winston270twm
Established Member
- Joined
- 26 Oct 2012
- Messages
- 1,899
Agreed, FSY needs to go if they are to hoping to keep the shareholders happy(-ish) - but I do just wonder if First could try a bit of experimentation by moving in a fresh MD with a clear brief to put a rocket up the operation........[Yes, probably all too late in the day I suppose]
To be fair, they should have head hunted someone & given them free rein to turnaround First Manchester as well, long before now.
Manchester & FSY are the two big loss makers within UK Bus, naturally removing their losses & also turnover contribution from UK Bus totals will improve the overall divisions profit margins.
I don't think they should entertain selling any crown jewels that earn that the money, but taking a hit on the loss makers may be the way to go to turn things around quicker.
re Manchester - the rule of thumb that I've read before is that a bus company with revenue of £1m/pa is worth £1m (i.e. the asset value of a company is roughly the same as the annual turnover). I've seen mention of it once being worth "£100m" on paper but now being sold for only a fifth of that amount. Does anyone know when that £100m figure related to? e.g. was that for the combined revenue including Wigan operations and before Metrolink opened to Oldham/Rochdale? I'm just trying to get my head round exactly how much of a discount they are willing to taken on Manchester (was the £100m only ever a "book value" five or ten years ago and the operation never stood a chance of being sold for anything like that in 2019?
Those kind of valuations are from years ago i.e. £1 takeover value for every £1 of turnover, even the most profitable bus companies don't earn anywhere near the margins that they used too, then there's pension deficits to consider. Also, clean air zones are driving requirements for large scale investment in upgrading buses to Euro 6 or having to buy new.
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