First Group: General Discussion

[Jordan Adam]

I think part of it is because Stagecoach regularly repaint buses and keep them clean. Unlike First!

Hahaha! As far as North Scotland are concerned that couldn't be further from the truth. Mechanically the buses are past it, cosmetically they're covered in dents and scratches, internally they're full of dust.

 

[carlberry]

Hahaha! As far as North Scotland are concerned that couldn't be further from the truth. Mechanically the buses are past it, cosmetically they're covered in dents and scratches, internally they're full of dust.

At least the wheels stay on nowadays!

 

[winston270twm]

Looks like Coast Capital have had a bit of set back looking at FGP's RNS from yesterday, David Martin (former Arriva Group CEO) is not eligible to be voted in as director at the GM (25th June), Coast have lost one of it's nominee's:

As stated in the Circular, and acknowledged in Coast Capital’s requisition notice, in order for a person nominated by a shareholder to be eligible to be appointed as a director, the Company must receive confirmation in writing of that person’s willingness to be appointed by not less than seven days before the date of the general meeting to consider that person’s appointment.

Under the articles of association of the Company, the deadline for receipt of such written confirmations was 18 June 2019.

The Company has not received any such confirmation from one of the Coast Nominees, Mr David Martin, of his willingness to be appointed as a director of the Company.

Accordingly, that Coast Nominee, Mr Martin, is not eligible to be appointed as a director of the Company at the General Meeting. As stated in the Circular, the resolution proposing to appoint Mr Martin (resolution (j)) is therefore not valid and will not be put to the General Meeting.

https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1294058&cid=858

 

[Gingerbus1991]

I think part of it is because Stagecoach regularly repaint buses and keep them clean. Unlike First!

That goes against everything I've learnt about stagecoach workin for them for near 4 years in the past, constant warning lights, Emission lights, derated engines etc etc, cleanliness is something they done well though I have to admit, I used to question why on earth there was so many faults recurring that weren't fixed properly, my depot manager at the time simply said it was due to budget restrictions.... Or in other words the engineering manager was watching his end of year bonuses...

 

[carlberry]

Looks like Coast Capital have had a bit of set back looking at FGP's RNS from yesterday, David Martin (former Arriva Group CEO) is not eligible to be voted in as director at the GM (25th June), Coast have lost one of it's nominee's:


https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1294058&cid=858

Things to do today:

1. Send out PR about how bad current management are and how much better we'd be.
2. Buy up some more shares
3. Fill in the correct forms.
Doh!!!!

 

[richw]

I think part of it is because Stagecoach regularly repaint buses and keep them clean. Unlike First!

Stagecoach do cosmetics well but not so good with keeping mechanical side up to date according to friends at stagecoach.

 

[goldisgood]

Stagecoach do cosmetics well but not so good with keeping mechanical side up to date according to friends at stagecoach.

That sounds about right for around here (Oxfordshire) - they have a great operation and the fleet presentation and drivers are on the whole fantastic, but there are issues with vehicles (particularly Scanias) which have been going on for a number of months now.

 

[richw]

That sounds about right for around here (Oxfordshire) - they have a great operation and the fleet presentation and drivers are on the whole fantastic, but there are issues with vehicles (particularly Scanias) which have been going on for a number of months now.

My friends who’ve made such comments are all in Devon at different depots

 

[Goldfish62]

Hahaha! As far as North Scotland are concerned that couldn't be further from the truth. Mechanically the buses are past it, cosmetically they're covered in dents and scratches, internally they're full of dust.

It's just my personal experience compared to First. Operations I'm familiar with are Devon, South East and Manchester. In all those locations buses receive regular repaints, plus a seat retrim at least once in their lives. First don't seem to have any sort of regular repaint programme given the number of buses out there still in Barbie livery, and seat retrims seem to be spasmodic.

 

[TheGrandWazoo]

It's just my personal experience compared to First. Operations I'm familiar with are Devon, South East and Manchester. In all those locations buses receive regular repaints, plus a seat retrim at least once in their lives. First don't seem to have any sort of regular repaint programme given the number of buses out there still in Barbie livery, and seat retrims seem to be spasmodic.

That's pretty much my experience. As a slight comparison, I posted a note on my experience of travelling on Stagecoach South Wales the other week, and a trip on a Solo. It was a 56 plate Solo that worked a less than core but interurban route in the Valleys from Pontypool to Blackwood. It may have been 13 years old but it had been refurbished and you'd have no idea it was that age cosmetically - seat cushions had been replaced, floor was clean, even things like handrails didn't have chunks of paint missing. Compare that to slightly older First Solos (18 months older?) on city services in Bath. With two exceptions, they have not been repainted since being delivered. The seat cushions are faded and threadbare, and they're very tired internally.

My impression FWIW, is that First WoE were looking to move them on and so not spend the money on them. They have however refurbished some similar age Eclipses for one of the city services. Perhaps this illustrates that such things are simply devolved to the individual OpCo and hence a lack of consistency; why spend the money on vehicles that they are hoping to offload to another OpCo?

 

[buslad1988]

My impression FWIW, is that First WoE were looking to move them on and so not spend the money on them. They have however refurbished some similar age Eclipses for one of the city services. Perhaps this illustrates that such things are simply devolved to the individual OpCo and hence a lack of consistency; why spend the money on vehicles that they are hoping to offload to another OpCo?

I think you’ve hit the nail on the head there - why would OpCo’s want to spend money on repainting/refurbing vehicles when they could be transferred out at a moments notice (probably without much say or choice in the matter either!).

The only positive thing IMO when barbie 2 was launched was that they insisted on repainting buses into that livery (if not already in it) upon transfer. So for a couple of years repaints were rapidly happening... but then came the decision for everything into barbie 3 (a bad move - they should shave kept the separate corporate interior/any other bus liveries).

Probably if they’d of been given a bit more fleet security money would have been spent on mid-life refurbs but more often than not buses would have been moved on by that time - although perhaps they should have made refurb/repaint necessary on transfer instead.

As with most things First - there was no strict rule book to follow and you end up with differing standards in each OpCo.

 

[mbonwick]

Hahaha! As far as North Scotland are concerned that couldn't be further from the truth. Mechanically the buses are past it, cosmetically they're covered in dents and scratches, internally they're full of dust.

I don't think you understand just how physically hard the operating territory of North Scotland is.
I know for a fact that there's a constant stream of North Scotland vehicles away for repaint but the shine doesn't last long...

No excuse for the internal dust though.

 

[KendalKing]

I don't think you understand just how physically hard the operating territory of North Scotland is.
I know for a fact that there's a constant stream of North Scotland vehicles away for repaint but the shine doesn't last long...

No excuse for the internal dust though.

That's because nobody lacquers buses anymore after repaint.

 

[Volvodart]

The paintwork on the recent Hybrids transferred from Perth looks a lot better quality/long lasting than repaints done in North Scotland. The red colour looks slightly different to that used by North Scotland. When it was still here, the original paintwork on 53316 looked a lot better than the buses repainted several years later.

 

[Jordan Adam]

I don't think you understand just how physically hard the operating territory of North Scotland is.
I know for a fact that there's a constant stream of North Scotland vehicles away for repaint but the shine doesn't last long...

No excuse for the internal dust though.

I've replied in the Stagecoach North Scotland thread to avoid further veering off topic.

 

[overthewater]

I doubt the RUMORED announcement is coming tomorrow morning, I take it the easiest will be Wednesday? since the shareholder meeting is Tuesday.

 

[GaryMcEwan]

I doubt the RUMORED announcement is coming tomorrow morning, I take it the easiest will be Wednesday? since the shareholder meeting is Tuesday.

If anything is going to be announced, it needs to go to the Stock Market first for it goes to staff and the public.

Keep an eye on the FTSE for the documents that are uploaded at 7am.

 

[winston270twm]

I doubt the RUMORED announcement is coming tomorrow morning, I take it the easiest will be Wednesday? since the shareholder meeting is Tuesday.

Depending on the outcome of Tuesdays FGP meeting, anything that has been agreed up to now, could all be torn up, if half of the board get replaced.

Under existing management, First Group are poised to win the WCML & also potentially take on unknown pension liabilities that Stagecoach refused to include in their bids / hence there disqualification from bidding. If Coast get their way, theire board will turn down the WCML contract:

Activist investor Coast Capital rails against First franchise bid

Alexandra Rogers
Reporter at City A.M. covering City politics, transport and law. Get in touch: [email protected]
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An activist investor vying to shake up First Group has warned that it will pull out of a contract to run one of the UK’s leading rail franchises if it succeeds in toppling the firm’s management at a showdown on Tuesday.

Coast Capital, which owns a near 10 per cent stake in transport giant First, has called an extraordinary general meeting at which it will attempt to oust the firm’s six-strong management team with its own nominees.

Read more: Coast nominee for First Group board turns down role

The New York-based hedge fund has been agitating for a radical restructuring of the company, including that it splits its UK assets from its US assets, withdraws from Britain’s railways and overhauls its board by appointing seven of its candidates, now narrowed to six after ex-Arriva boss David Martin turned down the role.

Last month First caved into some of the pressure. It agreed to split up the group and said that while it would continue to operate its UK franchises, which include South Western Railway and the TransPennine Express, it had “concerns with the current balance of risk and reward” being offered by UK rail franchises.

Today Coast reacted furiously to reports that First is poised to win the West Coast franchise from the Department for Transport (DfT), calling it a “disturbing revelation”.

The West Coast franchise has become mired in controversy ever since rival rail giant Stagecoach was barred from the bidding process over its refusal to accept open-ended pension liabilities with the government. Reports said Whitehall is awaiting the result of Tuesday’s EGM before revealing its decision on the franchise.

James Rasteh, Coast’s chief investment officer, told City A.M: “There is no doubt that winning the West Coast franchise will result in further value destruction in a UK rail business which has already destroyed vast amounts of shareholder capital.

“It would also move First Group further away from their recently stated strategic objective of focusing more on their highly valuable US assets and businesses. Against this backdrop, there is no doubt that institutions who vote for the current chairman and CEO are not looking after their investors’ best interests.”

He added: “We also put the board of First Group on notice that, after the EGM, Coast will reserve the right to contact the secretary of state for transport and warn him of the risks of contractual non-complete if a contract is awarded by his department to First Group. As the company’s largest shareholder, we will not stand by and watch further wanton value destruction under this board.”

Rasteh also raised concern surrounding the reported intention to award the West Coast contract to First, as one of the DfT’s civil servants is the brother of First chief executive Matthew Gregory.

“The UK is not a banana republic and this is not how things should work,” Rasteh said.

Read more: First Group launches searing attack on ‘opportunistic’ activist investor

A DfT spokesperson said measures had been put in place to avoid a potential conflict of interest and that Andrew Gregory had been “recused from all discussions related to First Group, any franchise competition involving First Group, any in-life contract changes to franchises operated by First Group, and any discussions of the commercial standing of First Group or its competitors on live franchise competitions”.

A First spokesman said: “On Tuesday, we will learn what shareholders think of Coast Capital’s plans to seize control of a UK plc without paying a premium. Coast’s plans are inconsistent and irresponsible, would leave the group with higher debt and are not in the best interests of all shareholders or our wider stakeholders.”

https://www.cityam.com/activist-investor-coast-capital-rails-against-first-franchise-bid/

 

[TheGrandWazoo]

I doubt the RUMORED announcement is coming tomorrow morning, I take it the easiest will be Wednesday? since the shareholder meeting is Tuesday.

Easiest?

 

[overthewater]

Earliest, ah so the L was missing. You think your have it right.

 

[Stan Drews]

Earliest, ah so the L was missing. You think your have it right.

I reckon the R took the L, ...and that TheGrandWazoo is innocent!

 

[overthewater]

As Meatloaf said, Two out of three ain't bad. Third time the charm.

 

[lastbus]

I doubt the RUMORED announcement is coming tomorrow morning, I take it the easiest will be Wednesday? since the shareholder meeting is Tuesday.

What’s the rumoured announcement?

 

[overthewater]

What’s the rumoured announcement?

That we might at long last hear news about another Manchester depot being sold off. Of course everything is to play for....

 

[deltic]

City AM lead story tomorrow is that activist shareholders who are trying to displace present directors want First to divest it’s rail operations

 

[winston270twm]

City AM lead story tomorrow is that activist shareholders who are trying to displace present directors want First to divest it’s rail operations

To be fair, I'm inclined to agree. The risks with UK Rail far outweigh the rewards these days....

I don't agree with Coasts desire to sell First's US ops though, Greyhound yes, Student & Transit no, unless they're only talking floating on NYSE & First retaining majority shareholding, it's the most profitable part of the group.

 

[TheGrandWazoo]

To be fair, I'm inclined to agree. The risks with UK Rail far outweigh the rewards these days....

I don't agree with Coasts desire to sell First's US ops though, Greyhound yes, Student & Transit no, unless they're only talking floating on NYSE & First retaining majority shareholding, it's the most profitable part of the group.

CC don't give a stuff about what they sell or keep as long as they can break it up and make money for themselves. That they might make 10p in the pound is great for them but they don't care about the longer term investors who'll lose out. Just depends if the longer term investors think that CC are the best bet and that, at least, they'll get something. Who knows....

As for First getting West Coast.... they surely can't be taking on open ended pensions liabilities? I agree with you though - I'd not be fancying UK Rail though Stagecoach did feel that there was still money to be made outside the pensions issue.

 

[Stan Drews]

The recent announcement from the existing board at First suggested they would maintain their current rail franchises, but it didn’t seem to suggest any great appetite for taking on new ones.

 

[TheGrandWazoo]

The recent announcement from the existing board at First suggested they would maintain their current rail franchises, but it didn’t seem to suggest any great appetite for taking on new ones.

Gregory stated that “any future commitments to UK rail will need to have an appropriate balance of potential risks and rewards for our shareholders”

 

[winston270twm]

CC don't give a stuff about what they sell or keep as long as they can break it up and make money for themselves. That they might make 10p in the pound is great for them but they don't care about the longer term investors who'll lose out. Just depends if the longer term investors think that CC are the best bet and that, at least, they'll get something. Who knows....

As for First getting West Coast.... they surely can't be taking on open ended pensions liabilities? I agree with you though - I'd not be fancying UK Rail though Stagecoach did feel that there was still money to be made outside the pensions issue.

It's only the prospect of something happening that had been driving the share price higher recently, even that seems to have fizzled out. Longer term I personally think they should retain First Student / Transit & UK Bus, ditch Greyhound & exit UK Rail asap / possibly even sell (Trenitalia was rumoured to be interested at one point). Reduced debt to a level where they can invest in UK Bus & grow through bolt-on acquisitions & acquisitions in new markets.

The board would be mad to sign up to open ended pension liabilities, there's just not enough profit in rail to cover that level of exposure. Stagecoach did the right thing by not signing on the dotted line to take on the risk, it will be interesting to see the outcome of their Court action. Stagecoach overall are a better managed group and typically react far quicker to change / go for the exit much earlier when things go against them.

This week looks set to be interesting week for the big 2 transport groups.