Go Ahead looks into growing its bus business further

[winston270twm]

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.

Why would they want FSE, Go-Ahead have committed to increasing bus profits, not reducing them..... :P
--- old post above --- --- new post below ---

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.

I don't believe Go-Ahead gave Go West Midlands a proper go last time, they had a part-time MD shared with City of Oxford & only brought in ex London cascades (mainly Darts) to see off the step entry buses, they did have to write off circa £10 Million on sale to Rotala Plc. The 'Diamond' operation is far smaller, more streamlined today & profitable, plus you would be acquiring the former First Redditch & Kidderminster operations.

 

[South Westerly]

Pure fantasy; Do you really think Stagecoach are going to pitch up in Truro or Camborne to compete on one route. Stagecoach may be good at what they do, but they don't have a Midas touch. Nor have they made their money by walking into odd towns to run buses on odd routes. The real fantasy is the belief that First are waiting for anyone to take Cornwall off them. Look at the facts. First has won the Truro Park and Ride contract, holds the Eden Park and Ride contract, has won the new Exeter Falmouth Uni contract, apparently got a new Truro College contract at much better rates, wiped the floor in West Cornwall with the Council tenders that start next week at a huge price increase, managed to slide in a really clever fare 'simplification' that has raised fares significantly and presumably done the same to concession payments. On top of that they slimmed down the commercial network last year. Western Greyhound have been pushed back into East Cornwall. First have every base covered in Cornwall, every contract tied up for literally years, have cut their costs and must have really increased fare and oap revenue. Put simply they seem to have very quietly and cleverly turned the basket case they had in Cornwall into a nice little business. You only have to look at the Cornwall County Council tender prices to see just how much they have made out of that one single change. in doing all this they have also closed the door on anyone else in the west of Cornwall.

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.[/QUOTE]

 

[Robertj21a]

Pure fantasy; Do you really think Stagecoach are going to pitch up in Truro or Camborne to compete on one route. Stagecoach may be good at what they do, but they don't have a Midas touch. Nor have they made their money by walking into odd towns to run buses on odd routes. The real fantasy is the belief that First are waiting for anyone to take Cornwall off them. Look at the facts. First has won the Truro Park and Ride contract, holds the Eden Park and Ride contract, has won the new Exeter Falmouth Uni contract, apparently got a new Truro College contract at much better rates, wiped the floor in West Cornwall with the Council tenders that start next week at a huge price increase, managed to slide in a really clever fare 'simplification' that has raised fares significantly and presumably done the same to concession payments. On top of that they slimmed down the commercial network last year. Western Greyhound have been pushed back into East Cornwall. First have every base covered in Cornwall, every contract tied up for literally years, have cut their costs and must have really increased fare and oap revenue. Put simply they seem to have very quietly and cleverly turned the basket case they had in Cornwall into a nice little business. You only have to look at the Cornwall County Council tender prices to see just how much they have made out of that one single change. in doing all this they have also closed the door on anyone else in the west of Cornwall.

----------------

I'd agree that Stagecoach won't attempt Cornwall - but it's nothing to do with First's overdue improvement of late. Cornwall is quite simply of too little interest for them to bother.

Robert

 

[northwichcat]

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

Robert

Yes.

Do you think any big company would want to buy the Network Warrington operations? As the council is the owner of the company they aren't trying to profit on subsided routes, which is why they win all the WBC tenders because other operators want a nice shareholders payout. WBC like others have had to reduce the funding available for subsided services, which in turn hit Network Warrington.

WBC had a fall out with Cheshire County Council over the 47 Lower Peover-Knutsford-Warrington route, they wanted CCC to subside part of the route but CCC were only willing to subside a token service and awarded that to Tomlinson Travel, which seemed to spell the end for WBT (as they were then known) being awarded Cheshire bus tenders. After that they lost a school route and also the Cheshire Show contract.

Operators like Bakerbus and D&G Bus have run in financial difficulties in the last year and have remained in operation without being taken over. In the case of D&G Bus they raised single fares by 20% in January.

I think if anything happens to Network Warrington, I think it'll either finish up with WBT owning 51% and a private operator owning 49%, or like Metrolink where it's run as a concession by a private operator.

 

[overthewater]

I would suggest Stagecoach is more likely in Warrington. South Westerly has just underlined that First are at least trying to improve is portfolio in Cornwall, which will lead to better buses, more passengers etc. It's making a feel effort to improve, unlike a certain Scottish central belt operations...

 

[TheGrandWazoo]

Pure fantasy; Do you really think Stagecoach are going to pitch up in Truro or Camborne to compete on one route. Stagecoach may be good at what they do, but they don't have a Midas touch. Nor have they made their money by walking into odd towns to run buses on odd routes. The real fantasy is the belief that First are waiting for anyone to take Cornwall off them. Look at the facts. First has won the Truro Park and Ride contract, holds the Eden Park and Ride contract, has won the new Exeter Falmouth Uni contract, apparently got a new Truro College contract at much better rates, wiped the floor in West Cornwall with the Council tenders that start next week at a huge price increase, managed to slide in a really clever fare 'simplification' that has raised fares significantly and presumably done the same to concession payments. On top of that they slimmed down the commercial network last year. Western Greyhound have been pushed back into East Cornwall. First have every base covered in Cornwall, every contract tied up for literally years, have cut their costs and must have really increased fare and oap revenue. Put simply they seem to have very quietly and cleverly turned the basket case they had in Cornwall into a nice little business. You only have to look at the Cornwall County Council tender prices to see just how much they have made out of that one single change. in doing all this they have also closed the door on anyone else in the west ]

Pretty decent summary and yes, I can't see First Kernow going anywhere. The winning of the Helston tenders and later securing WGLs exit from Penzance has really consolidated things. Now it's been stabilised, it'll be interesting how the fleet gets updated.

 

[Surreyman]

Just to chuck another pebble in the pond!
National Express group would make an excellent fit for Go-Ahead,
West Midlands, Dundee bus operations, no competition issues.
The directly run coach operations at Stansted & Heathrow(including the hotel hopper network) plus Kings Ferry coach operation in North Kent.
And of course the 'National Express' brand and franchise operation.
Given NEs size, would be more of a merger than a takeover.

 

[GaryMcEwan]

Just to chuck another pebble in the pond!
National Express group would make an excellent fit for Go-Ahead,
West Midlands, Dundee bus operations, no competition issues.
The directly run coach operations at Stansted & Heathrow(including the hotel hopper network) plus Kings Ferry coach operation in North Kent.
And of course the 'National Express' brand and franchise operation.
Given NEs size, would be more of a merger than a takeover.

Not to sure about Dundee given that Strathtay have got a big presence in the city...

 

[winston270twm]

Not to sure about Dundee given that Strathtay have got a big presence in the city...

No competition issues from merging with NX by the Oft, not competition from other operators
--- old post above --- --- new post below ---

Just to chuck another pebble in the pond!
National Express group would make an excellent fit for Go-Ahead,
West Midlands, Dundee bus operations, no competition issues.
The directly run coach operations at Stansted & Heathrow(including the hotel hopper network) plus Kings Ferry coach operation in North Kent.
And of course the 'National Express' brand and franchise operation.
Given NEs size, would be more of a merger than a takeover.

I'd be more than happy to see the two groups merge. NX is the bigger of the two group by Market Cap:

Go-Ahead Group = £946.1 Million
NX Group = £1.4185 Billion

It would give NX an increased presence in UK Bus & Rail, and Go-Ahead a large presence in US, Canada, Spain & future potential European bus, coach & rail operations

 

[TheGrandWazoo]

Hmmm.... I can see what GA get from an NX merger but why would NX entertain it? From the depths of a few years ago and the predatory ambitions of carpet baggers, they've sorted themselves out nicely.

Could've happened then but now....nah!

 

[bussnapperwm]

As long as they get rid of that silly national express bus livery, instead moving to the go ahead ideal of more individuality within the operating areas, even I would favour that!

 

[Mr Manager]

Alot of local speculation around my parts is that they will try again to get the Bus services of Beestons of Hadleigh. Natural fit if you look at it. All services can be transferred into the Sudbury Garage of the Chambers/Heddingham operation. Also Arriva are rumoured to be trying to Offload the Former Tgm operation in Colchester . this would mean Ga would be surrounding First on all angles in Suffolk and Essex. Carters are too small with only a small amount of tendered routes etc. this will also give Ga the much wanted presence in Ipswich again a first territory. Also the Bus services of Mulleys could attract them as both Beestons/Chambers And mulleys are all seen in Bury st Edmunds. A town that First pulled out of recently. I dont think Stephensons are attractive to them as its spread over a wide area. Neither will Ensign be attractive i dont think.

 

[winston270twm]

Hmmm.... I can see what GA get from an NX merger but why would NX entertain it? From the depths of a few years ago and the predatory ambitions of carpet baggers, they've sorted themselves out nicely.

Could've happened then but now....nah!

GA are debt free, it would give NX a much bigger presence in the UK, GA operate in some large urban operations i.e. North East, London, Brighton & Hove i.e high frequency urban operations as per NXWM & Dundee. It would also get NX back in UK Rail Franchises on scale.

A deal between NX & GA wouldn't attract any interest from the Oft or MMC.

Thank good NX never merged with First Group back in 2009. They would of had £3 Billion worth of debt between the two of them....

 

[TheGrandWazoo]

GA are debt free, it would give NX a much bigger presence in the UK, GA operate in some large urban operations i.e. North East, London, Brighton & Hove i.e high frequency urban operations as per NXWM & Dundee. It would also get NX back in UK Rail Franchises on scale.

A deal between NX & GA wouldn't attract any interest from the Oft or MMC.

Thank good NX never merged with First Group back in 2009. They would of had £3 Billion worth of debt between the two of them....

Again, it's obvious where the benefits lie for GA. However, apart from UK rail, I question what's in it for NX. I'll lay money - it won't happen!

 

[South Westerly]

GA are debt free, it would give NX a much bigger presence in the UK, GA operate in some large urban operations i.e. North East, London, Brighton & Hove i.e high frequency urban operations as per NXWM & Dundee. It would also get NX back in UK Rail Franchises on scale.

A deal between NX & GA wouldn't attract any interest from the Oft or MMC.

Thank good NX never merged with First Group back in 2009. They would of had £3 Billion worth of debt between the two of them....

It's only about one thing - shareholder value. The only things GA will do are things that increase their share price. I very much doubt it will be small operators - they've got their fingers burnt there already. The small companies they bought in that phase of growth haven't been financially successful as they admitted. If they buy anything it will no doubt be substantial, whether it's a municipal or private business.

 

[Surreyman]

Alot of local speculation around my parts is that they will try again to get the Bus services of Beestons of Hadleigh. Natural fit if you look at it. All services can be transferred into the Sudbury Garage of the Chambers/Heddingham operation. Also Arriva are rumoured to be trying to Offload the Former Tgm operation in Colchester . this would mean Ga would be surrounding First on all angles in Suffolk and Essex. Carters are too small with only a small amount of tendered routes etc. this will also give Ga the much wanted presence in Ipswich again a first territory. Also the Bus services of Mulleys could attract them as both Beestons/Chambers And mulleys are all seen in Bury st Edmunds. A town that First pulled out of recently. I dont think Stephensons are attractive to them as its spread over a wide area. Neither will Ensign be attractive i dont think.

I admit that this is something I have been hoping for, primarily because it might eventually force First out of Ipswich, there was an article recently, possibly with Giles Fearnley, where he said he had been approached by an operator in Suffolk looking to sell but it was a no-go because the Oft etc would never have allowed it, the only possible operators would have been Beestons, Carters and Simonds.
Would Oft or whatever they are now called, allow it as Hedingham is so close?

 

[Mr Manager]

I can see it happening to be honest. cant see any reason for the Oft to be involved. Lots of other operators around. And Beestons have the monopoly on Sudbury anyway. A certain x First Ipswich Depot manager is a good Friend of mine and like he said First would love to dispose of Ipswich. But that would leave Norwich out on a limb Along with Yarmouth and Lowestoft. Colchester being the nearest. though they are all under the Essex banner now anyway. Since the legend in his own lunchtime (Chris speed) has convinced the board at first to spend money at Ipswich I think an attack from outside by Ga is the safest bet.

Beestons will offload the bus side if the price is right . The Munsons are not getting younger. Neither Brother Is. Mulleys and Beestons would be Perfect for Ga in my opinion anyway. I think its a case of watch this space for developments as its not a case of How but when.

 

[RELL6L]

OK, OK, I accept what everyone says about First in Cornwall and Western Greyhound! I am sure the returns there are too sparse and if anyone wants to compete with First there are better places. I am surprised no-one has set up a serious competitive operation in better places like Bristol, Leeds or Norwich, where First must make really good money.

I agree with the idea of Beestons, although it is pretty small. Would add to Chambers, Hedingham, Anglian and Konectbus in East Anglia. I'm sure Go Ahead would like Ipswich though, which they failed to buy in 2010. And TGM in Colchester if it is for sale. I think this would be too small to worry the OFT when there is a significant competitor everywhere (First).

No-one has suggested Thamesdown yet. I don't know if there is any possibility that it would be for sale but it is adjacent to Go Ahead in Oxford and Thames Travel, even though there is very little actual connection. Go Ahead seem to have a good track record of co-existence alongside Stagecoach, eg in Oxford, Brighton and (so far as I am aware but I am not local) Newcastle.

High Peak? Not sure how profitable this is and it might be a bit out on a limb.

And, if they were ever for sale - Nottingham or Lothian.

 

[South Westerly]

OK, OK, I accept what everyone says about First in Cornwall and Western Greyhound! I am sure the returns there are too sparse and if anyone wants to compete with First there are better places. I am surprised no-one has set up a serious competitive operation in better places like Bristol, Leeds or Norwich, where First must make really good money.

.

With the greatest of respect, you are still missing the point. The informed opinion is that First have sorted their Kernow operation and that the returns will probably be good. But this thread is about Go Ahead making acquisitions...not about them competing head on with First (or anyone else). Go Ahead aren't looking to do that, and indeed why would they. Firstly, they want to increase their share value by growing their profits. You don't do that by pouring money into head on competition. they said very clearly that they were considering whether to buy companies, not to start competition actions.
And anyway, just look at Plymouth. The one significant part of the Go Ahead empire where they aren't making money, purely because they started a war with First thinking that they would roll over and give them the whole city to themselves. How very wrong they were!

 

[winston270twm]

Again, it's obvious where the benefits lie for GA. However, apart from UK rail, I question what's in it for NX. I'll lay money - it won't happen!

NX would gain an additional £2.5 billion turnover, an additional £102 Million operating profit based on little or no debt. Greater cash flow to increase 'free cashflow' to further reduce NX existing debts. It would give NX some high quality / award winning bus operations to increase it's presence in UK bus.

For years it has been suggested that the big five should become 4, NX has received its fair share of merger/takeover proposals particularly around 2009. I don't realistically think it will happen, but I can see a number of positives for both groups.

I always though that NX might tie up First Group in the future given Dean Finches 'First Group' roots....

 

[34D]

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.

Why wouldn't First be able to take over transdev? One route into Manchester, one route Shipley-Bradford and a 36 that doesn't even pick up where it intersects with First routes is hardly major.

Also why couldn't Stagecoach take over Trent Barton?

I agree however that Go Ahead could be a perfect buyer for Transdev, Wellglade or EYMS.

 

[TheGrandWazoo]

NX would gain an additional £2.5 billion turnover, an additional £102 Million operating profit based on little or no debt. Greater cash flow to increase 'free cashflow' to further reduce NX existing debts. It would give NX some high quality / award winning bus operations to increase it's presence in UK bus.

For years it has been suggested that the big five should become 4, NX has received its fair share of merger/takeover proposals particularly around 2009. I don't realistically think it will happen, but I can see a number of positives for both groups.

I always though that NX might tie up First Group in the future given Dean Finches 'First Group' roots....

The Dean Finch thing has been doing the rounds for ages. Some were commentating on him going to First (either corporate or UK Bus instead of which they appointed Giles). Classic 2+2 territory.

There are a plethora of opportunities that would grow NatEx organically without the upheaval of a merger. Also, 5 yrs have passed since the NXEC debacle. With different management and, like as not, a new government in 2015, there's nothing to stop a proper return to UK Rail. It's not a deal NatEx need. Also, a big leap from GA wanting to grow revenue and margin a bit to then attempting a full merger. Won't happen!

Also, not attempting a merger allows a potential suitor to come along for NatEx and that is a better bet for obtaining shareholder value, and that is what it's all about.

 

[winston270twm]

The Dean Finch thing has been doing the rounds for ages. Some were commentating on him going to First (either corporate or UK Bus instead of which they appointed Giles). Classic 2+2 territory.

There are a plethora of opportunities that would grow NatEx organically without the upheaval of a merger. Also, 5 yrs have passed since the NXEC debacle. With different management and, like as not, a new government in 2015, there's nothing to stop a proper return to UK Rail. It's not a deal NatEx need. Also, a big leap from GA wanting to grow revenue and margin a bit to then attempting a full merger. Won't happen!

Also, not attempting a merger allows a potential suitor to come along for NatEx and that is a better bet for obtaining shareholder value, and that is what it's all about.

I think NX have put in a strong bid for the Scotrail Franchise and could win it back off First.

Dean Finch has some long term pay/share award that ties him to NX for the foreseeable.

Who do you see as a potential suitor for NX then?
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Why wouldn't First be able to take over transdev? One route into Manchester, one route Shipley-Bradford and a 36 that doesn't even pick up where it intersects with First routes is hardly major.

It's not so much the overlap of First routes with those of Transdev, it's the fact that First would control a large chunk of all Yorkshire services

 

[TheGrandWazoo]

I think NX have put in a strong bid for the Scotrail Franchise and could win it back off First.

Dean Finch has some long term pay/share award that ties him to NX for the foreseeable.

Who do you see as a potential suitor for NX then?
--- old post above --- --- new post below ---


It's not so much the overlap of First routes with those of Transdev, it's the fact that First would control a large chunk of all Yorkshire services

Don't know who might fancy NX in reality, but you can always look at investors from Far East, India or Europe. Who's to say that an Abellio or Deutsche Bahn might not, but in truth, there could be anyone

You're right about the Transdev Yorkshire piece. A whole tract of land with virtual exclusivity in York, Harrogate, Bradford and Keighley - in fact almost all of the northern part of West Yorkshire

Same with Stagecoach and TB - most of Nottinghamshire and Derbyshire would be with one operator especially around Sutton/Alfreton and Chesterfield

 

[Robertj21a]

I think NX have put in a strong bid for the Scotrail Franchise and could win it back off First.

Dean Finch has some long term pay/share award that ties him to NX for the foreseeable.

Who do you see as a potential suitor for NX then?
--- old post above --- --- new post below ---


Surely it will be Stagecoach, in due course (possibly longer term).

Robert

 

[winston270twm]

Who do you see as a potential suitor for NX then?
--- old post above --- --- new post below ---


Surely it will be Stagecoach, in due course (possibly longer term).

Robert

I really hope not, Mr Souter would love to finally get his hands on NXWM. He's been knocked back twice now..... I hope it isn't Arriva/D Bahn either.

If it was an English bus group, I personally would like it to be either First Group (once they've sorted their own backyard out) or Go-Ahead Group.

 

[Robertj21a]

I really hope not, Mr Souter would love to finally get his hands on NXWM. He's been knocked back twice now..... I hope it isn't Arriva/D Bahn either.

If it was an English bus group, I personally would like it to be either First Group (once they've sorted their own backyard out) or Go-Ahead Group.

Presumably, Arriva would have some competition issues to resolve given their significant presence in parts of the West Midlands/Staffs. I would rather wait to see how well First Group do when they, eventually, get back to being a first rate operator - looks like it's a long haul yet (5 years ?).

No, I'd still put some money on Brian Souter triumphing in due course - he's far more astute, both generally and financially, than the others.

Robert

 

[winston270twm]

Presumably, Arriva would have some competition issues to resolve given their significant presence in parts of the West Midlands/Staffs. I would rather wait to see how well First Group do when they, eventually, get back to being a first rate operator - looks like it's a long haul yet (5 years ?).

No, I'd still put some money on Brian Souter triumphing in due course - he's far more astute, both generally and financially, than the others.

Robert

Yes I'd agree that it's going to take First Group min 5 years to get back to where they once were, there may be further unforeseen twists & turns along the way.

Stagecoach would have far more competition issues than Arriva, i.e. Stagecoach Strathtay vs NX Dundee, Stagecoach Warwickshire vs NX Coventry & Megabus vs NX coaches & Eurolines. It would be third time lucky for Brian Souter to get his hands on NXWM, you can't knock him for what he's achieved, I just didn't like the Stagecoach bullying / running operators off the road tactics employed in the early years after deregulation.

 

[Robertj21a]

Yes I'd agree that it's going to take First Group min 5 years to get back to where they once were, there may be further unforeseen twists & turns along the way.

Stagecoach would have far more competition issues than Arriva, i.e. Stagecoach Strathtay vs NX Dundee, Stagecoach Warwickshire vs NX Coventry & Megabus vs NX coaches & Eurolines. It would be third time lucky for Brian Souter to get his hands on NXWM, you can't knock him for what he's achieved, I just didn't like the Stagecoach bullying / running operators off the road tactics employed in the early years after deregulation.

That's very old history nowadays, he has more than made up for his earlier tactics. Dundee needn't be a problem as it could be sold off separately to someone else - likewise Coventry.

Robert

 

[winston270twm]

That's very old history nowadays, he has more than made up for his earlier tactics. Dundee needn't be a problem as it could be sold off separately to someone else - likewise Coventry.

Robert

Yes, I now. Just never really been a fan of Stagecoach and prefer any NX suitor to not be Mr Souter.

I'd have thought NX Dundee would be more profitable than Strathtay being an urban operation. Coventry I'm not so sure as Stagecoach Warwickshire is one of Stagecoach's best earners.

Megabus & NX Coaches will be a big problem