Timetable
for First bus disposals dropped
First Group has
announced that its plans to sell underperforming UK bus businesses have fallen
behind schedule.
In May the Aberdeen-based group set a target to
realise at least £100m from the disposals programme by the end of the current
financial year in March 2013. However, to date, only £14m has been achieved from
the sale of the Northumberland Park bus depot in London to Go Ahead seven months
ago.
First has now rescinded any set timescale for realising the £100m
and acknowledged that the disposal programme is unlikely to be completed in
2013/14. It is understood that a number of potential deals have fallen through
after interested parties contacted by First saw limited value in the companies
for sale. Concerns expressed included wage levels and debt and the investment
required to turn round the low margin and loss making companies.
The
Office of Fair Trading's ruling on the sale of First's North Devon business to
Stagecoach, which effectively scuppered the deal has also narrowed the field of
potential buyers.
In a presentation to City analysts earlier this month,
First's new finance director Chris Surch said that the group remained confident
of raising £100m from disposals and that discussions with a number of parties
were continuing. However, First was no longer prepared to give a date for
achieving the deals.
"In previous lives I've been very much involved in
mergers and acquisitions and the one thing that I've learned is to be cautious
on exact timing; and, clearly, you also understand, we don't want to be backed
into a corner with giving specific dates on specific deals," Surch
commented.
"So the way I would categorise the disposal programme is, it
will be when it will be, and if that goes into a future year, it goes into a
future year. The key is that we're confident that we will achieve
it."
Greyhound
axed as First races to get on track
First Group has
pulled the plug on its high profile Greyhound UK coach operation between London
and the south coast.
The move comes as the group considers radical steps
that will enable it to pay down its £2bn debt mountain and restore investor
confidence following the cancellation of the inter-city West Coast rail
franchise competition.
In summer 2009 First invited the media to a
specially-erected marquee by London's Tower Bridge to announce that it would
bring its iconic Greyhound brand across the Atlantic to the
UK
The initial routes,
linking London with Portsmouth and Southampton with 40 daily departures, began
in September 2009, using coaches refurbished to a high specification. However,
expansion was limited and new services linking London with Bournemouth,
Winchester and Glasgow were later dropped.
From 17 November 2012,
Greyhound's original London-Southampton/Portsmouth services will also be
withdrawn. Four vehicles are currently allocated to these
routes.
"Unfortunately, these services are not seeing sufficient
passenger numbers and therefore we've reached the difficult decision to withdraw
the buses from the routes," said Marc Reddy, regional commercial and business
growth director for First Bus in the South West and Wales.
From 17
November the only remaining Greyhound UK service will be the Swansea-Cardiff
route, which was re-branded as a Greyhound service in September
2010.