoach, First and National Express as an example for my last bit of work!

Stagecoach's profit from UK non London bus operations has actually been 18%!  It's all the other businesses that drag the average down, in particular rail.

In their last sets of accounts First had UK bus revenues of £1,157.2m and profit of £134.4m, against £1140.2m and £176.2 for Stagecoach.  This is despite the fact that (far) less profitable London bus operations accounted for £230.5m of Stagecoach's revenue but only £219.9m of First's larger revenue.

First also has a huge debt pile to service; it's profit is around 2.5 times its interest bill, whereas for Stagecoach it's closer to 7 times.

There are a couple of indicators where First comes out on top of Stagecoach; I think one was that it has more available cash in the bank, and I think another was that although First has a lot of debt, it is long term debt and Stagecoach needs to refinance a massive percentage of its borrowing within the next 5 years.

I don't know about Brighton & Hove, but Lothian has certainly had a dreadful patch over the last few years because of the disruption caused by the tram works.  Before then it was doing a lot better; despite coming out the other end of a brutal bus war, and despite being publicly owned and perhaps therefore having the possibility to be tempted by lacking an 100% drive for the profit motive!
« Last Edit: December 03, 2012, 06:11:34 PM by barryb »

Offline TCD813

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Re: First to sell off 7 operations ?
« Reply #51 on: December 03, 2012, 06:28:39 PM »
I'm not normally so sad as to actually have the figures... but I'm doing an accounting degree in my spare time and used Stagecoach, First and National Express as an example for my last bit of work!

Nothing sad about that, Barry. And good for you for furthering your education.

There are a couple of indicators where First comes out on top of Stagecoach; I think one was that it has more available cash in the bank, and I think another was that although First has a lot of debt, it is long term debt and Stagecoach needs to refinance a massive percentage of its borrowing within the next 5 years.

I wouldn't imagine that Stagecoach's debt refinancing would be a problem. If you recall, On 7 October 2011, a general meeting of the shareholders of Stagecoach Group plc approved proposals to return approximately £340m to its shareholders. The return of cash took place on 21 October 2011.

However, Stagecoach goes in reverse after Citigroup cuts rating on outlook fears
Quote from: Nick Fletcher, Friday 14 September 2012, guardian.co.uk
Citigroup moved its recommendation from buy to neutral ... Citi says Stagecoach's UK rail and bus businesses face headwinds ... Citi said: Since 1 April Stagecoach has gained 14% versus its peers at 9% to falls of 7%. We do not see sufficient upside in non-rail businesses to support a further increase in valuation and higher target price.

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Offline barryb

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Re: First to sell off 7 operations ?
« Reply #52 on: December 03, 2012, 06:36:36 PM »
Indeed; people will want to lend money to a highly profitable company.  If I had the odd spare billion kicking around I'd certainly consider lending a hundred million or so of it to Stagecoach!

They seem to have the magic touch that first lack.  Compare the fates of MegaBus and Greyhound, for example!
« Last Edit: December 03, 2012, 06:41:54 PM by barryb »

Offline TCD813

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Re: First to sell off 7 operations ?
« Reply #53 on: December 03, 2012, 07:20:11 PM »
... Compare the fates of MegaBus and Greyhound, for example!

Quite!
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