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First Group: General Discussion

TheGrandWazoo

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I see that the disposal of the US business has been approved by the shareholders https://www.route-one.net/business-...first-transit-sale-gets-shareholder-approval/

FirstGroup shareholders have voted to approve the sale of the First Student and First Transit businesses in North America to EQT Infrastructure.

61.3% of votes cast were in favour, with 38.7% against and a small number withheld. News of the proposed sale was first announced on 23 April. The two businesses are to be sold for £3.3bn and FirstGroup expects that completion will be achieved in the second half of 2021.

After shareholders approved the transaction, FirstGroup Chairman David Martin quickly underlined how the proceeds will leave it “in prime position to deliver on its goals with a well-capitalised balance sheet and an operating model that will support an attractive divided for shareholders.” First Bus has already committed to an ambitious target of running an entirely zero-emission bus fleet in the UK by 2035.

Since news of the deal broke in April, private equity firm and FirstGroup’s largest shareholder Coast Capital has been vocal in its opposition to the sale. It has claimed that the process had been “rushed” and was “unexhaustive”, and that the return realised would be below market value.

Those comments were strongly rebutted by FirstGroup. In return, it accused Coast Capital of issuing statements with “numerous inaccuracies.” FirstGroup also reiterated its belief that £3.3m “represents a full strategic value” of First Student and First Transit. Mr Martin noted at that time that “shareholders have waited long enough” for the sale, although after the vote to approve the transaction he added that he and the Board accept that a significant minority of them voted against it.

The proceeds will additionally make what FirstGroup describes as “a substantial contribution” to the group’s pension schemes. At the time that it announced the proposed sale of First Student and First Transit to EQT, the group added that it is pursuing “all exit options” for its remaining Greyhound business in North America
 
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Whisky Papa

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From the quote in the post above:
After shareholders approved the transaction, FirstGroup Chairman David Martin quickly underlined how the proceeds will leave it “in prime position to deliver on its goals with a well-capitalised balance sheet and an operating model that will support an attractive divided for shareholders.”

I assume that's a typo for dividend? I certainly hope so, having a residual shareholding from my driving days that has not been of much use in recent years. I would not expect to see the quite high (excessive even?) dividend levels of a decade ago, but some financial return would be much appreciated!
 

RPI

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At last! Can't remember the last time they paid out a dividend! Haven't got a massive amount of shares but it all helps
 

Volvodart

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Not sure that is the full story anyway, as he has also been appointed a director of the Yorkshire companies and the associated Manchester and Potteries etc. operations too. The southern part of First Bus appear to have appointed Joseph Andrew Thompson as a director at the start of this month too, presumably replacing Brian Alexander whose directorship was terminated last month. This is back to the situation 7 years ago with the north/south split apart from Potteries/Leicester/Midland Red now being in the north part rather than the south part.
 
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TheGrandWazoo

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Not sure that is the full story anyway, as he has also been appointed a director of the Yorkshire companies and the associated Manchester and Potteries etc. operations too. The Southern part of First Bus appear to have appointed Joseph Andrew Thompson as a director at the start of this month too, presumably replacing Brian Alexander whose directorship was terminated last month.
You mean Dave Alexander?

Has he walked or has he left to pursue other interests outside the business?
 

Volvodart

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Yes. Resignations are still going through, so he may be coming off everything but I am not sure. To confuse matters, Jarvis is not a director of First Cymru.
 

Volvodart

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First Bus realigns operating companies into two portfolios​


https://www.route-one.net/news/first-bus-realigns-operating-companies-into-two-portfolios/

By

routeone Team
-
June 9, 2021
https://www.facebook.com/sharer.php...igns-operating-companies-into-two-portfolios/
https://twitter.com/intent/tweet?te...panies-into-two-portfolios/&via=@routeoneteam

https://www.linkedin.com/shareArtic...ligns+operating+companies+into+two+portfolios
First Bus creates two operating company portfolios
First Bus has segmented its operating companies into two portfolios, each with its own Managing Director. The move follows Dave Alexander’s recent decision to step down from the role of Divisional Director due to personal reasons.
MDs of the two portfolios are Andrew Jarvis, currently First Bus MD for Scotland, and Joe Thompson, respectively. Mr Thompson has joined the group having previously held senior roles with airline Virgin Atlantic and Virgin Holidays.
Mr Jarvis’s portfolio is made up of the Cymru, Manchester, Midlands and South Yorkshire, Scotland, West Yorkshire, and York operating companies. Mr Thompson’s consists of the Aircoach, Eastern Counties, Essex, First Travel Solutions, Hampshire Dorset and Berkshire, South West, and West of England subsidiaries. Both men report to First Bus Divisional MD Janette Bell and are complemented by a wider executive team.
A First Bus spokesperson says that the realignment has seen businesses clustered according to the opportunities and challenges that they present. The change “will provide our regional operating company MDs and their teams with more support to deliver better performance and to grow and improve local partnerships, benefiting both customers and colleagues,” they add.
“Our focus remains on providing safe and reliable services for our customers as the UK emerges from the pandemic, and as we refresh our strategy and realign our culture to become truly customer-centric.”
 

Goldfish62

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Pretty sure I saw he announced his retirement some time back
I must have missed that.

He's certainly done well for himself. I first came across him when he was running BTS (Borehamwood Travel Services).
 

asw22

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Giles Fearnley and Dave Alexander became colleagues when Blazefield bought BTS around 1992 and remained so until around 2008 when Dave Alexander joined First West Yorkshire, then again when Giles Fearnley jpined First in 2011). Giles Fearnley retired I believe towards the end of 2020 and the article quoted by Volvodart explains it a bit more.)

Although First has faced its challenges, it has been noticeable (from a passenger view) in certain areas that the quality of service has improved over the past 10 years or so (thinking Leeds City, Bristol, Cornwall) and this has probably been influenced by these two during their time at First (well done as not easy at a large organisation with its own traditional way of doing things).

 

Ken H

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Giles Fearnley and Dave Alexander became colleagues when Blazefield bought BTS around 1992 and remained so until around 2008 when Dave Alexander joined First West Yorkshire, then again when Giles Fearnley jpined First in 2011). Giles Fearnley retired I believe towards the end of 2020 and the article quoted by Volvodart explains it a bit more.)

Although First has faced its challenges, it has been noticeable (from a passenger view) in certain areas that the quality of service has improved over the past 10 years or so (thinking Leeds City, Bristol, Cornwall) and this has probably been influenced by these two during their time at First (well done as not easy at a large organisation with its own traditional way of doing things).
But in some areas they seem to have given up. They have withdrawn from the Hereford area, and Rotala/Diamond have made a success of routes abandoned by First, not least round Redditch.
 

TheGrandWazoo

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But in some areas they seem to have given up. They have withdrawn from the Hereford area, and Rotala/Diamond have made a success of routes abandoned by First, not least round Redditch.
In Hereford, they realised that they couldn't make it pay so they just knocked it on the head. Was a little surprised that Stagecoach didn't have a look at going in there but Yeomans just filled the void. Redditch/Kiddy - not so certain about that. First sold their operations to Rotala in Jan 2013 having realised that they couldn't sustain the competitive battle in Redditch and also needing to raise funds from selling assets. They inherited a right mess there as First had mismanaged the old MRW business for years.

However, it isn't as if Rotala is a byword for quality operation in the towns. They may be getting their act together now but they've had two TC enquiries in Kiddy for failing to operate journeys. They're making some money but it's not an unqualified success.

The remaining First operations in Worcester did get new investment in 2014/5 but the need to obtain LEZ compliant vehicles for Leicester has seen a number of those spirited away so the age profile is rather poor. 13/14 yr old Citaros (and older) have benefited from a refurb but it's all a bit peachy.
 

Ken H

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In Hereford, they realised that they couldn't make it pay so they just knocked it on the head. Was a little surprised that Stagecoach didn't have a look at going in there but Yeomans just filled the void. Redditch/Kiddy - not so certain about that. First sold their operations to Rotala in Jan 2013 having realised that they couldn't sustain the competitive battle in Redditch and also needing to raise funds from selling assets. They inherited a right mess there as First had mismanaged the old MRW business for years.

However, it isn't as if Rotala is a byword for quality operation in the towns. They may be getting their act together now but they've had two TC enquiries in Kiddy for failing to operate journeys. They're making some money but it's not an unqualified success.

The remaining First operations in Worcester did get new investment in 2014/5 but the need to obtain LEZ compliant vehicles for Leicester has seen a number of those spirited away so the age profile is rather poor. 13/14 yr old Citaros (and older) have benefited from a refurb but it's all a bit peachy.
To be fair, Redditch is a difficult place to operate buses. There were stories of evening buses not running because crews refused to go into certain areas because of trouble. And of damage to buses from vandals. Also Studley and Alcester are in a different county soo neither Worcestershire nor Warwickshire are that interested.
 

TheGrandWazoo

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To be fair, Redditch is a difficult place to operate buses. There were stories of evening buses not running because crews refused to go into certain areas because of trouble. And of damage to buses from vandals. Also Studley and Alcester are in a different county soo neither Worcestershire nor Warwickshire are that interested.
Redditch has some good bus territory but others less so. However, the quality of Diamond Worcestershire has not been great.
 

01d-and

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Redditch has some good bus territory but others less so. However, the quality of Diamond Worcestershire has not been great.
Diamond are getting there slowly. There are only a few vehicles left in Hanson and Central Buses livery and at last, the scrap heap around the side and back of Kidderminster Depot has been greatly reduced. Back to First, word keeps getting put around of "newer" buses being cascaded to Worcester; we wait with bated breath. Similarly, the "news" that the area around the Depot in Worcester is going to be redeveloped; again we wait to see.
 
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TheGrandWazoo

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Diamond are getting there slowly. There are only a few vehicles left in Hanson and Central Buses livery and at last, the scrap heap around the side and back of Kidderminster Depot has been greatly reduced. Back to First, word keeps getting put around of "newer" buses being cascaded to Worcester; we wait with bated breath. Similarly, the "news" that the area around the Depot in Worcester is going to be redeveloped; again we wait to see.
In fairness, I said it hadn't been great. It's been a little while since I was up there (as a pandemic has gotten in the way!) and restricted my fairly regular trips to Kiddy which was, frankly, an embarrassment with the number of vehicles in the scrap line visible from the road. However, I have been aware that that, the age profile and external presentation have been improved in the last 18 months.

Don't know about newer buses to Worcester though. The age profile is rather mature now with the long Streetlites having gone to Leicester and not certain what else may change; the Citaros seem to have congregated there now from Berkshire.
 

DD12

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Diamond are getting there slowly. There are only a few vehicles left in Hanson and Central Buses livery and at last, the scrap heap around the side and back of Kidderminster Depot has been greatly reduced. Back to First, word keeps getting put around of "newer" buses being cascaded to Worcester; we wait with bated breath. Similarly, the "news" that the area around the Depot in Worcester is going to be redeveloped; again we wait to see.
I am unaware of any rumours of newer buses for Worcester, - and I regularly view the forum on "midlandred.net".

"Worcester News" has recently reported the completion of, the approval and funding processes for the new redevelopments which will include the current First Worcester depot (First Midland Red).

There has been no confirmation, yet, as to where the new depot will be; it strikes me as an opportunity to equip the new depot for "alternative propulsion" vehicles, and battery-electric propulsion springs to mind, however Worcester has 5 hilly routes, and several long-ish routes / workings, so would hybrid diesel / battery buses be better?

Unfortunately, I think if I were a senior manager at First, I would need a lot of convincing that Worcestershire county council are going to be able to adapt and form the constructive partnership (including with First), that is required by the government's new legislation and funding arrangements.

Worcester city council, in my opinion, continues to redevelop areas of the city without providing adequate roads, and is now "booting out" the central bus depot which is currently in the best location, and the government has imposed large amounts of new housing around Worcester (which hasn't even got a ring-road), and between them all, over the years, I think they have put Worcester in a straitjacket!

Worcester is the biggest HUB for South Worcestershire bus routes, but before the "quiet" brought on by the pandemic, we frequently had major traffic jams which "wrecked" bus services in Worcester, and South Worcestershire.

I think the two councils will have to make radical changes, IE: BUS PRIORITIES, (unpopular with the motorist / voter), otherwise I can see First pulling-out.
 
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Robertj21a

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I am unaware of any rumours of newer buses for Worcester, - and I regularly view the forum on "midlandred.net".

"Worcester News" has recently reported the completion of, the approval and funding processes for the new redevelopments which will include the current First Worcester depot (First Midland Red).

There has been no confirmation, yet, as to where the new depot will be; it strikes me as an opportunity to equip the new depot for "alternative propulsion" vehicles, and battery-electric propulsion springs to mind, however Worcester has 5 hilly routes, and several long-ish routes / workings, so would hybrid diesel / battery buses be better?

Unfortunately, I think if I were a senior manager at First, I would need a lot of convincing that Worcestershire county council are going to be able to adapt and form the constructive partnership (including with First), that is required by the government's new legislation and funding arrangements.

Worcester city council, in my opinion, continues to redevelop areas of the city without providing adequate roads, and is now "booting out" the central bus depot which is currently in the best location, and the government has imposed large amounts of new housing around Worcester (which hasn't even got a ring-road), and between them all, over the years, I think they have put Worcester in a straitjacket!

Worcester is the biggest HUB for South Worcestershire bus routes, but before the "quiet" brought on by the pandemic, we frequently had major traffic jams which "wrecked" bus services in Worcester, and South Worcestershire.

I think the two councils will have to make radical changes, IE: BUS PRIORITIES, (unpopular with the motorist / voter), otherwise I can see First pulling-out.
Unfortunately, Worcester is hardly the jewel in First's crown, just about profitable but largely due to a very aged fleet. The renowned traffic issues are enough to deter many operators and the loss of the depot could be the last straw [do they own it?]
 

DD12

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Unfortunately, Worcester is hardly the jewel in First's crown, just about profitable but largely due to a very aged fleet. The renowned traffic issues are enough to deter many operators and the loss of the depot could be the last straw [do they own it?]
I believe they owned it, and have read that First have sold it, but I cannot vouch for the accuracy of that !!
 

01d-and

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I am unaware of any rumours of newer buses for Worcester, - and I regularly view the forum on "midlandred.net".
Apologies DD12 , I should have worded it that we have over the years kept hearing rumours of the arrival of newer vehicles and still await them .
 

Robertj21a

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Apologies DD12 , I should have worded it that we have over the years kept hearing rumours of the arrival of newer vehicles and still await them .
Presumably, the last new buses at First Worcester were the Streetlites (since moved to Leicester) and the Streetdecks?
 

TheGrandWazoo

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Presumably, the last new buses at First Worcester were the Streetlites (since moved to Leicester) and the Streetdecks?
Yes. They got some shorter Streetlites of which two moved to Potteries, then the (now Leicester) Streetlite Maxes and the four Streetdecks. So they have 10 modern vehicles whilst the rest are getting on with a number of 19 year old Citaros.

Some sub-10 yr old cascades would be good but guess the finances don’t support that
 

mjc

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I've tried searching and can't find this discussed before, but forgive me if I've missed it.
Been trying to plan journey to the office for some visits next month, having worked from home since last March. For First Potteries there's nothing in the system after about 25th July, whether you use their journey planner, Google or Traveline. I can understand that things might change but seems like poor service to only have information available a few weeks in advance, especially when many people will be planning either back to office journies, school journies or holiday trips.
Is this just First Potteries being slugging or group-wide?
 

Volvodart

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Sale completion and increase in proposed return of value

https://otp.tools.investis.com/generic/regulatory-story.aspx?newsid=1493477&cid=858

Released : 22.07.2021

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Thursday 22 July 2021



FirstGroup plc

Sale completion and increase in proposed return of value
  • Sale of First Student and First Transit to EQT Infrastructure completed yesterday evening
  • Proposed return of value in autumn increased to £500m (c.41p per share) from £365m
  • Estimated pro forma net debt of c.£100m following the Sale and the use of proceeds is unchanged, as the increase in proposed return of value reflects:
    • $58m increase in cash proceeds received at completion due to final working capital and debt and debt-like balances
    • Increased clarity for First Rail resulting from agreement of SWR and TPE National Rail Contracts and final rail franchise termination sums
    • Cashflows of the continuing Group anticipated to be better than was assumed in April
FirstGroup plc ('FirstGroup' or the 'Group') is pleased to announce that it has completed the sale of First Student and First Transit to EQT Infrastructure (the 'Sale'), which was approved by FirstGroup shareholders on 27 May 2021. Completion follows the satisfaction of the conditions precedent to the Sale, as outlined in the circular to FirstGroup shareholders published on 10 May 2021.
The net disposal proceeds of $3,123m received by FirstGroup at completion is an increase of $58m over the base amount previously announced, due to the final adjustments for working capital and debt and debt-like items as described in the circular.
The Board intends to increase the proposed return of value to shareholders to £500m (equivalent to c.41p per share) from £365m. The increased quantum reflects the higher cash proceeds received from the Sale, the increased clarity for First Rail resulting from agreement in May 2021 of SWR and TPE National Rail Contracts and the TPE final rail franchise termination sum being c.£50m lower than anticipated, and improving cash flow expectations for the continuing Group as a result of further easing of pandemic restrictions in our core UK bus and rail markets. The estimated pro forma net debt of c.£100m for the ongoing Group following the Sale, and the other uses of net disposal proceeds set out in the circular, are therefore unchanged. The proposed return of value is expected to be undertaken in the autumn of 2021, with the distribution mechanism to be announced in due course in consultation with shareholders.
In addition to the cash consideration received at completion of the Sale, the First Transit earnout worth up to $240m was also agreed as part of the Sale consideration, under which the Group will receive 62.5% of First Transit's value above $380m, either in three years (following an independent valuation) or sooner in the event that it is sold by EQT Infrastructure to a third party.
The Board is committed to keeping the balance sheet position of the ongoing Group under review and will consider the prospects for making further additional distributions to shareholders in due course, following crystallisation of the First Transit earnout noted above, resolution of the legacy liabilities related to Greyhound and the potential release of monies from pension escrow (up to £117m). The Board also notes the capacity to increase gearing over time, as end market conditions and hence business performance improves.
First Student and First Transit will be reported as discontinued operations in the Group's annual results to the end of March 2021, which will be announced on 27 July.
Commenting, FirstGroup Chairman David Martin said:

"We are pleased to announce the completion of the sale of First Student and First Transit and a significant increase in the proposed return of value to shareholders this autumn. This delivers on our strategic objective and creates a focused and stronger business with a bright future. The vital role of public transport in the UK has never been clearer, and with the most supportive policy backdrop in decades coupled with our strong credentials, FirstGroup is in prime position to deliver on its goals with a well-capitalised balance sheet and an operating model that will support attractive dividends."
Commenting, FirstGroup Chief Executive Matthew Gregory said:

"We have delivered this transformational sale which resolves the Group's long-standing legacy liabilities, puts the Group in a strong position to benefit from its many opportunities, and releases £500m of value to return to shareholders. I would like to thank everyone in First Student and First Transit for the pivotal role they play in their communities. As part of the FirstGroup family for many years, they have gone from strength to strength, and I am confident that they will continue to flourish as part of EQT Infrastructure."


------------------------------------------------------------------------------------------------------------------------------------------

27 July 2021

Mr Gregory is stepping down as Chief Executive at the AGM with the Chairman doing his duties in the interim:-

https://www.firstgroupplc.com/investors/results-centre.aspx

Board changes

  • Matthew Gregory has informed Board of intention to step down as Chief Executive after AGM; David Martin to become interim Executive Chairman. Comprehensive search underway for a new Chief Executive

Regarding Greyhound:-

  • Greyhound remains non-core and the Group continues to pursue all exit options for the business in order to conclude the Group’s portfolio rationalisation strategy

From the conference call with analysts today, First bus are buying an unspecified number of diesel buses this current financial year before they go all zero emission purchases next financial year.
 
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