First Group: General Discussion

[Volvodart]

http://www.firstgroup.com/corporate/latest_news/?id=009241

FirstGroup Announces Sale of Eight London Bus Depots

Tuesday 9 April 2013


As part of FirstGroup's stated strategy to reposition its UK Bus division to focus on those areas that offer the greatest potential for growth, it has today announced the sale of eight of its London bus depots.


The bus depots at Alperton, Greenford, Hayes, Uxbridge and Willesden Junction, along with 494 vehicles and approximately 1,700 employees, will transfer to Metroline on completion of the sale for a gross consideration of £57.5m. Metroline is an existing London bus operator and wholly-owned subsidiary of Comfort DelGro Corporation Limited, a Singapore-incorporated transportation company.


The bus depots at Atlas Road, Lea Interchange and Westbourne Park, along with approximately 400 vehicles and 1,500 employees, will transfer to Transit Systems Group, an Australian transport operator, on completion of the sale for a gross consideration of £21.3m.


Both disposals are subject to the necessary regulatory approvals including contractual obligations with Transport for London.


Commenting, Giles Fearnley, First’s Managing Director UK Bus, said:


“The sale of these operations marks further progress in our programme to reposition our UK Bus portfolio, recover performance and equip the business to achieve sustainable revenue and patronage growth. Our strategy is to focus on those areas of the country which offer the greatest potential and while we have been a key operator in London for many years, our focus going forward is on the deregulated market outside of the capital.


“Today’s decision is a business driven one and does not reflect on the effort, commitment or individual performance of our employees in London and we will be supporting them fully as they transfer to their new employers. Over the years we have enjoyed a constructive relationship with Transport for London and look forward to working closely with them to ensure this transfer goes ahead as smoothly as possible.”

 

[winston270twm]

Well it's confirmed that London is to be sold, (£80M) lets hope there are more sales to follow!

I guess at least they have finally hit the £100 Million disposal target, which takes the pressure off Tom O'Toole a little. Still plenty to sort out with UK bus and potentially there could still be further disposals of the under-performing bits of First UK bus. First will also have lost their source of midlife vehicles to cascade within UK bus, which is no doubt good news for the provinces.

 

[markie73]

Well it's confirmed that London is to be sold, (£80M) lets hope there are more sales to follow!

So First have done what we thought they would do, selling most of the family jewels, they must now be close to raising the cash needed to clear their deficit?.

 

[winston270twm]

http://www.firstgroup.com/corporate/latest_news/?id=009241
The bus depots at Alperton, Greenford, Hayes, Uxbridge and Willesden Junction, along with 494 vehicles and approximately 1,700 employees, will transfer to Metroline on completion of the sale for a gross consideration of £57.5m. Metroline is an existing London bus operator and wholly-owned subsidiary of Comfort DelGro Corporation Limited, a Singapore-incorporated transportation company.


The bus depots at Atlas Road, Lea Interchange and Westbourne Park, along with approximately 400 vehicles and 1,500 employees, will transfer to Transit Systems Group, an Australian transport operator, on completion of the sale for a gross consideration of £21.3m.

I notice Dagenham depot isn't included on any of the lists of depots purchased, I wonder if what's left of it after Stagecoach take up its new Tfl tender wins will also be sold to them?

 

[overthewater]

I guess at least they have finally hit the £100 Million disposal target, which takes the pressure off Tom O'Toole a little. Still plenty to sort out with UK bus and potentially there could still be further disposals of the under-performing bits of First UK bus. First will also have lost their source of midlife vehicles to cascade within UK bus, which is no doubt good news for the provinces.

As part of FirstGroup's stated strategy to reposition its UK Bus division to focus on those areas that offer the greatest potential for growth, it has today announced the sale of eight of its London bus depots.

Commenting, Giles Fearnley, First’s Managing Director UK Bus, said:
“The sale of these operations marks further progress in our programme to reposition our UK Bus portfolio, recover performance and equip the business to achieve sustainable revenue and patronage growth. Our strategy is to focus on those areas of the country which offer the greatest potential and while we have been a key operator in London for many years, our focus going forward is on the deregulated market outside of the capital.

Remind me never to get financial advice off the bank of america, ever.

Giles never really said the sell of the UK Bus fleet is over, but is it over? I think were 1.5M short of the £100M total, what depots could be sold off for that amount? The amount that has been sold if we included Texas does go over this figure. As you say winston, a few under ( will under) performing depots still exist within the first group operations, and with little spare cash how will said place be sorted out. First may not have lost its source of mid life buses, first could end up buying on the cheap ex rented stock, from ensign, as long as some refurb takes place.

Has anything come out about the trading profits? profits up? Scotland down? Cornwall down? etc?

 

[winston270twm]

So First have done what we thought they would do, selling most of the family jewels, they must now be close to raising the cash needed to clear their deficit?.

They have achieved the £100 million target they set themselves some time ago, but that isn't going to put much of a dent in the £1.9 billion they still owe

 

[overthewater]

So First have done what we thought they would do, selling most of the family jewels, they must now be close to raising the cash needed to clear their deficit?.

No, All the First Family jewels are still in the hands if first.

 

[winston270twm]

Has anything come out about the trading profits? profits up? Scotland down? Cornwall down? etc?

It was the last trading statement before the final results are released in the next few months, even those figures wont breakdown the results of individual subsidiaries

 

[overthewater]

It was the last trading statement before the final results are released in the next few months, even those figures wont breakdown the results of individual subsidiaries

First knows where is losing money, I take it said information needs to be hidden away as long as possible?

 

[Volvodart]

First knows where is losing money, I take it said information needs to be hidden away as long as possible?

31/3/13 individual company accounts are usually lodged by the last date possible, at the end of December 2013.

 

[winston270twm]

31/3/13 individual company accounts are usually lodged by the last date possible, at the end of December 2013.

I assume you'll only be able to get that kind of info via companies house?

 

[overthewater]

I assume you'll only be able to get that kind of info via companies house?

One pound each

 

[tbtc]

First will also have lost their source of midlife vehicles to cascade within UK bus, which is no doubt good news for the provinces

This bit will be interesting.

As Comfort DelGro Corporation Limited's only UK operations outside London are Citylink/ Megabus, there's nowhere for them to internally cascade buses to.

Presumably their current arrangement is to lease buses? If so, who tends to pick these buses up once they are too old for the London market?

If Comfort DelGro buy buses outright, could there be some arrangement for First to aquire them after five/ten years (i.e. too old for London)?

 

[Ivo]

I like how the one rumour I've added to this thread turned out to be true

I should have put a bet on it Aw well, it's only the third bet I would have won in the last 72 hours that I haven't bothered with (Grand National; JPT Final)...

On a more serious note, as has been mentioned First have lost their most obvious source of mid-life buses, meaning the flurry of ex-London Tridents to here, there and everywhere is almost certainly coming to an end. Do we know if *every* bus they operate in London is part of this deal, or are some excluded?

 

[Deerfold]

It should be noted the flow of buses from London may well be slowing down anyway as fewer new contracts are specifying new buses.

 

[winston270twm]

This bit will be interesting.

As Comfort DelGro Corporation Limited's only UK operations outside London are Citylink/ Megabus, there's nowhere for them to internally cascade buses to.

Presumably their current arrangement is to lease buses? If so, who tends to pick these buses up once they are too old for the London market?

If Comfort DelGro buy buses outright, could there be some arrangement for First to aquire them after five/ten years (i.e. too old for London)?

More & more of the London bus operators are choosing to lease the buses rather than buying them outright

 

[Volvodart]

Plus all the new Routemasters coming which will stay in London.

 

[Deerfold]

Plus all the new Routemasters coming which will stay in London.

Oh boy. Yes. The Borisbuses (really nothing like Routemasters) will be about 8% of the fleet in a short time. And noone else wants them. And operators don't want to buy them.

 

[tbtc]

More & more of the London bus operators are choosing to lease the buses rather than buying them outright

What's happening to the midlife vehicles that are too old for the capital? Are they just being sold off by the lease companies in small batches?

(reason I'm asking is that there are going to be some operators in danger of missing the accesibility requirements in a year or two's time, so who may need low floor buses at relatively short notice)

 

[winston270twm]

What's happening to the midlife vehicles that are too old for the capital? Are they just being sold off by the lease companies in small batches?

(reason I'm asking is that there are going to be some operators in danger of missing the accesibility requirements in a year or two's time, so who may need low floor buses at relatively short notice)

The leased ones are generally returned to the lessor & eventually sold on. Some get sold via Ensign

 

[cainebj]

They end up with various dealers really, or sold directly. A few examples linked:
Ex Stagecoach London Articulated Citaro's
Ex First London Articulated Citaro's
53reg ex London United Trident/ALX400's
52reg ex Abellio London Trident/ALX400's
Plenty of double deckers at Ensign
and of course singles
You also get various other adverts in trade magazines from finance companies and also sometimes straight from the operator.

 

[F Great Eastern]

Well that is a big sale. Question is what are going to make up the rest of it.

Comfort DelGro are in Ireland too, but it's little more than a franchise. They contracted out all of their Irish Citylink coach business to contractors so hold no coaches and very little staff themselves.

There was talk of them buying out Aircoach in Ireland just before the turn of the year, seeing as the two parties were talking about other depots, it'll be interesting to see if they get that as well.

 

[winston270twm]

Well that is a big sale. Question is what are going to make up the rest of it.

Comfort DelGro are in Ireland too, but it's little more than a franchise. They contracted out all of their Irish Citylink coach business to contractors so hold no coaches and very little staff themselves.

There was talk of them buying out Aircoach in Ireland just before the turn of the year, seeing as the two parties were talking about other depots, it'll be interesting to see if they get that as well.

First have virtually hit the £100 Million UK bus disposal target:

Wigan - Stagecoach for £12million
Birkenhead & Chester - Stagecoach for £4.5million
Redditch & Kidderminster - Rotala for £1.5million
London (5 depots) - Metroline £57.5million
London (3 depots) - Transit Systems £21.3million

Total £96.8million

The trading statement doesn't necessarily say that is the end of the disposal program either

 

[Volvodart]

All they said in the conference call for analysts today was that their disposal target had been achieved and that they were not planning any major exits like London.

 

[WatcherZero]

How many depots does that leave them in London?

 

[winston270twm]

All they said in the conference call for analysts today was that their disposal target had been achieved and that they were not planning any major exits like London.

I expect we'll see plenty more fine tuning of UK bus, either through garage closures or smaller asset sales. There are still quite a few underperforming areas where the fleets comprise of mainly elderly vehicles, which will require considerable investment to get them up to scratch

 

[Volvodart]

They said to all intents that they were out of London so they will have Dagenham depot to dispose of eventually.

 

[winston270twm]

London (5 depots) - Metroline £57.5million
London (3 depots) - Transit Systems £21.3million

Its notable the price difference between the two separate London disposals, obviously Metroline have acquired the best bits given that there are only 94 (20%) buses difference between the two deals, but Metroline have paid over 2.5 times what Transit Systems have...... Obviously the former Centrewest part of First London was still the most profitable
--- old post above --- --- new post below ---

They said to all intents that they were out of London so they will have Dagenham depot to dispose of eventually.

I think Stagecoach will now buy Dagenham at a knock down price, given that they have already won half its Pvr through the tendering process, its unlikey to be of interest to anyone else

 

[ryson357]

First group might aswell give up. They do rubbish services. They have horrible trains, Which never turn up on time. The buses are a rip off. Even though I like some buses, everyday I'm starting to dislike them more and more. So I be glad to see First Group go in the bin and turn into a different company.

 

[overthewater]

First have virtually hit the £100 Million UK bus disposal target:

Wigan - Stagecoach for £12million
Birkenhead & Chester - Stagecoach for £4.5million
Redditch & Kidderminster - Rotala for £1.5million
London (5 depots) - Metroline £57.5million
London (3 depots) - Transit Systems £21.3million

Total £96.8million

The trading statement doesn't necessarily say that is the end of the disposal program either

If were add in the other sell offs, how much are been sold in total? Texas? Kings Lynn, First London Depot?

All they said in the conference call for analysts today was that their disposal target had been achieved and that they were not planning any major exits like London.

I expect we'll see plenty more fine tuning of UK bus, either through garage closures or smaller asset sales. There are still quite a few under performing areas where the fleets comprise of mainly elderly vehicles, which will require considerable investment to get them up to scratch

Under performing is key, I keep asking and it no one is able to answer how are there going to improve said areas? most are in debt, no spare cash to overhaul the places etc:

Just incase your wondering where said depots are:

* First in Northampton:

* First Edinburgh:

* Irish Aircoach:

* First Cornwall :

* First Glasgow No2: - Overtown:

* First Ipswich