Saturday, 27 October 2012

First News

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First has now rescinded any set timescale for realising the £100m and acknowledged that the disposal programme is unlikely to be completed in 2013/14.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.