Central Buses

[j789]

Still think Rotala are at risk from the bigger players. Its an uncertain time at the moment so don't think the bigger groups would make a move as yet but I do think they would be open to a rival moving in and just sweeping them aside. Perhaps they are hoping a larger group will buy them out but I'd think a number of the big boys could move in to their areas, particularly Worcestershire and Preston, and set up new companies cheaper than actually purchasing Rotala. I could certainly see NX going into Redditch were Diamond to attempt any major new competition.

Personally think the next sale will be Arriva Midlands to either Stagecoach or NX.

[j789]

However, saying that about Stagecoach, after just reading an article about them giving up the East Coast Main Line franchise early and potentially losing £200 million perhaps they will limit any more spending for a bit!

[winston]

Still think Rotala are at risk from the bigger players. Its an uncertain time at the moment so don't think the bigger groups would make a move as yet but I do think they would be open to a rival moving in and just sweeping them aside. Perhaps they are hoping a larger group will buy them out but I'd think a number of the big boys could move in to their areas, particularly Worcestershire and Preston, and set up new companies cheaper than actually purchasing Rotala. I could certainly see NX going into Redditch were Diamond to attempt any major new competition.

Personally think the next sale will be Arriva Midlands to either Stagecoach or NX.

I don't see Rotala increasing competition in the West Midlands against NX. All the WM acquisitions to date are independents with their own commercial services made up largely from services the big groups have axed, and also TfWM & various council tendered services. Rotala can obviously generate higher margins from those routes through economies of scale, with savings on fuel prices (due to Rotala hedging) and absorbing fleets in to existing depot/engineering overheads.

I wouldn't rule out Rotala either should Arriva Midlands ever come up for sale, their trading statement said they are still on the look out for further suitable acquistions with £10 million spare headroom for further expansion.

The only group that is currently in a strong position and frequently beating profit expectations is NX Group. I would rule out European / International Transport Groups casting their rules over the likes of Stagecoach with a Mkt Cap of £833 million.

[2206]

I don't see Rotala increasing competition in the West Midlands against NX. All the WM acquisitions to date are independents with their own commercial services made up largely from services the big groups have axed, and also TfWM & various council tendered services. Rotala can obviously generate higher margins from those routes through economies of scale, with savings on fuel prices (due to Rotala hedging) and absorbing fleets in to existing depot/engineering overheads.

I wouldn't rule out Rotala either should Arriva Midlands ever come up for sale, their trading statement said they are still on the look out for further suitable acquistions with £10 million spare headroom for further expansion.

The only group that is currently in a strong position and frequently beating profit expectations is NX Group. I would rule out European / International Transport Groups casting their rules over the likes of Stagecoach with a Mkt Cap of £833 million.

Most of Hansons routes were tendered services, weren't they, what services did they operate that the big groups axed?
The majority of Central Buses West Midlands services are also tendered aren't they?
What comercial routes do they operate that the big groups have axed, other than the 35 and Kingsbury services?

[Dom]

With the acquisition of central buses the three main operators of the West Midlands is 1. NX 2. Diamond and 3. Igo. I have a feeling Igo will soon merge with diamond

I can't see that happening.

[Straightlines]

Still think Rotala are at risk from the bigger players. Its an uncertain time at the moment so don't think the bigger groups would make a move as yet but I do think they would be open to a rival moving in and just sweeping them aside. Perhaps they are hoping a larger group will buy them out but I'd think a number of the big boys could move in to their areas, particularly Worcestershire and Preston, and set up new companies cheaper than actually purchasing Rotala. I could certainly see NX going into Redditch were Diamond to attempt any major new competition.

Personally think the next sale will be Arriva Midlands to either Stagecoach or NX.

I don't see this, the 'Bigger Players' have already altered their strategy and are now looking at alternative ways of strengthening their position rather than buying Bus Companies. The model Rotala are using for their expansion is effectively 20 years out of date.

With falling passenger numbers, increasing constraints on local government and rising costs it is clear to see that the bigger players are now having to adapt and diversify their Business Models. Just look at how many new Buses NX, First and Stagecoach have ordered?  Far less than previous years. Same with local bus acquisitions. I would go as far to say I can also see First or Arriva pulling out of the UK Bus Market as time goes on should market conditions not change.

[winston]

I don't see this, the 'Bigger Players' have already altered their strategy and are now looking at alternative ways of strengthening their position rather than buying Bus Companies. The model Rotala are using for their expansion is effectively 20 years out of date.

With falling passenger numbers, increasing constraints on local government and rising costs it is clear to see that the bigger players are now having to adapt and diversify their Business Models. Just look at how many new Buses NX, First and Stagecoach have ordered?  Far less than previous years. Same with local bus acquisitions. I would go as far to say I can also see First or Arriva pulling out of the UK Bus Market as time goes on should market conditions not change.

First are struggling both with their debt levels strangling capiatal investment / restricting expansion in more lucrative markets and UK Bus performance dragging the profitable US part of the group back. Some of UK buses poor performance stems from previous poor First Group decisions / failure to adapt, in addition, they now have deteriorating market conditions to contend with when already weak in some of their areas. I don't First exiting the UK, but I could see them contracting somewhat with potentially another round of Opoco sell off's / or main shareholders may finally loose patience and push for the entire group to be broken up & sold off. 5 years on from the rights issue, their shareprice is less than 20% above the rights issue price / main shareholders will still be nursing heavy losses and there is no prospect of a dividend being re-instated. Their strategy to turn the group around is not working.

I can see Arriva contracting further and exiting their more marginal UK bus ops, whilst retaining the better performing areas.

NX Group may be in a good position to pick up some UK bus ops of the above Groups if they can be turned around with investment under a different owner.

[Straightlines]

First are struggling both with their debt levels strangling capiatal investment / restricting expansion in more lucrative markets and UK Bus performance dragging the profitable US part of the group back. Some of UK buses poor performance stems from previous poor First Group decisions / failure to adapt, in addition, they now have deteriorating market conditions to contend with when already weak in some of their areas. I don't First exiting the UK, but I could see them contracting somewhat with potentially another round of Opoco sell off's / or main shareholders may finally loose patience and push for the entire group to be broken up & sold off. 5 years on from the rights issue, their shareprice is less than 20% above the rights issue price / main shareholders will still be nursing heavy losses and there is no prospect of a dividend being re-instated. Their strategy to turn the group around is not working.

I can see Arriva contracting further and exiting their more marginal UK bus ops, whilst retaining the better performing areas.

NX Group may be in a good position to pick up some UK bus ops of the above Groups if they can be turned around with investment under a different owner.

I think it is well documented that National Express's growth is currently being driven by International Markets and Intercity Coach Travel.

I would find it surprising for them to make further acquisitions within Local Bus within the UK.

[winston]

I think it is well documented that National Express's growth is currently being driven by International Markets and Intercity Coach Travel.

I would find it surprising for them to make further acquisitions within Local Bus within the UK.

I think you're forgetting that NX Group were involved in the £100 million First Group disposals of 2012, and were strongly rumoured to be days away from acquiring at least Redditch/Kidderminster & Wigan depot ops plus potentially others as a package. The Group are now in a much stronger financial position should suitable businesses come up for sale that can be considered 'bolt on' to existing or are available at the right price and have turnaround potential under a different management / strategy.

[Straightlines]

I think you're forgetting that NX Group were involved in the £100 million First Group disposals of 2012, and were strongly rumoured to be days away from acquiring at least Redditch/Kidderminster & Wigan depot ops plus potentially others as a package. The Group are now in a much stronger financial position should suitable businesses come up for sale that can be considered 'bolt on' to existing or are available at the right price and have turnaround potential under a different management / strategy.

We'll see!

The Bus Industry and operating conditions has changed massively since 2012...

[Trident 4194]

I think you're forgetting that NX Group were involved in the £100 million First Group disposals of 2012, and were strongly rumoured to be days away from acquiring at least Redditch/Kidderminster & Wigan depot ops plus potentially others as a package. The Group are now in a much stronger financial position should suitable businesses come up for sale that can be considered 'bolt on' to existing or are available at the right price and have turnaround potential under a different management / strategy.

There are issues of getting too large for your own good- in theory can have diseconomies of scale and divorce between ownership and control which is worsened in a large firm.

[Tony]

We'll see!

The Bus Industry and operating conditions has changed massively since 2012...

NX are looking for bolt on additions

[winston]

NX are looking for bolt on additions

Thanks Boss! they'd be foolish not to in the current climate, if they can pick something up with potential at the right price and extract better margins than current owner without taking big risks. I don't see they have much much to loose.

[Trident 4194]

NX are looking for bolt on additions

I can't see who would be willing to sell out though? Arriva operations are looking a shambles in Cannock- but I doubt they would want to sell out to a regarded rival firm?

[winston]

I can't see who would be willing to sell out though? Arriva operations are looking a shambles in Cannock- but I doubt they would want to sell out to a regarded rival firm?

Arriva Cannock also came very close to being bought out by TWM (NX) some years ago and the plan was to absorb their routes and operate out of Walsall depot. This was before Arriva acquired Chase.