FirstGroup's NW bus businesses just the ticket for Stagecoach

A number of buses in Birkenhead and Chester are set to get a respray after a change of ownership from FirstGroup to Stagecoach.

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.

"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

Recommended

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
5 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

House prices could fall 30%. Should investors be worried about a repeat of 2008?
Investments

House prices could fall 30%. Should investors be worried about a repeat of 2008?

Some analysts are predicting that house prices could fall as much as 30%, which, when compared to the fact that prices have jumped 28% since April 201…
24 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023