I don't think FGP should have sold off London or Wigan in 2013, both were profitable ops with London being a good source of midlife buses for the poorer performing ops in the provinces.
I wouldn't say Wigan was that profitable if at all
Really?
Extract from below article:
But analysts questioned why FirstGroup is selling a business that returned an operating profit of £1.5m on revenues of £13.2m in the year to 31 March, delivering a 11.3 per cent margin.
https://www.scotsman.com/business/m...us-business-from-firstgroup-for-12m-1-2607002
Chicken and egg here.
Why were First selling "profitable" Wigan could equally be turned around to "why would Stagecoach offer much money for any operation that
wasn't profitable?".
I don't know how profitable Wigan actually was (the figures quoted above look good but there were stories at the time about the age of the fleet and the cost of bringing it up to spec, so it may be that they were only looking good due to flogging tired buses into the ground, and the alternative to Stagecoach's offer would have required First to put their hand in their pocket and upgrade the tired fleet).
All I know is that, if you want to bring in reasonable revenues then you have to consider selling some of the profitable operations - everything has its price - Stagecoach aren't daft - you're not going to raise enough cash to keep the market happy from disposing of piddly little marginal depots like North Berwick - I keep reading comments along the lines of "Why would First want to sell off a profitable city like (INSERT NAME HERE)..." but if you want to raise money then you have to be prepared to let some "crown jewels" go - tinkering around the edges and walking away from disaster zones like Northampton isn't going to make much difference.
Part of First's problem is that they had a number of potential "crown jewels" twenty years ago but have managed to turn decent city networks like Sheffield and Stoke into messes - even the potential flagships of Glasgow and Aberdeen are only kept going by regular PVR reductions and keeping buses on the road much longer than they should have been (B10BLEs were great in the 1990s but it's the second half of 2018 and they are still running around).
Regarding the London sell-off, at the time they were talking about getting back to double-digit margins, which London didn't do, but some of the provincial cities had been achieving.
True - and there's also the issue of whether London was becoming the tail that wagged the "provincial" dog - 95% of the investment was in London (because contracts demanded new vehicles) so previously healthy big-city operations had to make do with cascaded dual doored vehicles that were fairly knackered for future use (meaning somewhere like Bristol/ Sheffield/ Glasgow had to spend money converting them just for the sake of acquiring a mid-life Trident with a tiny number of seats downstairs due to London specification/ big staircases etc).
Okay, London has changed (since you can't dump "used" Borismasters to normal cities), but prior to the time of the dispersal, it had skewed the "provincial" First fleet - Stagecoach (who got out of London earlier, before going back in) seemed to be reaping the benefits of regularly investing in provincial places - compare Stagecoach investment in Manchester with First investment in Manchester during the first decade of the millennium.
I take
@winston270twm 's point about "London being a good source of midlife buses for the poorer performing ops in the provinces", but the problem was that London ended up being the source of midlife buses for provincial operations that used to be able to afford new buses every year (before First's business model turned them into dumping grounds for Marshall Darts and other cast-offs).
