First Group: General Discussion

[overthewater]

If I was on the Broad I would carry on as before, and tighten our grip on it. Only way to do that is push through all points your wish to happen. IE Said broad don't appear weak.

 

[TheGrandWazoo]

If I was on the Broad I would carry on as before, and tighten our grip on it. Only way to do that is push through all points your wish to happen. IE Said broad don't appear weak.

Who is the broad? Is it a gangster’s moll?

 

[overthewater]

I still to this day, get Board and broad mixed up.

 

[Stan Drews]

I still to this day, get Board and broad mixed up.

...as long as you don’t get bored of the broad, you’ll be fine!

 

[trainbow]

CityAM Front page 26/6

 

[winston270twm]

Rotala have acquired the majority of First Bolton :

Acquisition in Manchester
Released : 27/06/2019 07:00

RNS Number : 5630D
Rotala PLC
27 June 2019

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.



27 June 2019

Rotala Plc

("Rotala" or "the Company" or "the Group")


Acquisition in Manchester


Pursuant to the terms of an asset purchase agreement ("APA"), Rotala is pleased to announce that it has agreed to acquire from First Manchester Limited ("First"), a subsidiary of FirstGroup plc, its Bolton depot and the majority of the First business located at that depot (the "Acquisition"). The total consideration for the Acquisition is £5.3 million, payable in cash on completion of the APA, which shall be satisfied from the Company's existing bank facilities.

Transaction highlights:

· Acquisition of Bolton depot and associated business, capable of operating up to 200 vehicles and serving 18 commercial bus routes

· Acquisition will make Rotala the second largest player in the Manchester bus market, one of the largest bus markets in the country

· Bolton depot will become the headquarters of the Rotala Group in the North West

· Rotala to lease 125 vehicles from First initially to service the new routes, with vehicles being replaced progressively by the Group in the next two years, leading to lower maintenance costs and fuel efficiencies

· Acquisition to be financed in cash from existing debt facilities

· Capital expenditure on bus replacement and re-equipment can be financed using the Group's existing panel of providers of hire purchase finance facilities

· Acquisition expected to be earnings enhancing in the first full year following completion and will significantly increase the scale of the business

· Completion of the Acquisition is expected to occur in August 2019 following receipt of necessary regulatory permissions


John Gunn, Chairman of Rotala, commented:

"This acquisition represents an exciting opportunity to expand significantly Rotala's presence in the Greater Manchester bus market. The deal is an indicator of how the UK bus landscape is beginning to change. We can expect more divestment by the big bus groups in future years. Rotala aims to be a major player in these market developments in years to come."

For further information please contact:


Rotala Plc

0121 322 2222

John Gunn, Chairman
Simon Dunn, Chief Executive
Kim Taylor, Group Finance Director



Nominated Adviser & Joint Broker:

Cenkos Securities plc


020 7397 8900

Stephen Keys/Callum Davidson (Corporate Finance)
Michael Johnson/Julian Morse (Corporate Broking)



Joint Broker: Dowgate Capital Stockbrokers Ltd

0203 903 7715

David Poutney/James Serjeant (Corporate Broking)




About the business

Rotala provides a range of transport solutions, ranging from local bus services under contract to local authorities, through to commercial bus routes. Rotala has operations at Heathrowairport, in the West Midlands and the North West.

The Acquisition

The business to be acquired from First by Rotala comprises 18 commercial bus routes operating in the Bolton and Bury areas and into the centre of Manchester. The Acquisition includes the depot at Weston Street, Bolton, the plant and machinery at that site and the goodwill of the business. The Bolton depot covers an area of 6.7 acres and consists largely of a combination of freehold and long leasehold interests. The depot is a purpose-built bus depot, constructed about 15 years ago, capable of operating up to 200 vehicles. Approximately 500 staff will also transfer to Rotala with the business.

The Directors believe that the Acquisition will enable Rotala to strengthen significantly its operations in Greater Manchester. After London, Manchester represents one of the largest bus markets in the country, on a par with the West Midlands where Rotala already has a significant presence. The Acquisition will enable Rotala to create a business which will have a substantial share of the bus market in the Greater Manchester area and which will become the largest division in the Rotala Group. The Group already has two smaller depots in Greater Manchester, in Eccles and Atherton, operating approximately 90 vehicles. The Bolton depot will become the headquarters of the Rotala Group in the North West and the existing operations of the Group in the region will be re-organised in order to make full use of the facilities and capacity of the Bolton depot. This re-organisation will enable Rotala to benefit from synergies that the Directors have identified between the acquired Bolton business and its existing operations in Eccles and Atherton, and enable its expanded services in the Greater Manchester area to operate in the most efficient manner possible.

The Acquisition is expected to be earnings accretive in the first full year following completion and the Directors believe that the Company will benefit from material additional sales, EBITDA and profit before tax contributions.

For the 12 months ended 31 March 2019 it is estimated that the turnover, EBITDA* and profit before tax* attributable to the Acquisition were approximately £24.7m, £2.3m, and £0.3mrespectively. The fair value of the assets to be acquired under the APA was a total of £4.3m, as at 31 March 2019.

The Directors believe that the Acquisition provides an exciting opportunity to achieve a significantly larger presence in this key bus market and to improve further the financial performance of the new combined Manchesterbusiness in the medium term, once the integration plans have been implemented.

Under the terms of a separate vehicle leasing agreement, Rotala has agreed with First to lease from it 125 vehicles which are used at the present time to service the 18 commercial bus routes which form the business to be acquired. These vehicles will be replaced progressively by the Group with more modern vehicles by 30 June 2021 and the leased vehicles will be returned to First by that date. The Directors estimate that the capital expenditure to be incurred in the re-equipment of this business will total approximately £26m, which may be financed using the Group's existing panel of providers of hire purchase finance facilities.

Completion of the APA is expected to occur in August 2019, following receipt by Rotala of the necessary regulatory permissions from the relevant Traffic Commissioner, among other conditions, and, in any event, by no later than 17 November 2019.

*EBITDA and profit before tax figures shown before exceptional items and group recharges.






This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

END


ACQBLGDLRXDBGCL

http://otp.investis.com/clients/uk/rotala/rns/regulatory-story.aspx?cid=182&newsid=1303062

 

[TheGrandWazoo]

Rotala have acquired the majority of First Bolton



http://otp.investis.com/clients/uk/rotala/rns/regulatory-story.aspx?cid=182&newsid=1303062

What a shock, Winston

The majority of ops so not Vantage?

 

[winston270twm]

What a shock, Winston

The majority of ops so not Vantage?

Yes - Totally unexpected

They seem to have acquired Bolton for a decent price. Only £5.3 million for a 200 bus op + modern depot. Not much to chuck back in the First coffers.....

Looks like 125 new buses aswell over the next two years.

 

[Goldfish62]

Rotala have acquired the majority of First Bolton :



http://otp.investis.com/clients/uk/rotala/rns/regulatory-story.aspx?cid=182&newsid=1303062

I was told about this a couple of weeks ago. I didn't want to believe it...

 

[Goldfish62]

Looks like 125 new buses aswell over the next two years.

It actually says "more modern vehicles", not new.

 

[winston270twm]

It actually says "more modern vehicles", not new.

They will all need to be Euro 6 to comply with forthcoming Emission rules. Also, Rotala aren't interested in going down the upgrading existing to Euro 6 route....

 

[TheGrandWazoo]

It actually says "more modern vehicles", not new.

Most of them will be new.

The return of leased vehicles will doubtless influence new vehicle orders for First.

 

[winston270twm]

Most of them will be new.

Indeed, to add... Rotala have acquired very few used vehicles over the past 12-18 months, instead buying brand new Euro 6 Micro Hybrids.

It actually says "more modern vehicles", not new.

It also says underneath 'the modern vehicles' the cap ex is expected to be £26 million for the replacement buses, average £208k / bus.

 

[Volvodart]

I presume it is genuine, someone posted on Firstgroup enthusiasts facebook that Yellow School Buses and tendered services will not form part of the sale, as well as Vantage.

 

[overthewater]

Deadpan: Oh my, what a surprise. who never saw this coming.......... it was like the worst kept secret. The poor passengers and drivers of Bolton. So when is Transdev getting Oldham?

I take it Rotala will merge its other depots into one around Bolton? No point have spare depot space especially since Vantage and school works is staying with First.

 

[TheGrandWazoo]

So when is Transdev getting Oldham?

I take it Rotala will merge its other depots into one around Bolton? No point have spare depot space especially since Vantage and school works is staying with First.

Don't know if Transdev are taking Oldham? There was an interested part initially and it wasn't them.

I'm not so certain if they'll look to fold their Eccles or Tyldesley depots into Bolton, perhaps Eccles might? The staff at Bolton will be on higher terms and conditions than the others so it could be contentious. Also, part of the long term train crash of First in the Leigh area was precipitated by the closure of their Atherton depot and moving it into Wigan/Bolton so better if they retained that local base IMHO.

 

[overthewater]

I did say transdev in deadpan. was the other one Go ahead. Its impossible to tell what could happen.

I wouldn't rule out a depot meger somewhere with that lot.

 

[Kahuna47]

Sitting in the canteen at Bolton when this story broke - a lot of despondent faces today, utterly gutting news for staff.

We will see what happens but I see major shortages in the near future as staff walk. T&Cs will be tuped over, but they can't tupe maintenance and morale (which was poor to start with!).

K

 

[KendalKing]

 

[Robertj21a]

Sitting in the canteen at Bolton when this story broke - a lot of despondent faces today, utterly gutting news for staff.

We will see what happens but I see major shortages in the near future as staff walk. T&Cs will be tuped over, but they can't tupe maintenance and morale (which was poor to start with!).

K

Quite understandable reaction to a Rotala acquisition !

 

[overthewater]

If cutback happens then there a chance for the others to expand..

 

[lastbus]

I presume it is genuine, someone posted on Firstgroup enthusiasts facebook that Yellow School Buses and tendered services will not form part of the sale, as well as Vantage.

From what I’ve heard the vantage stuff will be ran from Rusholme depot.

 

[overthewater]

What is the fleet like at Bolton? If its of the newer end I take as TGW has pointed out first will not have to buy many new buses next year... Win win for first.

 

[Volvodart]

What is the fleet like at Bolton? If its of the newer end I take as TGW has pointed out first will not have to buy many new buses next year... Win win for first.

Depends how quick over the next 2 years they are replaced by new buses.

 

[Kahuna47]

What is the fleet like at Bolton?

Enviro400s, Volvo B7 and B9s. The B5s are Vantage and Versas are YSB, neither are included in the sale.

Personally, the B9s are the best of the fleet driving wise - even though they're getting on a bit!

K

 

[TheGrandWazoo]

What is the fleet like at Bolton? If its of the newer end I take as TGW has pointed out first will not have to buy many new buses next year... Win win for first.

IIRC, the fleet at Bolton is a mix of 12 and 14 plate e400s (I assume that it's those that will be on loan initially) plus a fair few standard B9TLs from 2008/9. There are a number of B7RLE Eclipses - these date from 2005/6 mainly (incl. some that were new to Manchester but then went to Cornwall for many years before returning back) and I'd guess that they will move across as the book value will be low. There are a few newer Eclipses mainly for the trunk 581 to Leigh too - wonder if they may also be leased to Rotala.

EDIT: excluded the Vantage stuff and any TfGM assets

 

[DD12]

Could anyone clarify please -- with the latest developments regarding First's board and shareholders etc, -- could any more sell-offs of all, or parts of First Bus UK still happen in the near future, OR is that now effectively "blocked" for MONTHS ??

 

[winston270twm]

Deadpan: Oh my, what a surprise. who never saw this coming.......... it was like the worst kept secret. The poor passengers and drivers of Bolton. So when is Transdev getting Oldham?

I take it Rotala will merge its other depots into one around Bolton? No point have spare depot space especially since Vantage and school works is staying with First.

No, there's no depot merger planned at present. All spare capacity is being retained. Bolton doesn't have enough spare capacity to absorb Atherton.

Vantage is staying with First because they didn't want it on First's terms.

Could anyone clarify please -- with the latest developments regarding First's board and shareholders etc, -- could any more sell-offs of all, or parts of First Bus UK still happen in the near future, OR is that now effectively "blocked" for MONTHS ??

At it currently stands, it has since been confirmed in the press that everything First own is now for sale 'at the right price'. With the Chairman standing down and Stagecoach confirming they are now quitting UK Rail with their FY results, I suspect the pressure will be on FGP's board to amended the strategy regarding UK Rail at least going forward. Although the board defeated Coast Capital, nearly 30% of the vote agreed with Coast, that comprised of First's top 3 shareholders. FGP won this battle, but I suspect it won't be long before Coast come back with something else and other disgruntled shareholders will keep up the pressure.

There is nothing to stop any planned negations / sales to proceed now the GM is out the way.

Depends how quick over the next 2 years they are replaced by new buses.

There is slack within Diamond WM fleet circa 20 buses), spare 08 plate Volvo/Wright have been repainted & liveried for Diamond Bus NW (30851/2 initially on loan to Preston Bus) & 30857 was still parked in Tividale HQ last week. I believe a new bus order for Rotala is close to being announced.

 

[Robertj21a]

Could anyone clarify please -- with the latest developments regarding First's board and shareholders etc, -- could any more sell-offs of all, or parts of First Bus UK still happen in the near future, OR is that now effectively "blocked" for MONTHS ??

I would hope that the Board will make every effort to press ahead with any sales that they can achieve - somehow/anyhow. That might be one way of quietening down some of the shareholders. However, we're only back to much the same situation as it's been for a long time already - First want to sell (anything), but nobody wants to buy (at anything above 'fire sale' prices).

 

[DaveLondon]

Rather surprised that people who live much nearer than me to Bolton did not know that Rotala was the expected purchaser. The delay in announcing the sale is understood to be because TFGM was not willing for Vantage routes to be transferred from one operator to another without the services being re-tendered. This made Bolton rather less attractive but presumably this is all now reflected in the purchase price. David