Western Greyhound Fire and subsequent WG general discussion.

[SWTH]

Not sure how many of these assets are DDA complaint? I'd hazard a guess that the ones that are complaint are old and starting to reach the end of their useful life, either way this means more investment will be needed soon!

When I left in September four Varios needed replacement by the end of 2014 and three Solos needed replacement or alteration to be DDA compliant by the end of 2015. DDA compliance is not the full picture - fleet reliability (or the lack of) is the most pressing issue. Sort out the fleet availability and chances are the four Varios could go without all of them being replaced, and worry about the Solos next year.

 

[Goldfish62]

Not sure how many of these assets are DDA complaint? I'd hazard a guess that the ones that are complaint are old and starting to reach the end of their useful life, either way this means more investment will be needed soon!

I understand that it has now been confirmed that none of the Varios are DDA compliant without expensive mods, which means they're useless after the end of this year.

I see it as inevitable that the company will go into receivership, possibly as early as next week. The only thing worth buying is the Summercourt depot, which of course First would be able to if buying from the receiver...

 

[ECML180]

fleet reliability (or the lack of) is the most pressing issue

I understand that it has now been confirmed that none of the Varios are DDA compliant without expensive mods, which means they're useless after the end of this year.

So if anyone does buy it looks like they'll need a big spending spree pretty soon then

 

[Baxenden Bank]

I understand that it has now been confirmed that none of the Varios are DDA compliant without expensive mods, which means they're useless after the end of this year.

I see it as inevitable that the company will go into receivership, possibly as early as next week. The only thing worth buying is the Summercourt depot, which of course First would be able to if buying from the receiver...

Presumably, First cannot buy the company if it is trading normally because the competition authorities will regard it as creating a monopoly (repeat of Stagecoach / Barnstaple situation). So they have two choices:
Take it by force - register all the routes, commercially, in competition with WG or;
Buy from the administrator / receiver / liquidator.

Other options are to let WG fail and pick up the routes they want utilising short notice registrations (replacing a service recently withdrawn rule) or to let someone else, perhaps a major group, into the territory.

By registering some routes (where First have only relatively recently withdrawn anyway) they have 'put a marker down' to discourage anyone else from buying the company - unless that person is up for a big scrap (no pun intended) and has deep enough pockets for the likely 'bus war'.

Are the Germans still buying anything that moves, and many things that don't?

It may be that the 'administrator in waiting' already has a bid on the table but, in order to prove they have secured the best possible deal for the 'creditors', they have advertised the business on the open market. There is no other way of proving all potential bidders have been made aware of the opportunity.

If the deadline is Friday 14th, I suspect some people will be working every hour God sends over the weekend and Monday may be an interesting day, but not one for trying to catch a bus in Cornwall!

 

[Robertj21a]

I understand that it has now been confirmed that none of the Varios are DDA compliant without expensive mods, which means they're useless after the end of this year.

I see it as inevitable that the company will go into receivership, possibly as early as next week. The only thing worth buying is the Summercourt depot, which of course First would be able to if buying from the receiver...

Presumably these Varios aren't the same ones that they have already got classified as 'coaches' (which do not come under the December 2014 deadline) ?

 

[Rich McLean]

Presumably these Varios aren't the same ones that they have already got classified as 'coaches' (which do not come under the December 2014 deadline) ?

To qualify for that rule, they must weigh over 7.5 tonnes. Varios currently weight around the 4.2 tonne mark (depending on size etc)

 

[starrymarkb]

Presumably these Varios aren't the same ones that they have already got classified as 'coaches' (which do not come under the December 2014 deadline) ?

I get the feeling that loophole has been closed

 

[robertclark125]

Cornish Guardian report: http://www.cornishguardian.co.uk/Jo...eyhound-sale/story-24527804-detail/story.html

A much-criticised Cornish bus operator has been put up for sale in a move which may have major implications for bus users across the county.

Western Greyhound Ltd, which is headquartered in Summercourt, has been put on the market for an undisclosed sum through London-based property consultants ES Group, and a new buyer is now being sought to safeguard the futures of the firm’s employees.

The listing on ES Group’s website states that potential buyers must register an expression of interest for the business and assets before 5pm tomorrow.

A meeting is being held in Summercourt at 1pm today, where staff are expected to hear more about the situation from the company’s managing director, Mark Howarth.



One driver, who did not wish to be named, told the Cornish Guardian: “We’ve been told not to tell anyone, but the deadline for buyers to come forward is tomorrow.

“There are lots of rumours that somebody else might be stepping in tomorrow, but nothing’s been confirmed. We don’t a clue if we’re going to have a job on Saturday morning.”

Western Greyhound has been criticised following chaotic services which in recent weeks have frequently seen buses fail to turn up, or entire services being suspended.

The company’s website states that journeys were temporarily suspended due, in part, to a shortage of staff.

An update posted on the site said: “We apologise for any convenience this may cause but we are working hard to recruit drivers as soon as we possibly can.”

The driver said: “A lot of drivers have been walking out for the past three weeks, hence, the reason why services have been missing.

“The passengers don’t blame us, we try our best in the circumstances and if we can turn up we do turn up.”

Western Greyhound operates throughout Cornwall and into Devon, serving Plymouth, and recorded a turnover of almost £8m last year. It is reported to have a fleet of 77 buses plus six heritage buses.

In May last year, the company lost 35 buses in an arson attack at its Summercourt depot. In January of this year, a further three buses were lost in a second arson attack near Liskeard.

Mark Howarth did not respond to the Cornish Guardian’s requests for a comment.

One thing I must say, right now, despite these ongoing shortages, Western Greyhound is still trading. If someone does come in and buy the business, there will probably be more changes, and the WG that would survive would almost certainly not be the one that was put up for sale.

 

[Busaholic]

We should know the worst (or best) sometime after 14.00 tomorrow then.

 

[richw]

I see it as inevitable that the company will go into receivership, possibly as early as next week. The only thing worth buying is the Summercourt depot, which of course First would be able to if buying from the receiver...

The Summercourt depot is only leased, so not an asset of Western Greyhound's to sell

The driver's comment in the Cornishman

There are lots of rumours that somebody else might be stepping in tomorrow, but nothing’s been confirmed. We don’t a clue if we’re going to have a job on Saturday morning.”

suggests to me if no buyer by Friday evening it will be curtains on Friday night.

 

[mbonwick]

To qualify for that rule, they must weigh over 7.5 tonnes. Varios currently weight around the 4.2 tonne mark (depending on size etc)

Not this argument again...as has been said repeatedly in the DDA thread, there is no weight limit on coaches, and those Varios that are considered coaches are OK until 2017.

 

[richw]

Not this argument again...as has been said repeatedly in the DDA thread, there is no weight limit on coaches, and those Varios that are considered coaches are OK until 2017.

This was initially correct, but I understood coaches have until 2020.

But....
The legislation wording has changed and now says vehicles under 7.5t, it doesn't say buses under 7.5t which is what is contentious and causing further discussion that the loophole for the Varios has now closed.

 

[Robertj21a]

To qualify for that rule, they must weigh over 7.5 tonnes. Varios currently weight around the 4.2 tonne mark (depending on size etc)

No, they're 'coaches'.

 

[Busaholic]

No, they're 'coaches'.

It may well all be irrelevant after tomorrow.:roll:

 

[richw]

No, they're 'coaches'.

Irrelevant. I have been saying the same as you but have researched the legislation further and found I am wrong.

The dates for each of the deadlines are below :



1st January 2015 - All buses and coaches up to 7.5 tonnes GVW

1st January 2016 - Single-deck buses over 7.5 tonnes GVW

1st January 2017 - Double-deck buses

1st January 2020 - Coaches

 

[winston270twm]

The Summercourt depot is only leased, so not an asset of Western Greyhound's to sell

I'm pretty sure the depot was purpose built for Western Greyhound & is owned, the land may well be leasehold, but I believe the depot itself is actually an asset.

I'm sure I can across an article about Midas Construction building it for WG, but can't find it online now.

I think the asking price in the headline may need tweaking a little:
http://www.westernmorningnews.co.uk...ale-8million/story-24528933-detail/story.html

 

[Goldfish62]

Presumably these Varios aren't the same ones that they have already got classified as 'coaches' (which do not come under the December 2014 deadline) ?

They're the very same ones unfortunately.

 

[bussnapperwm]

Well, the deadline has passed and so we should hear soon what's happening.

I was seriously tempted to put a bid in but decided against it.

 

[winston270twm]

Well, the deadline has passed and so we should hear soon what's happening.

I was seriously tempted to put a bid in but decided against it.

No-one has to submit bids by today, just say they would be interested in acquiring all/parts of WG.

 

[83G/84D]

Business as usual at Newquay bus station today when I was there. The staff were keeping quiet and even a couple I knew and spoke to briefly were not very talkative when it came to matters relating to the company.

Understandable I guess in these difficult times for the company employee's.

 

[Rich McLean]

Might be worth keeping an eye on VOSA over the coming weeks to see if First, PCB and Stagecoach make any emergency applications and variations........

 

[richw]

I'm pretty sure the depot was purpose built for Western Greyhound & is owned, the land may well be leasehold, but I believe the depot itself is actually an asset.

Its all leased albeit for minimal rent. If what you say is the case makes wonder whether they sold it to raise funds and leased it back.

The sale advert mentioned 3 leased depots, but didn't mention any owned depots.

 

[swifty]

Its all leased albeit for minimal rent. If what you say is the case makes wonder whether they sold it to raise funds and leased it back.

The sale advert mentioned 3 leased depots, but didn't mention any owned depots.

If you're referring to this line "Extensive bus fleet operating from a freehold and 3 leasehold depots and workshops"

Freehold would suggest they own at least one of the sites they operate from.

--- old post above --- --- new post below ---

I'm pretty sure the depot was purpose built for Western Greyhound & is owned, the land may well be leasehold, but I believe the depot itself is actually an asset.

I'm sure I can across an article about Midas Construction building it for WG, but can't find it online now.

Indeed, there is a section that mentions all of the above on the WG website, although as Rich says it is possible they've since sold it off and are leasing the site.

In 2004, WGL purchased a green field site in Summercourt and obtained planning permission to build a brand-new purpose built depot and office. This was built by Midas Construction and enabled both the rented site and the rented shop in Newquay to be given up, as at the same time, the Travelshop was moved into the new Bus Station.

 

[winston270twm]

If you're referring to this line "Extensive bus fleet operating from a freehold and 3 leasehold depots and workshops"

Freehold would suggest they own at least one of the sites they operate from.

--- old post above --- --- new post below ---


Indeed, there is a section that mentions all of the above on the WG website, although as Rich says it is possible they've since sold it off and are leasing the site.

Swifty,

Unless they've sold it & leased it back since 30th Sept 2013 accounts, then they own Freehold land & buildings with a nett book value of £791k

Net assets at 30th Sept 2013 were £1.2227 Million

I also noticed in the Directors report that accompanied their 2012 accounts, that WG had since settled with its insurers in relation to the Summercourt fire & took a £170k hit on book loss on disposal.

If you then look at the 2013 accounts of the £507k pre-tax loss, £190k of that was one off exceptional charges & the admin expenses were £60k higher on less turnover, I assume all due to the fire & subsequent disruption to business.

The one thing that could finish them is lack of cash, the need a cash injection to continue trading for another 12 months, the accounts don't read quite as bad & some indicate. Based on the turnover of £9.718 Million & a post tax loss of £405k they lost circa 4.2%. But that did include exceptionals, so ???

I'm not sure when the sale of newer Optare Solo's took place in exchange for older MPD's & Tridents, that may have affected asset values / costs etc.

 

[LateThanNever]

Swifty,

Unless they've sold it & leased it back since 30th Sept 2013 accounts, then they own Freehold land & buildings with a nett book value of £791k

Net assets at 30th Sept 2013 were £1.2227 Million

I also noticed in the Directors report that accompanied their 2012 accounts, that WG had since settled with its insurers in relation to the Summercourt fire & took a £170k hit on book loss on disposal.

If you then look at the 2013 accounts of the £507k pre-tax loss, £190k of that was one off exceptional charges & the admin expenses were £60k higher on less turnover, I assume all due to the fire & subsequent disruption to business.

The one thing that could finish them is lack of cash, the need a cash injection to continue trading for another 12 months, the accounts don't read quite as bad & some indicate. Based on the turnover of £9.718 Million & a post tax loss of £405k they lost circa 4.2%. But that did include exceptionals, so ???

I'm not sure when the sale of newer Optare Solo's took place in exchange for older MPD's & Tridents, that may have affected asset values / costs etc.

Great to have somebody who knows how to read the figures! I'm unsurprised to discover the insurance had paid up - albeit well short of what should have been - given that insurance is supposed to put you in the situation before the event occurred. But that's a negotiation and having a couple of fires since must make the insurance a disastrous problem so has it tipped into the subsequent difficulties? Obviously cashflow will be problematic because of the rumours. Who would give them credit now? Be interesting to see the eventual offer...

 

[swifty]

I also noticed in the Directors report that accompanied their 2012 accounts, that WG had since settled with its insurers in relation to the Summercourt fire & took a £170k hit on book loss on disposal.

If you then look at the 2013 accounts of the £507k pre-tax loss, £190k of that was one off exceptional charges & the admin expenses were £60k higher on less turnover, I assume all due to the fire & subsequent disruption to business.

There was an alleged £5k excess on each vehicle, lost in the fire, to add into the mix as well.

 

[winston270twm]

Great to have somebody who knows how to read the figures! I'm unsurprised to discover the insurance had paid up - albeit well short of what should have been - given that insurance is supposed to put you in the situation before the event occurred. But that's a negotiation and having a couple of fires since must make the insurance a disastrous problem so has it tipped into the subsequent difficulties? Obviously cashflow will be problematic because of the rumours. Who would give them credit now? Be interesting to see the eventual offer...

It's lack of cash & staff will be the main hurdles, tarnished company name & reputation (which could be re-built over time). If someone is prepared to back them. They need a backer or takeover, but the company does still appear to have value.

 

[South Westerly]

It's lack of cash & staff will be the main hurdles, tarnished company name & reputation (which could be re-built over time). If someone is prepared to back them. They need a backer or takeover, but the company does still appear to have value.

The accounts were for the year ending March 31 2013. The statement from the auditors says that it has continued to lose money since. There have been nineteen months since! The auditors also note that the liabilities are about to exceed the assets. On top of the continuing losses, First is now competing on more routes since 2 November and has registered a much wider set of routes in competition from 5 October.

Why haven't the current owners scaled back the business to make it viable if that is possible as they say in the Directors' statement in the accounts?

 

[richw]

Swifty,

Unless they've sold it & leased it back since 30th Sept 2013 accounts, then they own Freehold land & buildings with a nett book value of £791k

Net assets at 30th Sept 2013 were £1.2227 Million

I also noticed in the Directors report that accompanied their 2012 accounts, that WG had since settled with its insurers in relation to the Summercourt fire & took a £170k hit on book loss on disposal.

If you then look at the 2013 accounts of the £507k pre-tax loss, £190k of that was one off exceptional charges & the admin expenses were £60k higher on less turnover, I assume all due to the fire & subsequent disruption to business.

The one thing that could finish them is lack of cash, the need a cash injection to continue trading for another 12 months, the accounts don't read quite as bad & some indicate. Based on the turnover of £9.718 Million & a post tax loss of £405k they lost circa 4.2%. But that did include exceptionals, so ???

I'm not sure when the sale of newer Optare Solo's took place in exchange for older MPD's & Tridents, that may have affected asset values / costs etc.

Without the one off additional costs, additional admin expenses, and loss of fleet value would that mean approx. £35k profit on this basis, or do we take the pre tax loss, so a £70k pre tax loss? Maybe attractive to an investor if the price is low enough.

 

[winston270twm]

The accounts were for the year ending March 31 2013. The statement from the auditors says that it has continued to lose money since. There have been nineteen months since! The auditors also note that the liabilities are about to exceed the assets. On top of the continuing losses, First is now competing on more routes since 2 November and has registered a much wider set of routes in competition from 5 October.

Why haven't the current owners scaled back the business to make it viable if that is possible as they say in the Directors' statement in the accounts?

30th Sept 2013 I think you'll find (13 months)

The new First routes are 5th Jan next year.

They did sell newer Solo's and replace these with older MPD's which should of helped things to reduce costs i.e. vehicle depreciation etc

Scaling back and streamlining the business could be a plan any newer owner could see to return to break even & hopefully in the future return to profitability. First have done it with Kernow, they are improving Plymouth's figures by using old depreciated Tridents. WG just need a lifeline for a cash injection & enough funds to carry out a turnaround plan.
--- old post above --- --- new post below ---

Without the one off additional costs, additional admin expenses, and loss of fleet value would that mean approx. £35k profit on this basis, or do we take the pre tax loss, so a £70k pre tax loss? Maybe attractive to an investor if the price is low enough.

No, it would be £507k pre-tax loss, take off £190k exceptional charges, take off £60k additional admin expenses = £257 pre tax loss plus tax due to loss might still leave them will a £200k loss. Which on £9.7 Million turnover is a fraction over 2%

First have launched competing services, but we don't know how many passengers First are taking off WG, most might be defecting due to WG's unreliable services. That can be rectified with WG's future safe guarded