First Group: General Discussion

[Robertj21a]

The LSE is clearly impressed with FGP's results, shares are currently marked down -20% to just over a £1/share.

Makes you wonder why on earth they thought there would be better news.

 

[TheGrandWazoo]

Makes you wonder why on earth they thought there would be better news.

Quite!

More write downs to get Greyhound sold, and more work to extricate UK Bus from the group (which was always going to be the case).

 

[winston270twm]

Makes you wonder why on earth they thought there would be better news.

The stock market clearly wants to see more urgency in delivering their new strategy & delivering this shareholder value they keep banging on about.

UK bus disposals seem to have stalled and it will be interesting to see who takes on Greyhound. It's also interesting that these increased insurance claims provisions only seem to be confined to First, I've not seen any mention for NX's US divisions results.

 

[TheGrandWazoo]

The stock market clearly wants to see more urgency in delivering their new strategy & delivering this shareholder value they keep banging on about.

UK bus disposals seem to have stalled and it will be interesting to see who takes on Greyhound. It's also interesting that these increased insurance claims provisions only seem to be confined to First, I've not seen any mention for NX's US divisions results.

To be fair, I don't think it's so much about the disposal of UK Bus. However, a further unexpected loss caused by impairment on Greyhound is exactly what will have irked the market, especially as they had the £277m impairment 18 months ago.

 

[overthewater]

The Expect on the BBC News is blaming oil prices for the troubles...

 

[Volvodart]

In the conference call on the results yesterday, it was mentioned they are looking at a sale of First bus as a whole or in 4 regional parts when the decision is made next year.

 

[Jordan Adam]

In the conference call on the results yesterday, it was mentioned they are looking at a sale of First bus as a whole or in 4 regional parts when the decision is made next year.

I'd guess those 4 regional parts are....?

• Scotland
• Yorkshire
• South East / East
• South West / Cymru

 

[overthewater]

Well that rules out stagecoach and arriva, that juat leaves Transdev, Go ahead, National express, ratp group and everyone fav company from the black country.

More interesting fact which come out yesterday.
More passengers are using contactless/moblie app than cash fares on first services. Does anyone know how this compares to everyone else?

 

[DD12]

I'd guess those 4 regional parts are....?

• Scotland
• Yorkshire
• South East / East
• South West / Cymru

What about the Midlands ?

 

[Jordan Adam]

What about the Midlands ?

I'd guess they'd be included in Yorkshire or South East / East? I always forget the geography of the First network down that way!

 

[Rod Harrison]

Well that rules out stagecoach and arriva, that juat leaves Transdev, Go ahead, National express, ratp group and everyone fav company from the black country.

More interesting fact which come out yesterday.
More passengers are using contactless/moblie app than cash fares on first services. Does anyone know how this compares to everyone else?

Not necessarily as Stagecoach/Aviva could, along with another operator, buy one, or more, of the areas and split them up.

 

[Jordan Adam]

Not necessarily as Stagecoach/Aviva could, along with another operator, buy one, or more, of the areas and split them up.

Honestly i can't see Stagecoach having much interest in any First Opco, they seem more interested in increasing profits in their existing operating areas (through cuts & new commercial ventures) rather than acquiring other operators.

Arriva is a bit tougher to predict. They could expand but would they be in the position to once First decide on a sale? Given the issues they have of their own probably not.

Well that rules out stagecoach and arriva, that juat leaves Transdev, Go ahead, National express, ratp group and everyone fav company from the black country.

I wouldn't be too surprised if a non-UK firm made some moves.

 

[F Great Eastern]

You'd imagine one of the regions would be Ireland / Northern Ireland with Go-Ahead favourites to buy.

 

[Robertj21a]

I'd guess they'd be included in Yorkshire or South East / East? I always forget the geography of the First network down that way!

I don't think the split is much like what has been suggested above. It's too unbalanced and, if it was anything similar, it would probably have to include the Midlands with the East. I think you'll find it's quite different, if indeed it ever gets that far.

 

[Jordan Adam]

I don't think the split is much like what has been suggested above. It's too unbalanced and, if it was anything similar, it would probably have to include the Midlands with the East. I think you'll find it's quite different, if indeed it ever gets that far.

Not going to disagree, as i stated it was purely a guess with no real backing.

 

[winston270twm]

I don't think the split is much like what has been suggested above. It's too unbalanced and, if it was anything similar, it would probably have to include the Midlands with the East. I think you'll find it's quite different, if indeed it ever gets that far.

Selling UK Bus either as a whole or splitting it up in to only 4 divisions will restrict the number of interested parties/potential bidders due to competition issues, ultimately, it would also constrain the takeover price which will in turn have a negative effect of releasing this much sought after shareholder value.....

 

[Volvodart]

It would help with management buy outs though!

 

[overthewater]

It would help with management buy outs though!

Maybe Mr Jarvis has a chance

 

[TheGrandWazoo]

It would help with management buy outs though!

I'm not certain where you're coming from on that?

I was always a bit sceptical that First would have a long winded process of flogging off a load of OpCos. That would take so much management time, take an age, and whilst flogging off the good desirable pieces will be easy enough, they could be left with the less attractive bits and what do they do with them.... close them down or give them away? Not good.

Also, the MBO bit might be compromised by the size of the deals that would now need to be done.

On a wider point raised by others, the issue of who might be interested....look away from just other bus companies and think of investment firms. After all, of the interested parties interested in Arriva, it was investment funds not transport providers.

 

[richw]

More interesting fact which come out yesterday.
More passengers are using contactless/moblie app than cash fares on first services.

it’s certainly how things seems to me as a driver. I’m taking very little cash recently but plenty of card. Makes my life easier not having to carry tons of cash about and less time to pay in with only small cash amounts

 

[Robertj21a]

There's only a few paying by cash on most services I use nowadays. Hardly surprising.

 

[PaulMc7]

There's only a few paying by cash on most services I use nowadays. Hardly surprising.

I see it a lot on the main buses I use. Rarely a cash payment ever despite there being so many customers. It's all phone tickets and contactless these days. Even if First gave change in Glasgow where I'm from I don't even think it would make that much of a difference for customers in terms of using cash

 

[Volvodart]

If they just buy one company on its own, what do they do with the buses too old for them that have some life left? If there are a selection of companies it gives them somewhere to cascade them to rather than have to sell them to the market, and with the things going on with low emissions etc., there may be a glut in the market with mid life buses anyway.

 

[overthewater]

On a wider point raised by others, the issue of who might be interested....look away from just other bus companies and think of investment firms. After all, of the interested parties interested in Arriva, it was investment funds not transport providers.

To be fair, Arriva is EU wide and covers trains and buses, in numerous countries. With First it's buses and that's it, within a limited area within certain parts of the England Or Scotland. You have to wonder why that would interest such companies unless the plan is to sell them off to other people?

 

[CM]

To be fair, Arriva is EU wide and covers trains and buses, in numerous countries. With First it's buses and that's it, within a limited area within certain parts of the England Or Scotland. You have to wonder why that would interest such companies unless the plan is to sell them off to other people?

First also run rail franchises you know...

 

[carlberry]

First also run rail franchises you know...

I suspect they're not listed in the accounts under assets!

 

[TheGrandWazoo]

To be fair, Arriva is EU wide and covers trains and buses, in numerous countries. With First it's buses and that's it, within a limited area within certain parts of the England Or Scotland. You have to wonder why that would interest such companies unless the plan is to sell them off to other people?

What’s the relevance of geography?

You do realise that Private Equity Funds have interests in many industries - the only common thread is making money.

 

[carlberry]

To be fair, Arriva is EU wide and covers trains and buses, in numerous countries. With First it's buses and that's it, within a limited area within certain parts of the England Or Scotland. You have to wonder why that would interest such companies unless the plan is to sell them off to other people?

And Wales, without they've suddenly disowned that bit!

 

[overthewater]

First also run rail franchises you know...

That's by in by as rail is not included in this sale. It's just uk bus.

What’s the relevance of geography?

You do realise that Private Equity Funds have interests in many industries - the only common thread is making money.

If said compaines buy all of ukbus it might make £££ however if they only get certain parts would it really generate the type of profits there after? Also they might need to spend more money getting things sorted.

And Wales, without they've suddenly disowned that bit!

Yes and South Wales.

 

[TheGrandWazoo]

If said compaines buy all of ukbus it might make £££ however if they only get certain parts would it really generate the type of profits there after? Also they might need to spend more money getting things sorted.
.

Sorry to labour the point but you’re looking at this rather one dimensionally. Much of what PE businesses do is around buying distressed firms and making a sum before flipping the business.

Take an example like Greybull who have invested in all manner of things from steel manufacturing to snooker halls.