First Group: General Discussion

[Robertj21a]

Some of the businesses like Aberdeen and, presumably, Glasgow are having to make PVR cuts. All of the businesses had to contribute to these "efficiencies" somehow, but it is not clear what those that did not have to make PVR cuts are doing.

Looking over their shoulder to check whether representatives of Stagecoach, GoAhead or National Express are looking at their premises ?

 

[overthewater]

In the absence of any new stock it looks like First Glasgow are going down the route of cutting PVR to get rid of the oldest vehicles. They’ve registered a lot of changes from the middle of next month and most of the timetables are already on Traveline. 12 minute frequencies on the 10/57/57a go down to 15 minute all year round, the 15 is swallowed up by the 8, the M4 goes, Carluke drops off the network and the Hamilton locals get cut back. I’m guessing there’s more if you dig into it.

First have a strange attitude to fleet replacement in Glasgow – either feast or famine. I remember 2004 when they had to order 200 buses, but even the influx of Enviro’s in 2012/13 is getting on for 5 years ago. You’d think it would make sense to bring in a new fleet for the One (surely one First’s best earners) and cascade the existing fleet (which has been hammered up and down the Expressway for 5 years) onto busy routes like the 9?

Starving one of the most profitable parts of the bus business of investment doesn’t seem like a well-thought out long-term strategy, and if I was a shareholder I’d be asking serious questions about whether there really is a coherent plan to turn the business round. If a bus business serving some of Britains biggest cities can’t afford to invest in new stock to improve the offer to customers, it’s probably time to give up.

Not even five mins in the door and Mr Javis has started cutting. Its bonkers what going here, FiG No2 is the more profitable part of the Glasgow business but is getting more cuts, it's bad enough in North Lanarkshire for congestion it's only going to worse. Service 241 was every 10mins before school holidays started now after there finished there will be cut from every 12 to 15mins over most of the route.

Within Glasgow it would seem some of the school holiday freq are being kept. Its bonkers and its not going to solve any issues and long term, It would seem Simplcity concept is dead.

I think the other companies like McGills or JMB can smell blood and will go for it in part of Lanarkshire. I will admit there are places within Glasgow where some proper reasonable cuts can and should be taking place, just like at the No 8 and 15 etc but the cuts are going once again going too far...

 

[NorthernSpirit]

Wonder where the current Citaro Bendies will go?

If First still have the Cherry Row depot in Leeds, then they'd go there to be stored or probably dumped at the back of Old Fieldhouse Lane (Huddersfield) or Skircoat Road (Halifax) depots. I don't think they have space at Bramley or at Hunslet for them. It'd be pointless sending them to store though when they can still be used in service.

I wouldn't mind seeing them being used on the 8 Bristol Zoo circular, the 265 between Bath and Salisbury and the 271 / 272 Bath to Bowerhill / Urchfont to be honest but we can only imagine.

If the Citaro's do go anywhere then its likely they'd be shunted off to Leeds or Halifax but even then the only suitable routes where they could go would either be on the 1, 6, 64 or the 72 in Leeds, the 503, 576, 590 and 592 in Halifax and probably on the 397, 398, 399 Huddersfield Uni services.

 

[TheGrandWazoo]

It could be argued that First has never really had any money to pay for new buses all the time that their overall debts are so high. The fact that they did buy new buses was, partly, related to the fact that they had a legal requirement to meet their PSVAR obligations. This year they don't........

The rights issue was supposed to address (at least in part) both of those issues in providing the capital to help achieve compliance and to reduce debt. The plan was also to exit certain ops via sales to raise £100m to reduce debt or closure - ops that required extra investment and/or were loss making.

Whether there was enough clearing of the decks at the time is perhaps doubtful - a position I now take with the benefit of hindsight. However, the plan was clearly to effect a change in order to be PSVAR compliant and to restore margins through passenger growth. However, some of the operations remain obstinately weak.

The problem is that since 2012, the bus industry has suffered massively from cuts to BSOG in that year, cuts to subsidies, cuts to ENCTS remuneration and then burgeoning congestion and disrupters such as Uber. They'd bargained on getting an improved trading position by this point.

This isn't confined to First. We're seeing the impact on Stagecoach's bus operations; First were in a much weaker position that them!

 

[TheGrandWazoo]

If First still have the Cherry Row depot in Leeds, then they'd go there to be stored or probably dumped at the back of Old Fieldhouse Lane (Huddersfield) or Skircoat Road (Halifax) depots. I don't think they have space at Bramley or at Hunslet for them. It'd be pointless sending them to store though when they can still be used in service.

I wouldn't mind seeing them being used on the 8 Bristol Zoo circular, the 265 between Bath and Salisbury and the 271 / 272 Bath to Bowerhill / Urchfont to be honest but we can only imagine.

I'd take more water with whatever you're drinking...

 

[Robertj21a]

The rights issue was supposed to address (at least in part) both of those issues in providing the capital to help achieve compliance and to reduce debt. The plan was also to exit certain ops via sales to raise £100m to reduce debt or closure - ops that required extra investment and/or were loss making.

Whether there was enough clearing of the decks at the time is perhaps doubtful - a position I now take with the benefit of hindsight. However, the plan was clearly to effect a change in order to be PSVAR compliant and to restore margins through passenger growth. However, some of the operations remain obstinately weak.

The problem is that since 2012, the bus industry has suffered massively from cuts to BSOG in that year, cuts to subsidies, cuts to ENCTS remuneration and then burgeoning congestion and disrupters such as Uber. They'd bargained on getting an improved trading position by this point.

This isn't confined to First. We're seeing the impact on Stagecoach's bus operations; First were in a much weaker position that them!

I quite agree that the rights issue should have resolved many of these issues but, in practice, it now looks little more than a sticking plaster.

I don't think anyone underestimates what Giles and Tim O'T have had to do just to keep the UK bus operations afloat but it's clearly still not been enough. As you say, there are problems across the industry (even Stagecoach) nowadays but, as usual, it's First that starts off on the back foot.

What would have happened if those shareholders had succeeded in splitting up the group into more manageable (saleable) units ?

 

[overthewater]

What would have happened if those shareholders had succeeded in splitting up the group into more manageable (saleable) units ?

I believe we would be in a much better footing since debt would be lower, bus operation profits could be put back in the business much more easier, while trains side I dont care much for it, but im sure UK Bus and USA bus could be one opertions.

 

[swifty]

I'd take more water with whatever you're drinking...

There's a reason "we can only imagine"

 

[Bungle965]

If First still have the Cherry Row depot in Leeds, then they'd go there to be stored or probably dumped at the back of Old Fieldhouse Lane (Huddersfield) or Skircoat Road (Halifax) depots. I don't think they have space at Bramley or at Hunslet for them. It'd be pointless sending them to store though when they can still be used in service.

I wouldn't mind seeing them being used on the 8 Bristol Zoo circular, the 265 between Bath and Salisbury and the 271 / 272 Bath to Bowerhill / Urchfont to be honest but we can only imagine.

If the Citaro's do go anywhere then its likely they'd be shunted off to Leeds or Halifax but even then the only suitable routes where they could go would either be on the 1, 6, 64 or the 72 in Leeds, the 503, 576, 590 and 592 in Halifax and probably on the 397, 398, 399 Huddersfield Uni services.

If they are going to go on any route the 590 will be towards the bottom of the list, there are simply too many obstacles that would have to be overcome to have them on that (fuel usage, route clearance etc)
However there are very full buses that come into Rochdale Bus Station in the mornings and leave again in the evening so extra capacity is needed. I seem to remember that deckers don't normally go on that route due to the depot that operates the 590 cannot accommodate deckers in their depot due to height restrictions.
Sam

 

[THarris123]

I'd take more water with whatever you're drinking...

Similar sort of line as I was going to use.

265 nearly doesn't warrant the Streetlite Maxs - especially to Salisbury. You could increase the frequency on 265 up to Warminster to every 20 mins and retain 265 to Salisbury every 2 hours, then use smaller vehicles.
271/272 neither warrants the current vehicles.

I'd love to see a Bendy go around the 8 service. I think you might end up going through the whole batch within 1 day.

The only services that can handle Bendies in our area are U1 and the park and rides. I suppose the only other services that I can think of is the Bristol Airport A1, but nothing else really can justify bendies either through demand or the route it takes.

 

[swifty]

Similar sort of line as I was going to use.

265 nearly doesn't warrant the Streetlite Maxs - especially to Salisbury. You could increase the frequency on 265 up to Warminster to every 20 mins and retain 265 to Salisbury every 2 hours, then use smaller vehicles.
271/272 neither warrants the current vehicles.

I'd love to see a Bendy go around the 8 service. I think you might end up going through the whole batch within 1 day.

The only services that can handle Bendies in our area are U1 and the park and rides. I suppose the only other services that I can think of is the Bristol Airport A1, but nothing else really can justify bendies either through demand or the route it takes.

Don't forget thought that an 18m bendy bus is more manoeuvrable than a rigid 12m single decker. Whilst it's true that most routes are better off with standard stock quite a few would easily take one.

 

[DD12]

Can anyone tell me how much profit First UK bus made in the last financial year, please ?
- and after "a payment towards reducing the Group's debt", and other payments - like a share dividend, ETC, - was this "still a profit" ?

(Obviously I know nothing about the finance aspects of the small bus operating companies and the international group of companies, - so no "put-downs" please).

 

[F Great Eastern]

First Aircoach in Dublin could be a destination for the bendies.

They had 11 delivered a few years ago coupled with two existing rigid buses which allowed to run the various car park and staff shuttles comfortably with room for small expansion of PVR without needing to add extra vehicles to the fleet.

The PVR slowly expanded over last few years to the point where the spare vehicles became regular vehicles and last year they added a second-hand Streetlite and this year a second hand Citaro and there has been rumour that there are more vehicles to come as passenger numbers continue to boom at Dublin Airport.

Only this month Dublin Airport have asked for a second staff shuttle bus to be run which has seen a 15 year old Citaro come out of retirement.

Still no word on the Belfast Coaches.

 

[TheGrandWazoo]

Similar sort of line as I was going to use.

265 nearly doesn't warrant the Streetlite Maxs - especially to Salisbury. You could increase the frequency on 265 up to Warminster to every 20 mins and retain 265 to Salisbury every 2 hours, then use smaller vehicles.
271/272 neither warrants the current vehicles.

I'd love to see a Bendy go around the 8 service. I think you might end up going through the whole batch within 1 day.

The only services that can handle Bendies in our area arehe U1 and the park and rides. I suppose the only other services that I can think of is the Bristol Airport A1, but nothing else really can justify bendies either through demand or the route it takes.

The UWE service in Bristol probably could as well as the U5/6 - the latter did have bendis in a previous incarnation though I'd doubt it happening. And there's always Metrobus

 

[TheGrandWazoo]

Can anyone tell me how much profit First UK bus made in the last financial year, please ?
- and after "a payment towards reducing the Group's debt", and other payments - like a share dividend, ETC, - was this "still a profit" ?

(Obviously I know nothing about the finance aspects of the small bus operating companies and the international group of companies, - so no "put-downs" please).

£870m rev created £113m ebit but only £52m op profit

 

[Baxenden Bank]

In the absence of any new stock it looks like First Glasgow are going down the route of cutting PVR to get rid of the oldest vehicles. They’ve registered a lot of changes from the middle of next month and most of the timetables are already on Traveline. 12 minute frequencies on the 10/57/57a go down to 15 minute all year round, the 15 is swallowed up by the 8, the M4 goes, Carluke drops off the network and the Hamilton locals get cut back. I’m guessing there’s more if you dig into it.

First have a strange attitude to fleet replacement in Glasgow – either feast or famine. I remember 2004 when they had to order 200 buses, but even the influx of Enviro’s in 2012/13 is getting on for 5 years ago. You’d think it would make sense to bring in a new fleet for the One (surely one First’s best earners) and cascade the existing fleet (which has been hammered up and down the Expressway for 5 years) onto busy routes like the 9?

Starving one of the most profitable parts of the bus business of investment doesn’t seem like a well-thought out long-term strategy, and if I was a shareholder I’d be asking serious questions about whether there really is a coherent plan to turn the business round. If a bus business serving some of Britains biggest cities can’t afford to invest in new stock to improve the offer to customers, it’s probably time to give up.

Perhaps the long-term strategy is to exit the UK bus business? In which case gradual thinning of routes / services / networks / depots, as buses become life expired is a good way of doing it - no write downs, no seriously bad publicity as a five minute frequency is reduced to no service, reduction in staff through natural wastage so no redundancy costs etc.

 

[Robertj21a]

Can anyone tell me how much profit First UK bus made in the last financial year, please ?
- and after "a payment towards reducing the Group's debt", and other payments - like a share dividend, ETC, - was this "still a profit" ?

(Obviously I know nothing about the finance aspects of the small bus operating companies and the international group of companies, - so no "put-downs" please).

The 2017 Accounts for First UK Bus showed an 'Adjusted' Operating profit of just £37m (£52m the previous year) - so, a bit over 10% of the £339m profit made by the whole Group (mostly in the USA).

 

[Robertj21a]

Perhaps the long-term strategy is to exit the UK bus business? In which case gradual thinning of routes / services / networks / depots, as buses become life expired is a good way of doing it - no write downs, no seriously bad publicity as a five minute frequency is reduced to no service, reduction in staff through natural wastage so no redundancy costs etc.

Well, if anybody looks at a list of all their closures in recent years you could say that it's been their policy all along !

 

[Baxenden Bank]

Can anyone tell me how much profit First UK bus made in the last financial year, please ?
- and after "a payment towards reducing the Group's debt", and other payments - like a share dividend, ETC, - was this "still a profit" ?

(Obviously I know nothing about the finance aspects of the small bus operating companies and the international group of companies, - so no "put-downs" please).

From the 2016 accounts:
£871m turnover (2015 £896m)
6% adjusted operating margin (2015 5.8%)
£52m adjusted operating profit (2015 £51.8m)
17,500 employees (2015 18,000)
6,200 buses
1.6m passengers per day

Supporting text blames anything and everything on reduced passengers except - reduced frequencies are less attractive to customers so they made alternative arrangements!

 

[TheGrandWazoo]

From the 2016 accounts:
£871m turnover (2015 £896m)
6% adjusted operating margin (2015 5.8%)
£52m adjusted operating profit (2015 £51.8m)
17,500 employees (2015 18,000)
6,200 buses
1.6m passengers per day

Supporting text blames anything and everything on reduced passengers except - reduced frequencies are less attractive to customers so they made alternative arrangements!

The supporting text is very similar to Stagecoach who said "Management action taken across our bus operations in response to period of subdued revenue trends
– targeted network, pricing and management changes" - that management action being a lot of service trimming - Devon, Ayrshire, Fife, Forest of Dean et al

It's a tough market and First were in a bad place beforehand. Of their own doing I might add.

 

[TheGrandWazoo]

Perhaps the long-term strategy is to exit the UK bus business? In which case gradual thinning of routes / services / networks / depots, as buses become life expired is a good way of doing it - no write downs, no seriously bad publicity as a five minute frequency is reduced to no service, reduction in staff through natural wastage so no redundancy costs etc.

If it's (the company) an asset on the books, it will still need to be written down.

 

[DD12]

£870m rev created £113m ebit but only £52m op profit

Thanks GW and everyone who has replied !

I have just looked on Wikipedia to find out that "ebit" is earnings before interest and tax" !

In the examples of the operating profit above, can I assume that this has to be paid to the GROUP ("HQ"), and that Group HQ then decides how much of this goes towards debt repayment ?, dividends ?, new vehicles ?, - "or what" ?

THANKS. (P.S. I already know I'm "THICK", thank you).

 

[TheGrandWazoo]

The 2017 Accounts for First UK Bus showed an 'Adjusted' Operating profit of just £37m (£52m the previous year) - so, a bit over 10% of the £339m profit made by the whole Group (mostly in the USA).

Well spotted - I'd quoted the 2016 figures

 

[winston270twm]

Thanks GW and everyone who has replied !

I have just looked on Wikipedia to find out that "ebit" is earnings before interest and tax" !

In the examples of the operating profit above, can I assume that this has to be paid to the GROUP ("HQ"), and that Group HQ then decides how much of this goes towards debt repayment ?, dividends ?, new vehicles ?, - "or what" ?

THANKS. (P.S. I already know I'm "THICK", thank you).

First Group hasn't paid a dividend to shareholders since before the rights issue (4 years ago ish). I suspect the proceeds from the right issue investment & turnaround plan was also based on the likelihood of retaining much of their Rail Franchises at that time and potentially winning a new large one to generate cash. Which didn't happen on both counts, they have however since gained SWT, but Rail doesn't generate anywhere near the profits it used to and as we've seen with Stagecoach / Virgin East Coast companies are still paying over the odds for franchises.

I'm wondering if First Group will spread say 2 year’s worth of new vehicle investment over 3 years for example or delay it to the end of the year so deliveries take place in the later quarter of 2017/18 & cross over in to 2018/19. Personally, I think it's the wrong time to be potentially cutting back on fleet investment, especially at a time when growth has stalled, passenger numbers are falling and you also need to consider that a number of UK towns & cities are implementing low emission zones etc. Whilst there has been a lot of improvements with the existing fleet, most of it is only cosmetic (i.e. repaints/ rebrands only) interiors still aren't being touched in a lot of cases.

Cutting frequencies to remove time expired buses will only continue the downward spiral of falling passenger numbers followed by more cuts etc

 

[overthewater]

Cutting frequencies to remove time expired buses will only continue the downward spiral of falling passenger numbers followed by more cuts etc

First Scotland East hasn't had to made any cuts because there cut everything to the bone over the past four years. With Old buses because it sold off stuff it allowed it to move lots of newer buses to the current areas.

Problem for First now in other areas it not going to sell anything else off now, and there are plenty of companies just waiting to make a killing.

 

[overthewater]

First Glasgow Service changes are now up, Its hard to put your finger on these changes. Some of there are good, while others are no mention what so ever are cuts are happening around Lanarkshire. Auchinairn has seen alot of redevelopment. Any bus savings wont kill of the scrap.

NOTE: Timetables and whats posted below dont add up..

https://www.firstgroup.com/greater-...-changes/service-change-sunday-20-august-2017

Timetable changes will be made to services 3, 4/4A*, X4, 18, 57A, 81, 88/88A/88C, 89/89A/89B and 90^^, 201, 227, 229, 241, 254, 255, 263, 267

*Saturday only ^^Sunday only

Service M4 Anniesland to Partick via Kelvindale will be withdrawn.

Service 6A will start and terminate at George Square North and will not stop on Cochrane Street – minor timetable changes introduced.

Service 8 will be extended from Partick to the Queen Elizabeth University Hospitals and rerouted via Summerston, to replace service 15

service 8 will not serve Sandbank Street between Thornton Street and Maryhill Road – no change to service 8A
new direct links from Ashfield, Lambhill and Cadder to the QEUH
revised timetable but no change to frequency
stance 2 will be used at Partick towards the QEUH and stance 4 at Arrivals Square
Service X8 on journeys towards Pollok will be rerouted via St Vincent Street and Wellington Street and will no longer serve Union Street and Argyle Street.

Service X8 will stop on Renfield Street at The Renfield Bar, St Vincent Street after Renfield Street and Waterloo Street.

Services 10 and 57 Darnley and Auchinairn
To improve the reliability of services 10 and 57, simplify their operation and take account of the reduction in passenger demand resulting from population changes, the timetables and routes of these services will be revised:

service 10 will operate between Silverburn and city centre, Douglas Street
service 57 will operate between Silverburn and Auchinairn and will be diverted to Auchinairn Road to replace service 10
new service 87 will operate between Buchanan bus station (stance 36) and Westerhill via Springburn every 15 minutes Monday to Saturday daytime, and every 30 minutes evenings and Sundays replacing most of service 10
Monday to Friday mainday frequency of services 10, 57 and service 57A will be reduced from 12 to 15 minutes.
Between Thornliebank station, city centre and Red Road, services 57 and 57A will combine to operate every 7-8 minutes during the day Monday to Saturday, 15 minutes in the evening and 10 minutes during the day on Sunday.
no change to the evening, Saturday or Sunday frequencies although revised timetables will be introduced daily.
Service 15 Summerston and QEUH will be withdrawn and fully replaced by revised service 8.

Service 16 Drumchapel and QEUH will be rerouted between Blairdardrie and Drumchapel, Merryton Avenue and a revised timetable introduced.

Service 21 Gardenhall and city centre terminal point in city centre moved from Wellington Street to Cochrane Street, minor timetable changes. Stop UC at the Royal Scot pub will be used in Union Street and the stop on Argyle Street at Frasers will no longer be used.

Services X85 and X87 city centre and Campsie Glen or Waterside

new hourly X87 evening service introduced improving Kirkintilloch – city centre frequency in the evenings to 30 minutes. At Buchanan bus station these services will move to stance 38

NEW service 87 Buchanan bus station and Auchinairn, Westerhill

replaces service 10 between the city centre and Auchinairn Road, and service 57 to Westerhill (when Westerhill Road reopens)
operates every 15 minutes Monday to Saturday mainday and every 30 minutes evenings and Sundays.
between Springburn and Buchanan bus station combines with service 88 to operate every 7-8 minutes Monday to Saturday mainday and 15 minutes Sunday mainday, and 4 buses per hour in the evenings.
leaves from stance 36 at Buchanan bus station
Service 240 city centre and Pather or Carluke will be revised to operate between city centre and Overtown. Section of route between Wishaw and Carluke withdrawn. Service 242 will be diverted at Wishaw to serve Pather.

Revised frequency will be introduced on Saturdays.

Service 242 Maxim or Holytown and Overtown will be diverted at Wishaw to serve Pather to replace service 240 between Wishaw and Pather

Service 266 Hamilton and Newmains or Shotts during the mainday Monday to Friday, the frequency between Hamilton and Newmains Cross will be improved from every 7-8 minutes to every 6 minutes.

 

[TheGrandWazoo]

First Scotland East hasn't had to made any cuts because there cut everything to the bone over the past four years. With Old buses because it sold off stuff it allowed it to move lots of newer buses to the current areas.

Problem for First now in other areas it not going to sell anything else off now, and there are plenty of companies just waiting to make a killing.

Are there really companies waiting to make a killing?

The way the bus industry is at the moment, I wouldn't say so. Look at the Stagecoach figures viz reduction in revenue of 1.5% - Majority of this came (£15m) came from reductions in tendered and school revenue (£10m). Shows how hard things are.

Compare that with First revenue dropping by 0.6%

 

[winston270twm]

Are there really companies waiting to make a killing?

The way the bus industry is at the moment, I wouldn't say so. Look at the Stagecoach figures viz reduction in revenue of 1.5% - Majority of this came (£15m) came from reductions in tendered and school revenue (£10m). Shows how hard things are.

Compare that with First revenue dropping by 0.6%

No one is the bus industry makes a killing these days, they are all struggling to maintain existing profit levels let alone grow them. And that's the better of the big groups / operating subsidiaries.

 

[TheGrandWazoo]

No one is the bus industry makes a killing these days, they are all struggling to maintain existing profit levels let alone grow them. And that's the better of the big groups / operating subsidiaries.

Indeed, and that's not to excuse the position that First found themselves in after the Lockhead years. My view FWIW is that Stagecoach found themselves in a similar position in the early 2000s but sorted themselves out more quickly, essentially when Brian bulleted Kinski.

The difference is that it was identified early and decisive action taken. Moir (with his pride) didn't do that and allowed the position to weaken appreciably. First have hit this period in a much weaker position.

 

[winston270twm]

Indeed, and that's not to excuse the position that First found themselves in after the Lockhead years. My view FWIW is that Stagecoach found themselves in a similar position in the early 2000s but sorted themselves out more quickly, essentially when Brian bulleted Kinski.

The difference is that it was identified early and decisive action taken. Moir (with his pride) didn't do that and allowed the position to weaken appreciably. First have hit this period in a much weaker position.

FGW,

That sums up First's position pretty well, and in the current climate it's even harder to turn around UK Bus than it would have been a few years back. Ultimately UK Bus has since paid the price for the 2007 Laidlaw acquisition which clearly shows FGP had bitten off more they could chew and has strangled them ever since.... It's a damn good job NX rejected First Groups takeover bid in 2009, imagine what would of happened to First Group with having to sort of the then NX Group, which also would have bought with it another £1billion worth of debt. Lockhead's focus shifted to being the biggest, instead of being the best. Dean Finch has since done a stirling job to turn around NX's fortunes and his strategy has paid dividends with not having a large UK Bus op & only investing in low risk new business / bolt on acquisitions only etc.

May be First Group would have done better bidding for smaller/lower risk German Franchises, Singapore Bus Contracts etc