Go Ahead looks into growing its bus business further

[overthewater]

Its good news if Go Ahead is now using its new cash flow to acquire new companies. One does have to wonder where the company could spend its new found cash.


http://www.passengertransport.co.uk/2014/05/tsgn-win-set-to-boost-go-ahead-bus-business/

Go-Ahead is set to consider options for additional investment in its bus business and acquisitions following the Department for Transport’s announcement that its Govia joint venture with Keolis will operate the new Thameslink Southern Great Northern franchise.

Initially, Govia will take over the First Capital Connect franchise in September. It will then merge the business with Govia’s existing Southern franchise in July 2015 as well as Southeastern services which use the Thameslink route core.

Profits from the new franchise are forecast to be £33m in the first year the combined franchise operates. Go-Ahead’s share will be £22m. The company also pointed out that it is targeting a similar boost to its profits from its objective to achieve £100m of profit from its bus operations in 2015/16.

As well as examining whether to invest in existing and new bus operations, Go-Ahead will also consider whether the TSGN franchise profits should be used to increase dividend payments to shareholders.

“We are in a good position, flexible and will consider our options in due course,” finance director Keith Down said.

The TSGN contract will run for seven years until 2021. It is understood that Go-Ahead beat off competition from FirstGroup after the incumbent operators were selected as the final two companies in the running for the contract from the shortlist of five bidders. The other three companies competing were Stagecoach, Abellio and Hong Kong’s MTR.

 

[Volvodart]

Its good news if Go Ahead is now using its new cash flow to acquire new companies. One does have to wonder where the company could spend its new found cash.

McGills?

 

[Mugby]

Or TrentBarton?

 

[pemma]

Depends whether they want to expand their operations in the South and East of England or move in to new areas.

GHA Coaches could be one if they want to get a completely new market. Apparently Glenvale Transport t/a Stagecoach Merseyside have been interested in purchasing GHA Coaches but haven't put a bid together that has attracted GHA Coaches' interest.

 

[overthewater]

Would Go-ahead be allowed to buy anything else in East Anglia? Thames Travel is badly needing some cash to improve its operations.

 

[Surreyman]

Or TrentBarton?

EYMS - Peter Shipp has to retire sometime!

 

[pemma]

EYMS - Peter Shipp has to retire sometime!

Well he sold Finglands to First Group.

 

[MK Tom]

What would be amazing is if GoAhead were able to buy Arriva's Milton Keynes operations. That would create such a massive improvement in service quality.

Wherever it is they expand, I'm glad to see it. They're one of the better national operators, second only to Stagecoach in my book.

 

[mbonwick]

Or TrentBarton?

I doubt Wellglade Group would part with that....

 

[Surreyman]

I doubt Wellglade Group would part with that....

WELLGLADES owners/directors - some of them are getting on a bit!
I suspect that if the price was right they might.

 

[baza585]

What would be amazing is if GoAhead were able to buy Arriva's Milton Keynes operations. That would create such a massive improvement in service quality.

Wherever it is they expand, I'm glad to see it. They're one of the better national operators, second only to Stagecoach in my book.

You've obviously never experienced any of the Go South Coast companies then. Bluestar are dire and Damory are far far worse. They make the local First subsidiary look worldbeaters by comparison.

 

[fgwrich]

You've obviously never experienced any of the Go South Coast companies then. Bluestar are dire and Damory are far far worse. They make the local First subsidiary look worldbeaters by comparison.

Or the bizarre splitting of Wilts and Dorset - a rather well known name, into More Bus for Dorset (or More or Less bus as they've been dubbed!) and The Salisbury Reds for the Wiltshire operations. All of which make it a rather confused company, especially when the More Bus branding was rolled out initially for the commuter type routes for Bournemouth and Poole.

 

[W-on-Sea]

...while the management of Thames Travel might charitably be described as a bunch of clowns: one ill-considered decision after another (alongside some that might well be beneficial, were they to be seen through properly...), constant reversals and retrenchment, and an extraordinary lack of professionalism...

 

[Surreyman]

I reckon Courtney buses of Finchampstead would make an excellent buy, oh & Thames travel are pulling out of the area, so no competition issues!

 

[RELL6L]

There aren’t as many opportunities as there used to be but some possible acquisitions for Go Ahead might be:

Western Greyhound – a well run and innovative company despite difficult operating territory, close to their existing business in Plymouth. I have always thought Stagecoach would end up buying this though

Compass Bus in Sussex – an operator that has expanded well in its niche over the years and close to existing Go Ahead businesses in Brighton and Metrobus. Possible competition issues

Ipswich Buses – are there already some links?

Sanders Coaches in Norfolk – adjacent to existing operations with Konnectbus and Anglian, would be a good fit but possible competition issues here also, as they compete between Norwich and Sheringham

Webberbus – not sure how attractive this would be if most of its business is competitive against First in Somerset and not very close to any existing Go Ahead businesses

I agree GHA would be an attractive acquisition for someone, if it were for sale. It would be complete new territory for Go Ahead. I wonder whether Halton and/or Warrington might be prised from their council owners at some point, if one of these could be added they would begin to get some critical mass in the area. I agree that Stagecoach would be a more logical purchaser for GHA as it is.

The area where there are most independents is probably West Wales, with Silcox, Morris, Richards, Lloyds, Express and Padarn but this is sparse operating territory and it is hard to see that a viable business could be built by a larger group here.

Trent Barton and East Yorkshire are the plum businesses still privately owned. Cardiff, Newport, Rosso or Blackpool if any are for sale – but they probably aren’t. Or even Transdev’s bus businesses?

 

[pemma]

I wonder whether Halton and/or Warrington might be prised from their council owners at some point, if one of these could be added they would begin to get some critical mass in the area.

I think Warrington and Blackpool are the two councils who are mostly likely to want to keep control of their bus companies.

 

[glennds999]

The area where there are most independents is probably West Wales, with Silcox, Morris, Richards, Lloyds, Express and Padarn but this is sparse operating territory and it is hard to see that a viable business could be built by a larger group here.

Well, Padarn Bus has announced their closure effective today at midnight:
http://www.bbc.co.uk/news/uk-wales-north-west-wales-27631877

 

[winston270twm]

There aren’t as many opportunities as there used to be but some possible acquisitions for Go Ahead might be:

Western Greyhound – a well run and innovative company despite difficult operating territory, close to their existing business in Plymouth. I have always thought Stagecoach would end up buying this though

Compass Bus in Sussex – an operator that has expanded well in its niche over the years and close to existing Go Ahead businesses in Brighton and Metrobus. Possible competition issues

Ipswich Buses – are there already some links?

Sanders Coaches in Norfolk – adjacent to existing operations with Konnectbus and Anglian, would be a good fit but possible competition issues here also, as they compete between Norwich and Sheringham

Webberbus – not sure how attractive this would be if most of its business is competitive against First in Somerset and not very close to any existing Go Ahead businesses

I agree GHA would be an attractive acquisition for someone, if it were for sale. It would be complete new territory for Go Ahead. I wonder whether Halton and/or Warrington might be prised from their council owners at some point, if one of these could be added they would begin to get some critical mass in the area. I agree that Stagecoach would be a more logical purchaser for GHA as it is.

The area where there are most independents is probably West Wales, with Silcox, Morris, Richards, Lloyds, Express and Padarn but this is sparse operating territory and it is hard to see that a viable business could be built by a larger group here.

Trent Barton and East Yorkshire are the plum businesses still privately owned. Cardiff, Newport, Rosso or Blackpool if any are for sale – but they probably aren’t. Or even Transdev’s bus businesses?

Another option that know one has mentioned is the possibility of Go-Ahead acquiring Rotala Plc? It's is a profitable business with the potential to expand, obviously Go-Ahead would potentially re-acquiring the Go West Midlands business they sold to Rotala in 2008.

 

[TheGrandWazoo]

Another option that know one has mentioned is the possibility of Go-Ahead acquiring Rotala Plc? It's is a profitable business with the potential to expand, obviously Go-Ahead would potentially re-acquiring the Go West Midlands business they sold to Rotala in 2008.

Rotala is certainly one.

Another which might be a real surprise could be something like Transdev. Having sold their London ops, Transdev is now confined to the North West and Yorkshire, is decent quality. Also, it doesn't fit with the usual Transdev model (they tend to operate franchises etc in Europe and North America) of commercial operation. Also, Caisse de Depots (parent company) are attempting to raise the cash to divorce themselves from Veolia.....

As for Webberbus.... can't see why anyone would want them. They've lost their Weston services, removed by NSC for poor performance. They've lost Taunton P&R, removed by SCC for poor performance. They tried to capitalise on First's rumoured Somerset divestment by starting Wells to Taunton/Bridgwater. However, a rejuvenated First is fighting back hard with the new BoS image, slashing weekly ticket prices and flooding the Wells to Street corridor (if that's too much of a Somerset joke!). Oh, and most of the fleet is leased not owned, and they've just lost the SCC funding for Minehead town and Wells to Burnham service so they're operating it commercially. Hardly a brilliant buy....

 

[SWTH]

Western Greyhound – a well run and innovative company despite difficult operating territory, close to their existing business in Plymouth. I have always thought Stagecoach would end up buying this though.

Can't see it myself, Go-Ahead would be more likely. WGL requires massive investment in both capital and management to return to its former self, for example newer buses (59-plate Solos) are being sold and replaced by 51/02 plate MPD's. A couple of the withdrawn Varios are being resurrected too. Given the limited potential for profit, coupled with Cornwall Councils unwillingness to support anything other than the bare minimum of services, I doubt Stagecoach would be interested in anything other than the Bude/Exeter operations.

 

[infobleep]

What about Countryliner or Safe Guard, the latter based in Guildford and the former I think also in Surrey.

Sent from my Nexus 5 using Tapatalk

 

[Robertj21a]

I think Warrington and Blackpool are the two councils who are mostly likely to want to keep control of their bus companies.

Didn't Warrington need a financial bail-out from the council a year or so ago ?

Robert

 

[bussnapperwm]

What about Countryliner or Safe Guard, the latter based in Guildford and the former I think also in Surrey.

Sent from my Nexus 5 using Tapatalk

Didn't countryliner go under?

 

[RELL6L]

Well, Padarn Bus has announced their closure effective today at midnight:
http://www.bbc.co.uk/news/uk-wales-north-west-wales-27631877

Yes, I shouldn't have mentioned Padarn! I have just seen this too. Gwynedd and Anglesey have moved quickly and most of Padarn's bus services are being taken over from tomorrow, albeit at a reduced frequency, by Arriva, Express Motors and - a long way from home - GHA appear to be the new operator of the Snowdon Sherpa.

Countryliner was mentioned - I think they ceased trading a year or two ago. Safeguard is a bit small.
--- old post above --- --- new post below ---

Rotala is certainly one.

Another which might be a real surprise could be something like Transdev. Having sold their London ops, Transdev is now confined to the North West and Yorkshire, is decent quality. Also, it doesn't fit with the usual Transdev model (they tend to operate franchises etc in Europe and North America) of commercial operation. Also, Caisse de Depots (parent company) are attempting to raise the cash to divorce themselves from Veolia.....

As for Webberbus.... can't see why anyone would want them. They've lost their Weston services, removed by NSC for poor performance. They've lost Taunton P&R, removed by SCC for poor performance. They tried to capitalise on First's rumoured Somerset divestment by starting Wells to Taunton/Bridgwater. However, a rejuvenated First is fighting back hard with the new BoS image, slashing weekly ticket prices and flooding the Wells to Street corridor (if that's too much of a Somerset joke!). Oh, and most of the fleet is leased not owned, and they've just lost the SCC funding for Minehead town and Wells to Burnham service so they're operating it commercially. Hardly a brilliant buy....

Yes, I mentioned Transdev in my original post as a wildcard. They have sold their London operations, perhaps they would sell the lot. I discounted Rotala as this would include the West Midlands business on which Go Ahead got their fingers burned a few years ago. And Webberbus I mentioned really to discount as I can't see that, there isn't any decent underlying good business.

 

[Robertj21a]

.
I'm sure that Wellglade hope it will be Yourbus !

Robert

 

[Surreyman]

What about Countryliner or Safe Guard, the latter based in Guildford and the former I think also in Surrey.

Sent from my Nexus 5 using Tapatalk

Countryliner went out of business a few years ago and Safeguard (who have around half a dozen buses) is very very unlikely to sell.

 

[Mr Manager]

.
I'm sure that Wellglade hope it will be Yourbus !

Robert

I'm sure wellglade wont lol

 

[RELL6L]

.
I'm sure that Wellglade hope it will be Yourbus !

Robert

I would think that the most desirable acquisition anywhere is Wellglade / Trent Barton. Anybody who buys Yourbus would surely be unable to buy Trent Barton as well. So I cannot see Stagecoach, First or Go Ahead buying Yourbus. Arriva probably couldn't buy Trent Barton anyway due to competition in Derby so they would be the only big group who might to buy Yourbus (unless & until Trent Barton is snapped up). Only one potential buyer would probably mean a lower price but Arriva don't seem to have much acquisition appetite at the moment and I don't suppose that, if they did, Yourbus would be their number 1 target!
--- old post above --- --- new post below ---

Can't see it myself, Go-Ahead would be more likely. WGL requires massive investment in both capital and management to return to its former self, for example newer buses (59-plate Solos) are being sold and replaced by 51/02 plate MPD's. A couple of the withdrawn Varios are being resurrected too. Given the limited potential for profit, coupled with Cornwall Councils unwillingness to support anything other than the bare minimum of services, I doubt Stagecoach would be interested in anything other than the Bude/Exeter operations.

I would pretty much agree with this but with one caveat. First seem to have been able to draw a line in Cornwall with Western Greyhound to say you can compete this far but no further. They have largely seen them off in Helston and West Cornwall and Western Greyhound don't have the financial clout to compete for the cream routes (not, I grant you, that there are many). But if Stagecoach came in and competed on the 14/18 and the 88, say, then First might just roll over and give up in the area. Plymouth Citibus could then pick up the pieces in the Plymouth area and Stagecoach in Cornwall. Maybe under its new management First would retaliate, I don't know, but they appeared to give up pretty tamely in North Devon and on Torquay to Plymouth / Dartmouth. Pure speculation though, on balance I agree that the investment required to update Western Greyhound would be too much.

 

[Surreyman]

I would think that the most desirable acquisition anywhere is Wellglade / Trent Barton. Anybody who buys Yourbus would surely be unable to buy Trent Barton as well. So I cannot see Stagecoach, First or Go Ahead buying Yourbus. Arriva probably couldn't buy Trent Barton anyway due to competition in Derby so they would be the only big group who might to buy Yourbus (unless & until Trent Barton is snapped up). Only one potential buyer would probably mean a lower price but Arriva don't seem to have much acquisition appetite at the moment and I don't suppose that, if they did, Yourbus would be their number 1 target!
--- old post above --- --- new post below ---


I would pretty much agree with this but with one caveat. First seem to have been able to draw a line in Cornwall with Western Greyhound to say you can compete this far but no further. They have largely seen them off in Helston and West Cornwall and Western Greyhound don't have the financial clout to compete for the cream routes (not, I grant you, that there are many). But if Stagecoach came in and competed on the 14/18 and the 88, say, then First might just roll over and give up in the area. Plymouth Citibus could then pick up the pieces in the Plymouth area and Stagecoach in Cornwall. Maybe under its new management First would retaliate, I don't know, but they appeared to give up pretty tamely in North Devon and on Torquay to Plymouth / Dartmouth. Pure speculation though, on balance I agree that the investment required to update Western Greyhound would be too much.

To summarize others comments,
The 3 plum prizes for Go Ahead would be: -

1. Transdev Lancs & Yorks
2. Trent Barton
3. EYMS
There would be no competition issues with any of these, indeed it is worth remembering that First would not be able to take over Transdev, Stagecoach would not be able to takeover TB or EYMS and Arriva would not be allowed to take over TB.
On your Devon/Cornwall point, much as I would like to see First extinct in this area, I can't see any reason why Stagecoach would want to move into Cornwall.

 

[overthewater]

I'm surprised no one mentioned First Scotland East...... I'll get my coat.....

The three you have listed Surryman does seem like a possibility.