First Group: General Discussion

[markie73]

Am I right in thinking Stagecoach haven't got a registration for a Kingsthorpe route yet? By the way the Parklands end of the new 10 duplicates one of the not currently competed parts of the 2. Stagecoach already duplicate most of it.

Only for the 3 but nothing registered to compete with the 4A as yet.

 

[MK Tom]

Yeah we've already been over that twice! I meant they haven't registered anything on the 4A route? Wonder why they've left that? Or does the route you described cover part of the 4A too?

Like I said the 2 is basically fully duplicated by Stagecoach already, but the new 10 does fill a little gap in it.

 

[markie73]

Yeah we've already been over that twice! I meant they haven't registered anything on the 4A route? Wonder why they've left that? Or does the route you described cover part of the 4A too?

Like I said the 2 is basically fully duplicated by Stagecoach already, but the new 10 does fill a little gap in it.

Sorry!, The 4A is a totaly seperate route, but I suspect Stagecoach are watching that one as well.

 

[overthewater]

Or maybe Stagecoach are letting someone else have it

 

[markie73]

Or maybe Stagecoach are letting someone else have it

Stagecoach have had their eyes on returning to Kingsthorpe ever since they discontinued the 4U, but its odd that we have not heard anything from Unobus in all of this I would have thought that they would have been sniffing around as well.

 

[overthewater]

So that time up, First has mist its own deadlines. Will this have a major effort on its shares? well we see a string a new closures on Tuesday? Remember the first sell off was Dalkieth on Monday 2st April.

!2 months have past, and we have seen new livery, addition buses, and some sell offs but first really has not moved that further forward.

 

[Surreyman]

So that time up, First has mist its own deadlines. Will this have a major effort on its shares? well we see a string a new closures on Tuesday? Remember the first sell off was Dalkieth on Monday 2st April.

!2 months have past, and we have seen new livery, addition buses, and some sell offs but first really has not moved that further forward.

A number of Rumours are circulating that the sale of Firsts London operation is imminent, possibly to more than one buyer.

 

[winston270twm]

A number of Rumours are circulating that the sale of Firsts London operation is imminent, possibly to more than one buyer.

First Group would certainly hit its internal target for £100 million of UK Bus disposals if that were the case, would loose the supply of midlife buses to transfer within. The profit margins the London bus business generates isn't as high as the deregulated/ex PTE areas First Group have large bus operations in. So wouldn't make as much impact of group profits as selling one of those would.

Likely buyers for all/part:
ComfortDelgro (Metroline Parent)
Ned Railways (Abellio Parent)
RAPT Dev (London Untied/Epsom Buses Parent)
Transdev (London Sovereign Parent)
National Express Group (No current London operation)
Stagecoach (Could buy parts?)

I'm not aware of any other European bus groups that are looking to enter the UK bus market, I think its fairly safe to say that its unlikely Arriva & Go-Ahead would acquire any parts of First London as they already have large market shares themselves

Dos anyone else have any other suggestions/thoughts?

 

[tbtc]

First Group would certainly hit its internal target for £100 million of UK Bus disposals if that were the case, would loose the supply of midlife buses to transfer within

This would be a huge change for First - apart from a few big orders for Manchester, Glasgow and Leeds, most of the past decade has seen the rest of the UK surviving mainly on ten year old cascades from London.

(plus, the ex-London Tridents we've had in Sheffield are rubbish!)

 

[winston270twm]

This would be a huge change for First - apart from a few big orders for Manchester, Glasgow and Leeds, most of the past decade has seen the rest of the UK surviving mainly on ten year old cascades from London.

(plus, the ex-London Tridents we've had in Sheffield are rubbish!)

It might mean the remaining parts of First Group would get brand new buses

 

[overthewater]

It might mean the remaining parts of First Group would get brand new buses

Or said areas will get the cast offs from good areas which will get new buses ever year...

 

[Surreyman]

First Group would certainly hit its internal target for £100 million of UK Bus disposals if that were the case, would loose the supply of midlife buses to transfer within. The profit margins the London bus business generates isn't as high as the deregulated/ex PTE areas First Group have large bus operations in. So wouldn't make as much impact of group profits as selling one of those would.

Likely buyers for all/part:
ComfortDelgro (Metroline Parent)
Ned Railways (Abellio Parent)
RAPT Dev (London Untied/Epsom Buses Parent)
Transdev (London Sovereign Parent)
National Express Group (No current London operation)
Stagecoach (Could buy parts?)

I'm not aware of any other European bus groups that are looking to enter the UK bus market, I think its fairly safe to say that its unlikely Arriva & Go-Ahead would acquire any parts of First London as they already have large market shares themselves

Dos anyone else have any other suggestions/thoughts?

The rumours mention a split between Metroline and a 'Bank',
If true? might be just part of London.
25% is the maximum share TFL will allow, whether that is based on mileage/turnover or what, I do not know, so with the exception of Go-Ahead (@24%) any of the companies you have listed could acquire all or part of First London.
If this is true, I am hoping it doesn't mean other First companies won't be sold/closed down.
The downside is that First will have a healthier balance sheet, the upside is that their operations will be smaller.
Could turn out to be an early April Fool?

 

[overthewater]

If this is true, I am hoping it doesn't mean other First companies won't be sold/closed down.

Alas even if London is sold it will not sort out a few ( the ones I have mentioned above) depots and companies which continue to make losses. First cant keep wasting money down the drain, on debt ridden places, nor does it have spare money to drag them up either. At least two other places could still be closed down just to clear its feet.

 

[radamfi]

If this is true, I am hoping it doesn't mean other First companies won't be sold/closed down.

What is so bad about other First companies being sold? Indeed, would it be a great loss if the whole of First was carved up and sold off completely?

 

[robertclark125]

What is so bad about other First companies being sold? Indeed, would it be a great loss if the whole of First was carved up and sold off completely?

Actually, there's a thought; could an outside firm come in and make a takeover for First, such as RATP? If so, they may offer a price, that could be accepted by shareholders, and then RATP could dispose of bits it doesn't want, or try to make a better go of it than First.

Whilst the DB takeover of Arriva hasn't seen much change, if any, if another firm bought out First, there is the potential for major change, and I'm sure a new owner would make changes.

 

[winston270twm]

Actually, there's a thought; could an outside firm come in and make a takeover for First, such as RATP? If so, they may offer a price, that could be accepted by shareholders, and then RATP could dispose of bits it doesn't want, or try to make a better go of it than First.

Whilst the DB takeover of Arriva hasn't seen much change, if any, if another firm bought out First, there is the potential for major change, and I'm sure a new owner would make changes.

It's always possible, as that is what the Cosmen's & CVC capital tried to do with NX group when it was struggling with massive debts. The group was worth more as individual units than as a group. The plan if successful was to brake the group up & sell it off in chunks, The Cosmen's were going to have ALSA back, a side deal was done with Stagecoach to buy the UK bus, coach & train franchises etc.

For anyone to launch a takeover of First Group they would need to have deep pockets, at Friday's close @ 201p the market cap was £969 million, they would have to offer a premium of at least 30% £1.260 billion & absorb £2.1 billion worth of debt, all told circa £3.360 billion

 

[mbonwick]

How much would just the UK Bus operations of FirstGroup be worth? Not looked at their figures so I don't know if its possible to tell...

 

[tbtc]

It's always possible, as that is what the Cosmen's & CVC capital tried to do with NX group when it was struggling with massive debts. The group was worth more as individual units than as a group

Speaking of NX, they'd be suited to some of FirstGroup's "urban" operations (Greater Glasgow, LeedsBradford, Leicester, Bristol) - how's NX's health these days (in terms of being able to afford any acquisition)?

 

[winston270twm]

How much would just the UK Bus operations of FirstGroup be worth? Not looked at their figures so I don't know if its possible to tell...

Not really certain in the current climate. In the past businesses were valued at/takeover offers were based upon £1 turnover = £1 value. In the last full accounts published in 2012, UK bus turned over £1.1572 Billion. I'd have guessed with the size of First Groups UK bus fleet, and with large operations in many major cities/former PTE operations in Bristol, Glasgow, Manchester, West Yorkshire, South Yorkshire & London etc you may find UK bus alone could be worth £900 million - £1 billion by itself i.e. the current value of First Group with £2.1 billion debt. Even with the debt in the past First Group share hit over £8 in Jan 2008 which would have valued the group at £3.9 billion plus nett debt still at £2.1 billion = £6 billion.

 

[mbonwick]

Let's do it a different way - I know above you guessed a price based on market capitalisation, so do we know what % of profit UK Bus contributed to the group? Then from that guess a price....

 

[overthewater]

you couldn't sell First Edinburgh for £56M? its not even worth that, its make £4m losses.

 

[winston270twm]

Speaking of NX, they'd be suited to some of FirstGroup's "urban" operations (Greater Glasgow, LeedsBradford, Leicester, Bristol) - how's NX's health these days (in terms of being able to afford any acquisition)?

That is exactly my thoughts, as NX are interested in high frequency/urban operations, which First have quite a few of, not to mention they have a former First Group director at the helm i.e. Dean Finch. Although NX exited London with the sale of Travel London to Abellio, however that was under Richard Bowker & when they were struggling under high levels of debt. It was sold due to being non-core, not having the scale in London and requiring too much finance to grow the business significantly. If First's London's business is up for sale I think NX could be a contender.

NX are in much better shape these days, all divisions are growing profit margins year on year, the only set back being that the coach division profits have took a hit since the concessionary scheme was abolished and they have struggling to replace the 1 million fewer journey's being made by senior citizens. NX turnover & profits are yet to get back to the levels prior to loosing the East Anglia rail franchise to Abellio. NX market cap is currently £1.050 billion plus £828 million nett debt = £1.878 billion approx value. I think NX could easily raise the funds to buy bigger chunks of First Group if the opportunity arose, they could afford to buyout out First Group as a whole as it would be a reverse takeover i.e. First Group is much bigger than NX, but another option could be to be to combine via a merger?
--- old post above --- --- new post below ---

Let's do it a different way - I know above you guessed a price based on market capitalisation, so do we know what % of profit UK Bus contributed to the group? Then from that guess a price....

Y/e 2012 annual report

Group revenue = £6.6787 Billion
Group profit = £428.5 million

UK bus turnover was £1.1572 Billion (17.3% group turnover), £134.4 million profit (31.4% group profits).

Based on the above figures, UK bus is of the most profitable parts of First Group, even in its current under-performing state

http://www.firstgroup.com/corporate/investors/annualreports.php

Based on current First Group share price @ 201p, market cap @ £969 million + £2.1 billion of debt. Group value of £3.069 Billion. UK bus valued at 31.4% of £3.069 billion = £964 million without any takeover premium, which is smack within my previous guestimate range

Looking back over past annual reports, its clear that UK bus generates the most profit for First Group accounting for only 17% of group turnover but 31% group profits, next is First student accounting for 25% group turnover & 27% of group profits
--- old post above --- --- new post below ---

you couldn't sell First Edinburgh for £56M? its not even worth that, its make £4m losses.

I think First Group would be lucky to get £1-£2 million for it, when you consider what Rotala brought Redditch & Kidderminster for and it was only making around £50k loss, plus what Stagecoach paid for Chester & Wirral operations which were both profitable.....

 

[Surreyman]

What is so bad about other First companies being sold? Indeed, would it be a great loss if the whole of First was carved up and sold off completely?

Think you misunderstand me radamfi, I want Firstbus to get smaller, sell off/close down its operations.
I suspect the dilemma they have is that many of the smaller operations that are loss-making or barely profitable/have no long term prospects, are of no interest to other bus companies.
'Roll up, Roll up, who will start the bidding for this unprofitable bus co"?
The big 3 - Stagecoach, Arrive & Go Ahead are quite reasonably only interested in Bus operations that are profitable or have the potential to be profitable.

 

[Afcwimbledon2]

Just a note on the betting odds - really don't think Ipswich will get changed. Its received some newish buses recently and it buses have slowly been given the new attempt at a livery. Also it is in the middle of a bus war with Ipswich Buses which it itself started. Shame it seems to be losing it - with most people preferring flat fares, clean buses and friendly staff that come with Ipswich Buses

 

[overthewater]

Just a note on the betting odds - really don't think Ipswich will get changed. Its received some newish buses recently and it buses have slowly been given the new attempt at a livery. Also it is in the middle of a bus war with Ipswich Buses which it itself started. Shame it seems to be losing it - with most people preferring flat fares, clean buses and friendly staff that come with Ipswich Buses

which hits the nail on the head, if first are losing the war it started it wont have the funds to keep such a place to the top end, thus when it loses, the new fleet will be sent away, maybe replaced by Northampton fleet? and cost cutting will come in to play.

 

[Afcwimbledon2]

which hits the nail on the head, if first are losing the war it started it wont have the funds to keep such a place to the top end, thus when it loses, the new fleet will be sent away, maybe replaced by Northampton fleet? and cost cutting will come in to play.

Well neither side has blinked yet. Although Ipswich Buses may be the first to do so as they only have a limited funding base and they are desperately trying to make their routes profitable. First have the 66 which makes money, along with every main route that leaves Ipswich - with the exception of the Go Ahead Anglian Buses that aren't really making much of an impression either.

First are losing the battle, but they might just win the war.

 

[F Great Eastern]

First Aircoach (Ireland) update.

Pointing against a sell off
A couple of the Belfast vehicles have got repainted and have got livery modifications to advertise the Belfast to Dublin services, so maybe there will be repaints on a few vehicles that badly need them after all despite the fact a number of the vehicles were allowed to get in some state in the last few months.

RFID Drivegreen has been installed on the Aircoach fleet, which does not suggest that a sell of is around the corner, according to what has been seen on a tweet from the person in First who is responsible for this area of the business http://twitter.com/TerrySparkhall

Pointing for a sell off
However the competition have upped the ante on the Dublin to Cork route by what looks to be an expensive advertising campaign. They have been running a long running advert on Facebook for several weeks which everyone in Ireland can't miss upon login. They've also been running a Google campaign so everyone sees an ad for their services when they search for Aircoach on Google

Basically it seems the marketplace is getting even tougher with the competition really now taking on Aircoach which is unlikely to help the loss making situation and may well reduce the odds.

 

[SuffolkRaider]

Just read on another blog that some of First Norwich are being seen debranded which now sparks the same type of rumour about a sell off but i was thinking that with the arrival of the new X1 buses the existing ones are being cascaded into the city and others onward to lowestoft and yarmouth but I also think it could go the other way the X1 stuff will go elsewhere as they are all 07/58 plates and we get some super dooper 05 plate stuff or better still some more W reg goodies. I know we have the gasbus phenom but First need to up the game a bit as all Yarmouth got from Essex was a couple of W's and some ropey looking 05's makes you feel Eastern is the "end of life" station for First sometimes.Seems strange they are making money but just not using it to strengthen their position or am I seeing that wrong. Ok rant mode de-selected lol

 

[lemonic]

You don't really believe that do you? First fares in the area are not nearly as bad as is suggested in popular media (or by half-wits with poor grammatical ability who decide the Government can tell them to change their fares).

My advice to people who complain, especially regular passengers, is to think for a moment. If you travel every day on a route which charges a £6 return, buy a South-West weekly/monthly...

In fact. I have criticised them for certain fares being too cheap. £90 for a 13-week Student pass in Bath is far too low - if I was in charge of pricing, it would be nearer £120. But with those Rotala morons around, such a price would destroy the depot's cash cow (the 18).

Sorry for only replying to this post now that was made over a week ago - I have just seen it.

I live in Bristol. The prices for single journeys in Bristol are extortionate. I am not talking about prices for day tickets, weekly tickets, monthly tickets etc. but simply for single tickets within Bristol. This is what people complain about when they talk about the high bus prices in Bristol. £2.90 for a single from Temple Meads for a journey that is 2 or 3 miles to, say Whiteladies Road or Cromwell Road, is a rip-off - I challenge you to call that value-for-money! I once got on the bus to be told the price and got off again and walked!

 

[overthewater]

Just read on another blog that some of First Norwich are being seen debranded which now sparks the same type of rumour about a sell off but i was thinking that with the arrival of the new X1 buses the existing ones are being cascaded into the city and others onward to lowestoft and yarmouth but I also think it could go the other way the X1 stuff will go elsewhere as they are all 07/58 plates and we get some super dooper 05 plate stuff or better still some more W reg goodies. I know we have the gasbus phenom but First need to up the game a bit as all Yarmouth got from Essex was a couple of W's and some ropey looking 05's makes you feel Eastern is the "end of life" station for First sometimes.Seems strange they are making money but just not using it to strengthen their position or am I seeing that wrong. Ok rant mode de-selected lol

Do you have a like to that blog? I thought most of the X1 were based at Kings lynn?

Tomorrow will be interesting, and it will be one year on since the first announcement.