First Group: General Discussion

[DragonEast]

It has been mentioned previously that ANY First UK Bus unit is available for sale. Few of them contribute significant profits so their loss will barely be noticed (and might be a blessing for the Accounts). Those that do some good for the balance sheet (as above - the West Yorkshire/Glasgow/Leicester's of the world) would still need to find a buyer willing to fork out quite a bit of money - and the bus industry in general is not in a very good shape to encourage any such purchasers.

I slightly amended my post. No one will buy to do First a favour. The purchaser is doing itself a favour, and in the present state of the industry that won't happen . . . unless it fits the purchasers strategy for the future. And I suspect that is less to do with the industry than macro-economic factors. Where is the future growth coming - yes I know it's more uncertain than ever, but there are a few places thriving (outside London - which might not be for much longer or as much as it has in the past). The one thing that is certain is that if there are opportunities, First are without some miracle in no position to take advantage of them!

 

[Robertj21a]

I slightly amended my post. No one will buy to do First a favour. The purchaser is doing itself a favour, and in the present state of the industry that won't happen . . . unless it fits the purchasers strategy for the future. And I suspect that is less to do with the industry than macro-economic factors. Where is the future growth coming - yes I know it's more uncertain than ever, but there are a few places thriving (outside London - which might not be for much longer or as much as it has in the past). The one thing that is certain is that if there are opportunities, First are without some miracle in no position to take advantage of them!

Just off the top of my head, there aren't too many areas of the UK that I'd consider to really be thriving for bus operators - the usual well-run places like Brighton, Lothian, Nottingham, Reading etc - Transdev seems to be doing ok, as are NatExp West Midlands. Bristol is looking a lot better and even Blackpool is investing quite a bit. As we've said, First has places like Leeds and Glasgow which look to be ok at present and Stagecoach is quite strong in a number of areas.
East Anglia and Staffordshire seem to be struggling - but I'm sure there's very many more !.

 

[DragonEast]

East Anglia and Staffordshire seem to be struggling - but I'm sure there's very many more !.

Hmm, I'm not sure I'd be calling the Cambridge-Oxford corridor struggling - unless it's struggling with growth, that is!* (Unlike First UKBus - but you're right I suspect, they are marooned with no prospect of any rescue, and all they can do is continue to chuck services overboard in the effort to stay afloat).

*Bluntly, Essex has the housing, Cambridge has the jobs, (and a bit less so the Lea Valley and A1M corridor). The $64K question is, I suppose, whether the bus has a role to play in getting from one to the other? (At the moment Stansted performs the role of the English channel). If it does then surely it won't be First, their lack of resources makes that one a no-go. Nothing happens overnight, but over the next 10 years and longer? To date all the jobs have been in London, and First are geared up for London commuters but the future . . . and with new stations on the London lines planned anyway. Though National Rail will ensure that they are more than a decade away . . .

 

[Robertj21a]

Hmm, I'm not sure I'd be calling the Cambridge-Oxford corridor struggling - unless it's struggling with growth, that is!* (Unlike First UKBus - but you're right I suspect, they are marooned with no prospect of any rescue, and all they can do is continue to chuck services overboard in the effort to stay afloat).

*Bluntly, Essex has the housing, Cambridge has the jobs, (and a bit less so the Lea Valley and A1M corridor). The $64K question is, I suppose, whether the bus has a role to play in getting from one to the other? (At the moment Stansted performs the role of the English channel). If it does then surely it won't be First, their lack of resources makes that one a no-go. Nothing happens overnight, but over the next 10 years and longer? To date all the jobs have been in London, and First are geared up for London commuters but the future . . . and with new stations on the London lines planned anyway. Though National Rail will ensure that they are more than a decade away . . .

I wasn't thinking of Cambridge, more the disasters with GoAhead's various acquisitions, some problems with First Essex (and Eastern Counties) etc - hasn't Ipswich also collapsed a bit too (despite now acquiring some ex-London deckers) ?

 

[DragonEast]

I wasn't thinking of Cambridge, more the disasters with GoAhead's various acquisitions, some problems with First Essex (and Eastern Counties) etc - hasn't Ipswich also collapsed a bit too (despite now acquiring some ex-London deckers) ?

I don't think we can ignore Cambridge.

The eastern coastal fringe though has always suffered. I think maybe Eastern Counties were saved by the X1 (which helped them get through to do their tarting up in Norwich), even though First showed their gratitude by getting rid of the MD who gave it to them (and after that the one who made it a success). Essex got an ex-London MD who thought he was still in London, perhaps; the result was a wholly predictable mess. And Ipswich Buses and Go-Ahead sought salvation in ENCTS (acquiring rural and small town-based operations) and thought Eastern Counties were there for the taking! Eastern Counties, god bless 'em, seem to have had a different idea! Around Ipswich they seem to have retained a (small) portfolio of growth routes. That always seemed a pretty good idea to me. Now the ex-Essex (who I think gave us the 100, 70 and X30 which if they have a core network, seems to be most of it! - with a couple of the old Hadleigh and district routes in the south that are the great survivors - they knew what they were doing), now MD of Eastern Counties, seems to have returned, perhaps to sort it out if we're inclined to look on the bright side, though that's optimistic. It's First, after all!

 

[Cesarcollie]

The trouble is, First Essex has drifted so far that it will take draconian cuts to turn it round quickly (and First don't have the time to do growth initiatives which tend to be slow). The 2017 accounts aren't out yet but y/e March 2016 the business made £51,000 after tax on a turnover of £50m!! There has been little action in the subsequent year to improve that figure - Braintree downsized, but ongoing cost increases especially staff (Essex suffers from being close to London in that respect).

 

[DragonEast]

Essex also amalgamated three depots into one in Colchester, but with Braintree that's a drop in the ocean of the abysmal performance. There are simply far too many buses on the road for the demand, and to manage and maintain within the resources they have so that both performance and patronage are in a viscous circle of decline. The hell of day to day operation must only be matched by the headache of trying to make the cuts and maintain the coverage of the network which hitherto has been their game. The trouble is I suspect the biggest losses are in their core area where they are almost sole operator, mid-Essex, and the performance is actually slightly better where they have competition. And they've been gobbling up contracts to add to the resource problem, but they need the money!

 

[Lezlee]

I would expect the Braintree outstation to close as services are bought into neighbouring depots after the changes have been made to reduce PVR.

For the first time in a while, First Essex have stopped recruiting drivers as they prepare to reduce staffing levels.

The X30 will be having changes of sorts, as some double deck buses will be bought in to address the capacity issues. They will be cascades, I assume from Berkshire as they have recently wound up the Greenline route.

It feels that First Essex have been left alone for a long time to carry on as they are. I suppose this is because there have been more pressing issues (eg the loss making companies). It does feel that some direction is finally being given.

It will certainly be interesting to watch the progress of First Essex over the coming months.

 

[F Great Eastern]

The X30 is a perfect example of what happens when a company tries to do something on the cheap and cut corners- the fact that it ends up costing more in the long run than doing it properly in the first place would.

The same could end out playing out at Aircoach in Ireland where they're about to replace long and spacious high specification vehicles with a more basic, shorter and more cramped vehicle, presumably to save a few bucks.

 

[DragonEast]

The X30 is a perfect example of what happens when a company tries to do something on the cheap and cut corners- the fact that it ends up costing more in the long run than doing it properly in the first place would.

Yeah, but First isn't the only place where, sometimes, it's a choice between doing what you can and doing what you should. Would we rather First had not tried at all to improve the X30? I think I prefer that they tried, didn't (or couldn't) get it right first time then changed it. It's what most of us do; those of us anyway that aren't lucky enough to live in a perfect world. Or, of course, we can just not try at all. I hope they keep on trying (and proactively listening to their customers and drivers).

The other problem, not unique to First either, is how long do you have to give something before you give up? Try, try and try again my granny used to say; but never for ever. Some ideas need to be given time, sometimes it takes little time to see something needs to be changed or isn't working, and some ideas should never be given the time of day at all. God grant us the wisdom to see the difference.

 

[F Great Eastern]

Yeah, but First isn't the only place where, sometimes, it's a choice between doing what you can and doing what you should. Would we rather First had not tried at all to improve the X30? I think I prefer that they tried, didn't (or couldn't) get it right first time then changed it.

I wouldn't call replacing coaches with 49 comfortable seats and plenty of luggage storage with much cheaper seats, a lack of luggage storage and a lack of capacity whilst still charging a premium price as an upgrade. Certainly nobody I know feels they are getting value for money right now on the X30 and I know half a dozen people who have switched to the train because of it.

What it's going to cost to refit the Enviro 200s to remove the airport spec that is no longer going to be useful when they are no longer used on the X30? What's it going to cost to then bring in hand me downs as their replacement and then refurbish them to airport spec?

By the time they spend all of the money putting it right and all the associated costs have been bore, and the fact that they'll have to buy new vehicles in a short amount of time because of the use of hand me downs as a temporary fix, it'll probably cost them far more overall over the next 2-3 years than buying the right thing out of the box.

The other problem, not unique to First either, is how long do you have to give something before you give up? Try, try and try again my granny used to say; but never for ever. Some ideas need to be given time, sometimes it takes little time to see something needs to be changed or isn't working, and some ideas should never be given the time of day at all..

Doesn't taken Einstein to work out if you replace one vehicle with another one with a third less capacity and a lot less space for luggage that the chances of outgrowing a vehicle are much higher as are the chances of luggage blocking seats. Bad planning, simple as that.

 

[DragonEast]

Fair points. But First Essex (like the rest) can only do what First Bus will let them. What sort of service is the X30 exactly? I'm sure Ensign (for instance) or someone else wouldn't have had this trouble, but would they actually have run the service? I don't know. First Essex haven't got a reputation as muddle and make do, or Going-nowhere for no reason.

Perhaps the question is whether the First Bus model ("we're a bus operator not a coach operator") is viable for something that has pretensions (so they keep telling us) to be "a leading UK transport operator"? Perhaps in our small island you have to be prepared to be both?

Has anyone within First actually asked, let alone answered, the question?

 

[Volvodart]

I dont believe Aberdeen is in a good sharpe ( partly due to the oil turndown), but I'm sure Midland bluebird is doing better along with Portsmouth and York?

We only know the latter two which had greatly reduced profits and similar losses to last year respectively.

 

[F Great Eastern]

Fair points. But First Essex (like the rest) can only do what First Bus will let them. What sort of service is the X30 exactly? I'm sure Ensign (for instance) or someone else wouldn't have had this trouble, but would they actually have run the service? I don't know. First Essex haven't got a reputation as muddle and make do, or Going-nowhere for no reason.

But this kind of 'investment' is making the problems in First worse, not making them better. If they don't invest properly in the few successful routes they have, is it any wonder the business as a whole continues to be in decline? The problem with such short term thinking is that the return on investment is extremely poor.

For example, you replace a 50 seat coach with a bus that seats just over 30 at best and then First come out and moan that there is little growth and passengers are on the decline and services are becoming less viable - it's the height of stupidity to invest in something that will actually reduce the potential revenue of the route and even risk losing some of the customers you already have.

I understand that First is not in a great place financially, but cutbacks on successful services and running said services on the cheap, will simply mean the few services that are successful will also go the way of the ones that are struggling and are facing cuts and lower passenger numbers as well and if they carry on in this pattern then the better performing business units will go the way of the poorly performing ones.

Perhaps the question is whether the First Bus model ("we're a bus operator not a coach operator") is viable for something that has pretensions (so they keep telling us) to be "a leading UK transport operator"? Perhaps in our small island you have to be prepared to be both?

First Aircoach in Ireland has raked in €11m profit in the last two years. They are doing extremely well on one route and are the market leader by far because they were out the blocks on this route way before anyone else and invested several million in it and are now reaping the dividends, another route is doing pretty well and another two are doing alright.

The fifth route is Dublin - Belfast which also for several years has been performing well, is de-regulated and they now have a competitor running at the same time from the same stop one end and at the same time the other end. Such competitor is using brand new Mercedes coaches taunting First on their coaches that they have less seats so they have more room than First for the last few months.

The competitions Mercedes are 2017 coaches at 13m with 49 seats and First 2009 coaches at 13.4m with 51 seats but fuel costs are a fair bit more. First appears to be replacing them with 12.6m 53 seat more basic vehicles. Presumably as it's a standard seat spec and length so saves a fair bit of cash, but it's hardly going to slow down the slow passenger bleed to the competition is it, more the opposite?

It's not l

 

[TheGrandWazoo]

But this kind of 'investment' is making the problems in First worse, not making them better. If they don't invest properly in the few successful routes they have, is it any wonder the business as a whole continues to be in decline? The problem with such short term thinking is that the return on investment is extremely poor.

For example, you replace a 50 seat coach with a bus that seats just over 30 at best and then First come out and moan that there is little growth and passengers are on the decline and services are becoming less viable - it's the height of stupidity to invest in something that will actually reduce the potential revenue of the route and even risk losing some of the customers you already have.

I understand that First is not in a great place financially, but cutbacks on successful services and running said services on the cheap, will simply mean the few services that are successful will also go the way of the ones that are struggling and are facing cuts and lower passenger numbers as well and if they carry on in this pattern then the better performing business units will go the way of the poorly performing ones.

Apologies if I'm asking daft questions but the old service X30 was hourly with 49 seaters (with luggage stowed beneath)? It now has 36 seaters with luggage racks. However, at the same time, they introduced an hourly X10 so that the Stansted to Chelmsford section was made half hourly (with similar vehicles)?

As an outsider (and I confess that I don't know First Essex at all), that would seem to be an improvement in capacity. So what is exactly the issue? Are there/were there just many more from Southend to Chelmsford? Or are there delays that make bunching an issue so overloading services? Also, do Stansted have any influence on the choice of vehicle?

Just an observation but aside from Ireland, First do seem to have moved away from coaches. The Bristol Airport service was a coach service but went to B7RLEs and is now moving over to decker operation. Meanwhile, the old Cardiff to Swansea shuttle service is still making do with 11 year old ex Greyhounds. For balance, I'd point out that aside from Stagecoach, coaches on local express work seem to be a disappearing species across the industry with services that have had them for years (like Darlington to Middlesbrough or Newcastle to Carlisle) now making do with saloons. Even Stagecoach have removed them from the Lake District X5, though the Falcon and the Varsity X5 (plus most of Scotland!) do show what is possible.

 

[overthewater]

To be fair to Stagecoach Stagecoach there had not an easy time with the coaches either, Route 99, St Andrew - Dundee as converted to coaches for a few years, and that went down like a lead balloon. There were converted back to buses in 1999, and since then has grown from every 30min to every 10 min. X7 Perth - Dundee - Montrose - Aberdeen has had a never ending line of people moaning about the coaches being used on that route, hence why when the X8 was introduced there used low floor buses instead of more Volvo B11R Plaxon Elite i or B9 coaches. Also the x34/X36 where coaches are not operated by Low floor E300/E400 with coach seating.

I'm surprised Stagecoach Midlands operations like the X4 and X7 are not coaches, Mind you there converted them to buses ( gold in the case of the X4) and passengers numbers have shot up. and the X7 is now 30mins service.

 

[Robertj21a]

Midland Bluebird has had a poor year in the Accounts to March 2017. An operating loss of £234,000 in 2016 increased to a loss of £2.064m in 2017. A change in the calculation of group overheads made the figures even worse, by a further £1.4m, but the biggest adverse impact was from a massive 'Remeasurement of defined benefit pension liability' of............. nearly £4.8m

Wow !

 

[Robertj21a]

First Aberdeen Operating profit to March 2017 was down from £3.672m (2016) to £1.897m - mostly due to a 7.6% drop in sales.

 

[TheGrandWazoo]

I'm surprised Stagecoach Midlands operations like the X4 and X7 are not coaches, Mind you there converted them to buses ( gold in the case of the X4) and passengers numbers have shot up. and the X7 is now 30mins service.

The X4 and X7 were (at one time) my local route in Northampton. To be honest, they aren't really long distance services but a series of shorter links. Take the X7 - it looks to take people from Harborough and Kibworth into Leicester, from Harborough and Brixworth in Northampton, but cleverly looks to provide links through the north part of Northampton (Kingsthorpe) as well as southern districts like Grange Park to Milton Keynes.

In terms of the X4, you don't get many people leaving CMK and being on the bus past the edge of Northampton towards Wellingborough!

 

[TheGrandWazoo]

Midland Bluebird has had a poor year in the Accounts to March 2017. An operating loss of £234,000 in 2016 increased to a loss of £2.064m in 2017. A change in the calculation of group overheads made the figures even worse, by a further £1.4m, but the biggest adverse impact was from a massive 'Remeasurement of defined benefit pension liability' of............. nearly £4.8m

Wow !

Christ - not much good news out there!

 

[overthewater]

Midland Bluebird has had a poor year in the Accounts to March 2017. An operating loss of £234,000 in 2016 increased to a loss of £2.064m in 2017. A change in the calculation of group overheads made the figures even worse, by a further £1.4m, but the biggest adverse impact was from a massive 'Remeasurement of defined benefit pension liability' of............. nearly £4.8m
Wow !

Christ - not much good news out there!

Ok I never expect that, since there made some improvements over past year. Or I'm thinking of the current accounts April 17-18 Is there anything in the accounts to show how much money was raised from selling of Border area?

It's Better news for the livingston Depot: I would NOT be surprised if there merged Falkirk/Stirling depots with livingston depot.

 

[Lezlee]

Apologies if I'm asking daft questions but the old service X30 was hourly with 49 seaters (with luggage stowed beneath)? It now has 36 seaters with luggage racks. However, at the same time, they introduced an hourly X10 so that the Stansted to Chelmsford section was made half hourly (with similar vehicles)?

As an outsider (and I confess that I don't know First Essex at all), that would seem to be an improvement in capacity. So what is exactly the issue? Are there/were there just many more from Southend to Chelmsford? Or are there delays that make bunching an issue so overloading services? Also, do Stansted have any influence on the choice of vehicle?

The main issue is crowding between Southend and Chelmsford. Some buses are leaving passengers behind around the time the ENCTS kicks in. The only alternative bus is the service 3, which is 2 hourly, a slower route and not running at all for now since Regal wound up.

 

[overthewater]

Here is First glasgow NO1; IE CITY ROUTES...

HERE is First Glasgow No2: Lanarkshire and route out of the city....

 

[Robertj21a]

In a weird about-turn, First Glasgow No 2 has significantly increased Operating Profits from £4.953m (2016) to £8.353m. However, First Glasgow No 1 has dropped heavily (despite increased sales of 3.8%), from £6.039m (2016) to only £1.958m in the 2017 Accounts - again, pension fund adjustments appear to explain the massive drop.

 

[DragonEast]

The main issue is crowding between Southend and Chelmsford. Some buses are leaving passengers behind around the time the ENCTS kicks in. The only alternative bus is the service 3, which is 2 hourly, a slower route and not running at all for now since Regal wound up.

Yep, and probably that First charge for it as a premium route with fares some 25% higher than their buses. Not amusing for the profit-making season ticket commuters who have to stand, if they can get the bus at all. And strangely the X10/X30 seem to be timetabled within a few minutes of each other over the shared Stansted leg. It's the sort of strange First logic we've become used to. Though we can argue the congestion makes the timetables largely irrelevant across the network anyway. I've forgotten the number of times I've seen an X10/30 following each other, though that's almost normal along shared routes. I'm not sure the 3 is any sort of competitor as it wends its way through the villages and takes over twice as long, which may be why we don't yet know the result of the tendering (and perhaps the miracle that Regal ran it commercially for several years)!

Perhaps now is the time to ask: when First announced their 2016/7 results they stated they were going to concentrate investment on areas where local authority support was evident and forthcoming. So what is the plan for the rest? I can't see that To'T was ever asked the question. Perhaps a question given more impetus now the OpCo results are coming through. Is it too cynical to suggest that major contracts at least are marketable assets?

Just one other thought, as a labour intensive industry (and what looks here like an ageing workforce) the pension liabilities must be horrible?

 

[Robertj21a]

First Hampshire & Dorset Operating Profit down from £3.592m (2016) to just £844k in 2017. A drop of 7% in 'on bus' sales apparently.

Most of the figures so far look rather worrying........

 

[F Great Eastern]

Apologies if I'm asking daft questions but the old service X30 was hourly with 49 seaters (with luggage stowed beneath)? It now has 36 seaters with luggage racks. However, at the same time, they introduced an hourly X10 so that the Stansted to Chelmsford section was made half hourly (with similar vehicles)

They are 36 seats but in my experience you'll never get that many passengers on a lot of the busy services as seats are being blocked up with luggage so it ends up being closer to 30. First themselves have admitted that single deck vehicles are insufficient for demand which many people told them would be an issue the moment this plan was arrived at over a year ago, but nobody issued.

Core issues are between Southend and Chelmsford but also from Stansted can be an issue which isn't helped by the fact that an X10 leaves at 20 past the hour and the X30 00 past the hour - if they worked them so they left on a half hour clockface frequency it might mitigate a little bit since right now the balance between the X10 and the X30 isn't right - the former is relatively lightly loaded and the X30 leaving people behind.

Just an observation but aside from Ireland, First do seem to have moved away from coaches. The Bristol Airport service was a coach service but went to B7RLEs and is now moving over to decker operation. Meanwhile, the old Cardiff to Swansea shuttle service is still making do with 11 year old ex Greyhounds.

Indeed, but look at the price that First are charging for Chelmsford - Stansted (£10/£15) compared to Bristol Airport (£7/£11) - Glasgow Airport - Glasgow (£8/£12) if they want to charge premium prices they need to provide a premium experience which they simply are not doing right now.

The value for money is now vastly poorer than it was previously, I can stomach paying a premium for a spacious coach but not an overcrowded city bus - it's no wonder people are choosing to switch to the train paying coach prices for an experience which has been downgraded to a glorified city bus that's overcrowded.

 

[ag51ruk]

First Potteries have moved into profit (£0.3m loss the previous year has become £0.7m operating profit) despite a 6% fall in sales - which doesn't seem too bad considering the reduction in the number of buses during the same period. But like the other areas mentioned above they have also taken a big hit on pension liabilities.

 

[DD12]

First Potteries have moved into profit (£0.3m loss the previous year has become £0.7m operating profit) despite a 6% fall in sales - which doesn't seem too bad considering the reduction in the number of buses during the same period. But like the other areas mentioned above they have also taken a big hit on pension liabilities.

Last year, I had no problem "Googling-up" these financial results, but currently I cannot find ANY of the new ones, nor any of the "old" ones !!

I'm interested in seeing the latest results for First Potteries, First Leicester, and First Midland Red - -
can a kind person please provide me with a link, or tell me the correct sequence of clicks ??

THANKS. (Sorry for being "thick" !)

 

[F Great Eastern]

https://beta.companieshouse.gov.uk/ - not all are in yet - some show up as processing and others don't appear at all - the deadline for the accounts was 31 December so they're probably all been submitted by now.