Powells

[Mr Manager]

Apparently bought by HCT Hackney community transport . Post on twitter by Phil Stockley.

 

[overthewater]

https://twitter.com/philstockley/status/1021806464011304960 which make that statement.

 

[tbtc]

I don't claim any insider knowledge, so this felt a surprising move (no doubt some people will be quick to claim that it was obvious and they knew about it months ago).

Powells are a funny operator that seem to lack a raison d'être. They were running a few commercial services in the Dearne Valley but cancelled these, seeming to prefer "simpler" contracts like the Rotherham "FreeBee".

They had a niche in providing a direct service from Sheffield/ Meadowhall to the ex-mining town of Maltby (the other side of Rotherham), after First gave up on the long established 287/289/X7/X9 corridor (previously SYT/ Sheafline/ Mainline etc). Powells ran a daytime 286 from Meadowhall to Maltby and a peak X7 from Sheffield to Maltby - which was a handy way of getting buses for "school" duties from the depot at Hellaby into Sheffield in the morning and back from Sheffield in the evening. But then the downgraded "BRT" plans (that were supposed to provide two ten-minute services using new guided busways from Sheffield to Parkgate in Rotherham but ended up being downgraded to a ten minute bus service from Sheffield to Rotherham with conventional vehicles on regular roads) became the X1 from Sheffield to Maltby (via Meadowhall) - flooding that market with 65-plate double deckers - so Powells lost their "cash cow".

MASS/ BrightBus finished running their bright green school buses last summer, so maybe there's a gap in the market for a specialist schools provider but there's not a lot of money to pay for such services (a lot of the links previous provided by MASS are now provided by diverted First/Stagecoach services, since the PTE can't pay for everything they'd like to).

The rest of the South Yorkshire scene isn't great territory - Yorkshire Tiger are giving up the vast majority of tendered services they "won" around Barnsley - routes that Tates couldn't run efficiently either.

Maybe the involvement of HCT will allow Powells to bid for the kind of large tenders that they'd previously have been too small to compete on (like the Bristol Park & Ride that another arm of HCT won). Maybe the've an eye on First abandoning more of the Rotherham "network" (now that they don't have a depot in the town, the running costs of local services have become a lot more expensive, due to the dead mileage and remoter locations) - it might be a cheap way of getting a foot in the door when First (inevitably?) start to cut their local services?

 

[freetoview33]

I don't claim any insider knowledge, so this felt a surprising move (no doubt some people will be quick to claim that it was obvious and they knew about it months ago).

Powells are a funny operator that seem to lack a raison d'être. They were running a few commercial services in the Dearne Valley but cancelled these, seeming to prefer "simpler" contracts like the Rotherham "FreeBee".

They had a niche in providing a direct service from Sheffield/ Meadowhall to the ex-mining town of Maltby (the other side of Rotherham), after First gave up on the long established 287/289/X7/X9 corridor (previously SYT/ Sheafline/ Mainline etc). Powells ran a daytime 286 from Meadowhall to Maltby and a peak X7 from Sheffield to Maltby - which was a handy way of getting buses for "school" duties from the depot at Hellaby into Sheffield in the morning and back from Sheffield in the evening. But then the downgraded "BRT" plans (that were supposed to provide two ten-minute services using new guided busways from Sheffield to Parkgate in Rotherham but ended up being downgraded to a ten minute bus service from Sheffield to Rotherham with conventional vehicles on regular roads) became the X1 from Sheffield to Maltby (via Meadowhall) - flooding that market with 65-plate double deckers - so Powells lost their "cash cow".

MASS/ BrightBus finished running their bright green school buses last summer, so maybe there's a gap in the market for a specialist schools provider but there's not a lot of money to pay for such services (a lot of the links previous provided by MASS are now provided by diverted First/Stagecoach services, since the PTE can't pay for everything they'd like to).

The rest of the South Yorkshire scene isn't great territory - Yorkshire Tiger are giving up the vast majority of tendered services they "won" around Barnsley - routes that Tates couldn't run efficiently either.

Maybe the involvement of HCT will allow Powells to bid for the kind of large tenders that they'd previously have been too small to compete on (like the Bristol Park & Ride that another arm of HCT won). Maybe the've an eye on First abandoning more of the Rotherham "network" (now that they don't have a depot in the town, the running costs of local services have become a lot more expensive, due to the dead mileage and remoter locations) - it might be a cheap way of getting a foot in the door when First (inevitably?) start to cut their local services?

Or working with First like they seem to have started doing in Bristol?

 

[Ginga]

It's a bit naughty of Mr Stockley, as he has inside info on Tm Travel. Im Not sure how much of the Rotherham market Tm Travel has left.

 

[Busaholic]

How big, and commercial, can a Community Transport group become while still able to lay claim to that title? Please don't look for implied criticism in the question, I'd just like answers or opinions.

 

[freetoview33]

How big, and commercial, can a Community Transport group become while still able to lay claim to that title? Please don't look for implied criticism in the question, I'd just like answers or opinions.

Surely it depends on how much debt they have?

 

[carlberry]

How big, and commercial, can a Community Transport group become while still able to lay claim to that title? Please don't look for implied criticism in the question, I'd just like answers or opinions.

In theory there is no limit, other than something that's stated in their own rules. I assume the company is setup as limited by guarantee in some way and, as long as they carry on dealing with any profit in the way that they've stated, then they can grow as much as they want.

 

[freetoview33]

In theory there is no limit, other than something that's stated in their own rules. I assume the company is setup as limited by guarantee in some way and, as long as they carry on dealing with any profit in the way that they've stated, then they can grow as much as they want.

Surly if they get into too much debt though there is a higher risk of it becoming owned by a bank!

 

[PhilStockley]

How big, and commercial, can a Community Transport group become while still able to lay claim to that title? Please don't look for implied criticism in the question, I'd just like answers or opinions.

I suspect there is some misunderstanding/conflation of terms. There is no such thing as a "Community Transport group" - it's a term that has no meaning, so HCT Group doesn't lay claim to that title at all. It is in fact a social enterprise, comprising two distinct strands of activity.

The traditional "community transport" elements which are not commercial organisations and run under section 19 licences (Hackney Community Transport, Social Access, Leeds Alternative Travel and one or two other bits) are a small subset of the group and they can't grow very much because they can't act in a commercial way - they certainly can't buy companies - the most they can do is cover their own costs.

The bit that is growing rapidly is the commercial arm of the business - CT Plus, CT Plus Yorkshire etc - and it is this part of the business that has acquired Powells. This part of the business functions in exactly the same way as any other company. It operates in a commercial way, using normal 'o' licences with all the same rules and regulations as any other bus company. It has to raise investment commercially and it has to make a profit in order to survive. The only difference to a normal limited company is that there are no shareholders as such and no dividends. So the profits are used for reinvestment and to fund activities which generate social impact, rather than being distributed to shareholders. In every other respect, they operate in exactly the same environment as any other company.

There is a common misconception that the whole group is "not for profit" and somehow runs under different rules to other businesses, whereas in fact nothing could be further from the truth and in fact the need to operate in a commercial way in a commercial marketplace and generate profits is absolutely vital to be able to support the group's social mission.

So the direct answer to your question is very big - because the commercial arm of the business trades on exactly the same terms as the plc's and other big transport groups and therefore doesn't need to be inhibited in any way, and we've done very well recently in generating funds for investment - and very commercial, because the more commercial it is, the more good stuff it can do with the profits.

Appreciating there's some repetition in there, I hope that gives a bit of clarity.

 

[Busaholic]

I suspect there is some misunderstanding/conflation of terms. There is no such thing as a "Community Transport group" - it's a term that has no meaning, so HCT Group doesn't lay claim to that title at all. It is in fact a social enterprise, comprising two distinct strands of activity.

The traditional "community transport" elements which are not commercial organisations and run under section 19 licences (Hackney Community Transport, Social Access, Leeds Alternative Travel and one or two other bits) are a small subset of the group and they can't grow very much because they can't act in a commercial way - they certainly can't buy companies - the most they can do is cover their own costs.

The bit that is growing rapidly is the commercial arm of the business - CT Plus, CT Plus Yorkshire etc - and it is this part of the business that has acquired Powells. This part of the business functions in exactly the same way as any other company. It operates in a commercial way, using normal 'o' licences with all the same rules and regulations as any other bus company. It has to raise investment commercially and it has to make a profit in order to survive. The only difference to a normal limited company is that there are no shareholders as such and no dividends. So the profits are used for reinvestment and to fund activities which generate social impact, rather than being distributed to shareholders. In every other respect, they operate in exactly the same environment as any other company.

There is a common misconception that the whole group is "not for profit" and somehow runs under different rules to other businesses, whereas in fact nothing could be further from the truth and in fact the need to operate in a commercial way in a commercial marketplace and generate profits is absolutely vital to be able to support the group's social mission.

So the direct answer to your question is very big - because the commercial arm of the business trades on exactly the same terms as the plc's and other big transport groups and therefore doesn't need to be inhibited in any way, and we've done very well recently in generating funds for investment - and very commercial, because the more commercial it is, the more good stuff it can do with the profits.

Appreciating there's some repetition in there, I hope that gives a bit of clarity.

A very clear answer which sweeps away some assumptions I'd certainly made and, from previous replies to my question, some possible misconceptions by others. Thank you.

 

[RhysHand]

It's a bit naughty of Mr Stockley, as he has inside info on Tm Travel. Im Not sure how much of the Rotherham market Tm Travel has left.

Not quite sure why this is ‘naughty’ of Mr Stockley - yes he previously ran TM Travel, but there are many bus industry managers and directors who have worked for various businesses that operate in competing areas - the fact HCT Group have decided to purchase Powell’s isn’t anything to do with if Phil works for them or not. I’m sure it would of happens either way. Good luck to them and Phil I say ! Good move !

 

[tbtc]

Maybe the involvement of HCT will allow Powells to bid for the kind of large tenders that they'd previously have been too small to compete on (like the Bristol Park & Ride that another arm of HCT won). Maybe the've an eye on First abandoning more of the Rotherham "network" (now that they don't have a depot in the town, the running costs of local services have become a lot more expensive, due to the dead mileage and remoter locations) - it might be a cheap way of getting a foot in the door when First (inevitably?) start to cut their local services?

Yet more proof that I don't know what I'm talking about...

I suggested last summer that Powells (as part of HCT) might be trying to fill the gaps left by First in/around Rotherham (as the local "Town Services" became uneconomical for the bigger operator), go for more tendered work etc. Maybe become the default operator of tendered services (with Yorkshire Tiger and Tates having left the scene and TM Travel being based further away so potentially more dead mileage).

BUT, instead of shrinking back/ plugging holes in other people's networks, Powells are turning their (peak only) X7 into a half hourly service from Maltby into Sheffield - quite a turnaround for a service that has gradually lost journeys over the year until it became just a handful of departures - and quite an aggressive move against the First X1 (and X10) from Maltby to Sheffield (though the First services run via Rotherham rather than fast along Sheffield Parkway).

Instead of coming out of Rotherham, First are filling gaps in other people's withdrawals around the town (the TM 31, the TM 227 and now the Powells 87 which is being scrapped to provide resources for the improved X7).

As always, you can safely ignore any predictions I make

 

[Busaholic]

Yet more proof that I don't know what I'm talking about...

I suggested last summer that Powells (as part of HCT) might be trying to fill the gaps left by First in/around Rotherham (as the local "Town Services" became uneconomical for the bigger operator), go for more tendered work etc. Maybe become the default operator of tendered services (with Yorkshire Tiger and Tates having left the scene and TM Travel being based further away so potentially more dead mileage).

BUT, instead of shrinking back/ plugging holes in other people's networks, Powells are turning their (peak only) X7 into a half hourly service from Maltby into Sheffield - quite a turnaround for a service that has gradually lost journeys over the year until it became just a handful of departures - and quite an aggressive move against the First X1 (and X10) from Maltby to Sheffield (though the First services run via Rotherham rather than fast along Sheffield Parkway).

Instead of coming out of Rotherham, First are filling gaps in other people's withdrawals around the town (the TM 31, the TM 227 and now the Powells 87 which is being scrapped to provide resources for the improved X7).

As always, you can safely ignore any predictions I make

Don't be too hard on yourself, I'm sure you're right 50% of the time.