02 April 2012

First to sell more

For Sale Portobello Mkt

FIRSTGROUP, the Scottish transport company, aims to raise about £100 million offloading more than a tenth of its UK bus business over the next 12 months. Its plans emerged after it revealed that margins in the division are being squeezed by sluggish passenger numbers in Scotland and the north of England.Rachael Borthwick, head of corporate communications at FirstGroup, said the disposals were expected to raise more than £100m. Deals will be done on a case-by-case basis, with the aim of completing the overhaul in the next 12 months. The group, which has sold smaller parcels of its bus business during the past year, has already drawn up a list of operations to be put up for sale. Borthwick would not comment on the location or types of activities set for disposal, but did say they would not all fall within under-performing regions.

FirstGroup, led by chief executive Tim O’Toole, sold its German bus unit last year in a £4.8m deal with Marwyn European Transport. Its North Devon bus business is set to transfer to Stagecoach for £2.8m, while a London depot was sold earlier this month to rival GoAhead for £14m.

Analysts estimate this new tranche of disposals account for between £130m and £140m of the UK bus division’s £1.2 billion in annual revenues, equal to as much as 11.7 per cent of sales.

Scotsman

It remains to be seen if the remaining Devon & Cornwall operations are included in the ‘sale list’. I cant imagine they would get a lot for it when they seem to be looking for some quite large sums in order to make up the £100 million. Who would want the Cornwall operations? Its pure speculation on my part but if Stagecoach really wanted Cornwall then wouldn't they have brought the whole company when they got North Devon?  It may be that only North Devon was for sale at that time but First are clearly looking to raise money through selling so surely would have considered any such offer. The other question is why have First suddenly expanded in Cornwall taking much work off Western Greyhound? Is it to boost the area prior to a sale?

There have been very strong suggestions that a deal with Lothian Buses in Scotland is on the cards and they were in talks with Stagecoach over the sale of a large chunk of the London operations. I am sure the likes of Go Ahead and Stagecoach have their eye on selected operations within the group.

As always at times like this its the staff who are left in a strange limbo, not knowing who they will end up working for. Devon & Cornwall staff have been living with rumours of First selling up for years. What;s different this time, is that First Group ARE selling and ARE looking to sell more.


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2 comments:

  1. Just been announced that any sale to Lothian has fallen through and instead First are embarking on mass service withdrawals and a depot closure in Edinburgh. 90 days notice given to 200 staff.

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  2. But would they sell the Plymouth operations though,,, if so it could only really be to Stagecoach or just close down altogether as they would not be able to sell to Go Ahead due to competion rules ??? Would Stagecoach buy First Plymouth operations possibly with an eye on expanding the network ???

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