I know a few drivers from First too tbh so I have snippets more than most. I can understand some things but if something is glaringly obvious I will point that out too. Case in point what I've said about social media. I understand it from a cost point of view but in 2019 it's something any company needs to be on point with and First just aren't. Nothing I've said is outrageously wrong it's came from almost my full life of using them. There's plenty of factors but studying business for long enough has helped me understand them and it's something everyone can learn about if they put the time into it as it shows a lot of people on here have. I've not seen very many comments from people who haven't put a lot of thought into them and that's good. We all have different opinions but none of them are majorly wrong
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First Group: General Discussion
- Thread starter overthewater
- Start date
I know a few drivers from First too tbh so I have snippets more than most. I can understand some things but if something is glaringly obvious I will point that out too. Case in point what I've said about social media. I understand it from a cost point of view but in 2019 it's something any company needs to be on point with and First just aren't. Nothing I've said is outrageously wrong it's came from almost my full life of using them. There's plenty of factors but studying business for long enough has helped me understand them and it's something everyone can learn about if they put the time into it as it shows a lot of people on here have. I've not seen very many comments from people who haven't put a lot of thought into them and that's good. We all have different opinions but none of them are majorly wrong
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TheGrandWazoo
Veteran Member
As the son of a driver, I’d caution against taking too much at face value. Better to speak to managers who have the information and know the financial realities.
I studied with people who have become bus (and rail) company managers and they have changed as they understand how people travel, the impact of legislation, the role (or not) of local authorities and PTEs, etc.
It’s not merely a lack of ideas, but hey, you’ve talked to some drivers so whatever...
Almost an adult response but being rude right at the end eh? I said snippets. Talking minor extra pieces of info.
TheGrandWazoo
Veteran Member
Hardly rude.
As I say, this sounds like you’ve done “tons of thinking” and got snippets from some drivers but that’s sufficient to denigrate bus companies for not having ideas and being unimaginative? Do you not realise that they may well have considered these but there are valid genuine reasons why they don’t pursue them?
The reality is that these managers are educated and experienced and have much more insight and knowledge than people care to realise.
I've never once said they don't have ideas at all? Ofcourse I've considered things too. As for saying "hardly rude" I really can't help you with that if you can't see it. Obviously I know these people have a load of insight too as they wouldn't be in the jobs if they didn't.
One of the problems for First Potteries is the huge number & cost of taxis in Stoke. £6 can take you almost anywhere you'd want to go, so if there are 2 travelling?. The lack of any service for most of the population outside peak hours has meant they have no choice anyway. People in Stoke have just got out of the habit of bus travel. Did First abandon them or did they abandon First?
To think, it's not that long ago that the council actually started to run a few night buses at weekends! We now don't even have morning or evening ones!
To think, it's not that long ago that the council actually started to run a few night buses at weekends! We now don't even have morning or evening ones!
TheGrandWazoo
Veteran Member
I wasn’t being rude; I was being direct. Offence can only be taken, not given.
My point is that you’re proffering an opinion but at no point have you expressly recognised WHY they don’t just do X. Stuff is apparently “glaringly obvious” and you know as you’ve used buses your entire life. Lines like “There's plenty of factors but studying business for long enough has helped me understand them and it's something everyone can learn about if they put the time into it” whereas these managers who have had a lifetime of running businesses don’t?
You/we don’t have the information to hand, don’t know the financial and political realities. That’s not to absolve people; they make mistakes. We all do. Some bus company managers are good, some arrogant, or naive, or are driven by expediency. A cross section as you get in any industry or in any social group.
Some things may seem “glaringly obvious” but, should you be in possession of the facts, things may prove to be less straightforward than mere bystanders like us would appreciate.
Good day to you sir.
TheGrandWazoo
Veteran Member
One of the other issues with evening travel was the change in licensing laws. Once upon a time, you went out at 7, last orders at 1030/1100. Now it’s more fragmented and, dare I suggest, the younger generation are less disposed to going out. So fewer passengers and more spread out and, of course, more taxi licenses means more cash for councils!
Robertj21a
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While I partly agree with you, I'm not sure if you realise that First Glasgow (No 1&2) is often the 2nd most profitable bus operation for First in the UK. That suggests to me that First Glasgow must be doing quite a lot that is right - confirmed when I use their services.
Yeah I'm aware of that as I've been involved in discussions regarding them for a while on here and it's came up. I've never once said there's things they don't do right but I will also point out the rest too exactly how I see it
SPT don't have responsibility for the trains and haven't had for some time.
DragonEast
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A question that has been buzzing inside my head for some time.
Accepting TGW's point that much of the criticism of First from our worms eye view is unfair, and that even the Board recognise a turnaround, why have First Group decided that FirstBus should exit the Group? Is it the fear (terror) of the franchising pressure? Why? Or even to provide finance for rail bids/contracts (a sort of DB the other way around)?
What's different about First Group from the other PLC transport groups that manage it?
It feels like they've hit a brick wall with FirstBus; but I can't put my finger on what that is, exactly.
Maybe I suppose it is managing the balance sheet, pure and simple. That just feels like an excuse, not a reason. They're running a transport operator, not an investment company, aren't they?
It's a common First-feeling, we 're not getting anything like the full story. Yes, i know we don't with anybody, but we are usually graced with something that makes sense (Boris excepted).
Accepting TGW's point that much of the criticism of First from our worms eye view is unfair, and that even the Board recognise a turnaround, why have First Group decided that FirstBus should exit the Group? Is it the fear (terror) of the franchising pressure? Why? Or even to provide finance for rail bids/contracts (a sort of DB the other way around)?
What's different about First Group from the other PLC transport groups that manage it?
It feels like they've hit a brick wall with FirstBus; but I can't put my finger on what that is, exactly.
Maybe I suppose it is managing the balance sheet, pure and simple. That just feels like an excuse, not a reason. They're running a transport operator, not an investment company, aren't they?
It's a common First-feeling, we 're not getting anything like the full story. Yes, i know we don't with anybody, but we are usually graced with something that makes sense (Boris excepted).
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TheGrandWazoo
Veteran Member
They are under pressure to realise value (ie break up the group to return money to shareholders). U.K. Bus has assets and is cash generative and is worth something (some OpCos more than others, obvs) so hence they are splitting it off. It will also help pay debt down.
Greyhound is losing money and has property so that’s getting disposed of too.
DB are flogging Arriva in order to reduce their debt pile too.
They had to do something this year after getting rid of Tim last year and no nearer them paying a dividend. They overpaid for the US businesses so selling them would be risky in terms of them receiving adequate return in the accounts as they stand just now.
Robertj21a
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What is different is that First labours under a debt mountain and has spent years doing too little about it.
DragonEast
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Yup.
So in my very simple terms, the Board are effectively doing the job of receivers. It must be the most common cry of shareholders, that a business is worth more in parts than together. Most Boards resist it on the basis that it's not their strategy. First have no viable strategy so . . . no answer.
Arriva are selling out of choice. First out of necessity to save the Board's skins, if not the Group.
So in my very simple terms, the Board are effectively doing the job of receivers. It must be the most common cry of shareholders, that a business is worth more in parts than together. Most Boards resist it on the basis that it's not their strategy. First have no viable strategy so . . . no answer.
Arriva are selling out of choice. First out of necessity to save the Board's skins, if not the Group.
TheGrandWazoo
Veteran Member
Your terms are simple and incorrect. You seem to be confusing administration with liquidation.
As with ANY management board of a quoted business, they are to secure the best return for shareholders and are not selling the entire business. Under TOT, they believed that they could trade their way out of trouble but the decline in the U.K. bus market, an overly bold TPE bid and Greyhound being outmanoeuvred by airlines and new entrants mean that strategy didn’t work.
overthewater
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I know that, however even back in the day it cared more about trains.
Even with the trains moved away it still cares more, its nearly finished Robroyston new park n ride for trains.
NorthernSpirit
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From my view the First Group empire has become too large to sustain and given the fact that the Group have no other option, they'd had to commence carving up UK Bus just to keep FirstGroup in existance.
Where this will leave UK Bus I don't know, but as we've seen in Greater Manchester with the operations there being reduced dramatically to a single depot are sure signs that we will see this happening across the network either that or going down the route of Mangement Buyouts or social enterprising and every member of staff becomes a shareholder - similar to how Preston Bus operated pre Stagecoach takeover.
winston270twm
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DB are also selling Arriva Group out of necessity for a cash injection:
Germany’s Deutsche Bahn €3 billion short on cash
13.09.2019
German auditors recommended the rail company sell parts of its business or risk being unable to finance itself. But some say the state has let down its national train service.
The Deutsche Bahn increased its debts in 2019 and the German rail company is now €3 billion ($3.3 billion) short of meeting its financial obligations, according to a report by the Federal Court of Auditors.
The company overshot its debt threshold for 2019 by June 30th this year and currently holds €1.5 billion more in outstanding financial obligations than the Federal Republic of Germany allows. Deutsche Bahn is a private, joint-stock company with the German state as its only shareholder.
If Deutsche Bahn fails to fill in these budgetary gaps, it will "not be able to finance itself on its own," the report said. The authors expect liquidity to remain a problem for the company through to 2023.
The report, which was provided to lawmakers on Thursday and seen by a number of German media outlets, pointed to "extra investments, including long-distance trains and Stuttgart 21,” referring to the controversial restructuring of rail lines in Stuttgart, and organizational inefficiencies as reasons for the high costs. The Court of Auditors recommended the company sell Arriva, its foreign train line, as well as DB Schenker, its logistics branch, to help finance its projects.
Management vs government blame game
Deutsche Bahn said in a statement released Thursday that it had not seen the auditors' report and that there is a "clear plan for the billions invested in trains, infrastructure and employees.”
Scheuer said he expects a clear plan on where Deutsche Bahn is headed
German Transport Minister Andreas Scheuer said he expects "clear answers" from the rail company regarding its future plans and that he's told the Bahn it needs to restructure and streamline. "The structure has to serve the hundred thousand employees and millions of clients," he said in an interview with the daily Bild.
Read more: Why Germans love to complain about trains
Sven-Christian Kindler, a Green member of parliament, called out Scheuer and his predecessors, saying that they have ignored problems at the German rail company. "For years now, political leadership from the German government has been lacking,” he said.
Deutsche Bahn's board of supervisors will meet on September 18 to discuss the company's growth strategy. A plan to sell Arriva is already in the works.
https://www.google.com/amp/s/amp.dw.com/en/germanys-deutsche-bahn-3-billion-short-on-cash/a-50412978
I agree, but lots of other cities have kept a "reasonable" level of service. It's not as though the North Staffs area is some small town, the population served by First Potteries is knocking on 400,000 after all.
TheGrandWazoo
Veteran Member
You’ve got to remember two apathetic local authorities who have slashed support.
Robertj21a
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The Potteries always seems to me to be little more than a few medium sized towns vaguely linked together, which it is of course. I assume the centre nowadays is Hanley, as there's precious little in Stoke or any of the other towns. Given that most bus users have nothing good to say about First Potteries (historically, but difficult to shake off), it appears that most potential passengers must have got used to their own cars, or taxis. Of course, the main roads around there (A34/A50/M6 etc) are quite good really if you just want to get out somewhere. The area really does seem to be a bit of a lost cause for bus operations.
cnjb8
Established Member
Might be a stupid question.
What is Firsts most profitable operation?
TheGrandWazoo
Veteran Member
Not stupid but not straightforward either. Do you mean absolute total profit or margin or ROI?
If it is in absolute terms, then it’s First West Yorkshire. First Glasgow 1 & 2 are a comparable size if you combine them.
In terms of margin, might be Leicester at c.15%
Robertj21a
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I think recent years would suggest that it's always West Yorkshire, then followed by Glasgow (1+2 combined).
tbtc
Veteran Member
The problem that the Potteries have is that they *are* some small towns - or, since I don't mean that to sound disrespectful, medium sized but they aren't one big city with one big city centre - the urban area is in roughly the same ball park as maybe Bradford/ Hull/ Nottingham/ Bristol but these all have one obvious big city centre and public transport works best when there's simple markets to serve with a critical mass of passengers.
Say you need a dozen passengers to make a service viable - you might have a housing estate which will put twenty passengers on the average bus - enough to make a service profitable even for a company with First's problems - but whilst that estate in Bradford/ Hull/ Nottingham/ Bristol will generally have those twenty passengers wanting a link direct into the city centre, the Potteries passengers maybe split between wanting two or three different locations - none of which are necessarily sufficient in demand to keep a bus service going. How do you run a service when some people want Newcastle, some Hanley and some Stoke? There's a reasonable population there but how do you serve it?
Alexbus12
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Is it Bristol that is after Glasgow then?
TheGrandWazoo
Veteran Member
Difficult to fully gauge as they reordered the two ops into one. First Cymru is traditionally a decent performer with >£3m profit = 9% margin