First Group: General Discussion

[Cesarcollie]

Without wishing to turn this into a First Essex thread, it does seem that it is one of the OpCos that really needs some concerted effort. Route networks in places like Chelmsford seem inordinately complex. Take the 42 group of services in Chelmsford. A group of routes that are essentially a cross city route from Galleywood to Broomfield Hospital every 10 mins but are then projected to Stansted (hourly) or Braintree (half hourly); that looks like two very different types of route welded together for operational convenience. It's something that you'd expect a new management team to look at and question, and those convoluted patterns seem endemic in that business. As well as making it difficult to be reliable, how do you go about marketing it?

That they have challenges in recruitment and congestion (as per much of the South East) is without question but it's not beyond redemption. The region is economically better than, say, South Yorkshire. First have shown that they can reinvigorate businesses such as FSW and FWoE. If First South West can do things differently (and that was much more of a basket case), then there is scope; Essex has a reasonable council (not brilliant but not bad) and there are opportunities to exploit.

However, as an outsider looking in, I'd agree that they seem to be treading water. Aside from the Airport services, there's little in terms of product development or marketing. If there's a plan to break the cycle, it isn't apparent, instead relying on a few mid-life cascades, and religiously still repainting stuff in Urban, aside from a few heritage schemes to keep the gricers happy even if the general public really couldn't give a monkeys about Westcliff on Sea, a firm that disappeared in 1952 or something. As with Nigel Eggleton and the Midlands team taking on First South Yorkshire, some new faces is probably what Essex needs and to bring in some of the best practice that has been shown to deliver benefits in places like Cornwall and Bristol.

You mention Go Ahead and Arriva and, to be honest, they are hardly in great shape themselves. I'd be intrigued to see what surgery Go Ahead may undertake on their East business which has lost money hand over fist in recent years. Arriva Colchester is a shadow of an operation (underpinned by the P&R), Harlow has had problems for many a year, and now Southend is being rumoured that it will lose its modern deckers to Leicester. Certainly, First have the critical mass to be able to step in and get those opportunities.

In short, I agree with much of what you say. Where we differ is that you think it's a lost cause; I don't think it is....yet.

All very true TGW. Worth noting that First Essex now has a new MD (Piers Marlow) and Steve Wickers is concentrating wholly on Eastern Counties. Go Ahead East Anglia is a much bigger basket case (albeit on a smaller scale), but with CBSSG, will be achieving break-even for the first time ever! But veering off-topic.....

 

[richw]

Half year results announced this morning.
main figure is £10m adjusted profit year to date.

 

[freetoview33]

Half year results announced this morning.
main figure is £10m adjusted profit year to date.

A profit is a profit.

 

[richw]

A profit is a profit.

Exactly. Especially this year

 

[DragonEast]

In short, I agree with much of what you say. Where we differ is that you think it's a lost cause; I don't think it is....yet.

I think the only thing we disagree on is how easy it is. You think, just clone Cornwall, like wave Exalibur! I think it's harder than that.

Where would First Kernow be without the tourist business (which even covid has failed to stop)? Essex by contrast has to rely on just residents, most of whom commute to London (or now work from home, at least temporarily) and fortunately more schoolkids now, too. But what are the buses supposed to do for the rest of the day?
I don't think anyone set out to put First Essex in the position they're in. But what would you do with the 42A/B; withdraw them, leaving users with less or no service at all? Thanks. At least this way the routes are made viable to keep the accountants off their backs. Same for the 71/54/56/31 and multiple routes in Colchester and South Essex with sub-number variations. (Some passengers even ask for it, imagine multi-mode commuting at the end of a long day trying find the bus that takes you home rather than several streets away!) With Chelmsford, they all have more extensive networks than anyone else in the northern Home Counties. The resultant mess is the price we pay. (Just like the whole of the UK now, really).
And are Arriva and Go-Ahead really so useless when they can beat First on tenders and maintain viable commercial routes that First can't, with more modern vehicles in better condition. We put up with grotty buses, but it doesn't mean we don't prefer a decent one though!
As a passenger was quoted "I'd rather have a grotty bus than no bus at all", though with First Essex we not unusually end up with both!
It's good to see our new Managing Director is keeping to the longstanding tradition of being the invisible man. That'll help.
Sorry, but your constant incantation of First good, everyone else bad, does become a bit boring to those of us unfortunate enough to live outside Kernow. (and maybe some silent voices inside it too?)

 

[richw]

does become a bit boring to those of us unfortunate enough to live outside Kernow.

He doesn’t live in Kernow. That’s obvious from his other postings in the kernow group

 

[TheGrandWazoo]

I think the only thing we disagree on is how easy it is. You think, just clone Cornwall, like wave Exalibur! I think it's harder than that.

Where would First Kernow be without the tourist business (which even covid has failed to stop)? Essex by contrast has to rely on just residents, most of whom commute to London (or now work from home, at least temporarily) and fortunately more schoolkids now, too. But what are the buses supposed to do for the rest of the day?
I don't think anyone set out to put First Essex in the position they're in. But what would you do with the 42A/B; withdraw them, leaving users with less or no service at all? Thanks. At least this way the routes are made viable to keep the accountants off their backs. Same for the 71/54/56/31 and multiple routes in Colchester and South Essex with sub-number variations. (Some passengers even ask for it, imagine multi-mode commuting at the end of a long day trying find the bus that takes you home rather than several streets away!) With Chelmsford, they all have more extensive networks than anyone else in the northern Home Counties. The resultant mess is the price we pay. (Just like the whole of the UK now, really).
And are Arriva and Go-Ahead really so useless when they can beat First on tenders and maintain viable commercial routes that First can't, with more modern vehicles in better condition. We put up with grotty buses, but it doesn't mean we don't prefer a decent one though!
As a passenger was quoted "I'd rather have a grotty bus than no bus at all", though with First Essex we not unusually end up with both!
It's good to see our new Managing Director is keeping to the longstanding tradition of being the invisible man. That'll help.
Sorry, but your constant incantation of First good, everyone else bad, does become a bit boring to those of us unfortunate enough to live outside Kernow. (and maybe some silent voices inside it too?)

Er, I don't think it's easy. In fact, I have immense respect for the hard work that the management team at FSW have put in over recent years. However, it's not just FSW - you can look at FWoE or FHD for other examples of best practice.... it's just baffling that First haven't done that with FE.

Now I'm struggling to see how you have interpreted what I said. I mentioned about the 42 and question how you market that.... you view that suggesting sections of route are removed; I'm baffled.

Also, where you get this reckoning of First good, everyone else bad.... this is hardly unstinting praise

However, as an outsider looking in, I'd agree that they seem to be treading water. Aside from the Airport services, there's little in terms of product development or marketing. If there's a plan to break the cycle, it isn't apparent, instead relying on a few mid-life cascades, and religiously still repainting stuff in Urban, aside from a few heritage schemes to keep the gricers happy even if the general public really couldn't give a monkeys about Westcliff on Sea, a firm that disappeared in 1952 or something. As with Nigel Eggleton and the Midlands team taking on First South Yorkshire, some new faces is probably what Essex needs and to bring in some of the best practice that has been shown to deliver benefits in places like Cornwall and Bristol.

Also, you may wish to acquaint yourself with the accounts of Go East - winning tenders is one measure of "success" but turnover is vanity, profit is sanity!! Check them out....

Now, just so you're absolutely clear. I think First Essex is a deeply lacklustre business that has been bereft of investment and direction. I just don't believe that the territory is so bad that it cannot be resolved.

Do you understand??

He doesn’t live in Kernow. That’s obvious from his other postings in the kernow group

Or indeed - just look below my avatar!!

Almost like he hasn't read things thoroughly...

 

[DragonEast]

Er, I don't think it's easy. In fact, I have immense respect for the hard work that the management team at FSW have put in over recent years. However, it's not just FSW - you can look at FWoE or FHD for other examples of best practice.... it's just baffling that First haven't done that with FE.

Now I'm struggling to see how you have interpreted what I said. I mentioned about the 42 and question how you market that.... you view that suggesting sections of route are removed; I'm baffled.

Also, where you get this reckoning of First good, everyone else bad.... this is hardly unstinting praise



Also, you may wish to acquaint yourself with the accounts of Go East - winning tenders is one measure of "success" but turnover is vanity, profit is sanity!! Check them out....

Now, just so you're absolutely clear. I think First Essex is a deeply lacklustre business that has been bereft of investment and direction. I just don't believe that the territory is so bad that it cannot be resolved.

Do you understand??


Or indeed - just look below my avatar!!

Almost like he hasn't read things thoroughly...

Perhaps I wasn't clear. I said we were not far apart.

I think we often overlook just how much effort has gone in down the years at FEx to try and give the people of Essex the service they ask for. It's just that if they had to chose between the gloss and a service they can rely on, they'd universally choose reliability every time, and say so.

"deeply lacklustre". We could say the same of Arriva in Herts, Beds and Bucks, and Stagecoach East, as the two closest comparitors as well as FEx, and most of their independent competition too. It's not as though Essex are alone or any exception.

I understand very clearly that we live in a world where people don't chose the bus because they have no alternative, but they need to be enticed aboard, and FEx does precious little to entice us aboard (though many of their drivers individually do their best). I have feelings too! But I still think it's a different game from Cornwall's tourist hotspots, where it is much more of a beauty parade. Tourists too may have more time on their hands.

I am very aware of the parlous state of Go-East finances. It isn't an easy job forever playing second fiddle to the resurgent Eastern Counties and Stagecoach East! But I suspect the people of Clacton and Tendring are grateful at least. And now we can see how new tender entrant independent Ipswich Buses fare for comparison.

But I wouldn't be disparaging about historic liveries. The locals throng on to historic running days resurrecting long dead routes, on vintage buses which ran empty in their day, and where the modern replacements running alongside are still empty. Nostalgia is a funny 'ole thing.
So no offence, I just think every potential upside has a downside too, and there are no easy options. I never suggested (or meant to imply) that I thought you lived in Cornwall which I realise you don't, just that you seemed to be a fan of FSW!

 

[TheGrandWazoo]

Perhaps I wasn't clear. I said we were not far apart.

I think we often overlook just how much effort has gone in down the years at FEx to try and give the people of Essex the service they ask for. It's just that if they had to chose between the gloss and a service they can rely on, they'd universally choose reliability every time, and say so.

"deeply lacklustre". We could say the same of Arriva in Herts, Beds and Bucks, and Stagecoach East, as the two closest comparitors as well as FEx, and most of their independent competition too. It's not as though Essex are alone or any exception.

I understand very clearly that we live in a world where people don't chose the bus because they have no alternative, but they need to be enticed aboard, and FEx does precious little to entice us aboard (though many of their drivers individually do their best). I have feelings too! But I still think it's a different game from Cornwall's tourist hotspots, where it is much more of a beauty parade. Tourists too may have more time on their hands.

I am very aware of the parlous state of Go-East finances. It isn't an easy job forever playing second fiddle to the resurgent Eastern Counties and Stagecoach East! But I suspect the people of Clacton and Tendring are grateful at least. And now we can see how new tender entrant independent Ipswich Buses fare for comparison.

But I wouldn't be disparaging about historic liveries. The locals throng on to historic running days resurrecting long dead routes, on vintage buses which ran empty in their day, and where the modern replacements running alongside are still empty. Nostalgia is a funny 'ole thing.
So no offence, I just think every potential upside has a downside too, and there are no easy options. I never suggested (or meant to imply) that I thought you lived in Cornwall which I realise you don't, just that you seemed to be a fan of FSW!

The reference to FSW (and they are not perfect) is that it is a business that, similar to FEx, was regarded as a basket case. Beyond redemption. An elderly fleet, no investment, unloved and unwanted. Very much where FEx is now. A focussed experienced management team has transformed that business; it has taken a lot of hard work. However, it is not the only example of best practice - see also FHDB and FWoE.

As for disparaging about historic liveries.... my point is it's about priorities. I'd sooner see the energies directed at improving the marketing of the network than painting buses in liveries of yesteryear.

More centrally, I don't think First Essex is beyond redemption; the local area is (or was prior to Covid) still economically active. However, it will take a lot of work to resolve that. Whether Piers Marlow is the man to do that, we will have to wait and see.

 

[overthewater]

Some Movement at last: https://www.bbc.co.uk/news/uk-scotland-scotland-business-55497587

Transport giant FirstGroup has sold off three major bus facilities in North America for a total of £102m.
The Aberdeen-based firm said the move was part of a continuing drive to rationalise its Greyhound bus property portfolio.
The disposals include a garage and customer terminal facility in Los Angeles, as well as facilities in Denver, Colorado, and Ottawa, Canada.
The group reported a total profit for the three transactions of about £73m.
The cash proceeds will be used for "general corporate purposes".
FirstGroup said it was moving operations to intermodal transport hubs or new facilities "better tailored to customers' needs".
The company has already sold six smaller "surplus locations" in the first half of the financial year.
A number of other "property sales processes" are also under way

Hopefully First will be able to sale the rest of the operations in the USA.

 

[Jordan Adam]

Some Movement at last: https://www.bbc.co.uk/news/uk-scotland-scotland-business-55497587



Hopefully First will be able to sale the rest of the operations in the USA.

Some progress at last...

 

[overthewater]

I wonder if we will see the rest of the sales take place within 3 months to get US off the companies books before new financial year? Could be an interesting few months.

 

[DragonEast]

The reference to FSW (and they are not perfect) is that it is a business that, similar to FEx, was regarded as a basket case. Beyond redemption. An elderly fleet, no investment, unloved and unwanted. Very much where FEx is now. A focussed experienced management team has transformed that business; it has taken a lot of hard work. However, it is not the only example of best practice - see also FHDB and FWoE.

As for disparaging about historic liveries.... my point is it's about priorities. I'd sooner see the energies directed at improving the marketing of the network than painting buses in liveries of yesteryear.

More centrally, I don't think First Essex is beyond redemption; the local area is (or was prior to Covid) still economically active. However, it will take a lot of work to resolve that. Whether Piers Marlow is the man to do that, we will have to wait and see.

Yes, of course. It's whether and how his team can make the best of a bad job. But as that bloke across the pond is alleged to have said: we can put as much lipstick on a pig as we like, but it's still a pig no matter what.
The passengers make the bus, and not the other way around. So there has to be public support to build on, and enduring tourism or other commercial business, or public funding support, to tap into first. I'll be pilloried for saying it, but Cornwall and the affluent south coast are lucky to have an element of Londonistan Chelsea-on-Sea. It helps. Essex doesn't. In the northern home counties, there just isn't the public support for buses. Never has been, and likely never will be. As we ought to have learnt by now, operators have to adapt, or die. Everyone struggles to achieve scale or with resources, or both, more or less. First, it seems just suffer more than most. The northern country area of London Transport, then London Country, and the old Eastern National were always the poor relation.

 

[TheGrandWazoo]

Yes, of course. It's whether and how his team can make the best of a bad job. But as that bloke across the pond is alleged to have said: we can put as much lipstick on a pig as we like, but it's still a pig no matter what.
The passengers make the bus, and not the other way around. So there has to be public support to build on, and enduring tourism or other commercial business, or public funding support, to tap into first. I'll be pilloried for saying it, but Cornwall and the affluent south coast are lucky to have an element of Londonistan Chelsea-on-Sea. It helps. Essex doesn't. In the northern home counties, there just isn't the public support for buses. Never has been, and likely never will be. As we ought to have learnt by now, operators have to adapt, or die. Everyone struggles to achieve scale or with resources, or both, more or less. First, it seems just suffer more than most. The northern country area of London Transport, then London Country, and the old Eastern National were always the poor relation.

There are some areas that are always going to be difficult for bus companies. If you have low population density (e.g. Somerset or Lincolnshire) or places that are incredibly car centric in their construction; places like Harlow for instance. First Essex has Basildon but even that isn't as difficult to serve as other new towns. Nor does it have great swathes of territory that are economically under the cosh such as the north's rust belt. Don't get me wrong... It has places that really are deprived, like the oft-cited examples around Clacton, as well as parts of Southend.

As for stating that Cornwall gets the Londonistas.... I'm sorry but those people who are heading down from London to Cornwall for their holiday homes aren't generally using buses anyway. Instead, it's been an initially quiet revolution as they stabilised that business.

I don't doubt that there's some fundamental issues that have to be addressed with First Essex. The age profile is increasingly aged and, excusing the Covid extras from Yorkshire/Bristol etc, they have been receiving 15 year old deckers. The service pattern seems inordinately complex with all manner of route variations. As I pointed out before, you have a cross-town Chelmsford route (42) that then heads off cross-country in opposing directions; it may be operationally and theoretically clever but how you manage reliability, let alone how you market that, I have no idea. However, we've been over the issues ad nauseum.

Where we disagree is that you believe that First Essex is beyond redemption and that they should sell Chelmsford for housing (they can't - it's zoned for industry) and exit the area. I don't think it is at that point but it's a long road back to get that business where it should be.

 

[jammy36]

I'll be pilloried for saying it, but Cornwall and the affluent south coast are lucky to have an element of Londonistan Chelsea-on-Sea. It helps. Essex doesn't.

You very much misunderstand bus ridership in Cornwall and the demographics of those using First Kernow's services if you genuinely think this is the case.

Grouping Cornwall with the affluent south coast doesn't reflect the year round reality of the place - whilst there are isolated pockets of affluence, they are thinly spread and have little to no impact on bus ridership. The informative Unseen Cornwall initiative is worthy reading (https://www.cornwalllive.com/news/cornwall-news/unseen-cornwall-new-campaign-tackle-4782267).

I'd go as far as questioning the entire notion of an "affluent south coast" - I think you are imagining a concept that doesn't exist in reality

 

[nesw]

There are some areas that are always going to be difficult for bus companies. If you have low population density (e.g. Somerset or Lincolnshire) or places that are incredibly car centric in their construction; places like Harlow for instance. First Essex has Basildon but even that isn't as difficult to serve as other new towns. Nor does it have great swathes of territory that are economically under the cosh such as the north's rust belt. Don't get me wrong... It has places that really are deprived, like the oft-cited examples around Clacton, as well as parts of Southend.

As for stating that Cornwall gets the Londonistas.... I'm sorry but those people who are heading down from London to Cornwall for their holiday homes aren't generally using buses anyway. Instead, it's been an initially quiet revolution as they stabilised that business.

I don't doubt that there's some fundamental issues that have to be addressed with First Essex. The age profile is increasingly aged and, excusing the Covid extras from Yorkshire/Bristol etc, they have been receiving 15 year old deckers. The service pattern seems inordinately complex with all manner of route variations. As I pointed out before, you have a cross-town Chelmsford route (42) that then heads off cross-country in opposing directions; it may be operationally and theoretically clever but how you manage reliability, let alone how you market that, I have no idea. However, we've been over the issues ad nauseum.

Where we disagree is that you believe that First Essex is beyond redemption and that they should sell Chelmsford for housing (they can't - it's zoned for industry) and exit the area. I don't think it is at that point but it's a long road back to get that business where it should be.

Basildon and Chelmsford local services used to be very profitable, particularly around the time of the investment for Overground services in each area around 2002/3 Chelmsford local services were still overly complex then and Basildon has become more complex since 2013.
The 5 Basildon - Pitsea via Felmore was a real money spinner having had branding as ‘Famous Fives’ and new Dart SLFs and then as part of the Overground network. Everything possible would be done to make sure all trips were covered and because the bus workings were self contained it was easier to operate reliably.

 

[cnjb8]

What I've read on here is that First Essex could do with not interworking routes, simplify fares and routes and then hopefully some investment in new buses. Easier said then done but with the right management and smart decisions I think Essex can make a profit

 

[richw]

What I've read on here is that First Essex could do with not interworking routes, simplify fares and routes and then hopefully some investment in new buses. Easier said then done but with the right management and smart decisions I think Essex can make a profit

I don’t think there will be profit in bus routes for a long time thanks to covid. Branching out into contract work I suspect will be the bread and butter for bus operators now.

 

[cnjb8]

I don’t think there will be profit in bus routes for a long time thanks to covid. Branching out into contract work I suspect will be the bread and butter for bus operators now.

That's true, hopefully what I said will happen if Covid ever ends

 

[RomeoCharlie71]

What I've read on here is that First Essex could do with not interworking routes, simplify fares and routes and then hopefully some investment in new buses. Easier said then done but with the right management and smart decisions I think Essex can make a profit

Route interworking is a cost cutting initiative, though, and will likely become more prominent as routes receive frequency cuts.

For instance, say you have route 1 between point A and point B, and it takes 1hr 10m for a round trip on a half hourly frequency. That'd be 3 buses required.
Then perhaps there is a route 2 between point B and point C, which is a 1hr 40m round trip on half hourly frequency. That'd be 4 buses required.

If you interworked the two routes, you'd only need 6 buses instead of 7, because it'd be a 2hr 50m round trip. Less buses means less fuel. Less drivers means less wages, thus the company has lower expenses, more profit, based on the same revenue.

 

[Cesarcollie]

Route interworking is a cost cutting initiative, though, and will likely become more prominent as routes receive frequency cuts.

For instance, say you have route 1 between point A and point B, and it takes 1hr 10m for a round trip on a half hourly frequency. That'd be 3 buses required.
Then perhaps there is a route 2 between point B and point C, which is a 1hr 40m round trip on half hourly frequency. That'd be 4 buses required.

If you interworked the two routes, you'd only need 6 buses instead of 7, because it'd be a 2hr 50m round trip. Less buses means less fuel. Less drivers means less wages, thus the company has lower expenses, more profit, based on the same revenue.

Well almost. Apart from the fuel

 

[cnjb8]

Route interworking is a cost cutting initiative, though, and will likely become more prominent as routes receive frequency cuts.

For instance, say you have route 1 between point A and point B, and it takes 1hr 10m for a round trip on a half hourly frequency. That'd be 3 buses required.
Then perhaps there is a route 2 between point B and point C, which is a 1hr 40m round trip on half hourly frequency. That'd be 4 buses required.

If you interworked the two routes, you'd only need 6 buses instead of 7, because it'd be a 2hr 50m round trip. Less buses means less fuel. Less drivers means less wages, thus the company has lower expenses, more profit, based on the same revenue.

It's tough though. Interworking routes does have all the benefits you mention but reliability does seem to be a problem for Essex, which from what I've read on here interworking seems to be one of the problems that causes it

 

[richw]

It's tough though. Interworking routes does have all the benefits you mention but reliability does seem to be a problem for Essex, which from what I've read on here interworking seems to be one of the problems that causes it

That’s bad interworking if this is the case, when done well it shouldn’t affect reliability

 

[TheGrandWazoo]

It's tough though. Interworking routes does have all the benefits you mention but reliability does seem to be a problem for Essex, which from what I've read on here interworking seems to be one of the problems that causes it

That’s bad interworking if this is the case, when done well it shouldn’t affect reliability

Indeed, interworking can be very effective when done well. To highlight the example I used before, there are the 42/42A/42B that essentially operate as a cross city route from Galleywood via Chelmsford to Broomfield Hospital, every 10 mins. However, two per hour then disappear north to Braintree, whilst one per hour then bounds off west to Stansted. Except that on a Saturday, only one bus per hour heads to Braintree. It may be a judicious way of saving resources (avoiding duplication between Chelmsford and Broomfield) but you wonder the benefit against the operational problems.

And how do you market the 42.... it's three services in one!

 

[GusB]

Could we keep operator-specific discussions to the appropriate threads, please?

 

[TheGrandWazoo]

Could we keep operator-specific discussions to the appropriate threads, please?

Hi @GusB - fair point and appreciate the nudge I think the point is that within First Group, there is a bit of best practice that can be shared about. We're beginning to see it with the change of management at First South Yorkshire, employing some of the measures that have been used in the Midlands to improve FSY.

We all railed against the centrally imposed diktats that used to come from Aberdeen (though, of course, there is still the requirement to hit certain centrally specified targets on financial returns/budgets etc). Now we have the individuality and empowerment devolved to local management; it's fair to say that it has highlighted the different skills and capabilities in different OpCos etc.

Just seems odd that in East Anglia, you have FEx that have continued to plough a certain furrow, whilst FEC has done quite a decent job in developing that business.

 

[Simon75]

Are any of the UK bus operations for sales , in addition to USA/Canada?

 

[carlberry]

Are any of the UK bus operations for sales , in addition to USA/Canada?

Which bit do you want? Any of it would be up for sale for the right price, however the US bits appear to be more competitively priced at present.

 

[overthewater]

I thought the UK bus side was no longer for sale and that is where the new management is putting up all its forces? US side is getting dispose off ( the BBC link even says so " A number of other "property sales processes" are also under way"

I think by April of the end of the year First will be back to just being British isle operator

FirstGroup books $100 million profit as it sells Greyhound properties, 31 Dec 2020 10:20 | Shares Magazine

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More details here:

Shares in FTSE 250 transport operator FirstGroup gained 1.35% to 75p as it booked a profit of $100 million after selling three major properties in North America.

The company sold three facilities from its Greyhound property portfolio for a combined $137 million, or £102 million, as it seeks to downsize the portfolio.

It comes as embattled FirstGroup looks to sell the Greyhound business. The company has been looking to sell the division for some time and wants to offload it to help pay down its reported net debt of £2.9 billion.

Earlier this month, FirstGroup reported a pre-tax loss of £100 million in the six months to 30 September, though this was lower than the £187 million in the same period last year. Revenues slipped 12% to £3.1 billion.

FirstGroup sold Greyhound’s oversized legacy garage and customer terminal facility in the downtown arts district of Los Angeles, California to a subsidiary of logistics real estate business Prologis for $88 million net.

Greyhound will lease back the site from Prologis for two years, during which time it will complete the moves of its terminal to a more convenient location for customers and of its garage operations to a more appropriately-sized site elsewhere.

The other two property disposals announced were facilities in Denver, Colorado for net proceeds at the end of December of $37 million and in Ottawa, Ontario for net proceeds of $7 million.

In total, all three properties’ book value was $24 million as at 30 September 2020, resulting in a total profit for all three transactions of approximately $100 million, the company said, adding that the cash will be used for ‘general corporate purposes’.

It added, ‘These transactions are a further step in the group’s rationalisation of the Greyhound property portfolio for value, reducing the operational footprint by moving operations to intermodal transport hubs or new facilities better tailored to customers’ needs.’

FirstGroup said a number of other property sale processes are also underway.

 

[Volvodart]

The property sales are just Greyhounds, where they move out of downtown sites that are costly to operate and move to less expensive sites more suited to today's operations.