First Group: General Discussion

[TheGrandWazoo]

So you're saying that we might be seeing a lot of management buyouts from very large, country wide, organisations, possibly over a number of years. After a couple of years the stronger/earlier ones may start consolidating into bigger and bigger groups (some may chose transport names and some may chose animal names (hopefully ones the government isnt trying to kill off this time) and again, over time, some of these may get big enough to start taking an interest in other forms of transport or floating on the stock exchange.

I'm sure I've heard something like this before however, what could possibly go wrong!!

One might even think this was cyclical... Perhaps the government might wish to get involved, designing some sort of standard bus for use across the country. Oh, and fewer livery variations. Two colours should be plenty!!!

 

[DragonEast]

In East Anglia, at least independents (often retirees) are finding buyers among the larger independents. I suspect the problems for First and Arriva are the size of local operations and substantial restructuring costs. First, in particular, have a very patchy record across the country when it comes to not just change and adapting but keeping fleets up to date. Ticketing, customer services and a bit of depot reorganisation (a mixed blessing with the changes in leasehold accounting) is like slap, it looks good but doesn't mask and make up for everything else. So I suspect First overall (even compared to Arriva who aren't always that brilliant themselves) are well "behind the curve". Maybe they lost sight of the plot whilst they were trying to make their minds up what to do with First Bus, perhaps for much longer than any of us realise? Just from appearances, which aren't always deceptive, Arriva look in better shape. It might had been a sudden decision by the DB Board, but Arriva looked more prepared. Buyers know the tricks and they will look beneath the surface. I'm not sure that First have been so diligent in their past management of First Bus. I'm not sure that anyone is now that cavalier when it comes to risk.

I've always found First a bit of a peculiar concoction: weaker where they have less competition and better where they have more. It made sense for an operator with limited resources in the short term. Which though, is the better buy?

 

[winston270twm]

Like who? I can't see any independents who want out of the industry.

I'm not posting on here. Show's how much you can see then...

 

[Baxenden Bank]

I've said before that the Potteries has been fundamentally mismanaged in the past. How that translates into day to day operation these days is something that you'll know better. However, it's not helped by apathetic local authorities and a stagnant retail market.

What does the £1.9m of exceptionals relate to?

'Other external charges' £1.7m - which may fall within the business itself were it spun out as a free-standing business.
'Restructuring' £0.9m - which I seem to recall was central rather than company related. Possibly not to be repeated in future accounts.
'Impairment of fixed asset £0.8m - presumably not to be repeated in future accounts (£619k property related, £181k plant and equipment). The 'property' you previously suggested was an accounting rule change, the 'plant' was writing down the value of the previous ticket machines.

How do you solve the pensions issue?

Group administration!
Solves the debt issue at the same time.
Start fresh with a clean sheet though a pre-pack or external buyer. It seems to be quite the fashion nowadays - load with debt, walk away, lenders and shareholders and the pension protection fund take the pain. Doesn't seem to affect senior personnel future job prospects either.

Are there any vulture capitalists agitating around the business at all?

 

[winston270twm]

It is a buyers market so perhaps that IS why an MBO may seem more attractive?

Stagecoach is constrained by its market share. Exactly what I was getting at. Now, if Brian Souter fancies setting up Highwayman Group (I think that was his original venture back in 1980?) then so be it but it still isn't Stagecoach.

I think we're both right in that NatEx have indeed made bolt on coach acquisitions and the ATG ops as well as Europe. The margins and the balance of risk and reward have been demonstrated. However, we've had a few years of potential sales in First, and whilst some have been mooted, none have yet to clear that hurdle. That's not to say that anything can be ruled out or in but it may answer why MBOs are being viewed as more desirable. Take RichWs point too - who's to say that we might not see a grouping of MBOs viz FWOE/Cymru as an example?

Souter Investments does currently have a large lump of cash following various transport related sales, the majority of which would have come from ADL stake.

Maybe Bristol is the odd ball in these proposed MBO packages, I would have expected the big boys to trump any MBO offer if they wanted it desperately enough. I expect we may hear of a different outcome for the big former PTE operators i.e. Glasgow, FWY & potentially even FSY. NX have been rumoured to have been involved in 2013 sales, plus more recently looked at Manchester, but obviously they're far more risk adverse these days under Dean Finch. If it doesn't tick all the box, they don't buy it....

 

[TheGrandWazoo]

I have no experience of Rotala, other than through this forum, where they seem to be rather loathed across the piece!

All that would cheer me up, bus-service wise, would be some kind of evening service so that I can have a social life. Even just a couple of buses up to 2100, Thursday/Friday/Saturday would be a significant improvement. However I regard that as extremely unlikely to ever happen. Current management seem wholly incapable of providing a different 'offer' on different nights (except strangely on the 32 on Saturdays). Any resources which came the way of the council would be immediately soaked up by the operators to support the current level of service rather than any enhancements.

I am reduced to generally taking the bus once per week (that's one bus, not a return). Walk to town, buy any essentials from the high street discounters, a couple of pints with the afternoon drinkers then back home before curfew kicks in at 1835 (last bus, not an electronic tag!).

If they want my money, they will have to provide me with a decent service.

Believe me, you should head to Redditch and Kidderminster to see how Rotala have transformed the First operations there. Quite frankly, if you drive past the Kiddy depot (can't miss it if you drive in from Worcester), you'd think you were at a Carlton bus breakers with vehicles in various states of disrepair and cannibalisation. Vehicles routinely appear in a range of different liveries and they've had run ins with the TC. In Kiddy, there are no evening services; the main Stourport service runs until 2100 but everything else basically finishes at 1800 (so you get some vehicles running in c.1900-2000). In Redditch, it isn't much better - the main local services that were the focus of various bus wars get a service til 2100 and that is it.

As with many other places, the local authorities have pulled the evening subsidies and, quite simply, running around for 4 hours to carry fresh air just can't be justified in many cases. Just down the road in Cannock and it's much the same. Granted, there are some evening services but nothing on a Sunday.

 

[Baxenden Bank]

They aren't having buses and drivers sitting around for fun. If the journey times are extended that must be how long they think is necessary to run the service reliably. Passengers (and the traffic commissioner) would be very unhappy otherwise. It isn't fun when your bus sits for five minutes with the doors open at a random stop with no passengers (as seems to happen every time I use a particular route in Lancashire), but running on time is key to any transport operation.

Not necessarily. Many journey timings are based on only being allowed to sit on stand at Hanley Bus Station for five minutes. So the inbound journeys are extended timewise to ensure that the bus arrives just five minutes before it's next journey. A previous 32 timetable was atrocious for this - with large variations in sectional running times Werrington to Hanley on successive journeys. Now remind me which recently 'every 20 minutes' 'Gold' service will be cut to hourly at the end of the month? Why that will be the 32. Make something bad enough and you WILL kill it off eventually. Just do it by a thousand cuts so there is nothing left for a competitor to pick up when you finally throw in the towel yourself.

Or take the current service 6A timetable - 41 minutes outbound, 52 minutes inbound. Outbound Hanley to Longton given 11 minutes, just about legally achievable late at night, 20 minutes inbound. I know the intimate detail of every lamp-post between Longton and Hanley. It hurts, which is why I walk to town but catch the bus back.

 

[TheGrandWazoo]

'Other external charges' £1.7m - which may fall within the business itself were it spun out as a free-standing business.
'Restructuring' £0.9m - which I seem to recall was central rather than company related. Possibly not to be repeated in future accounts.
'Impairment of fixed asset £0.8m - presumably not to be repeated in future accounts (£619k property related, £181k plant and equipment). The 'property' you previously suggested was an accounting rule change, the 'plant' was writing down the value of the previous ticket machines.


Group administration!
Solves the debt issue at the same time.
Start fresh with a clean sheet though a pre-pack or external buyer. It seems to be quite the fashion nowadays - load with debt, walk away, lenders and shareholders and the pension protection fund take the pain. Doesn't seem to affect senior personnel future job prospects either.

Are there any vulture capitalists agitating around the business at all?

There is a reason why publicly listed companies don't put themselves into administration..... think about it!

 

[DragonEast]

Same lacklustre middle management and operational staff though, whoever buys it!

Management buyout with a MD that has reduced the PVR from around 160 to around 94 in five years! Plus massive reductions in network coverage and evening / Sunday services.

Operational staff happy to create a 90 minute gap in service by running consecutive buses private from Hanley to terminus when only a few minutes late, no thought to run one out private and one out in service (and return private instead) to mop up the frustrated customers.

A strong laxative is required to clear things out, not a buyout.

Superficially very much the same story in the (much larger) Essex operations. But perhaps it pays to look behind the facade? Rumours abound of a cold war between the MD and his operational staff at both EC and Essex. I simply don't know enough, but it just could be an explanation for the erratic "design" of the network as the planning and operational staff try to maintain services by "losing" the less profitable bits in longer and more convoluted routes in the face of a commercial/accountant MD narrowly focussed on profit and loss. (Coincidentally two of the most "difficult" routes, the 100 and 70 were amalgamations under the MD when he was the former commercial director; may be why no one seems able to do anything about them and we seem "stuck"? In those days I think it was a major portfolio that extended to Leicester, Potteries - pre-Eggleton, and Northampton.) We're good at "deals" with Developers, but they can mess up the network again. No wonder if it's true that First may have difficulty in attracting busmen. Like all of us they need to feel supported.

As has been pointed out First have got rid of plenty of "uncommercial" peripheral routes in East Anglia. But the repeated story seems to be that the independents who have taken over (and even Arriva in some cases) have increased patronage by up to 50-60% and run improved services profitably. The local First seem not to be very good at this bus lark, for whatever reason. Individually, everyone seems to be doing their best, and we have in some cases some of the "best" drivers I've ever come across in the country, and local depot management on the rare occasions we come across them seem to be doing their best, although they don't seem to stay around for long. Something seems amiss.

 

[markymark2000]

I'm not posting on here. Show's how much you can see then...

No, no. Come on, you said it now back it up.

Where I am, there are no independants who want out of the industry and if they want out, they up and leave. I don't know of any operator who is hanging on just incase of a big offer. Perhaps that is just where I am though. Clearly you can see things differently where you are, hence me asking who you are referring to. Send it in DM if you want but you can't say something that bold and then not back it up with any names.

 

[Robertj21a]

No, no. Come on, you said it now back it up.

Where I am, there are no independants who want out of the industry and if they want out, they up and leave. I don't know of any operator who is hanging on just incase of a big offer. Perhaps that is just where I am though. Clearly you can see things differently where you are, hence me asking who you are referring to. Send it in DM if you want but you can't say something that bold and then not back it up with any names.

I don't think Winston has to do or say anything, particularly as it should be confidential information. Many of us on here (me included) seem to be well aware of independents who want to sell up - and that's enough for me. If a sale goes through then we'll all hear soon enough.

 

[TheGrandWazoo]

No, no. Come on, you said it now back it up.

Where I am, there are no independants who want out of the industry and if they want out, they up and leave. I don't know of any operator who is hanging on just incase of a big offer. Perhaps that is just where I am though. Clearly you can see things differently where you are, hence me asking who you are referring to. Send it in DM if you want but you can't say something that bold and then not back it up with any names.

Winston doesn’t state things like that lightly. Some of us are party to information at times and whilst your frustration is understandable and you’d want to know, doing so would break confidences.

 

[markymark2000]

I am not asking for specifics about any sale as that would be wrong. All independents which I have spoken to seem reasonably happy with their position and as I say, from my experience, if an operator wants out, they just up and leave or gradually wind down services. As I said, obviously Winston has seen things differently and that is fine, we all see things in different ways but it should really be backed up in my opinion. If it would break confidences, I don't think it should have been hinted in the first place. That is how I see it.

People are hardly likely to go and message the company to ask about truths. If people already know these things, it can't be too much of a secret in your areas.

 

[Robertj21a]

I am not asking for specifics about any sale as that would be wrong. All independents which I have spoken to seem reasonably happy with their position and as I say, from my experience, if an operator wants out, they just up and leave or gradually wind down services. As I said, obviously Winston has seen things differently and that is fine, we all see things in different ways but it should really be backed up in my opinion. If it would break confidences, I don't think it should have been hinted in the first place. That is how I see it.

People are hardly likely to go and message the company to ask about truths. If people already know these things, it can't be too much of a secret in your areas.

Some of us may be subject to confidential arrangements, for all sorts of reasons. There's no reason at all to break those confidences and any suggestion that I, or others, should still do so will only meet with less being said on the forum in future.

 

[TheGrandWazoo]

I am not asking for specifics about any sale as that would be wrong. All independents which I have spoken to seem reasonably happy with their position and as I say, from my experience, if an operator wants out, they just up and leave or gradually wind down services. As I said, obviously Winston has seen things differently and that is fine, we all see things in different ways but it should really be backed up in my opinion. If it would break confidences, I don't think it should have been hinted in the first place. That is how I see it.

People are hardly likely to go and message the company to ask about truths. If people already know these things, it can't be too much of a secret in your areas.

You said that you didn’t know any independents who wanted to sell out. Winston said otherwise and you’ve essentially said “prove it”.

He can’t without breaking that confidence. I get information from people and I’m very conscious of what I say. It’s a fine line in providing sufficient information to be credible without breaking confidences.

Contrary to what you’ve experienced, there is certainly one business in the Midlands looking to sell.

 

[markymark2000]

Some of us may be subject to confidential arrangements, for all sorts of reasons. There's no reason at all to break those confidences and any suggestion that I, or others, should still do so will only meet with less being said on the forum in future.

If you work for the said companies and are therefore under such non disclosure agreements, that is fine and I do not expect you to put jobs on the line for that. It came across as more of an enthusiasts view though from chatting to drivers and management as a propose to being an employee knowing inside information. Perhaps I read it wrong. If so, I apologize. As I say, I do not expect anyone to put jobs on the line to give information as that would be daft. If that is the case, simply saying that would suffice however nothing was said about that, hence why I requested more information.

 

[Robertj21a]

If you work for the said companies and are therefore under such non disclosure agreements, that is fine and I do not expect you to put jobs on the line for that. It came across as more of an enthusiasts view though from chatting to drivers and management as a propose to being an employee knowing inside information. Perhaps I read it wrong. If so, I apologize. As I say, I do not expect anyone to put jobs on the line to give information as that would be daft. If that is the case, simply saying that would suffice however nothing was said about that, hence why I requested more information.

In all honesty, you are simply digging a bigger hole for yourself. I don't work for any such company but I still keep information quiet if told to me in strict confidence - and I'm not referring to enthusiast or driver gossip.

 

[TheGrandWazoo]

If you work for the said companies and are therefore under such non disclosure agreements, that is fine and I do not expect you to put jobs on the line for that. It came across as more of an enthusiasts view though from chatting to drivers and management as a propose to being an employee knowing inside information. Perhaps I read it wrong. If so, I apologize. As I say, I do not expect anyone to put jobs on the line to give information as that would be daft. If that is the case, simply saying that would suffice however nothing was said about that, hence why I requested more information.

I'm with Robert on this one. Whilst there are people who do work for companies (and so their ability to share information is governed by their contract of employment, there are a number of us who don't work for such firms but have friends/contacts who do share information. Some is sensitive but they are prepared to share, others less sensitive. I fully appreciate how the "I know stuff but I'm not prepared to elaborate" approach can grind your gears.

It is tricky when, and not accusing you of this, someone claims X firm is definitely doing Y (and criticising them for doing so). However, you know the owner of X firm and know it's nothing more than loose stool water. Do you say nothing and let the inaccuracy continue OR do you say otherwise but know that you can't provide the justification without breaching confidences? That's a rhetorical question, and it is a judgement call.

More often than not, the info is shared and indeed, Winston and Robert have done so when they can. Equally, I,m sure that they have doubtless kept schtum plenty of times.

 

[Goldfish62]

Believe me, you should head to Redditch and Kidderminster to see how Rotala have transformed the First operations there. Quite frankly, if you drive past the Kiddy depot (can't miss it if you drive in from Worcester), you'd think you were at a Carlton bus breakers with vehicles in various states of disrepair and cannibalisation. Vehicles routinely appear in a range of different liveries and they've had run ins with the TC. In Kiddy, there are no evening services; the main Stourport service runs until 2100 but everything else basically finishes at 1800 (so you get some vehicles running in c.1900-2000). In Redditch, it isn't much better - the main local services that were the focus of various bus wars get a service til 2100 and that is it.

As with many other places, the local authorities have pulled the evening subsidies and, quite simply, running around for 4 hours to carry fresh air just can't be justified in many cases. Just down the road in Cannock and it's much the same. Granted, there are some evening services but nothing on a Sunday.

Quite. I'm also sure it won't be long before the good people of Bolton are begging for First to come back.

 

[winston270twm]

No, no. Come on, you said it now back it up.

Where I am, there are no independants who want out of the industry and if they want out, they up and leave. I don't know of any operator who is hanging on just incase of a big offer. Perhaps that is just where I am though. Clearly you can see things differently where you are, hence me asking who you are referring to. Send it in DM if you want but you can't say something that bold and then not back it up with any names.

Err...... NO!

Don't have to confirm or back up anything, especially as I don't know who you or anyone else is on here, I was told in confidence. I don't take any notice of driver gossip, as they're usually the last to know.

I know of at least 4 independents that would be interested in selling out should the right offer come along. That's as much as you're getting.

 

[lastbus]

Every business is for sale at the right price

 

[Alexbus12]

Quite. I'm also sure it won't be long before the good people of Bolton are begging for First to come back.

That started on day 1 of operation

 

[winston270twm]

Every business is for sale at the right price

That's pointing out the obvious....

I'm talking about independent businesses that have actually approached potential buyers to express interest in selling out.

Wished I'd not bothered to comment now!

 

[TheGrandWazoo]

That's pointing out the obvious....!

"Well, they're 3-0 up at half time and if it stays like this, you've got to fancy them to win"

Keep the faith

 

[Andyh82]

That started on day 1 of operation

I was in Rochdale on Saturday and there were signs up saying that the 471 was running a reduced timetable due to operational difficulties

 

[winston270twm]

I was in Rochdale on Saturday and there were signs up saying that the 471 was running a reduced timetable due to operational difficulties

They're short of drivers.

 

[Alexbus12]

They're short of drivers.

Short by 100. Believe they're short on buses too

 

[F Great Eastern]

Winston doesn’t state things like that lightly. Some of us are party to information at times and whilst your frustration is understandable and you’d want to know, doing so would break confidences.

Same reason as why I've not mentioned specifics when I heard about something a few weeks ago which is currently still progressing.

 

[overthewater]

I'm also sure if people got wind of certain smaller operators thinking about selling up, what is to stop someone else just start a new service to get it for free?

Other problem is some many deals have fallen throw over the past 6 years? and nothing is set in stone until the fat lady sings, no matter what we want to believe.

Lets hope this is sorted out much sooner rather than later in the case of First, I've never saw a company in such troubles carry on as there were for so long.....

 

[ChrisPJ]

Every business is for sale at the right price

Even First Aberdeen? Sounds like the owners were reluctant.