A number of buses in Birkenhead and Chester are set to get a respray after a change of ownership from FirstGroup to Stagecoach.
In a development reminiscent of the passenger experience of waiting ages for a bus and then several coming along at once, bus and train group FirstGroup is selling its Birkenhead and Chester bus businesses to Stagecoach Group for £4.5m, having only last week sold its Wigan bus business to Stagecoach for £12m.
When the latest deal completes, the Birkenhead and Chester bus depots as well as a leased outstation in Wrexham will come under Stagecoach's ownership. Stagecoach will also gain around 110 vehicles while some 290 employees will transfer from FirstGroup to Stagecoach.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Birkenhead and Chester are businesses where we have previously seen lower than average margins and they are not core to our operations. They fit better with Stagecoach's existing portfolio in the area and also allow us to realise efficiencies in support costs," revealed Giles Fearnley, the Managing Director of FirstGroup's UK Bus operations.
"We are progressing our detailed programme to recover performance and equip our UK Bus business to achieve sustainable revenue and patronage growth," Fearnley claimed.
Last week FirstGroup held its interim dividend unchanged despite the Department for Transport's (DfT) cancellation of the InterCity West Coast competition, in which FirstGroup had initially been chosen as the winning bidder.
Stagecoach revealed that the businesses being acquired, which also include routes in Wrexham, had revenues of £11.9m in the 12 months to the end of March 31st, and generated earnings before interest, tax, depreciation and amortisation (EBITDA) of around £1.7m. Operating profits were around £0.6m.
The newly acquired operations will become part of Stagecoach Merseyside and South Lancashire.
Les Warneford, Managing Director of Stagecoach UK Bus, said: "This acquisition will extend our operations in the north west of England, particularly in Merseyside. We believe there is significant scope to develop these businesses and improve their financial performance by investing in the quality of the bus fleet, as well as offering customers our good value fares and attractive network tickets."
JH
-
Why CEOs deserve a pay riseOpinion The CEOs of big companies often come under fire for being grossly overpaid. But the truth, as per some economists, is the opposite. Do they merit a pay rise?
-
Europe prepares to stand alone as Trump turns on UkraineSupport for old military alliances is wavering in the US under Donald Trump. Europe’s leaders are rushing to fill the void. Simon Wilson reports
