Diamond Bus North West

[Winston]

RE: Diamond Bus North West

(13/07/2019 21:46)gilesbus1 Wrote:  I am just puzzled though with National Express why nothing really has happened bus wise in the UK for such a long time, and indead they have actually sold operations off to Abellio in the case of London and Arriva in the case of several other operations over the years, rather than bought anything.

Coaches have always appeared to be the main focus, and indeed National Express is probably the UK's main major player in Express City to City Coach operations although Stagecoach's presence has got bigger, and they are the dominant player in Scotland as a result of the deal with Scottish City Link and Parks effectively paralleling them under agreement.

National Express do have lots of operations in Morocco and Eastern Europe and also in Malta, so maybe a better move might be Arriva's European operations as they might bolt on nicely to what they already have. I still feel a merger with Go Ahead is the best option for UK growth for National Express, First seem to want over asset price for what they are selling in order to clear debts, and maybe that will in effect place many opp's into debt. If I was a large operator looking to buy the two king operations in First and Arriva that could generate the most money are simply First Glasgow and Arriva Merseyside, these are the units that carry the biggest profits in those two companies, If I was picking a third option then First West Yorkshire would be it, outside of Merseyside Arriva probably have very little of high value operations as they are heavily based on rural operations in the South East were car use is high and in the Midlands were outside of the Fox County and Derby section the opp's are extremely rural although there are services into Birmingham.

If I thought I could turn an operation from Loss to Profit I would pick probably Arriva's Milton Keynes operations as City expansion will give more opportunity for growth in the years ahead and economies car be made with garage sites there. e.g. closing the current sites and moving to a single site depot outside the town boundary on a new development site which could be picked up cheaply, also then looking at the fleet make up there and the road layout's which have lead to minibus operation in the past and working with the Borough Council to see how that situation could be made safer, easier and more efficient, maybe looking at the use of a guided busway to link Newport Pagnell, Milton Keynes City Centre and Bletchley maybe one option, and also the use of a click type service might be another, especially for usage after dark.

With NX UK Bus sales, the sales you're referring to Arriva were purchases made by WMT prior to flotation & eventually merger with NX in 1993, they were sold to Cowie in 1996 ish (which became Arriva), those ops sold were County Bus & Coach, Westlink & North East Bus, they were all non core / didn't match the urban high frequency characteristics of WMT etc. Westlink in particular was only acquired as a potential stepping stone to buy a former London Buses Op (but prices got stupid) and it didn't happen. WMT also bid for GM Bus North, WMT bought those ops to fatten itself up prior to flotation & not be just reliant on the West Midlands. Travel London was sold in 2009 due to needing cash when NX Group came close to collapse due to over stretching itself following Richard Bowker's £450 million acquisition of Continental Auto in Spain & unrealistic winning bid for the East Coast Main Line. During all that period NX have had a number of different CEO's, with different strategy's. At present, the focus for expansion has been US & Spain plus contracted ops, as there's been more opportunities abroad.

NX's operations in US are all school buses/transit buses & paratransit - no coaches, Morocco is all buses, as is Bahrain. There's no Eastern European operations. Only European operations are Spain via ALSA & German rail Franchises. NX UK Coach & Bus generate pretty equal profits & turnover isn't that far apart either, but UK ops are dwarfed by US & Spain. NX seem keener to grow UK Bus of late with NXWM bidding for various tenders inside/outside of the West Midlands, expanding in to Staffordshire with commercial extensions and I believe they are also interested in the former Ring & Ride Accessible Transport Group that went in to administration and are thought to have bid for that. Coincidentally, they have just re-named an existing limited company via companies house on 2nd July:

WEST MIDLANDS ACCESSIBLE TRANSPORT LIMITED
https://beta.companieshouse.gov.uk/company/02327223

Top of the shopping list for First ops will First Glasgow, First West Yorkshire, First Bristol etc, with First Leicester is a decent earner as well. South Yorkshire is also a large op which could be turnaround under different management. There's never been this much up for sale at anyone time, this is why I think NX may surprise and will be actively involved. Big urban ops like those don't come on the market very often. First may want top dollar, but there will be a limited number of buyers for their biggest ops, and the timing of Arriva sale doesn't help matters either. First are not exactly in the driving seat, major investors are tired excuses and little happening. Not sure how true, but on another forum NX management have supposedly been sighted at First Glasgow's Caledonia Depot. It will be interesting to see what Greyhound gets sold off for (most likely to Flixbus or PE), when Moir Lockhead supposedly snubbed Stagecoach's £700 million offer to buy it some years back.

Arriva Group will not be broken up & sold off by DB, it will be sold as a group or possibly split in to two i.e. UK & Europe at most. DB needs to reduce their debt pronto.