Sir Brian Souter, the Scottish chairman of transport group Stagecoach, is expanding his own bus business across Europe as he develops his portfolio of private investments.
The Stagecoach founder plans to double the size of his intercity bus business in Poland, which currently has a fleet of 140 vehicles. He is also looking at rolling out the model to countries including Ukraine, which he said he would enter if political unrest subsided and corruption lessened.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email
ftsales.support@ft.com to buy additional rights.
http://www.ft.com/cms/s/0/ab9885b8-d51d-11e3-9187-00144feabdc0.html#ixzz30yjbvn4q
If these risk indicators were to improve a bit we certainly think theres some great business opportunities and we think the market is just ready for that type of product, he said.
Sir Brian purchased a majority stake, believed to by 75 per cent, of the Finnish bus operator OnniBus.com for an undisclosed sum on Tuesday. The aim is to grow the intercity express coach service in a similar way to the business in Poland, which he set up in 2011.
Polski bus has won customers on its buses between Polish cities and to Berlin, Bratislava, Prague and Vienna by offering cheap fares, free WiFi and sometimes free food.
It is similar to Stagecoachs Megabus, which in the US is the groups fastest-growing business with revenues of $91m in the first half of its present financial year.
Since Sir Brian handed the job of Stagecoach chief executive to Martin Griffiths a year ago, he has acted as an adviser and has worked on business development.
He is advising Stagecoach on rolling out Megabus in Europe as the market opens up, although not into the countries he is looking at extending his private bus business into.
Stagecoach investors dont want to be investing in Ukraine or some place like that, its too high a risk for Stagecoach, he said.
National Express, the UK-listed bus and rail group, has also extended its bus business out of the UK into Spain, Morocco and Germany as well as the US.
The risk is that the market [in eastern Europe] is facing the same trends as the UK did 40 or 50 years ago and GDP and car ownership rises and public bus use declines, said Gerald Khoo, transport analyst at Liberum.
There may well be potential, but it feels like a relatively small and low-yield market.
Along with his sister, Ann Gloag, with whom he founded Stagecoach, Sir Brian is ranked at 118 in the Sunday Times Rich List of the wealthiest people in Britain, with a fortune of £730m.
The net value of Souter Investments increased by 21 per cent a year during the past three years, and six months ago the then 120 investments were worth £334m. They span financial services to healthcare, and the portfolio has profited from recent sales in the esure Group, Sunseeker and Argent Energy.
Transport businesses include Turkish ferry operator IDO, which is also expanding, as well as bus and ferry businesses in New Zealand.
Sir Brian said he would look at investing in large UK airports, with a partner who would run the operations. He looked at buying Edinburgh airport in 2011 and his sister bought Manston airport in Kent, which is struggling. UK regional airports were an unattractive investment, he said.
These small regional airports are very difficult to make money on, he said. You need very strong organic growth to make any of these deals really work at the multiples people are paying.
