First Group: General Discussion

[robertclark125]

I remember too when Fife Scottish (Now Stagecoach East Scotland) registered journeys on eleven services competing with tendered journeys operated by Moffat and Williamson. M&W complained to the OFT, who ruled in their favour, and placed covenants on Fife Scottish from January 1994 until January 1997, restricting fares and cuts to frequencies on commercial journeys competing against tendered journeys.

What was more interesting was, M&W withdrew most of their services in July 1994, including the aforementioned journeys, and Fife Scottish requested the OFT release them from the covenants, as M&W had withdrew their services that were the subject of the complaint. Fife Scottish claimed that M&W were planning to withdraw them before the complaint, according to a local newspaper report at the time. The OFT agreed, and released Fife Scottish from the covenants.

But on another similarity, more recently, when the ill fated Fife First operation withdrew its service 56 in summer 2000, Stagecoach Fife reduced the frequency of its route 19, from every 7/8 minutes to every 10 minutes, though the service frequency beyond Dunfermline to Rosyth was doubled from every 20 minutes to every 10 minutes. These changes took place 6 weeks after Fifefirst had gone.

 

[overthewater]

But on another similarity, more recently, when the ill fated Fife First operation withdrew its service 56 in summer 2000, Stagecoach Fife reduced the frequency of its route 19, from every 7/8 minutes to every 10 minutes, though the service frequency beyond Dunfermline to Rosyth was doubled from every 20 minutes to every 10 minutes. These changes took place 6 weeks after Fifefirst had gone.

Not to derail this: In June 2000 Stagecoach starting ruining the no19 into Odean every 20mins. Im sure of it on 16 July Stagecoach boosted the No19 up to 7/8mins - same day First left. edit (out by four months) : It wasn't until the 18th months later on January 2002 as you said it become every 10mins thought out the whole route. A whole 18months later.

 

[DragonEast]

I think it'd be far easier than this mess where everyone judges what they can get away with, and if we think competition is the answer to everything, to have the rule that no more than three buses an hour can be registered by an individual operator on a route. Congestion usually means that buses bunch up anyway, and quality of service goes to pot, even before anything and everything is pressed into service. Probably also tickets between competing operators on the same route would have to be made interchangeable too, which wouldn't be a bad thing, and perhaps the single best thing to promote competition.

Plenty of examples of "new" increases to multiple-frequency (and often poorly used, both before and afterwards) buses around Essex and East Anglia, which everyone ignores and where it seems you can get away with anything. (It seems to be the default reaction to passenger complaints about reliability; or politicians complaints, at least). It actually also seems to stymie the potential of competition, which actually might be the best thing to improve quality and reliability; rather than stretching resources, which doesn't. Though perhaps they're now just serving out their time "having made their point".

 

[noddingdonkey]

First West Yorkshire's figures are up on the Companies House site now, with a headline operating profit of £13.6m, up from £10.6 in 2015.

https://beta.companieshouse.gov.uk/company/01990370/filing-history

 

[DunsBus]

Meanwhile, Lothian's takeover of the (former) First depots at Musselburgh and North Berwick has been cleared:

http://www.edinburghnews.scotsman.c...n-of-ex-first-group-in-east-lothian-1-4346578

A COMPANY owned by Lothian Buses has been cleared by a business watchdog after an investigation into a rescue package that saw it take over bus services in East Lothian.

Richard Hall, managing director of Lothian Buses said: “We are absolutely delighted. We know that thousands of residents, workers and the economy of East Lothian rely on public transport.....

 

[overthewater]

Does that mean its can get rid of the awful East Coast Buses names and livery, and extend the Green and Lothian country buses.

 

[THarris123]

First West Yorkshire's figures are up on the Companies House site now, with a headline operating profit of £13.6m, up from £10.6 in 2015.

https://beta.companieshouse.gov.uk/company/01990370/filing-history

Looks to be up mainly due to Corp tax/deferred tax savings.

 

[Robertj21a]

I've only had a quick scan through the various 2015/16 results for each of the First operations. As others have rightly said, they don't always 'prove' anything as various issues can still affect the figures. Even so, the basic Operating Profit (Turnover less Operating Costs) is useful as a broad-brush guide.

On this basis, if I was to highlight the most profitable operations (£2.5m+) in 2015/16 it would seem to be:-

First West Yorkshire - £13.6m
First Glasgow (1+2) - £10.8m
First Aberdeen - £3.7m
First Cymru - £3.0m
First Hants & Dorset - £2.8m
Leicester Citybus - £2.5m

Those returning an Operating Loss over £1m were:-

First South West - £3.3m
First South Yorkshire - £3.0m
First Somerset/Avon - £1.9m
First Scotland East - £1.7m
First Midland Red - £1.0m

Apologies if I've missed any significant operations out.

Given that 9 months of the next financial year have already passed, has there been sufficient corrective action taken to improve matters at the loss makers ?

 

[F Great Eastern]

Four more Plaxton Panthers delivered to Aircoach in Ireland, takes it up to 32 now since 2014.

 

[overthewater]

Given that 9 months of the next financial year have already passed, has there been sufficient corrective action taken to improve matters at the loss makers ?

First South West - £3.3m
First South Yorkshire - £3.0m - going to close a depot and other changes.
First Somerset/Avon - £1.9m
First Scotland East - £1.7m - Closed down two depots and pull out of East Lothian
First Midland Red - £1.0m - further cut back have taken place

Would ne interesting to know what the other two have done.

 

[TheGrandWazoo]

First South West - £3.3m
First South Yorkshire - £3.0m - going to close a depot and other changes.
First Somerset/Avon - £1.9m
First Scotland East - £1.7m - Closed down two depots and pull out of East Lothian
First Midland Red - £1.0m - further cut back have taken place

Would ne interesting to know what the other two have done.

Again (broken record) but it's difficult to say what is behind the operating losses. Not least because it's tricky to say how FSA have lost that much when they had already jettisoned some of the worst loss makers in mid 2015. Only the real detail can explain that and therefore why relatively little fundamental change in their networks.

However, First South West still had Webberbus competing with them heavily so there is a considerable peace dividend. Some competing services withdrawn and removal of the cuckoo from some of their best routes (e.g. Taunton to Wellington/Bridgwater). That will also benefit FSA to an extent.

FSY, as well as losing the Rotherham depot, should also get a full year benefit from the various SY partnerships.

 

[baza585]

Again (broken record) but it's difficult to say what is behind the operating losses. Not least because it's tricky to say how FSA have lost that much when they had already jettisoned some of the worst loss makers in mid 2015. Only the real detail can explain that and therefore why relatively little fundamental change in their networks.

However, First South West still had Webberbus competing with them heavily so there is a considerable peace dividend. Some competing services withdrawn and removal of the cuckoo from some of their best routes (e.g. Taunton to Wellington/Bridgwater). That will also benefit FSA to an extent.

FSY, as well as losing the Rotherham depot, should also get a full year benefit from the various SY partnerships.

As you say not the whole story, but FSA's results appear to be pretty dismal in what ought to be reasonable operating territory (2 unis in Bath, and UWE in Bristol which should have benefitted some FSA services).

Probably not helped by them running modern, high depreciation, gas-guzzling B7RLEs on Solo/Dart routes like the 126 and the 175

South Yorkshire has always been difficult territory because of the legacy of very low fares from the PTE and the war with Stagecoach won't be helping. There may be a sort of peace dividend from the Sheffield partnership and the closure of Midland Rd will no doubt help in year 17-18, although it will bring operational challenges in the short term.

FMR (=Worcester) results may be affected by the closure of Hereford; ditto Berkshire re Bracknell.

Credit where credit's due, FSE and FSW may still have been lossmaking but less so than 3 years ago and both definitely headed in the right direction, and I would expect 2016-7 results for both to continue that improvement.

I doubt FHD's 16-17 results will be as good given the prolonged strike in Dorset, but both Hampshire and Cymru appear to have done well again in difficult markets.

 

[TheGrandWazoo]

As you say not the whole story, but FSA's results appear to be pretty dismal in what ought to be reasonable operating territory (2 unis in Bath, and UWE in Bristol which should have benefitted some FSA services).

Probably not helped by them running modern, high depreciation, gas-guzzling B7RLEs on Solo/Dart routes like the 126 and the 175

South Yorkshire has always been difficult territory because of the legacy of very low fares from the PTE and the war with Stagecoach won't be helping. There may be a sort of peace dividend from the Sheffield partnership and the closure of Midland Rd will no doubt help in year 17-18, although it will bring operational challenges in the short term.

FMR (=Worcester) results may be affected by the closure of Hereford; ditto Berkshire re Bracknell.

Credit where credit's due, FSE and FSW may still have been lossmaking but less so than 3 years ago and both definitely headed in the right direction, and I would expect 2016-7 results for both to continue that improvement.

I doubt FHD's 16-17 results will be as good given the prolonged strike in Dorset, but both Hampshire and Cymru appear to have done well again in difficult markets.

I did wonder how much of the closure of Hereford (and the other 2015 depot casualties) in terms of one off costs was reflected in the trading for FMR and others.

The strike will have damaged FHD and the impact may be evident next year. Certainly, the idea of newer fleet for the X51/3 will go on the back burner for a while and I wonder whether the X52 will survive past next summer.

To be fair to the 126, it was worked by fully depreciated fleet for much of 2015 Now, stop being wicked However, there's no obvious reason (to the passing enthusiast) why FSA should be trading so poorly; only if you have the detailed P&L and see what's in there will you discover.

 

[baza585]

I did wonder how much of the closure of Hereford (and the other 2015 depot casualties) in terms of one off costs was reflected in the trading for FMR and others.

The strike will have damaged FHD and the impact may be evident next year. Certainly, the idea of newer fleet for the X51/3 will go on the back burner for a while and I wonder whether the X52 will survive past next summer.

To be fair to the 126, it was worked by fully depreciated fleet for much of 2015 Now, stop being wicked However, there's no obvious reason (to the passing enthusiast) why FSA should be trading so poorly; only if you have the detailed P&L and see what's in there will you discover.

I doubt the Jurassic routes will ever recover from Dorset's appalling low ENCTS remuneration. Shame because it was a wonderful route end to end and FHD worked hard to build it up, but my impression is that the Damory tender cost the council a small fortune and they then found a set of consultants who could justify such a low remuneration rate. A salutory tale of the risks when councillors meddle and try to be too clever.

Mr. FSW could no doubt put me straight on the history if they choose to do so.

I suspect First Dorset will struggle on until the mass re-tendering of DCC contracts; if they don't get much joy there, I reckon we might see a withdrawal of the X52 and then maybe a sale of Bridport and Weymouth (possibly to Stagecoach who are strong in east Devon and there would be minimal CMA issues (the odd route around Lyme Regis and Axminster) compared with a sale to GA).

Alternatively a sale of Bournemouth Yellow Buses to First would really up the pressure on GSC but I can't see that happening any time soon to be honest. But you never know............

 

[baza585]

Looks to be up mainly due to Corp tax/deferred tax savings.

I am not an accountant (though I work with several....) but I would have thought that looking at Pre Tax profit (or possibly PT Profit less financing costs) is more appropriate when considering operational performance (because group relief and other deferred tax adjustments can distort the picture, particularly in years where the CT rate changes).

There are a number of subsids with double digit operating margins, including Aberdeen and Leicester as well as West Yorkshire and Cymru, and Glasgow and Hampshire aren't that far away.

Of the others some are in recovery (at varying speeds), but others (notably Essex and FSA) seem to be in steady decline, whilst the results from the big urban areas of Manchester, Bristol and South Yorkshire are frankly not very good.

Bristol has gone from an operating margin of 11.4% to 2.1% in a year; unless there are substantial one-offs (and I can't immediately see or think of any), I can only assume this is partly the impact of the fare reductions, whilst staff costs have increased by 17% which seems very high, but may reflect the use of agency drivers and/or the need to recruit and retain drivers.

I'm not adding to my modest holding in FGP just yet!

 

[Robertj21a]

I am not an accountant (though I work with several....) but I would have thought that looking at Pre Tax profit (or possibly PT Profit less financing costs) is more appropriate when considering operational performance (because group relief and other deferred tax adjustments can distort the picture, particularly in years where the CT rate changes).

There are a number of subsids with double digit operating margins, including Aberdeen and Leicester as well as West Yorkshire and Cymru, and Glasgow and Hampshire aren't that far away.

Of the others some are in recovery (at varying speeds), but others (notably Essex and FSA) seem to be in steady decline, whilst the results from the big urban areas of Manchester, Bristol and South Yorkshire are frankly not very good.

Bristol has gone from an operating margin of 11.4% to 2.1% in a year; unless there are substantial one-offs (and I can't immediately see or think of any), I can only assume this is partly the impact of the fare reductions, whilst staff costs have increased by 17% which seems very high, but may reflect the use of agency drivers and/or the need to recruit and retain drivers.

I'm not adding to my modest holding in FGP just yet!

Quite, I'd broadly agree with that. I deliberately avoided going too far into the data as, once past the basic in/out figures, there is too much opportunity for other weird and wonderful figures to suddenly appear ! - all perfectly legal and above board, but it just introduces added complications.

Bristol certainly had to use a lot of agency drivers if my memory serves me correctly, and they also suffer horrendous congestion. The never-ending congestion around Worcester is, apparently, now even worse and that may have been a big contributor to their dismal performance. Potteries has improved quite a bit following the depot closure and I wonder if that will be enough for the Senior Management.

 

[overthewater]

First Aberdeen are making cuts:

Stagecoach already operate a more frequent service to Woodend on its X17, and of course I dont see the point in the X40 still severing the Hospital ( for anyone unsure of Aberdeen - Said hospital is on the other side of the city centre, and the 23 cover part of its route with more buses)
There would be better off making the No4 every 30mins

https://www.pressandjournal.co.uk/fp/news/aberdeen/1149223/kingswells-bus-routes-removed-by-first/

Two major bus routes linking Kingswells with the city will be axed later this year.

First Aberdeen yesterday announced the changes to the 11 and X40 routes meaning they will not run to the Aberdeen suburb after April 1.

The 11 service will operate between Northfield and Woodend and the X40 service will run between Dubford, Bridge of Don Park and Ride and Aberdeen Royal Infirmary.

The removal of these services mean the only remaining route will be run by Stagecoach from Kingswells Park and Ride with no stops in the suburb itself.

With an average of only 3.6 passengers per bus First claim the routes are unsustainable.

The operator originally proposed removing them last September, however have continued running to allow for consultation with local residents and Aberdeen City Council.

But now the decision has been taken to remove the services completely.

A spokesman for the company said: “The withdrawal of the service was a last resort.

“We are committed to trying to deliver sustainable services for local people and when something like this happens it means we have completely run out of options.

“The services have been running at a loss, we’ve been trying to maintain them but can’t any longer.

“But they are just not sustainable.”

David Cameron, SNP councillor for Kingswells, Sheddocksley and Summerhill, has approached Stagecoach to see if they will increase their services between Kingswells and Aberdeen.

He said: “For the people of Kingswells, what they absolutely need is a consistent and regular bus service into Aberdeen.
“First were offering something that really wasn’t achievable, they were offering a 10 minute frequency.

“I want to be able to get an agreement to maintain a bus service, which will probably now be with Stagecoach.

“From my initial discussions with Stagecoach they said they won’t offer anything they can’t sustain so I don’t anticipate Stagecoach coming along and offering a 10 minute service.

“I think Stagecoach will offer something, but it will be a 30 minute service or something that is sustainable.”

Stagecoach admitted they are considering adding to their services from Kingswells.

A spokeswoman said: “We are looking at the possibility of introducing some new routes in Aberdeen city.

“However no decisions have yet been made.”

Aberdeen City Council Transport and Regeneration spokesman Councillor Ross Grant said: “As a commercial company, First decides the routes for its buses. We can confirm First has informed us it will no longer run buses through Kingwells from 2 April.

“Aberdeen City Council officers have been engaging with other operators to try and find a solution. We will also bring forward details of a public meeting for residents in Kingswells shortly to advise of the council’s discussions in trying to find a solution.”

 

[Volvodart]

They are just doing what they have been doing everywhere else for some time. Aberdeen has been doing well not to have cuts before now, as buses are noticably less busy with the downturn in the oil industry.

 

[overthewater]

They are just doing what they have been doing everywhere else for some time. Aberdeen has been doing well not to have cuts before now, as buses are noticably less busy with the downturn in the oil industry.

I know what your saying but the route in question just makes you wonder why have there left it this long, why did there leave it every 20mins mins.

the withdrawal of the service was a last resort.

Clearly it wasn't because there kept on running buses every 20mins and it hard to compete with the more frequent no23. Also the Park n ride might get more busier soon with the Aberdeen By pass being built.

 

[THarris123]

I am not an accountant (though I work with several....) but I would have thought that looking at Pre Tax profit (or possibly PT Profit less financing costs) is more appropriate when considering operational performance (because group relief and other deferred tax adjustments can distort the picture, particularly in years where the CT rate changes).

There are a number of subsids with double digit operating margins, including Aberdeen and Leicester as well as West Yorkshire and Cymru, and Glasgow and Hampshire aren't that far away.

Of the others some are in recovery (at varying speeds), but others (notably Essex and FSA) seem to be in steady decline, whilst the results from the big urban areas of Manchester, Bristol and South Yorkshire are frankly not very good.

Bristol has gone from an operating margin of 11.4% to 2.1% in a year; unless there are substantial one-offs (and I can't immediately see or think of any), I can only assume this is partly the impact of the fare reductions, whilst staff costs have increased by 17% which seems very high, but may reflect the use of agency drivers and/or the need to recruit and retain drivers.

I'm not adding to my modest holding in FGP just yet!

In Bristol, the fare reductions won't relate to it - turnover has increased. It's more the operational costs.

 

[THarris123]

Generally from a operational point of view, the profit before interest and tax is most vital, but to a shareholder or investor, the profit after tax is more vital. So yes you are right baza in what you say.

There will also be intra group transfers included in sales and purchases, so it still won't fully be as reliable as it shows on paper. The only real people that will know is Firsts accountants. The full accounts on Companies House (which I can view for Yorkshire but not Bristol (annoyingly)) gives much more detail as to how it is broken down, but there will always be stuff missing and it makes the accounts quite unreliable.

 

[THarris123]

http://www.route-one.net/articles/Operators/OPTARE_S_METROCITY_REAL_WORLD_TRIAL_SUCCESS_WITH_FIRST

Interesting article. Looks like First will be investing in some Metrocitys and I would assume from the article some Metrodeckers too.

I assume the Metrocity will go to Southampton - maybe a replacement for the B7s?

 

[ChrisPJ]

Was I reading a different article? Nothing in there comes remotely close to implying that firm orders will result for either bus.

 

[THarris123]

Was I reading a different article? Nothing in there comes remotely close to implying that firm orders will result for either bus.

Usually when I read First now has this bus in its approval list, I would expect them to order some buses.

 

[baza585]

http://www.route-one.net/articles/Operators/OPTARE_S_METROCITY_REAL_WORLD_TRIAL_SUCCESS_WITH_FIRST

Interesting article. Looks like First will be investing in some Metrocitys and I would assume from the article some Metrodeckers too.

I assume the Metrocity will go to Southampton - maybe a replacement for the B7s?

More likely to be Weymouth on the Jurassic routes, I'd have thought. That will be a serious test of its capabilities.

 

[BBC]

I am not an accountant (though I work with several....) but I would have thought that looking at Pre Tax profit (or possibly PT Profit less financing costs) is more appropriate when considering operational performance (because group relief and other deferred tax adjustments can distort the picture, particularly in years where the CT rate changes).

There are a number of subsids with double digit operating margins, including Aberdeen and Leicester as well as West Yorkshire and Cymru, and Glasgow and Hampshire aren't that far away.

Of the others some are in recovery (at varying speeds), but others (notably Essex and FSA) seem to be in steady decline, whilst the results from the big urban areas of Manchester, Bristol and South Yorkshire are frankly not very good.

Bristol has gone from an operating margin of 11.4% to 2.1% in a year; unless there are substantial one-offs (and I can't immediately see or think of any), I can only assume this is partly the impact of the fare reductions, whilst staff costs have increased by 17% which seems very high, but may reflect the use of agency drivers and/or the need to recruit and retain drivers.

I'm not adding to my modest holding in FGP just yet!

It's not just agency that contributed to that, there was also a 15% pay rise for new drivers in October 2015.

 

[dgl]

More likely to be Weymouth on the Jurassic routes, I'd have thought. That will be a serious test of its capabilities.

Agreed, there are some mighty steep hills on that route esp. Abbotsbury and Chideock hill, and also if diverted portesham hill (which is even worse)

 

[Robertj21a]

Generally from a operational point of view, the profit before interest and tax is most vital, but to a shareholder or investor, the profit after tax is more vital. So yes you are right baza in what you say.

There will also be intra group transfers included in sales and purchases, so it still won't fully be as reliable as it shows on paper. The only real people that will know is Firsts accountants. The full accounts on Companies House (which I can view for Yorkshire but not Bristol (annoyingly)) gives much more detail as to how it is broken down, but there will always be stuff missing and it makes the accounts quite unreliable.

But a shareholder in First can only invest in the whole group (FGP) - including Rail, USA operations etc etc. A break down by individual UK bus operating area won't be too much help in gaining an insight into the vastly bigger picture.

 

[winston270twm]

Surprised no one has any comments on this morning's trading statement:

http://otp.investis.com/generic/regulatory-story.aspx?newsid=842092&cid=858

http://www.telegraph.co.uk/business...firstgroup-revenues-gear-us-business-expands/

http://www.thisismoney.co.uk/money/...-repairs-falling-demand-buses-hurt-Group.html

 

[Baxenden Bank]

Surprised no one has any comments on this morning's trading statement:

http://otp.investis.com/generic/regulatory-story.aspx?newsid=842092&cid=858

http://www.telegraph.co.uk/business...firstgroup-revenues-gear-us-business-expands/

http://www.thisismoney.co.uk/money/...-repairs-falling-demand-buses-hurt-Group.html

Have you any comments on it?

Go on, save us the effort, summarise them.