First Group: General Discussion

[TheGrandWazoo]

50 (or 60) years would be quite normal for a proper 'bricks and mortar' building. A crinkly tin shed presumably less due to the nature of the materials.

The rate of return on the investment needed by the company to justify a development would perhaps be different to its depreciation rate in the accounts?

As an update, no outstation location has been opened or even identified (as yet) in First Potteries area.

Most of the buildings I deal with are steel portal construction and are sheet clad (albeit with a brick base) and are considerably larger than Plymouth's depot buildings.

Surprised at that as a term but hey ho.

 

[overthewater]

First Aberdeen have withdrawn alot of stock.

https://www.flickr.com/photos/41987105@N06/23487991343/
https://www.flickr.com/photos/41987105@N06/24032152391/
https://www.flickr.com/photos/41987105@N06/23487892813/

Spot who has better manners
https://www.flickr.com/photos/41987105@N06/24088230176/

 

[90sWereBetter]

Deja vu it would seem, as Norwich apparently has 8 Streetdecks on order for the Pink Line 11/12 services, to arrive sometime in the spring. I wonder if these will actually make it to Norwich.

In Norwich, the Orange, Purple and Turquoise Line refurbishment/repaint program is complete, and the Green Line now has its full allocation of Streetlites. The Yellow Line fleet is now being refurbished, leaving the Red and Blue Lines to be done, with the Pink Line presumably getting new stock. I could perhaps see the Blue Line getting new buses as well, which would shift the 11-reg B9s over to the Red Line to get rid of the worst of the Presidents (given the Red Line has the largest PVR in Norwich), but it's unlikely it'll happen this year.

Other than that, I can't see much happening at the other depots at Eastern Counties this year, other than the Presidents at Yarmouth finally getting a repaint, and the last Jersey Darts at Lowestoft to head to the West Country. There's now only one non-DDA bus left in service in the entire fleet, Olympian 34111, but there's a good chance that might have been withdrawn, the last report on the East Norfolk Bus Blog says it's currently parked up with the withdrawn fleet at the back of Yarmouth depot.

Any changes at Ipswich depend really if any rural contracts come up for grabs this year.

 

[THarris123]

Deja vu it would seem, as Norwich apparently has 8 Streetdecks on order for the Pink Line 11/12 services, to arrive sometime in the spring. I wonder if these will actually make it to Norwich.

In Norwich, the Orange, Purple and Turquoise Line refurbishment/repaint program is complete, and the Green Line now has its full allocation of Streetlites. The Yellow Line fleet is now being refurbished, leaving the Red and Blue Lines to be done, with the Pink Line presumably getting new stock. I could perhaps see the Blue Line getting new buses as well, which would shift the 11-reg B9s over to the Red Line to get rid of the worst of the Presidents (given the Red Line has the largest PVR in Norwich), but it's unlikely it'll happen this year.

Other than that, I can't see much happening at the other depots at Eastern Counties this year, other than the Presidents at Yarmouth finally getting a repaint, and the last Jersey Darts at Lowestoft to head to the West Country. There's now only one non-DDA bus left in service in the entire fleet, Olympian 34111, but there's a good chance that might have been withdrawn, the last report on the East Norfolk Bus Blog says it's currently parked up with the withdrawn fleet at the back of Yarmouth depot.

Any changes at Ipswich depend really if any rural contracts come up for grabs this year.

Thanks for update. Do we know what non DDA fleet is left in the other parts of the East (i.e. Colchester and the like)?

 

[overthewater]

http://www.emqtv.com/insider-buying...nsider-purchases-8028-shares-of-stock/159139/

I wonder what he knows...

FirstGroup plc (LON:FGP) insider O’Toole,Tim acquired 8,028 shares of the business’s stock in a transaction on Monday, January 25th. The shares were purchased at an average price of GBX 99 ($1.41) per share, for a total transaction of £7,947.72 ($11,339.31).

FirstGroup plc (LON:FGP) opened at 101.000 on Monday. The firm has a 50-day moving average of GBX 103.77 and a 200-day moving average of GBX 105.70. The company’s market capitalization is GBX 1.22 billion. FirstGroup plc has a one year low of GBX 88.65 and a one year high of GBX 129.90.

A number of research analysts have weighed in on FGP shares. JPMorgan Chase & Co. reiterated an “overweight” rating and set a GBX 169 ($2.41) price objective on shares of FirstGroup plc in a research report on Wednesday, September 30th. Jefferies Group reiterated a “hold” rating and set a GBX 120 ($1.71) price objective on shares of FirstGroup plc in a research report on Wednesday, September 30th. Panmure Gordon reiterated a “hold” rating and set a GBX 120 ($1.71) price objective on shares of FirstGroup plc in a research report on Friday, October 2nd. Barclays cut their price objective on shares of FirstGroup plc from GBX 130 ($1.85) to GBX 123 ($1.75) and set an “equal weight” rating on the stock in a research report on Monday, October 5th. Finally, RBC Capital reiterated a “sector performer” rating and set a GBX 110 ($1.57) price objective on shares of FirstGroup plc in a research report on Monday, October 5th. Nine analysts have rated the stock with a hold rating and five have issued a buy rating to the company’s stock. FirstGroup plc currently has a consensus rating of “Hold” and an average price target of GBX 130.42 ($1.86).

FirstGroup plc is a United Kingdom-based transport operator in United Kingdom and North America. The Company operates through five segments: First Student, First Transit, Greyhound, UK Bus and UK Rail. The First Student is the provider of student transportation in North America. The First Transit is the private sector providers of public transit management and contracting in North America. Greyhound is an operator of scheduled intercity coach services in the United States and Canada, serving 48 States in the United States and 10 Canadian Provinces and Territories. Its UK Bus is the bus operators in the United Kingdom with a fleet of approximately 6400 buses. The Company operates two UK rail franchises, First Great Western and First TransPennine Express, and one open access passenger rail service, First Hull Trains. It also operates the Tramlink service on behalf of Transport for London and the Heathrow Connect service with Heathrow Airport.

 

[Robertj21a]

http://www.emqtv.com/insider-buying...nsider-purchases-8028-shares-of-stock/159139/

I wonder what he knows...

Hardly a significant purchase ! - with their share price so abysmally low I suppose he thinks there's can't be much more downside (hopefully, not least for his position).

 

[WatcherZero]

The fact he bought them at an average of 99p in a week after they hit a one year low of 94p, but only a small quantity suggests his broker has been instructed to buy up stock below £1. Its since risen quite rapidly from the low of 94p to about £1.02 per share suggesting several like minded buyers noticing that price point.

 

[Volvodart]

I think some of the remuneration is in shares, so it is probably just that and not a specific purchase.

 

[WatcherZero]

Profit warning given causing a 12.5% slide in share price on thursday, dropped further on friday now down to 87p after touching 86.6p.

 

[Robertj21a]

.
Cue significant shareholders whose patience has now been exhausted.

 

[winston270twm]

.
Cue significant shareholders whose patience has now been exhausted.

I wouldn't be surprised for any of the large First Group shareholders that are unhappy with the groups continued decline to start revolting / by attracting hedge fund interest for a possible break-up of the group or effectively putting the group up for sale with another large transport group by committing their shareholding to any deal. The current set-up has had more than enough time to sort things out & it's it just not happening.

Tim O'toole's position must also be hanging in the balance after the latest release....

 

[overthewater]

Could Greyhound be sold off to pay off the debts?

 

[Sleepy]

If they fail to win East Anglia franchise will it signal a takeover or merger ? In view of this will they throw everything into a fantastic bid ?

 

[Volvodart]

There are plenty of other bids coming up if they do not win that one.

 

[TheGrandWazoo]

I wouldn't be surprised for any of the large First Group shareholders that are unhappy with the groups continued decline to start revolting / by attracting hedge fund interest for a possible break-up of the group or effectively putting the group up for sale with another large transport group by committing their shareholding to any deal. The current set-up has had more than enough time to sort things out & it's it just not happening.

Tim O'toole's position must also be hanging in the balance after the latest release....

I tend to agree with you. There's been 3 years since the share issue and whilst UK Bus is turning round (bad weather not withstanding), the loss of rail franchises and the long standing issues with Student and Greyhound are just acting as a brake.

Perhaps a major divestment or even just splitting the North American (and selling) and UK ops might be the way forward?

 

[winston270twm]

I tend to agree with you. There's been 3 years since the share issue and whilst UK Bus is turning round (bad weather not withstanding), the loss of rail franchises and the long standing issues with Student and Greyhound are just acting as a brake.

Perhaps a major divestment or even just splitting the North American (and selling) and UK ops might be the way forward?

Student & Transit should be generating well in excess of the 10% margins that is being sought by Group in the medium term for UK bus & North America. If First Group are intent on going it alone, I would be inclined to sell Greyhound which is non core to pay down debt, that said, that still doesn't solve the on-going problems of continued underperformance across the Group, it would only be a sticking plaster.

Personally, I think First Group should consider a friendly merger with NX Group & Tim O'toole should fall on his sword, Dean Finch knows First Group from previous positions held & has done an excellent job to turnaround NX Group from a similar position of high debt & falling profits to continued growth. Both groups have a number of complimenting businesses yet don't overlap in many places and therefore shouldn't attract to much attention from competition authorities.

 

[overthewater]

There would still have to sell of Greyhound to pay off debts, you would be mad to merge with such high debts

 

[F Great Eastern]

First Aircoach in Ireland went from a €700k loss to a €3m profit, although many people in the industry in Ireland were very surprised at the strength of those figures. They expected an improvement but did not expect anything like that. It became the highest profit the company had ever made.

The accounts used an exception in accounting rules to hide transactions between fellow group undertakings and the amount of short term cash owed to fellow group undertakings rose quite a bit, leading to speculation they injected some cash from fellow group companies.

 

[winston270twm]

There would still have to sell of Greyhound to pay off debts, you would be mad to merge with such high debts

Not necessarily, a combined group would benefit from economies of scale & various other cost savings. Increased cash generation would make high debts easier to service. NX Group at Half Year had debt of £714m, all it's divisions are growing revenues/passenger numbers & it has a number of German Rail franchises coming on stream over the next few years.

 

[TheGrandWazoo]

Not necessarily, a combined group would benefit from economies of scale & various other cost savings. Increased cash generation would make high debts easier to service. NX Group at Half Year had debt of £714m, all it's divisions are growing revenues/passenger numbers & it has a number of German Rail franchises coming on stream over the next few years.

I guess that's my question. What's in it for NatEx? Perhaps if First did pay down some debt, then it might be more doable?

 

[winston270twm]

I guess that's my question. What's in it for NatEx? Perhaps if First did pay down some debt, then it might be more doable?

A combination of the two would give them a significant presence in the UK bus market with First owning a large number of Urban / former PTE operations very similar to NXWM. They would own both renowned long distance express coach brands both sides of the pond NX Coaches & Greyhound. Plus they would be no 1 is the US School Bus & Transit markets

 

[overthewater]

A combination of the two would give them a significant presence in the UK bus market with First owning a large number of Urban / former PTE operations very similar to NXWM. They would own both renowned long distance express coach brands both sides of the pond NX Coaches & Greyhound. Plus they would be no 1 is the US School Bus & Transit markets

Greyhound is in the bin now. Also I bet the US will have something to say about the merger of US school bus operations and lack of competition.

 

[TheGrandWazoo]

A combination of the two would give them a significant presence in the UK bus market with First owning a large number of Urban / former PTE operations very similar to NXWM. They would own both renowned long distance express coach brands both sides of the pond NX Coaches & Greyhound. Plus they would be no 1 is the US School Bus & Transit markets

Yes, but is that really worth hooking up with First. The UK Bus might seem attractive but Greyhound?? I seem to recall sayings about vanity and sanity!!

 

[winston270twm]

Yes, but is that really worth hooking up with First. The UK Bus might seem attractive but Greyhound?? I seem to recall sayings about vanity and sanity!!

What's wrong with Greyhound? NX could apply the same operational / management styles that are employed at NX coaches / ALSA to improve performance at Greyhound.

To be fair Dean Finch is treading fairly cautiously and growing NX Group through capital light contract wins whilst paying down their debts. Realisically, I think a tie-up with First Group would be considered too big a risk. My money would be on hedge fund making a break-up bid
--- old post above --- --- new post below ---

What's wrong with Greyhound? NX could apply the same operational / management styles that are employed at NX coaches / ALSA to improve performance at Greyhound.

To be fair Dean Finch is treading fairly cautiously and growing NX Group through capital light contract wins whilst paying down their debts. Realisically, I think a tie-up with First Group would be considered too big a risk. My money would be on hedge fund making a break-up bid

Greyhound is in the bin now. Also I bet the US will have something to say about the merger of US school bus operations and lack of competition.

NX have approx 20,000 school buses in US & Canada (2nd biggest operator with 12% of the market)
First Group have approx 49,000 school buses in US & Canada

Extract from NX website regarding US School Bus market. Entire School Bus market is worth $24 Billion

We see attractive growth opportunities in the North American school bus market as it remains highly fragmented and the trend towards conversion continues. With over 10,000 private school bus businesses in the US, we see significant opportunity for consolidation. Better pricing discipline in the market, combined with our ongoing focus on efficient capital deployment, means we are optimistic about our prospects in North America.

 

[Robertj21a]

I expect some investors would favour breaking up First Group into the obvious constituent parts. At least it would enable clearer focus to be placed where it is most needed and some disposals can then ensue.

 

[WatcherZero]

Fell another 6% today, down to 83p a share seemingly prompted by Barclays cutting its valuation of the stock from £1.28 to £1.15. This 83p is a new all time low valuing the company at £1.01bn.

(i.e if share price falls any lower it will no longer be a billion pound company)

 

[overthewater]

Fell another 6% today, down to 83p a share seemingly prompted by Barclays cutting its valuation of the stock from £1.28 to £1.15. This 83p is a new all time low valuing the company at £1.01bn.

(i.e if share price falls any lower it will no longer be a billion pound company)

Does that make it easier to Private Equality company to swoop in?

Before anyone says, its been said upteen times, and a sell off of Greyhound could solve alot of problems.

 

[robertclark125]

Here's a long shot, and potentially ridiculous idea; a merger with Rotala? It would give cause for concern in Bristol and Bath with the presence of Wessex. But it would have the advantage of bringing Firstgroup into Preston, and giving a slight boost in terms of Greater Manchester territory with Diamond Bus north west. It would also see Rotala into Scotland.

There's also the west midlands presence.

Probably a non starter but just an idea.

I did however ask First East Scotland for clarification about the Fife school contracts they operate. The actual work is scheduled from 2015-2022. But, when I asked them regards First or a First subsidiary operating them to the end, they would only say the contracts will run in 2016. I don't know whether to read too much into that. Two friends on Facebook in the Glasgow area have told me the same thing regards parts of FSE, which I will not mention on here, but the fact they made their claims to me, and what FSE have said, are very interesting.

 

[overthewater]

The contracts are approved until till 2022, but any of the companies can pull out at any time. The amount of times that has happened is alot, Remember Rennies pulled of a few runs because of the damaged?

It also depends on whos running the contracts? I do know Livingston does operate a few of the runs along with Larbart. Its possible the First subsidiary could also change over the next 6 years. Especial if Larbart losses school work with the up coming new tender process in Falkirk area.

 

[TheGrandWazoo]

Here's a long shot, and potentially ridiculous idea; a merger with Rotala? It would give cause for concern in Bristol and Bath with the presence of Wessex. But it would have the advantage of bringing Firstgroup into Preston, and giving a slight boost in terms of Greater Manchester territory with Diamond Bus north west. It would also see Rotala into Scotland.

There's also the west midlands presence.

Probably a non starter but just an idea.

I did however ask First East Scotland for clarification about the Fife school contracts they operate. The actual work is scheduled from 2015-2022. But, when I asked them regards First or a First subsidiary operating them to the end, they would only say the contracts will run in 2016. I don't know whether to read too much into that. Two friends on Facebook in the Glasgow area have told me the same thing regards parts of FSE, which I will not mention on here, but the fact they made their claims to me, and what FSE have said, are very interesting.

Rotala aren't even in the same sport let alone the same league. How would a merger (it wouldn't be - it would be a whale consuming a fish) solve the issues First has?