First Group: General Discussion

[Mr Manager]

Well i can tell you that after a meeting today.

At least one company is for sale and at least another 2 garages will close. I'm not privvy as yet as to what and whom but first are in retrenchment.

 

[dgl]

All three still present at Weymouth this afternoon. 65724 inside having it's X74 branding removed whilst the others were outside in as arrived condition.

36005 ventured up to Portland today on service 1, normally a Streetlite or Dart on this I think.

Normally a streetlite, gemini (used to be the mainstay for a while). or various double deckers but streetlites are the norm.

 

[overthewater]

Well i can tell you that after a meeting today.

At least one company is for sale and at least another 2 garages will close. I'm not privvy as yet as to what and whom but first are in retrenchment.

Are we sure? I wonder what company could be up for offers and I wonder what the other depot is. I know where my money would go

 

[ChrisPJ]

Well i can tell you that after a meeting today.

At least one company is for sale and at least another 2 garages will close. I'm not privvy as yet as to what and whom but first are in retrenchment.

I'm not sure how believable this statement is! Not really giving much away there

 

[robertclark125]

What if a buyer can be found for the two garages which will close? Depends of course where they are.

And as for there being one company for sale, I have heard some speculation about at least one depot that could be changing hands soon, and that the potential buyer turned down a neighbouring depot. I won't say any more.

 

[THarris123]

Can we assume it is a depot that hasn't received any new vehicles in the last few years?

There aren't many left that haven't seen new vehicles of some sort. The only ones it can really be are in Scotland. Of course there's Yeovil and what about AG?

 

[the101]

Well i can tell you that after a meeting today.

At least one company is for sale and at least another 2 garages will close. I'm not privvy as yet as to what and whom but first are in retrenchment.

Not to comment immediately on what you have heard, but I think that given the fragility of First's finances at the moment any bit of it would be for sale, at the right price. Certainly at around the time Chester, Wigan and so on were disposed of it was a not too well-guarded secret that they would have sold other parts of the business for the right number of shekels.

If what you have heard is correct there can only be a one real contender if an entire business unit is actively for sale, however, and that is Potteries. Interest has been terminally lost there, in contrast to some other areas which were once considered no-hopers but now seem to be turning around.
--- old post above --- --- new post below ---

Can we assume it is a depot that hasn't received any new vehicles in the last few years?

There aren't many left that haven't seen new vehicles of some sort. The only ones it can really be are in Scotland. Of course there's Yeovil and what about AG?

Adderley Green received 10 StreetLites around this time last year; there were a further 20-odd planned for the current order but they were diverted elsewhere.

 

[Tetchytyke]

Greyhound was an interesting concept but fundamentally flawed IMO. Coach travel is price sensitive so unlikely to be able to charge a premium price whilst the coaches had 8 fewer seats so lower revenue but the same costs.

Souter understood that (Christ, it's where he cut his teeth) while Moir didn't.

You say that, but Megabus Gold seems to be working for Stagecoach.

Greyhound went for political reasons: Fearnley wanted to show he was the new boss, and getting rid of Greyhound was a way of doing that.

FTR was barking mad from the word go, mind.

 

[TheGrandWazoo]

You say that, but Megabus Gold seems to be working for Stagecoach.

Greyhound went for political reasons: Fearnley wanted to show he was the new boss, and getting rid of Greyhound was a way of doing that.

FTR was barking mad from the word go, mind.

If Greyhound had been making money, it would've lived but it was fundamentally flawed. Same reason why Megabus Gold didn't work out of Cardiff. Think about it...

• If a customer isn't price sensitive - they can spend £11 (advance) and do the journey in 1h 50 by train (rather than 2h 50)
• If a customer is price sensitive, they will go for the £5.50 (advance) and go NatEx
• If Greyhound match the NatEx prices, each journey will give them £44 less revenue than NatEx though they will have broadly similar costs

Megabus Gold in Scotland does offer a niche in that it's a sleeper to London so different from a standard NX coach but cheaper than a sleeper train. The daytime services probably benefit from a marginal costing in any case.
--- old post above --- --- new post below ---

Not to comment immediately on what you have heard, but I think that given the fragility of First's finances at the moment any bit of it would be for sale, at the right price. Certainly at around the time Chester, Wigan and so on were disposed of it was a not too well-guarded secret that they would have sold other parts of the business for the right number of shekels.

If what you have heard is correct there can only be a one real contender if an entire business unit is actively for sale, however, and that is Potteries. Interest has been terminally lost there, in contrast to some other areas which were once considered no-hopers but now seem to be turning around.
--- old post above --- --- new post below ---

Adderley Green received 10 StreetLites around this time last year; there were a further 20-odd planned for the current order but they were diverted elsewhere.

Problem is the rumour mill could justify most disposals or closures...

• The "it's on a limb" thread could include York, Yeovil, Slough, Potteries, Worcester, Leicester, Haverfordwest....
  
• The "selling some valuable" encompasses the Yorkshire, Bristol, GM areas...
  
• The "not had much new vehicle investment" includes FSE, Somerset, Kernow, Yeovil, Eastern Counties....
  
• The "possible depot rationalisations/other depots close by" could be South Wales, Eastern Counties, Manchester....

I've said I could see further depot disposals (not just with First) so it's not a surprise. It's difficult not to speculate but not great for the staff at those depots. However, you can argue that anywhere could be affected and who knows... After all, we had continued speculation on East Lothian but did anyone say Bracknell....???

 

[Volvodart]

It is difficult to see who would want to buy with the Buses Bill coming and they can always wait and see if it becomes like Plymouth.

 

[overthewater]

Megabus Gold in Scotland does offer a niche in that it's a sleeper to London so different from a standard NX coach but cheaper than a sleeper train. The daytime services probably benefit from a marginal costing in any case.

Two important points about Scotland, it has no competition, but add on the fact that most of the direct non stop coaches are operated by the Gold coaches in the first place. So its there direct with gold or slow citylink via the towns?

Add in the fact the OAP passes are allowed on those Gold service..... its a complete racket, passes are not there to give oap free tea/ coffee and a muffin with there bus travel.

Problem is the rumour mill could justify most disposals or closures...

• The "it's on a limb" thread could include York, Yeovil, Slough, Potteries, Worcester, Leicester, Haverfordwest....
• The "selling some valuable" encompasses the Yorkshire, Bristol, GM areas...
• The "not had much new vehicle investment" includes FSE, Somerset, Kernow, Yeovil, Eastern Counties....
• The "possible depot rationalisations/other depots close by" could be South Wales, Eastern Counties, Manchester....

I've said I could see further depot disposals (not just with First) so it's not a surprise. It's difficult not to speculate but not great for the staff at those depots. However, you can argue that anywhere could be affected and who knows... After all, we had continued speculation on East Lothian but did anyone say Bracknell....???

If and buts right now..... but the smart money would be on the following

* Yeovil,
* Slough
* Potteries.

I can't see first wishing to sale any more good assets. I think those are the best chance, but I really thought Yeovil would have went to buses of Somerset. If Worcester goes now then it all been for nothing, and it could have gotten a better price.

FSE has to be one of the depots, BUT if by pure chance nothing changes with FSE it will be a miracle!

One thing, are there any depots which could be shut to save money and everything moved to other places? Yes Stagecoach has shut three depots, but most of its commercial network around those locations are still the same. I cant think were else stagecoach would shut? Go ahead could shut a few depots to save cost.

 

[TheGrandWazoo]

Two important points about Scotland, it has no competition, but add on the fact that most of the direct non stop coaches are operated by the Gold coaches in the first place. So its there direct with gold or slow citylink via the towns?

Add in the fact the OAP passes are allowed on those Gold service..... its a complete racket, passes are not there to give oap free tea/ coffee and a muffin with there bus travel.



If and buts right now..... but the smart money would be on the following

* Yeovil,
* Slough
* Potteries.

I can't see first wishing to sale any more good assets. I think those are the best chance, but I really thought Yeovil would have went to buses of Somerset. If Worcester goes now then it all been for nothing, and it could have gotten a better price.

FSE has to be one of the depots, BUT if by pure chance nothing changes with FSE it will be a miracle!

One thing, are there any depots which could be shut to save money and everything moved to other places? Yes Stagecoach has shut three depots, but most of its commercial network around those locations are still the same. I cant think were else stagecoach would shut? Go ahead could shut a few depots to save cost.

Julian Peddle has some interesting views on the respective fortunes of the big 5.

My point is that you can speculate and justify almost anything and that perhaps it might be more sensitive not to speculate in too much detail about which depots could close?

 

[overthewater]

Julian Peddle has some interesting views on the respective fortunes of the big 5.

My point is that you can speculate and justify almost anything and that perhaps it might be more sensitive not to speculate in too much detail about which depots could close?

Where can you read the views of Julian Peddle ?

I don't think we have speculated to much details, we're all given a good overview what could and where it might happens, if it does.

 

[TheGrandWazoo]

Where can you read the views of Julian Peddle ?

I don't think we have speculated to much details, we're all given a good overview what could and where it might happens, if it does.

It's in Buses magazine... The upshot...

Stagecoach - the best of the 5 and quite innovative
First - weighed down by the debt burden and margins too low for recovery
Arriva - becalmed
Go Ahead - too focussed on centralisation
NatEx - perhaps best placed for the new environment of partnership and the buses bill

As for speculating too much....how long has this thread been going?

 

[Robertj21a]

It's in Buses magazine... The upshot...

Stagecoach - the best of the 5 and quite innovative
First - weighed down by the debt burden and margins too low for recovery
Arriva - becalmed
Go Ahead - too focussed on centralisation
NatEx - perhaps best placed for the new environment of partnership and the buses bill

As for speculating too much....how long has this thread been going?

I'd certainly agree with Julian about the first four - quite clear cut imho. Just can't make my mind up about NatEx (but not sure why !)

 

[TheGrandWazoo]

I'd certainly agree with Julian about the first four - quite clear cut imho. Just can't make my mind up about NatEx (but not sure why !)

I tend to be in agreement with him too. His view of Arriva is that they think that rebranding certain routes as Max or Sapphire is innovative when, in truth, it's fast becoming the new standard.

As for NatEx, I know what you mean. Think it was a miniature First Group - lost their way, distracted by growth, used bus operations as a cash cow and failed to invest, carpetbaggers sniffing around. I don't know Dundee but the WM operations are markedly better (the standard livery is still insipid but the new images are good) and they are investing (though the hangover from the bad times is perhaps still evident in places)

 

[Robertj21a]

I tend to be in agreement with him too. His view of Arriva is that they think that rebranding certain routes as Max or Sapphire is innovative when, in truth, it's fast becoming the new standard.

As for NatEx, I know what you mean. Think it was a miniature First Group - lost their way, distracted by growth, used bus operations as a cash cow and failed to invest, carpetbaggers sniffing around. I don't know Dundee but the WM operations are markedly better (the standard livery is still insipid but the new images are good) and they are investing (though the hangover from the bad times is perhaps still evident in places)

Arriva is a bit odd at times. As you say, MAX or Sapphire are nothing different to other operator's products (notably Gold). However, what I feel they have underplayed is their M-Ticketing and their live tracker app. Despite some initial bugs both of these innovations were a way ahead of their competitors and yet they rarely highlight them.

 

[overthewater]

As for NatEx, I know what you mean. Think it was a miniature First Group - lost their way, distracted by growth, used bus operations as a cash cow and failed to invest, carpetbaggers sniffing around. I don't know Dundee but the WM operations are markedly better (the standard livery is still insipid but the new images are good) and they are investing (though the hangover from the bad times is perhaps still evident in places)

I think I'll need to buy a copy of buses this month.

NE Dundee is/was dire, and the old MD has been kick out and it really was treated like a cash cow with very little investment. The fleet had buses older than FSE.

The new MD has overhauled the company and rebranded it as "Xplore Dundee" and new buses have been drafted in to to replace most of the old stock. http://nxbus.co.uk/dundee/news/its-time-to-xplore-dundee

Stagecoach are about to start a new route to complete against the company https://www.stagecoachbus.com/go-wild-in-dundee.aspx

Hopeful it will drive up standards in Dundee.

 

[d1672]

Hi,

Please remember that Parkhead Depot in Glasgow is closing on 16/01/16, I Think.

Thomas

 

[winston270twm]

I'd certainly agree with Julian about the first four - quite clear cut imho. Just can't make my mind up about NatEx (but not sure why !)

NX Group is considered the transport group with the least risk from the impending bus bill & had two broker upgrades yesterday:
http://news.markets/shares/national-express-out-in-front-after-broker-upgrade-17539/

Trading update for NX is due this Thurs. NX only derive approx. 33% of turnover & profits from the UK now. NXWM is pretty well protected through its award winning quality partnership with Centro.

Stagecoach surely have the most to lose being the biggest & depending on the implications, it could provide a further nail in First Groups coffin

 

[Surreyman]

NX Group is considered the transport group with the least risk from the impending bus bill & had two broker upgrades yesterday:
http://news.markets/shares/national-express-out-in-front-after-broker-upgrade-17539/

Trading update for NX is due this Thurs. NX only derive approx. 33% of turnover & profits form the UK now. NXWM is pretty well protected through its award winning quality partnership with Centro.

Stagecoach surely have the most to lose being the biggest & depending on the implications, it could provide a further nail in First Groups coffin

Current state of play with Bus Franchising is only Greater Manchester, Cornwall & Tyne & Wear (The only one with a 'worked up' detailed proposal),are committed at this stage.
Of the 38 Authorities who have applied for devolution powers, I would hazard a guess that Merseyside, West Yorkshire & South Yorkshire are 'certs' for Bus franchising.
We have yet to see the full firmed up proposals in the bill, the info available on line from Dft (& rumours from another blogsite) hint that Bus franchising will be an option and may not necessarily be taken up by all authorities.
In the case of First, Manchester, West Yorkshire & South Yorkshire make up a sizeable percentage of what is presumably some of there best (most profitable) territory.

 

[TheGrandWazoo]

Current state of play with Bus Franchising is only Greater Manchester, Cornwall & Tyne & Wear (The only one with a 'worked up' detailed proposal),are committed at this stage.
Of the 38 Authorities who have applied for devolution powers, I would hazard a guess that Merseyside, West Yorkshire & South Yorkshire are 'certs' for Bus franchising.
We have yet to see the full firmed up proposals in the bill, the info available on line from Dft (& rumours from another blogsite) hint that Bus franchising will be an option and may not necessarily be taken up by all authorities.
In the case of First, Manchester, West Yorkshire & South Yorkshire make up a sizeable percentage of what is presumably some of there best (most profitable) territory.

South Yorkshire are well down the road of partnership so possibly not. Next phase kicks in 1st Nov.

 

[KendalKing]

Hi,

Please remember that Parkhead Depot in Glasgow is closing on 16/01/16, I Think.

Thomas

Correct, could this be the planned depot closure, that is being referred too.

 

[overthewater]

Correct, could this be the planned depot closure, that is being referred too.

That would leave one other depot to close, if that is the case.

 

[Surreyman]

That would leave one other depot to close, if that is the case.

My 10 pennyworth -
Don't forget that the closure of Braintree has been announced, albeit this is a small depot due to be part replaced by an outstation.
However a brand new depot in Colchester just opened, replacing 2 sites.

If a 'Company' is to be sold, it gets a bit murky depending on how you define a company, The name on the operators licence? Midland Bluebird separate from FSE, Manchester Tameside known as First Pioneer.

What are First trying to achieve?

Stated future aim of a margin of 10-12% with a rationalisation of their bus operation, disposing of parts they do not think will achieve this?
(Future Franchised operations likely to have a lower margin than commercial).
Or: -
Sale in order to help pay down debt?
- A Sale would need to be an operation profitable enough to attract buyers.

 

[winston270twm]

My 10 pennyworth -
Don't forget that the closure of Braintree has been announced, albeit this is a small depot due to be part replaced by an outstation.
However a brand new depot in Colchester just opened, replacing 2 sites.

If a 'Company' is to be sold, it gets a bit murky depending on how you define a company, The name on the operators licence? Midland Bluebird separate from FSE, Manchester Tameside known as First Pioneer.

What are First trying to achieve?

Stated future aim of a margin of 10-12% with a rationalisation of their bus operation, disposing of parts they do not think will achieve this?
(Future Franchised operations likely to have a lower margin than commercial).
Or: -
Sale in order to help pay down debt?- A Sale would need to be an operation profitable enough to attract buyers.

Another issue, if anything is being sold to help pay down debt, it also needs to something of size/high value, otherwise it would barely scratch the surface of First Group debt

 

[overthewater]

I don't think it will be something to pay off debt since thats under control.

 

[Tetchytyke]

I reckon I'd probably agree with Julian Peddle about the state of the big five bus companies.

Go Ahead seem determined to centralise, which is going to destroy all that has been good about them in the last decade. But they're not even centralising in a coherent way; certainly up here their branding is in a proper muddle these days. I don't think it is going to end well.

Arriva are an odd one. MAX and Sapphire are not as innovative as they think they are, even if they have just won a gong for innovation with MAX, yet they're the bits they're making a song and dance about. The really innovative stuff- the mobile ticketing and bus tracking system- barely gets mentioned, yet nobody else does it.

Stagecoach can be innovative when they want to be, but usually only when they're forced to be. They can adapt to new markets but they're also the slowest at incorporating new technology; their website, for instance, is a disaster zone and has been for many years. I don't think they're anywhere near as good as their reputation would have you think.

Which leads us nicely on to First. I really don't understand what they are playing it. Getting rid of loss-making depots makes sense, but that doesn't seem to be what is happening. They seem to have decided that anything that isn't making 10% isn't worth keeping, which shows a startling lack of understanding of the industry for me. As we've seen so many times, scaling back on low-margin routes and depots just allows competitors to move in on to your patch. And before long your high margin depots are struggling because your competitors have a sound base and can use it to have a proper go on your best routes. Arriva learned this the hard way a few years ago and it looks as though First didn't pay attention.

The other issue with First is that it just breeds instability. I couldn't say there is a single business that isn't vulnerable, even their original heartlands in Bristol, Aberdeen and West Yorkshire. I don't see how they can encourage the best people to stay in their business if there is that little stability.

 

[winston270twm]

I don't think it will be something to pay off debt since thats under control.

It was under control after the Rights Issue & they had a plan, however, they were also banking on winning a big new rail franchise which would have brought in additional turnover, cash flows & potentially additional profits to accelerate the turnaround plan / reduce debts quicker.

The reality is quite the opposite, they lost the WCML contract after initially winning it, failed to win the ECML and also since failed to retain existing franchises for further periods which has meant turnover, cash flows & the profits for the group have fallen even further. There have also been cash outflows following the transfer of existing Rail franchises to the new operator

 

[overthewater]

It was under control after the Rights Issue & they had a plan, however, they were also banking on winning a big new rail franchise which would have brought in additional turnover, cash flows & potentially additional profits to accelerate the turnaround plan / reduce debts quicker.

The reality is quite the opposite, they lost the WCML contract after initially winning it, failed to win the ECML and also since failed to retain existing franchises for further periods which has meant turnover, cash flows & the profits for the group have fallen even further. There have also been cash outflows following the transfer of existing Rail franchises to the new operator

Then maybe should sell off something which would pay of alot of the debt, like Greyhound.