First Group: General Discussion

[TheGrandWazoo]

So will this go to the new owners??

Assuming they honour their commitment, then it should.

 

[overthewater]

Can the new owner decide what type can be brought?

 

[winston270twm]

I fully agree with you Winston and other posters that the comparison is pretty humbling! Now comparing the two bits of Manchester....and trying to be fair and objective....

First do operate in the parts of Greater Manchester that have perhaps suffered the greatest economic challenges. That much is fair enough and should be acknowledged in that Stagecoach perhaps have some of the better patches though you can't say that they haven't been affected by the trams and that they also have challenges in areas like East Manchester and areas like Wythenshawe.

However, and apologies if it hasn't been clear in earlier comments, but I am genuinely perplexed by how poorly First Manchester performs. Now, my recent trip out was just a snapshot to get a flavour for things, and it was more Manchester/Bolton orientated rather than out to Oldham etc. I mean, it's not a stellar experience to travel on but the buses-seemed to carry reasonable numbers even on a Saturday afternoon so whilst you would expect it to be under-performing, the losses it's turning in are quite something. And this is especially after the depot closures that were doubtless aimed at realigning the cost base.

Perhaps the most telling thing was the network map for Bolton https://www.firstgroup.com/uploads/maps/Manchester CC Network Map_Bolton.pdf - half the town is essentially vacated save for two routes.

In short, First can rightly point to some external factors but it does seem the business has been poorly managed for a long time, both pre and post Giles.

TGW, there's always one.... & it's normally you

I agree, operating territories are different (don't know Manchester that well), Stagecoach obviously get a lot of the Uni traffic along the Wilmslow Rd (high frequency routes) etc in the South, but also have an increasing presence in North Manchester. The problem as I see it, First aren't overly pro-active, more reactive, even then, it seems to take them a life time to react to change, by which time the rot has already set in. How long has there been speculation about selling Manchester & other parts of UK Bus off?? Now they're doing it as a fire sale at a knock down price. Additionally, my general opinion based on comments I read, suggests to me to think that First aren't helping themselves by offering a poorer standard of service. Treading over old ground, I don't personally think it was a wise decision to sell off Wigan (a profitable depot) then buy Finglands and compete with Stagecoach. It just seems to have been a very expensive distraction that has most likely resulted in the axe of Bolton routes 571/2 & 575, all of which were soon replaced by other operators. As more of the network has been eroded through withdrawals, there will be a continual downward spiral. Admittedly, the threat of quality contracts hasn't helped levels of investment, but it doesn't seem to have hampered Stagecoach financial performance.

Based on your analysis of operating areas, I'd would expect Stagecoach to be making £15 million profit & First a £5 million loss, First should be making a low margin single figure profit at the very least / whilst Stagecoach double digit margins.

Also, as pointed out above, the excuse from First UK Bus has always been Northern subsidiaries are struggling due to poorer economic conditions in North England & Scotland, yet Stagecoach results contradict that claim. Not sure what it is, but there just seems to still be something fundamentally wrong still within First UK bus, that still hasn't been dealt with. Stagecoach are clearly doing something better than First to still grow profits when the industry is in decline overall.

I'm looking forward to see who buys which bits of First Manchester and see how those depots do under different ownership.

 

[TheGrandWazoo]

TGW, there's always one.... & it's normally you

Don't know if I should be offended by that

Based on your analysis of operating areas, I'd would expect Stagecoach to be making £15 million profit & First a £5 million loss, First should be making a low margin single figure profit at the very least / whilst Stagecoach double digit margins.

Also, as pointed out above, the excuse from First UK Bus has always been Northern subsidiaries are struggling due to poorer economic conditions in North England & Scotland, yet Stagecoach results contradict that claim. Not sure what it is, but there just seems to still be something fundamentally wrong still within First UK bus, that still hasn't been dealt with. Stagecoach are clearly doing something better than First to still grow profits when the industry is in decline overall.

Can't disagree with that. Whilst there's obviously some difference in the operating areas, they really shouldn't be doing so much worse than Stagecoach, and you'd expect First to me making c.8% not losing a lump of cash. Like you, I'd be interested to see who does purchase what and actually turn around, invest and market what should be a decent operating patch, despite its socio-economic issues.

 

[carlberry]

Can't disagree with that. Whilst there's obviously some difference in the operating areas, they really shouldn't be doing so much worse than Stagecoach, and you'd expect First to me making c.8% not losing a lump of cash. Like you, I'd be interested to see who does purchase what and actually turn around, invest and market what should be a decent operating patch, despite its socio-economic issues.

Of course the PTE could rush in and buy all three depots to show everybody how things should be done (like East London buses).

 

[TheGrandWazoo]

Of course the PTE could rush in and buy all three depots to show everybody how things should be done (like East London buses).

Absolutely Brother Berry - come the revolution!!!

 

[winston270twm]

Don't know if I should be offended by that

Can't disagree with that. Whilst there's obviously some difference in the operating areas, they really shouldn't be doing so much worse than Stagecoach, and you'd expect First to me making c.8% not losing a lump of cash. Like you, I'd be interested to see who does purchase what and actually turn around, invest and market what should be a decent operating patch, despite its socio-economic issues.

No need TGW, friendly bit of banter.... Mr fair & objective

I'm getting concerned, I've never really been a fan of Stagecoach, but they're clearly doing something that First aren't, in areas that First claim have difficult operating conditions. Even if First were making under 5% margin, it would add +£10 million to First UK Bus profits. It's not like the Manchester fleet is that old, I don't understand what's going wrong & why they see if better to run for the exit.

 

[TheGrandWazoo]

No need TGW, friendly bit of banter.... Mr fair & objective

I'm getting concerned, I've never really been a fan of Stagecoach, but they're clearly doing something that First aren't, in areas that First claim have difficult operating conditions. Even if First were making under 5% margin, it would add +£10 million to First UK Bus profits. It's not like the Manchester fleet is that old, I don't understand what's going wrong & why they see if better to run for the exit.

Stagecoach have always (except the Kinski era) been very good at focussing on the core business and running a very tight ship. Screw down the prices on new vehicles, buy out restrictive terms and conditions (such as at Busways), hammer down competition and maintain market share, and by doing that, you keep your fares lower. People often have a downer on Stagecoach but they really do know how to run a business and in the shires, they've been pretty good in developing what were fairly unpromising markets such as Gloucestershire.

It is a little mystifying the size of the gulf between the two Manchester fleets, especially as on the ground, it's not as if Stagecoach are exceptional. They just do things that bit better and more consistently. There will be issues such as it is much cheaper (fuel and parts) to run an e400 rather than a B9TL, and I don't know if there are major differences in pay rates, working practices, pensions etc. However, the size and scale of difference is quite something.

I tend to benchmark First ops against my local OpCo, and in that respect, the Manchester fleet is in better shape than West of England in many ways... we have rafts of 2001-5 B7TLs here and yet you can see how the clear strategy in eliminating the competition, rationalising the network and really focussing and marketing on the core sub-networks and routes. Compare that with Manchester and the difference is really apparent - they've no really old fleet (>14 years old) to speak of but you can't see what the strategy has been and the marketing is non existent but why..... I just don't know.

 

[jonesy3001]

Will first sell the depots and send the the newer buses since the E400s are not to stagecoach standard to other subsidiaries and leave Manchester with all the old buses or will they all be included in the sale as well?

 

[Jordan Adam]

Will first sell the depots and send the the newer buses to other subsidiaries and leave Manchester with all the old buses or will they all be included in the sale as well?

I'm willing to be proven wrong, but they probably wouldn't be allowed to do that.

 

[overthewater]

I'm willing to be proven wrong, but they probably wouldn't be allowed to do that.

Stagecoach has done this, and Im sure First has also done this before.

 

[Andyh82]

I'm willing to be proven wrong, but they probably wouldn't be allowed to do that.

They would if it was known before the buyer did the deal, but of course the deal wouldn’t be worth as much then.

 

[Rod Harrison]

Stagecoach have always (except the Kinski era) been very good at focussing on the core business and running a very tight ship. Screw down the prices on new vehicles, buy out restrictive terms and conditions (such as at Busways), hammer down competition and maintain market share, and by doing that, you keep your fares lower. People often have a downer on Stagecoach but they really do know how to run a business and in the shires, they've been pretty good in developing what were fairly unpromising markets such as Gloucestershire.

It is a little mystifying the size of the gulf between the two Manchester fleets, especially as on the ground, it's not as if Stagecoach are exceptional. They just do things that bit better and more consistently. There will be issues such as it is much cheaper (fuel and parts) to run an e400 rather than a B9TL, and I don't know if there are major differences in pay rates, working practices, pensions etc. However, the size and scale of difference is quite something.

I tend to benchmark First ops against my local OpCo, and in that respect, the Manchester fleet is in better shape than West of England in many ways... we have rafts of 2001-5 B7TLs here and yet you can see how the clear strategy in eliminating the competition, rationalising the network and really focussing and marketing on the core sub-networks and routes. Compare that with Manchester and the difference is really apparent - they've no really old fleet (>14 years old) to speak of but you can't see what the strategy has been and the marketing is non existent but why..... I just don't know.

The clear difference between the two operators is that Stagecoach have not only invested in their fleet but have also updated routes (e.g. 50 to Media City) and expanded where possible. First, as has been stated above, have starved the fleet of investment and contracted throughout their operating areas. Not surprised about what is happening. Could happen elsewhere, possibly Halifax and Huddersfield as Leeds will get most investment because of the low emission zone being introduced there.

 

[Andyh82]

Despite the older fleet Halifax and Huddersfield are well run though, and do the best with what they’ve got. You never get the tired run down uncared for feel like you get in places like Doncaster.

The main problem I have is that First decide that the lower profitable depots don’t get investment, but that even means that any key high profitable routes within those depots don’t get investment either. So you’ve got the 503 & X63 running every 10 mins heavily used but with 14 year old buses.

 

[TheGrandWazoo]

Despite the older fleet Halifax and Huddersfield are well run though, and do the best with what they’ve got. You never get the tired run down uncared for feel like you get in places like Doncaster.

The main problem I have is that First decide that the lower profitable depots don’t get investment, but that even means that any key high profitable routes within those depots don’t get investment either. So you’ve got the 503 & X63 running every 10 mins heavily used but with 14 year old buses.

It’s not quite unprofitable depots but that they simply have limited capital and that is predominantly focused on simply meeting their partnership commitments, emission zones and things like P&R contracts. Hence the investment goes there rather than to places like Halifax. I do agree, the 14 yr old B7TLs are hardly Zesty and it’s a problem elsewhere.

 

[Alexbus12]

The clear difference between the two operators is that Stagecoach have not only invested in their fleet but have also updated routes (e.g. 50 to Media City) and expanded where possible. First, as has been stated above, have starved the fleet of investment and contracted throughout their operating areas. Not surprised about what is happening.

Let's not forget though, First have suffered major driver shortages in Manchester in recent years (I am led to believe that Bolton are short by 30 drivers currently) and was one of the main reasons as to why so many routes got the chop last April. It's hard to expand when you don't have the resources to do so..

 

[Robertj21a]

To me, I've always considered Stagecoach to be the 'Number One' amongst the big bus groups in the UK. What's most telling is that I've thought that for very many years, through good and bad times. Everything they do seems to be based on simple common sense, astute management, entrepreneurial flair, careful accounting, good publicity and attention to detail.
If you compare all the facts over the same period it's difficult to see how First come even remotely near to Stagecoach in just about any category !

 

[Jordan Adam]

To me, I've always considered Stagecoach to be the 'Number One' amongst the big bus groups in the UK. What's most telling is that I've thought that for very many years, through good and bad times. Everything they do seems to be based on simple common sense, astute management, entrepreneurial flair, careful accounting, good publicity and attention to detail.
If you compare all the facts over the same period it's difficult to see how First come even remotely near to Stagecoach in just about any category !

Only speaking on a local basis but Stagecoach's maintenance up here leaves lots to be desired!

I do agree though that the "higher up" management seem far more capable, Stagecoach's online marketing is far superior too.
Adverts like this are the sort of things that First would never think to do.

 

[overthewater]

I never know about those videos, Same good one along with some bad ones :P

 

[Mwanesh]

Can Andy Burnham not buy First Manchester and run it as a municipal.Its on the market worth a try .Its no good talking of regulating buses when an opportunity like this is now available.

 

[Volvodart]

First Manchester awarded funds to introduce electric buses

https://www.firstgroup.com/greater-...t-manchester-awarded-funds-introduce-electric

First Manchester awarded funds to introduce electric buses
First Manchester has been granted over £2million worth of funds to introduce a fleet of 12 electric buses and supporting infrastructure.

The funding awarded to First Manchester is part of £48m funding that’s been granted to nineteen bidders throughout England and Wales from the Office for Low Emission Vehicles. First Manchester will receive funding from the Ultra-Low Emission Bus Scheme to buy new low emission buses and supporting infrastructure such as charge points, which will serve the 582 route between Bolton, Atherton and Leigh.

Air pollution is a big challenge in all large cities and bus operators play a vital role in helping to find solutions to reduce air pollution, but more needs to be done to discourage people from driving into the city by car. Figures show that buses contribute to 12 per cent of emissions on Greater Manchester roads, but buses can also help to reduce emissions made by cars, as one double decker can take 75 cars off the road.

Ian Humphreys, Managing Director at First Manchester, said: “We’re pleased with today’s announcement, which will see 12 electric buses introduced into our Bolton fleet. This will help to improve air quality along the 582 Bolton to Leigh route.

“By working together, local authorities and bus operators can make a real impact on congestion and air quality, provide better services for our customers, support local economies more effectively and ultimately help to increase passenger numbers. These are all parts of a virtuous circle; more passengers mean fewer cars on the road, less congestion and, in turn, improved air quality.”

 

[SC43090]

Can Andy Burnham not buy First Manchester and run it as a municipal.Its on the market worth a try .Its no good talking of regulating buses when an opportunity like this is now available.

I agree with what you say.... If Andy Burnham can buy First Manchester that would be fantastic... that would be putting the bus user first & not the greedy shareholders.....

SC 43090

 

[Andyh82]

I agree with what you say.... If Andy Burnham can buy First Manchester that would be fantastic... that would be putting the bus user first & not the greedy shareholders.....

SC 43090

Those greedy shareholders must be rolling in cash from the dividends they’ve received off the back of First Manchester

 

[Kahuna47]

Those greedy shareholders must be rolling in cash from the dividends they’ve received off the back of First Manchester

I bet that Mars bar they got out of their dividend was tasty

No, that's not how I understand it, extract from article extract below:

"Each of the sites will be sold to separate bus companies, they added."​

Apologies Winston, I thought I saw a quote in the article which said two or three operators were interested, but can't seem to find it. I'll go back in my box now!

K

 

[TheGrandWazoo]

I agree with what you say.... If Andy Burnham can buy First Manchester that would be fantastic... that would be putting the bus user first & not the greedy shareholders.....

SC 43090

Firstly, the buses bill does not allow councils to operate buses directly.

Secondly, First Group haven't paid a dividend since 2013 and in fact, those greedy shareholders are well down on their investment, especially after the 2013 rights issue.

 

[Kahuna47]

Firstly, the buses bill does not allow councils to operate buses directly.

I vaguely remember when TWPTE/Nexus were going after their bus reform stuff they were considering running their own services, so much so they even applied for planning permission for a depot. Did they have a workaround for that or was it just one cockup in the endless cavalcade of cockups which quickly killed their proposal?

K

 

[TheGrandWazoo]

I vaguely remember when TWPTE/Nexus were going after their bus reform stuff they were considering running their own services, so much so they even applied for planning permission for a depot. Did they have a workaround for that or was it just one cockup in the endless cavalcade of cockups which quickly killed their proposal?

K

The Nexus plan came before the Buses Bill. Here's a quick summary of the bill https://www.bususers.org/news-events/news/the-buses-bill-at-a-glance/

 

[Kahuna47]

The Nexus plan came before the Buses Bill. Here's a quick summary of the bill https://www.bususers.org/news-events/news/the-buses-bill-at-a-glance/

Ta muchly

K

 

[Rod Harrison]

Those greedy shareholders must be rolling in cash from the dividends they’ve received off the back of First Manchester

I frequently read about ‘greedy shareholders’. Interesting, I was rescued from an orphanage when I was four days old by my grandparents who brought me up. My granddad wa a railwayman at Carnforth and had to work after retirement to enable me to continue in education. I worked during school holidays (one summer for Ribble hence my life long interest in buses) to help pay for my schooling. I have never been unemployed because I was told I must work for a living and pay my own way and that of my family. I spent some spare cash on some Stagecach shares which helps supplement my pension. One of those greedy shareholders!! Companies need to make profits to invest in their businesses and also it is why many pension funds invest in them. Shame First don’t know how to make money to create jobs, invest and help pensioners. Apologies for the rant - I have deleted the rest of it!

 

[winston270twm]

Those greedy shareholders must be rolling in cash from the dividends they’ve received off the back of First Manchester

As First Manchester have not contributed anything substantial to group profit coffers since 2014, if fact bleed them dry & pulled down UK Bus overall figures...... I find that highly unlikely. Even more so, as those 'Greedy Shareholders' have not received any dividends from First Group since 2013 & the shareprice is still languishing only slightly above the 2013 rights issue price from 2013, they have every right to be annoyed with FGP's performance.

Stagecoach have always (except the Kinski era) been very good at focussing on the core business and running a very tight ship. Screw down the prices on new vehicles, buy out restrictive terms and conditions (such as at Busways), hammer down competition and maintain market share, and by doing that, you keep your fares lower. People often have a downer on Stagecoach but they really do know how to run a business and in the shires, they've been pretty good in developing what were fairly unpromising markets such as Gloucestershire.

It is a little mystifying the size of the gulf between the two Manchester fleets, especially as on the ground, it's not as if Stagecoach are exceptional. They just do things that bit better and more consistently. There will be issues such as it is much cheaper (fuel and parts) to run an e400 rather than a B9TL, and I don't know if there are major differences in pay rates, working practices, pensions etc. However, the size and scale of difference is quite something.

I tend to benchmark First ops against my local OpCo, and in that respect, the Manchester fleet is in better shape than West of England in many ways... we have rafts of 2001-5 B7TLs here and yet you can see how the clear strategy in eliminating the competition, rationalising the network and really focussing and marketing on the core sub-networks and routes. Compare that with Manchester and the difference is really apparent - they've no really old fleet (>14 years old) to speak of but you can't see what the strategy has been and the marketing is non existent but why..... I just don't know.

I have to admit, I think my opinion on Stagecoach may be a little outdated, I never used to rate them back in the day when they used bullying tactics to force smaller operators out of business via various means... and also didn't fancy the prospect of Stagecoach buying NX Groups UK bus & coach arm off the Cosmen's back in 2009. That said, I'm now a 'Greedy Shareholder' in Stagecoach, who are paying decent dividends and seem to be on course to turnaround group prospects following the exit of ECML & Sale of USA division.

I do wonder what Stagecoach plans are going forward, especially as they are now solely reliant on the fortunes UK Bus industry.​