First Group: General Discussion

[TheGrandWazoo]

You can but with something specialist where there is an unproven market for it, the lessor is far more likely going to want to recoup the whole cost of the vehicle on the initial lease due to fears about not being able to place the asset again or sell it, which will result the lease either being long and/or the overall cost of lease being very high, which negates any benefit from leasing in the first place.

The only place bendy buses tend to be ordered right now are for contracted operations, park and rides and airport shuttles etc - normally these services are tendered for a medium term duration and often the operators who procure vehicles for such operations will have the leases for the vehicles aligned with the contract dates.

Indeed, given the debacle with London bendis, a full underwrite would be necessary. As I say though, it was a fundamentally flawed concept, irrespective of how the vehicles were funded.

 

[DragonEast]

Classic case of emperors new clothes.

Yep, but I thought the point was the emperor's new clothes successfully fooled us?

 

[TheGrandWazoo]

Yep, but I thought the point was the emperor's new clothes successfully fooled us?

Not my understanding of the tale.

Wasn’t the emperor fooled by some unscrupulous souls, who sold him something that wasn’t really material (in more ways than one) whilst toadying members of the court feigned approval?

 

[baza585]

Not my understanding of the tale.

Wasn’t the emperor fooled by some unscrupulous souls, who sold him something that wasn’t really material (in more ways than one) whilst toadying members of the court feigned approval?

Correct, and why it is particularly relevant to the sorry tale of the ftr.......

 

[TheGrandWazoo]

Correct, and why it is particularly relevant to the sorry tale of the ftr.......

In that someone sold some illusory benefits of FTR to Moir, and that people were too intimidated to point out the fallacy and instead went along with it, nodding at the appropriate moments

 

[Robertj21a]

In that someone sold some illusory benefits of FTR to Moir, and that people were too intimidated to point out the fallacy and instead went along with it, nodding at the appropriate moments

Spot on.

 

[overthewater]

Just to say the accounts have started to appear......

 

[Volvodart]

As always at this time of year!

 

[overthewater]

I predict midland bluebird accounts will be very healthy,

 

[Volvodart]

Tim did say all of Scotland was doing ok at the six monthly accounts reveal last month, but these accounts will still have the Borders losses plus whatever they may have had to write off with the sale.

 

[Robertj21a]

A quick look at the basic Operating Profit for First Manchester shows that a profit of £1.273m to March 2016 became a massive loss of £5.164m to March 2017, mostly due to the restructuring costs associated with the closure of Bury depot. Ouch !

 

[DragonEast]

Spot on.

No doubt the accounts will be as informative as ever in telling us what we already know.

I think of First as the Baldrick of the British bus business. Awaiting the next cunning plan . . .

 

[BradK2017]

A quick look at the basic Operating Profit for First Manchester shows that a profit of £1.273m to March 2016 became a massive loss of £5.164m to March 2017, mostly due to the restructuring costs associated with the closure of Bury depot. Ouch !

& in the same business report,they mentioned profits declining also "due to the ageing of the fleet",well hope they get more used to that with the new first policy of only investing in certain areas!

I Was also surprised to see First West Yorkshire (possibly their main cash cow apart from Glasgow) drop almost £5m in profits,from £16.079m to £11.762m,bet they are keeping fingers crossed the 284 new buses in Leeds hopefully pick that back up!

 

[Robertj21a]

& in the same business report,they mentioned profits declining also "due to the ageing of the fleet",well hope they get more used to that with the new first policy of only investing in certain areas!

I Was also surprised to see First West Yorkshire (possibly their main cash cow apart from Glasgow) drop almost £5m in profits,from £16.079m to £11.762m,bet they are keeping fingers crossed the 284 new buses in Leeds hopefully pick that back up!

To me, the key phrase in the FWY Accounts was that there 'has been a change in the allocation of group overheads, which has increased overhead expenses incurred by the company by £3.1m'. That, to me, smacks of this year's massaging of figures in an attempt to shield even worse figures elsewhere.

 

[overthewater]

How bad are the accounts for Berkshire and Pottiers? Also how on earth does it cost £6m to restructure?

 

[DragonEast]

I'm no accountant (and I know it shows) but to me it all smacks of minimising tax liabilities and maximising claims. After all when the Government plays fast and loose with subsidies (ENCTS) why shouldn't the recipients play the game?

 

[TheGrandWazoo]

How bad are the accounts for Berkshire and Pottiers? Also how on earth does it cost £6m to restructure?

I don't know but I'd not be surprised if the Dukinfield premises (and possibly the Bury depot) may have been leased. A lease may be many years though with a break clause at a certain point. You can trigger the break mechanism but you'll still have to pay most if not all of the total lease.

There are the usual things about redundancy etc, and don't know if there had to be any works undertaken at the other depots to accommodate the displaced vehicles.

Should also be noted that they state that the closure cost is the main reason - note that revenue dropped by £3m so not all the £6m variance can be laid at the door of restructuring costs.

 

[DragonEast]

I don't know but I'd not be surprised if the Dukinfield premises (and possibly the Bury depot) may have been leased. A lease may be many years though with a break clause at a certain point. You can trigger the break mechanism but you'll still have to pay most if not all of the total lease..

And don't forget dilapidation claims, especially if the depot has been neglected for years! That's caught a fair few (especially long-term) tenants; and landlords, justifiably, are much less forgiving than they were in a better economic climate. Damned if you do and damned if you don't describes a lot of business (like the rest of life).

 

[TheGrandWazoo]

And don't forget dilapidation claims, especially if the depot has been neglected for years! That's caught a fair few (especially long-term) tenants; and landlords, justifiably, are much less forgiving than they were in a better economic climate. Damned if you do and damned if you don't describes a lot of business (like the rest of life).

Very good point. Dilaps can be levied even if the building is maintained as it is to get the building back to original condition so somewhere like Dukinfield may well attract some on that basis.

 

[F Great Eastern]

People strongly suspect the First Aircoach figures have been manipulated in Ireland - they turned over 8 million in profit last year and paid a 10m dividend to Firstbus (South) Ltd.

Notably they say in the accounts they have took the option to decline to list transactions with fellow group undertakings in their company accounts.

Supposed to be news about the future fleet plan of that company next week where they may see sizable number of new vehicles come in, although there's speculation if it will be done on the cheap and in a short sighted way.

 

[d1672]

Yet there are plenty of shift workers all over the place but the bus companies had failed to keep up with the changing peace of the world. If your spent money on a car to get to work then why on earth would you take the bus at the weekends?? The traditional bus model of business isn't broken, it just private companies have become fat cats and have lost there pioneering spirit to make changes when needed.

I totally agree with this statement. Especially in relation to First in Scotland

 

[Dentonian]

A quick look at the basic Operating Profit for First Manchester shows that a profit of £1.273m to March 2016 became a massive loss of £5.164m to March 2017, mostly due to the restructuring costs associated with the closure of Bury depot. Ouch !

Presumably, this will be clawed back on the cost side by removing all customer facing Supervisors (and communicating with the public by Twitter only) and reducing the fleet by 20-25 buses since last Summer, despite only reducing the PVR by half a dozen or so - unless they lost some none-YSB tenders in September.

 

[Robertj21a]

Presumably, this will be clawed back on the cost side by removing all customer facing Supervisors (and communicating with the public by Twitter only) and reducing the fleet by 20-25 buses since last Summer, despite only reducing the PVR by half a dozen or so - unless they lost some none-YSB tenders in September.

I would hope they'd be spending far more time in trying to get another operator(s) to take it off their hands once and for all.

 

[Cesarcollie]

They don't stand much chance of that with 'franchising' on the horizon. The business essentially becomes worthless - worth only its assets less liabilities (primarily TUPE).

 

[Kahuna47]

I think Dukinfield was leased as it wasn't part of the original GMN deal - IIRC wasn't the Pioneer ops part of the Potteries management at one point?

I'm pretty sure Bury was owned by First as it was the last depot to be built by GMPTE in the 80s. I know First have tried to sell up several times to make it a supermarket and replace with cheaper premises on industrial land nearby. Bury Council put the blocks up everytime stating they wanted a depot in the middle of town - the Council have shot themselves in the foot now so to speak!

Improvement works at Queens, Oldham and Bolton have been rudimentary stuff to staff accomodation in order to fit more lockers etc in the buildings.

I reckon the bulk of that money has gone towards redundancy, wage costs and maybe some of the holiday pay issues rumbling on... It also explains why they've pushed for all ENTCS passes to be scanned so they get paid. Helps if they had the quicker Ticketer machines rather than the ancient Almex ones which barely work now!

Either way you look at it it'll fan the flames of takeover for the GM ops again!

 

[radamfi]

Helps if they had the quicker Ticketer machines rather than the ancient Almex ones which barely work now!

Those machines are great. They were the first machines to allow for contactless payment using touch in and touch out. First were ahead of the game and have been accepting contactless for 5 years now:

http://www.firstgroupplc.com/news-and-media/latest-news/2011/03-09-2011-ukbus.aspx

FirstGroup, the UK’s largest bus and rail operator, today revealed it is to invest £27m in revolutionary new ticketing technology for its 5,000 strong bus fleet in England, outside London.

The company intends to be the first bus operator outside London to offer customers ‘touch in touch out’ contactless payment. The new ticket machines, designed to read contactless debit or credit cards, in addition to ITSO smartcards such as concessionary bus passes, will be introduced to buses from the autumn and will initially allow customers with an ITSO smartcard to touch in. Contactless bank cards will be accepted across England from late 2012.

 

[Non Multi]

.... First were ahead of the game and have been accepting contactless for 5 years now.

Still waiting for contactless & ITSO in Berkshire (Slough).

 

[Kahuna47]

Still waiting for contactless & ITSO in Berkshire (Slough).

As we are in Manc (Contactless at least)...

 

[Robertj21a]

Still waiting for contactless & ITSO in Berkshire (Slough).

I wonder if they'll bother with Slough........

 

[Dentonian]

They don't stand much chance of that with 'franchising' on the horizon. The business essentially becomes worthless - worth only its assets less liabilities (primarily TUPE).

Probably not the whole company, but certainly parts of it. Rotala are very open about the oppurtunites they feel Franchising would produce, and am sure they are very keen on Bolton in particular. As things stand, they probably couldn't bid for part of First in a deregulated environment, as the CMA would block it. However, First's reputation is probably worse in Bolton than any where else in GM, as Bolton was the most profitable depot outside the east of GM in GMB/GMT days, yet First have consistently cut routes and services since the mid 1990s.