First Group: General Discussion

[winston270twm]

Photos of a new two tone blue Scania Enviro400MMC for First Essex have been posted on Facebook.

Are those for the Stansted Airport X30?

 

[DragonEast]

Are those for the Stansted Airport X30?

Well if there is some signs of investment, they are certainly making everyone pay for it, with the day network ticket (not X30) increasing to £9.20, compared to both Arriva (multi-county) and Stagecoach wider network at £7.80 and £7 respectively, both with more modern fleets and generally more reliable and often frequent services. The discrepancy seems to be reflected in single and return tickets too. In the past fares have been comparable.

If I make the sort of journey I was making by bus a few years ago when I was unable to drive, I could get more than 10 x the distance for less money on Arriva. Doesn't exactly make the passengers feel good, perhaps? All the indications have been that FEx run a very expensive network, that provides very poor value for money. This won't help to dispel the myth.

 

[RichSwitch]

Times writeup of the results said they had tried and failed to divest the UK bus operations and so they had switched tack and were now trying to divest the US operations.

It reminds me of this...
“You like potato and I like potahto
You like tomato and I like tomahto
Potato, potahto, Tomato, tomahto.
Let's call the whole thing off”

 

[Robertj21a]

The final Accounts for some First Group bus ops to 30th March have now been registered at Companies House and should be public in about a week.

 

[TheGrandWazoo]

The final Accounts for some First Group bus ops to 30th March have now been registered at Companies House and should be public in about a week.

With the exception of First South Yorkshire, they’re there! Aside from Scotland East (competition), they’re generally encouraging. Obviously, Greater Manchester is bad because of the asset impairments which highlights why just flogging stuff isn’t a panacea. However, the main take is that First had the disbenefit of a shorter 52 week year (last was 53) and there’s a pension change based on a court case but that’s generally outweighed by the 2018 costs associated with restructuring, new ticket machines etc now realising benefits.

One flat spot is Worcester (slipped into the red) and Aberdeen is still loss making but has improved. Essex without the exceptionals returned to a modest profit.

First South West turned in a very good performance (op profit up from £0.5m to £2m), and West of England was much improved (£0.8m to £5.3m) despite some well documented challenges in Q3. Glasgow remains strong. Potteries went from break even to £1.1m profit. Cymru takes pride of place with a near 12% margin and £5m profit.

 

[overthewater]

I take it Aberdeen can be overlooked since they had strike on?

 

[TheGrandWazoo]

I take it Aberdeen can be overlooked since they had strike on?

Did that fall in fy2017/8? It’s not mentioned as a factor in these accounts?

Revenue down 3% but actually it’s 5% for bus ops when you factor in the increase in coaching.

 

[Volvodart]

The dispute was settled in April 2018 but I think the costs went through last year.

 

[TheGrandWazoo]

The dispute was settled in April 2018 but I think the costs went through last year.

The revenue impact would’ve been in the previous year. The costs are ongoing!

 

[Volvodart]

They said £300K was incurred last year.

 

[Nammer]

How did Hampshire Dorset Berkshire perform in the latest set of results?

With the exception of First South Yorkshire, they’re there! Aside from Scotland East (competition), they’re generally encouraging. Obviously, Greater Manchester is bad because of the asset impairments which highlights why just flogging stuff isn’t a panacea. However, the main take is that First had the disbenefit of a shorter 52 week year (last was 53) and there’s a pension change based on a court case but that’s generally outweighed by the 2018 costs associated with restructuring, new ticket machines etc now realising benefits.

One flat spot is Worcester (slipped into the red) and Aberdeen is still loss making but has improved. Essex without the exceptionals returned to a modest profit.

First South West turned in a very good performance (op profit up from £0.5m to £2m), and West of England was much improved (£0.8m to £5.3m) despite some well documented challenges in Q3. Glasgow remains strong. Potteries went from break even to £1.1m profit. Cymru takes pride of place with a near 12% margin and £5m profit.

 

[Volvodart]

Berkshire did quite well with an operating profit of over 10%, Hampshire & Dorset over 8%, both a lot better than 2018.

 

[Non Multi]

Berkshire did quite well with an operating profit of over 10%, Hampshire & Dorset over 8%, both a lot better than 2018.

I suspect that's been driven by the move to offer convenient contactless fare payment. Game changer. Can't see why FG would sell Slough to Reading Transport whilst it's that profitable.

 

[cnjb8]

I suspect that's been driven by the move to offer convenient contactless fare payment. Game changer. Can't see why FG would sell Slough to Reading Transport whilst it's that profitable.

They didn't sell. First gave up a number of routes that were replaced by Reading amongst others. The remaining routes make Berkshire profitable

 

[Goldfish62]

They didn't sell. First gave up a number of routes that were replaced by Reading amongst others. The remaining routes make Berkshire profitable

And just to add, Reading Buses is currently a loss-maker.

 

[richw]

Berkshire did quite well with an operating profit of over 10%, Hampshire & Dorset over 8%, both a lot better than 2018.

Hasnt H&D been a loss maker for a long time? That’s quite a good margin from a loss maker. I could be mistaken

 

[buslad1988]

And just to add, Reading Buses is currently a loss-maker.

Yes; tables have certainly turned there! Funny how Reading Buses woes never really get mentioned anywhere though. People slate First but when they get the product/investment and market balance right they do quite well. It’s just their reputation they struggle with.

 

[TheGrandWazoo]

Hasnt H&D been a loss maker for a long time? That’s quite a good margin from a loss maker. I could be mistaken

It's actually been a decent moneyspinner in the past

2014 £0.1m
2015 £3.3m
2016 £3.3m
2017 £0.8m
2018 (£0.1m)
2019 £3.1m

Last year, there were some significant one-offs. Think the relocation of customer services from Southampton to Leeds meant restructuring and also the writing off of the old ticket machines.

 

[richw]

It’s just their reputation they struggle with.

Some opcos have dropped First from their trading brand. I wonder how this impacts trading and reputation? South west for example have no mention of First other than on the unpainted Tridents which are on borrowed time. leeds I believe is another example on their new branding and livery with no evidence of First

 

[Non Multi]

They didn't sell. First gave up a number of routes that were replaced by Reading amongst others. The remaining routes make Berkshire profitable

I was not referring to the routes that have already been taken over, or contracted out to Reading Transport. There's been a lot of talk recently (just talk, mind) that Reading Transport would buy First Beeline (Slough) in the near future. Not surprised that RT are making a loss considering the recent expansions and acquisitions.

 

[carlberry]

I was not referring to the routes that have already been taken over, or contracted out to Reading Transport. There's been a lot of talk recently (just talk, mind) that Reading Transport would buy First Beeline (Slough) in the near future. Not surprised that RT are making a loss considering the recent expansions and acquisitions.

I suspect the MMC would start asking questions if Reading bought Slough. Also there's no reason the recent expansions/acquisitions should make it lose money without they're taking a hit on write offs.

 

[Goldfish62]

Yes; tables have certainly turned there! Funny how Reading Buses woes never really get mentioned anywhere though. People slate First but when they get the product/investment and market balance right they do quite well. It’s just their reputation they struggle with.

Scratch the surface at Reading and it's not quite what it's trumped up to be. However there are companies that in some people's eyes can do no wrong. Stagecoach is another one.

Dear old First, however, can do nothing right in some people's eyes.

 

[winston270twm]

With the exception of First South Yorkshire, they’re there! Aside from Scotland East (competition), they’re generally encouraging. Obviously, Greater Manchester is bad because of the asset impairments which highlights why just flogging stuff isn’t a panacea. However, the main take is that First had the disbenefit of a shorter 52 week year (last was 53) and there’s a pension change based on a court case but that’s generally outweighed by the 2018 costs associated with restructuring, new ticket machines etc now realising benefits.

One flat spot is Worcester (slipped into the red) and Aberdeen is still loss making but has improved. Essex without the exceptionals returned to a modest profit.

First South West turned in a very good performance (op profit up from £0.5m to £2m), and West of England was much improved (£0.8m to £5.3m) despite some well documented challenges in Q3. Glasgow remains strong. Potteries went from break even to £1.1m profit. Cymru takes pride of place with a near 12% margin and £5m profit.

If you look closely, Worcester only slipped in to the red because of a £1.5 million hike in operating costs from £7.4million to £8.9 million (+20%), of that £500k increase in Group recharges, plus another £500k for insurance cost increases i.e. circa +£7.5k per bus which seems excessive, I doubt some of the buses are even worth that much (i.e. old Solo's / 52 & 03 plate Citaro's)

 

[TheGrandWazoo]

If you look closely, Worcester only slipped in to the red because of a £1.5 million hike in operating costs from £7.4million to £8.9 million (+20%), of that £500k increase in Group recharges, plus another £500k for insurance cost increases i.e. circa +£7.5k per bus which seems excessive, I doubt some of the buses are even worth that much (i.e. old Solo's / 52 & 03 plate Citaro's)

I had spotted that. Would the insurance element have any sensitivity as to the age of the vehicles as they’ll be self insured? It does seem heavy.

The hike in central overhead isn’t something I’ve spotted elsewhere but I confess I’ve not checked too closely

 

[winston270twm]

I had spotted that. Would the insurance element have any sensitivity as to the age of the vehicles as they’ll be self insured? It does seem heavy.

The hike in central overhead isn’t something I’ve spotted elsewhere but I confess I’ve not checked too closely

For the vehicle itself, it should only be cost of replacement. The book value of the older stuff within Worcester's fleet should be pretty low now for 16-17 year old buses.

I would expect First Group to be self-insuring like most other bus companies.

There does seem an exceptionally high increase in operating costs given the size of the fleet.

 

[TheGrandWazoo]

For the vehicle itself, it should only be cost of replacement. The book value of the older stuff within Worcester's fleet should be pretty low now for 16-17 year old buses.

I would expect First Group to be self-insuring like most other bus companies.

There does seem an exceptionally high increase in operating costs given the size of the fleet.

The greater issue is the age of any vehicle they hit as it’s third party claims. Mind you, it doesn’t specify vehicle insurances so could also involve PLI/ELI - see page 2 “claims risk”

 

[overthewater]

Isn't Worcester due new or castoff stock?

 

[winston270twm]

The greater issue is the age of any vehicle they hit as it’s third party claims. Mind you, it doesn’t specify vehicle insurances so could also involve PLI/ELI - see page 2 “claims risk”

Granted, but an increase of £7.5k per vehicle seems steep.

Isn't Worcester due new or castoff stock?

Worcester hasn't had anything new since 65 plate.

Even their core 144 (Salt Road) route upgrade only comprised 59 plate Volvo B7RLE/Wright refurbs sourced elsewhere. The frequency of the Birmingham - Bromsgrove section of the 144 is being cut to hourly during the daytime from 26th Jan.

More Citaro castoff's are understood to be due, believed to be displacing newer Streetlites​

 

[TheGrandWazoo]

Granted, but an increase of £7.5k per vehicle seems steep.

Worcester hasn't had anything new since 65 plate.

Even their core 144 (Salt Road) route upgrade only comprised 59 plate Volvo B7RLE/Wright refurbs sourced elsewhere. The frequency of the Birmingham - Bromsgrove section of the 144 is being cut to hourly during the daytime from 26th Jan.

More Citaro castoff's are understood to be due, believed to be displacing newer Streetlites​

agreed - whatever way you look at it, the £1m is a steep amount.

The speculation is former Berkshire Citaros allowing Streetlites to head to Leicester in order to meet LEZ requirements, according to Mid Red forum.

 

[Robertj21a]

agreed - whatever way you look at it, the £1m is a steep amount.

The speculation is former Berkshire Citaros allowing Streetlites to head to Leicester in order to meet LEZ requirements, according to Mid Red forum.

Correct, that has been the plan for some time. The hold up seems to be what is it that allows Slough to replace their Citaros.