FirstGroup: Restructuring and General Discussion

overthewater

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It seems growth has been very poor on the uk bus front and it seems there planing to sell off alot quicker.

http://www.guardian.co.uk/business/2012/may/23/first-group-selling-uk-bus-divisions?newsfeed=true

Gwyn Topham in The Guardian said:
FirstGroup to sell off UK bus operations

FirstGroup is to sell off more of its struggling UK bus operations as public spending cuts and rising fuel costs hit profits.

The Scotland-based transport group recorded pre-tax operating profits of £271.4m in the year to 31 March, a fall of 1% on the previous 12 months, boosted mainly by strong performances in the US from its school bus division.

Chief executive Tim O'Toole said there had also been "explosive growth" in Greyhound Express, their revamped intercity coach service in the US, which he said would be "a long-term trend and an opportunity".

O'Toole said the UK bus division — which operates in cities including Glasgow, Manchester and London — was the only part of the group not to have delivered according to plan, with operating profit falling nearly 10% to £134.4m. "We were surprised in January by our very poor yield after higher fares. We'll be selling certain operations — based on the depots we've sold this year we think there's appetite for this."

First Group's bus division had been hit to the tune of £50m by government cutbacks and higher fuel costs, he said. However, he was optimistic about its future. "I think we'll get back to a growing bus market. We're encouraged that the transport minister [Norman Baker] really seems to get it and is backing the bus market, because it's easier for them to cut subsidies and chip away at buses than big ticket items."

FirstGroup has around 8,000 buses operating in 40 towns and cities across the UK, carrying 2.5 million passengers every day.

The group's shares tumbled by a third in March after a profits warning.

FirstGroup pointed out it was the only transport operator to have pre-qualified for all four of the railway franchises currently on offer, including the prestigious west coast franchise and the great western route. O'Toole was also upbeat about the Olympics, for which FirstGroup claims to be "the main provider of spectator transport", or at least those services chartered by the Olympic Delivery Authority. "It will be a great time for the tube and for us as well as we run hundreds of buses, a chance to get these new buses and cascade them through the network."

Analysts however sounded a note of caution. Douglas McNeill of Charles Stanley said: "Management is upbeat on prospects – but that was the case before the March profit warning, so the proof of the pudding will be in the eating."
 
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anthony263

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I wonder what this will mean for First's south wales operations then.

That said if First do sell the south wales operations I expect Stagecoach to take the opportunity to take over the operation in Bridgend and Neath Valley both of which are within easy acess to the main depots in Porth or Aberdare/Cwmbach
 

Ivo

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What of the Swansea ftr scheme? If First were to pull out of Wales, would the City Council then have to subcontract it out to another group, in contrast to the ftr scheme being part of a deal between Wright and First?

Elsewhere, I think we safely say that Northampton are on the hit-list. In which case we'll have our bendies back thank you <(
 

aformeruser

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I wonder if more First operations in West Yorkshire will finish up being Centrebus operations.

Incidentally, I heard Stagecoach Manchester aren't performing well either.

Like I suggested in another thread people are walking shorter distances due to the higher fares and I wonder if lowering fares may actually increase profits as more people may travel.
 

MK Tom

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Still no mention of Northampton... They claim they're not selling it but also claim they're not giving it the new colour scheme. Sense made not.
 

overthewater

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Still no mention of Northampton... They claim they're not selling it but also claim they're not giving it the new colour scheme. Sense made not.
First Edinburgh is also not getting that scheme at the moment. I think we can guess what going to get sold off if we follow the pattens,

Manchester and West Yorkshire: Getting new buses and scheme shortly.
Can any say if York or Chester is getting any buses painted?
 

radamfi

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Which areas haven't got new ticket machines yet? First have been installing the same new ticket machines across the country so that smartcards can be used. If an area doesn't have or aren't getting new ticket machines, then maybe that area is intended to be sold off.

First Manchester installed their new ticket machines in February, which replaced machines that were only a few years old. On the other hand, I went to Fareham on Saturday and they were still using old Wayfarer 3 machines.
 

anthony263

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We have got new ticket machines on First cymru although I know of at least 1 bus running around with a wayfarer 2.

That said the almex machine I dont like I still prefer the lastest wayfarers as they are a lot easier and quicker to use
 

Schnellzug

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Which areas haven't got new ticket machines yet? First have been installing the same new ticket machines across the country so that smartcards can be used. If an area doesn't have or aren't getting new ticket machines, then maybe that area is intended to be sold off.

First Manchester installed their new ticket machines in February, which replaced machines that were only a few years old. On the other hand, I went to Fareham on Saturday and they were still using old Wayfarer 3 machines.
Well, they'd hardly be likely to part with that, I'd have thought, since they've just launched this new Eclipse or Enigma or whatever it's called service on that new busway, haven't they?
 

radamfi

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Well, they'd hardly be likely to part with that, I'd have thought, since they've just launched this new Eclipse or Enigma or whatever it's called service on that new busway, haven't they?
True, I was actually sampling the busway at the time! I thought it was odd, though, that they were still using those old dot matrix ticket machines which must be getting on for 20 years old now.
 

Polarbear

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Can any say if York or Chester is getting any buses painted?
There aren't any repainted vehicles at Chester or Birkenhead that I've seen. I would imagine the Chester & Wirral operation would be a contender to be sold off as other than route 1 (Chester - Liverpool), it doesn't appear to make lots of money.

The fact that most of the vehicles used are cast off's from elsewhere & much older than most other operators in the area use (especially Arriva who seem to have lots of money for new vehicles in Merseyside), seems to confirm this.
 

overthewater

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I have heard talk that the following areas are the most likely area to get sold off are:

* Edinburgh
* York
* Northampton
* Chester

Yorkshire, Manchester and most of the south safe.
 

tbtc

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The speculation does make me wonder about York (since they gained ex South Yorkshire Geminis to replace the ftrs - the Geminis would be much more "standard" for any new operator to inherit if the York operations were to be flogged off).

York isn't linked to any other First operations (compared to the potential confusion if they sold off part of their West Yorkshire routes, since the four main areas there are linked up), it may suit Stagecoach, given their successes in Oxford and Cambridge (similar operating territory, congested central streets, P&Rs, tourists etc).

Also, whilst many in South Yorkshire have speculated about the old Mainline operations being sold on (little investment, many routes cut, surrendering market share to Stagecoach etc), we have seen repainted buses (albeit four/five year old ones, but at least rebranded in the new livery) and we do have new ticket machines. Then again, since First don't sell off mid-life vehicles, they'll need *somewhere* for the redundant buses that they plan to run into the ground to operate... :p

I wonder if more First operations in West Yorkshire will finish up being Centrebus operations
I doubt Centrebus would have the pockets to buy anything from First. Maybe they'll win some more fringe routes that WY Metro tender of course.
 

Ivo

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I think this may explain a lot:

O'Toole said the UK bus division — which operates in cities including Glasgow, Manchester and London — was the only part of the group not to have delivered according to plan, with operating profit falling nearly 10% to £134.4m. "We were surprised in January by our very poor yield after higher fares. We'll be selling certain operations — based on the depots we've sold this year we think there's appetite for this."
They expected people to continue as before on higher fares as though nothing had happened. Whoops. You raise fares, some people will try alternatives. It's obvious. Did they really not consider this...?
 

tbtc

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I think this may explain a lot:



They expected people to continue as before on higher fares as though nothing had happened. Whoops. You raise fares, some people will try alternatives. It's obvious. Did they really not consider this...?
It had worked for many years, rising the fares above inflation has been a very popular tactic for them (would be interesting to compare a two mile/ five mile journey for single ticket prices in a typical First operation to a typical Stagecoach one), they must have thought they had a licence to print money, but things appear to have "snapped" and people just cannot afford this further increase.

Also worth pointing out that a lot of the "leisure" market isn't there these days, and a lot of town centres are becoming unattractive (look at how the big shops have moved out of Rochdale, Rotherham etc) - you can't rely on people paying 10% more each year when the "product" is less attractive.
 

radamfi

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They expected people to continue as before on higher fares as though nothing had happened. Whoops. You raise fares, some people will try alternatives. It's obvious. Did they really not consider this...?
In the past, increased income from the captive market through fare rises has outweighed reductions in passenger numbers. It has always been assumed that bus patronage is inelastic, but perhaps now that is changing. The captive market may well have shrunk too much to be relied upon. Places like Surrey experienced this some years ago, leading to mass deregistrations, with many parts of the county reliant totally on tendered services, but this phenomenon may be spreading.
 

anthony263

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I have to admit Ivo does raise a very good point.

I my local area a day ticket with First costs £5.00 however I can hop on the train for only £1.80 so which one do you think I use?.

Also the price of short distance single tickets has risen sharply and unlike First Stagecoach South Wales offer a good variety of different tickets which are cheaper and better value for money than what First offer.
 

MCW

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I have heard talk that the following areas are the most likely area to get sold off are:

* Edinburgh
* York
* Northampton
* Chester

Yorkshire, Manchester and most of the south safe.
Be interesting to see how that affects leicester and the re allocation of staff and vehicles....

the major worry with sell offs is the transferring of staff as it doesn't always happen, We can hope that it does.

Also I haven't heard of leicester getting the new scheme yet either, as well as newer vehicles and some of them need replacing already. It will definitely be interesting to see the outcome of this and the impact on the areas in which they still operate as a whole.
 

overthewater

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From what I believe there a few areas which will see proper overhauls like Southampton, but it will take time, to get everything sorted.

I have heard Aberdeen, Leicester, and Worcester are being lined up for it...
 

Ivo

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From what I believe there a few areas which will see proper overhauls like Southampton, but it will take time, to get everything sorted.

I have heard Aberdeen, Leicester, and Worcester are being lined up for it...
A lot of places First serve need an overhaul to revitalise them. The only one around here that is pretty much safe from that is Bristol; I for one believe Bath needs quite a bit of work - note to First, I'm only an e-mail only ;) - but I doubt they agree.

Among those that you suggest are set for an overhaul, you have to admit it would be a massive shock if they sold Aberdeen (as opposed to said overhaul). They're based there for Heaven's sake!
 

MCW

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A lot of places First serve need an overhaul to revitalise them. The only one around here that is pretty much safe from that is Bristol; I for one believe Bath needs quite a bit of work - note to First, I'm only an e-mail only ;) - but I doubt they agree.

Among those that you suggest are set for an overhaul, you have to admit it would be a massive shock if they sold Aberdeen (as opposed to said overhaul). They're based there for Heaven's sake!
when you think about it is only like a manufacturing company. HQ in the UK and made in china....

honest answers, do we really think they are going to pull out of scotland completely like Arriva did a month or two back?
 

overthewater

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when you think about it is only like a manufacturing company. HQ in the UK and made in china....

honest answers, do we really think they are going to pull out of scotland completely like Arriva did a month or two back?
No, I believe there will keep hold of Glasgow, Aberdeen and die trying to retain Scotrail... while the rest of FSE will probley get sold.
 

bb21

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It seems growth has been very poor on the uk bus front and it seems there planing to sell off alot quicker.

http://www.guardian.co.uk/business/2012/may/23/first-group-selling-uk-bus-divisions?newsfeed=true
Plenty of spin I see.

O'Stool said:
FirstGroup pointed out it was the only transport operator to have pre-qualified for all four of the railway franchises currently on offer, including the prestigious west coast franchise and the great western route.
How's that significant? It doesn't mean anything.

O'Stool said:
O'Toole was also upbeat about the Olympics, for which FirstGroup claims to be "the main provider of spectator transport", or at least those services chartered by the Olympic Delivery Authority. "It will be a great time for the tube and for us as well as we run hundreds of buses, a chance to get these new buses and cascade them through the network."
Great! More of London's cast-offs. <(

From what I believe there a few areas which will see proper overhauls like Southampton, but it will take time, to get everything sorted.

I have heard Aberdeen, Leicester, and Worcester are being lined up for it...
God, no. Please leave Leicester's routes in peace. 54 goes to the General Hospital, oh no, 14 goes to the General Hospital, oh no, 54 goes ...

Make up your frigging mind!

Mass deregistration of evening journeys seems to have helped WorstGroup with their profit margins in Leicester. It's a shame that they now have awful reputation.

Also, £1.80 for two fare stages? Who are you kidding? (In comparison, Arriva charge £1.40 for two fare stages.)
 

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