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First Group: General Discussion

lastbus

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What about a joint venture by Go ahead NX for the Scottish Region this is been speculated like wild fire in Glasgow Depots
Been told Go Ahead will take over Scottish operations early 2020. But as you say it’s rumours just now but one that isn’t going away.
 
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Jordan Adam

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Been told Go Ahead will take over Scottish operations early 2020. But as you say it’s rumours just now but one that isn’t going away.

While there probably will be a sale in the future i can't imagine it'll be early 2020. Not to mention a "Go-Ahead" or "NX" buy out are both merely speculation and depot gossip at the moment. That being said there has been a clear effort to make the Scottish ops more attractive for a potential buyer with many vehicles gaining partial repaints and the recent service changes "tidying" stuff up.
 

Volvodart

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It was mentioned in the recent half yearly results presentation that measures have been put in place to increase the profit margin in the second half of the financial year, as they are wanting the profit margin increased before any sale, so this seems unlikely. Of course, they cannot cut services and frequencies in places that have fixed service change dates, so it is not known if they are doing anything else in First Bus. That would suggest that nothing much will happen before the financial year end.
 

DragonEast

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At the risk of upsetting everyone (again) I'm not convinced that accounting measures (such as efficiency measures to improve margins and reducing pension deficits) or the business opportunities available to a PE owner, will solve the fundamental problem of First Bus. Looking at what is reported here (and elsewhere), and not just observation, that seems to me to be trying to do too much with too few resources. The result, unsurprisingly, is that the business is a mess. It didn't happen overnight; and it won't be cured overnight.

As far as First themselves tackling that issue they seem not to recognise it, let alone be willing or able to address it. And as far as anyone else is concerned, I'm far from certain that their best option is to take over a First OpCo with all its issues rather than start from scratch or expand the existing competition. First may well have lots of "interest" (as I would expect) and I would be shocked if they didn't. An "expression of interest" gives you nothing to lose; even the politicians have realised that one, like with their "promises". The hard bit is in turning that into a deal, once they get underneath the surface of the operation and perhaps even actually have to deliver.

As it's the season, maybe it's an analogy that Baron Hardup didn't have too much luck with the cosmetics on the ugly sisters, to attract the Prince Charming. Perhaps First need the Fairy Godmother? And I don't think that's a Council, transport authority; nor Boris or Jeremy (fortunately or unfortunately - depending on your point of view, I suppose).

I'm not sure what is in prospect to make the existing First Bus operation a better business prospect one or even two years (or longer) down the line. I can perhaps think of a few things (or just plain neglect) to make it worse. I think that everyone (at least outside politics) has had their fingers burnt once too often to just blithely assume that anything is solvable, whatever the business theory teaches.
 

Stef434

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While there probably will be a sale in the future i can't imagine it'll be early 2020. Not to mention a "Go-Ahead" or "NX" buy out are both merely speculation and depot gossip at the moment. That being said there has been a clear effort to make the Scottish ops more attractive for a potential buyer with many vehicles gaining partial repaints and the recent service changes "tidying" stuff up.
Lot more going on behind the scenes mate for merely depot gossip
 

Tetchytyke

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I'm not convinced that accounting measures (such as efficiency measures to improve margins and reducing pension deficits) or the business opportunities available to a PE owner, will solve the fundamental problem of First Bus.

PE firms are, by and large, carpetbaggers. Sell off the assets, hollow out the business, then flog the rest on. They make their cash, the other problems aren't their problem to fix.

To be fair, it's not just PE who do this. Those with longer memories will remember Alan Stevenson, who did pretty much the same thing, flogging off the operations of West Yorkshire Road Car and Sovereign/London Country NE but keeping the land for himself. Made a tidy profit too. And someone else fixed the mess with what became Blazefield.

Speaking of West Yorkshire, I see First are doing the whole "death by a thousand cuts" routine again in Leeds and Bradford. You never know, it might even work this time, 27th time lucky!
 

JumpinTrainz

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Surely if Glasgow was purchased by Go Ahead, they’d be millions on refurbing buses into their own corporate colours. I’ve noticed in Manchester they’ve fully internally refurbed the buses into their own colours and fully rebranded them again. This is just for a depot in Manchester - Glasgow has hundreds of buses!

I definitely do think this recent shake up to tidy up Scottish services is to make it more appealing to a buyer however.
 

winston270twm

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Surely if Glasgow was purchased by Go Ahead, they’d be millions on refurbing buses into their own corporate colours. I’ve noticed in Manchester they’ve fully internally refurbed the buses into their own colours and fully rebranded them again. This is just for a depot in Manchester - Glasgow has hundreds of buses!

I definitely do think this recent shake up to tidy up Scottish services is to make it more appealing to a buyer however.

The above isn't just confined to Go-Ahead, it would be required no matter who bough out First Glasgow. Other owners may chose to buy new Euro 6 against refurbishing the existing fleet longer term.

As regards Manchester, Go-Ahead are opting to refurb the existing Manchester buses / bring in used acquisitions & refurbing those instead of buying new Euro 6.
 

TheGrandWazoo

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Surely if Glasgow was purchased by Go Ahead, they’d be millions on refurbing buses into their own corporate colours. I’ve noticed in Manchester they’ve fully internally refurbed the buses into their own colours and fully rebranded them again. This is just for a depot in Manchester - Glasgow has hundreds of buses!

I definitely do think this recent shake up to tidy up Scottish services is to make it more appealing to a buyer however.

In Manchester, they are refurbishing some vehicles that are 2011/12 vintage that Go Ahead would have been looking to refurbish anyway at that age. They obviously would look to rebrand their services, not least because First still run in Manchester but they'd have done it anyway.

First are indeed smartening up their Glasgow fleet and not before time. However, whilst the changes that are being made across the board in terms of service cuts with various OpCos are undoubtedly being done to improve the financial performance and so help a sale, the cosmetic changes aren't or else they'd be replicated across the First empire.
 

mic

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as anyone seen FGMs 69537/38/39 last at Oldham in August donot think they are at Bolton Vantage depot also 33714/29/39 at Oldham now off lease from Diamond 33755 gone to South Yorkshire from Oldham 37383 left the fleet
 

47550

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as anyone seen FGMs 69537/38/39 last at Oldham in August donot think they are at Bolton Vantage depot also 33714/29/39 at Oldham now off lease from Diamond 33755 gone to South Yorkshire from Oldham 37383 left the fleet
I saw 69538 in Manchester the other day - now repainted into first livery, so must be still working out of Oldham
 

Rod Harrison

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The above isn't just confined to Go-Ahead, it would be required no matter who bough out First Glasgow. Other owners may chose to buy new Euro 6 against refurbishing the existing fleet longer term.

As regards Manchester, Go-Ahead are opting to refurb the existing Manchester buses / bring in used acquisitions & refurbing those instead of buying new Euro 6.
No one will do anything until after the general election as Labour want to nationalise buses (along with everything else).
 

Goldfish62

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No one will do anything until after the general election as Labour want to nationalise buses (along with everything else).
They don't want to nationalise buses, but as others have said it's somewhat irrelevant given the likely election result.
 

Volvodart

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First Solent has posted on Facebook a photo of an Enviro200MMC for Portsmouth stating coming soon.
 

DragonEast

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If the value in First Bus is in their property assets (which I can readily accept) what the heck is the point of faffing around trying to improve margins in the bus business? First can't realise that value directly for reasons we all know (not least Unite would have them by the short and curlies); but a bus business shorn of all its depots is going to be a different animal, surely? Buy whilst the Government-sponsored housing boom is in full swing just get on with it. So why hasn't anyone done so? If the boom doesn't last, how is this delay going to achieve a better price? Better to sell whilst the planning system is still in turmoil and planning permission easy to come by.

Four "national" operators is "enough" for a competitive market, surely.

Makes you wonder why no-one else has tried beyond selling off redundant depots and relocating from urban to cheaper modern out-of town sites at which everyone has been busy (including First as one of the busiest, but a fat lot of good it has done them). As far as I'm aware so far only the cowboys have tried running buses without depots. Whatever happened to them? Franchising a la NatEx Coaches? With the logiistics of a local bus network I'm not sure I can see where enough savings would come from to make the system worth it?

Certainly I can't see the value to any operator in overpaid, resentful staff and a dilapidated fleet; and locally with investment in the rail network much of the First network probably becomes redundant. In the interests of efficiency, it should. It's certainly a contrast with the 1970s where every town had a legacy bus garage/station as a matter of civic pride, though often ready for disposal. Modern buses outside the Mets, sometimes, (especially First, it seems) are now a matter of civic disgrace, if anything.
 
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TheGrandWazoo

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If the value in First Bus is in their property assets (which I can readily accept) what the heck is the point of faffing around trying to improve margins in the bus business? First can't realise that value directly for reasons we all know (not least Unite would have them by the short and curlies); but a bus business shorn of all its depots is going to be a different animal, surely? Buy whilst the Government-sponsored housing boom is in full swing just get on with it. So why hasn't anyone done so? If the boom doesn't last, how is this delay going to achieve a better price? Better to sell whilst the planning system is still in turmoil and planning permission easy to come by.

Four "national" operators is "enough" for a competitive market, surely.

Makes you wonder why no-one else has tried beyond selling off redundant depots and relocating from urban to cheaper modern out-of town sites at which everyone has been busy (including First as one of the busiest, but a fat lot of good it has done them). As far as I'm aware so far only the cowboys have tried running buses without depots. Whatever happened to them?

Certainly I can't see the value to any operator in overpaid, resentful staff and a dilapidated fleet; and locally with investment in the rail network much of the First network probably becomes redundant. In the interests of efficiency, it should. It's certainly a contrast with the 1970s where every town had a legacy bus garage/station as a matter of civic pride, though often ready for disposal. Modern buses outside the Mets, sometimes, (especially First, it seems) are now a matter of civic disgrace, if anything.

Nurse, nurse.... he’s out of bed again.

You do realise that most of the First bus OpCos are profitable?
 

winston270twm

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Nurse, nurse.... he’s out of bed again.

You do realise that most of the First bus OpCos are profitable?

Totally agree, I think the FGP board are just trying to give the OpCos's a shot in the arm, which may/may not also include reducing pension deficits (which seems to be a frequent stumbling block for deals to be done). Ultimately it's all aimed at bumping up the sale price & thus releasing higher value for shareholders when eventually sold.
 

Volvodart

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The pension deficit is going down according to the April 2019 actuarial valuation from the April 2016 valuation, but they did not specifically say how much as it is still in progress. They have a plan of what to do with the UK bus pension scheme which would work on any disposal process envisaged . Basically it is to make the scheme "self sufficient" by paying money from the disposal into the scheme.
 
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winston270twm

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The pension deficit is going down according to the April 2019 actuarial valuation, but they did not specifically say how much as it is still in progress. They have a plan of what to do with the UK bus pension scheme which would work on any disposal process envisaged . Basically it is to make the scheme "self sufficient" by paying money from the disposal into the scheme.

From chatter I've heard regarding potential suitors, it's mostly been the pension deficits that have deterred buyers rather than profit margins. Also, the level of investment required to bring the acquired fleets up to scratch / to boost the number of Euro 6 compliant buses etc, some First OpCos have had very little in the way of new fleet investment over multiple years.

I personally think First should get a move on with UK bus disposals whilst DB have pulled the plug / temporarily suspended their proposed sale of Arriva Group. I'd also like to see the board deliver a Greyhound sale announcement before this years out.
 

Robertj21a

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From chatter I've heard regarding potential suitors, it's mostly been the pension deficits that have deterred buyers rather than profit margins. Also, the level of investment required to bring the acquired fleets up to scratch / to boost the number of Euro 6 compliant buses etc, some First OpCos have had very little in the way of new fleet investment over multiple years.

I personally think First should get a move on with UK bus disposals whilst DB have pulled the plug / temporarily suspended their proposed sale of Arriva Group. I'd also like to see the board deliver a Greyhound sale announcement before this years out.

Totally agree.
 

Volvodart

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With the vastly reduced expected disposal proceeds, I would have thought an IPO might be more likely for Arriva.
 

winston270twm

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With the vastly reduced expected disposal proceeds, I would have thought an IPO might be more likely for Arriva.

It would make sense, as Arriva doesn't come with the same issues as First Group, it's the parent that are heavily indebted. That said, the longer DB dither, the more damage they are doing to their Arriva business, as things seems very much up in the air, with little new bus investment going in to most Arriva subsidiaries.

Either way, the DB delay should help First Group achieve higher sale prices due to less being for sale on the market.
 

overthewater

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How is this news?

https://cbwmagazine.com/firstgroup-urged-to-sell-usa-operations-by-groups-largest-shareholder/
FirstGroup’s largest individual shareholder, Iranian-born property investor Robert Tchenguiz, who holds a 4.7% economic interest in FirstGroup, said he would seek a shareholder meeting as soon as practical, and has urged the company to sell all of its operations in the United States. He has also asked for more clarity about strategic plans as the British bus and train operator works to sell its US intercity service Greyhound.

A spokesman for FirstGroup said in response that its First Student and First Transit division’s in North America were ‘valuable assets and well positioned with profitable growth.’

“The board has been consistent and clear that the objective is to realise value and therefore were a credible and deliverable offer to be received for these or any other business in the portfolio then, of course, the board would give that serious consideration,” it said.

FirstGroup American subsidiary Greyhound was put up for sale earlier this year due to competition from low-cost airlines, but the First Student and First Transit accounted for 60% of the company’s operating profit in 2019.

It is understood that FirstGroup is currently in talks with bidders for Greyhound.
 
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mic

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Manchesters 69537/38/39 now all Vantage spares again all moved back to Bolton Oldhams 33714 transffered to Sheffield yestaday
 

Blackpudding

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Manchesters 69537/38/39 now all Vantage spares again all moved back to Bolton Oldhams 33714 transffered to Sheffield yestaday

And to add to that it's reported that Volvo B7RLE 69198 and 69202 have moved from Oldham to Aircoach, Dublin.
 

mic

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thanks for info i bet some buses will be returning of lease from diamond and going to oldham if they have gone to Dublin not yet re-registered still showing on DVLA as uk regs
 

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