Stagecoach acquires First South Devon services…
First South West has agreed to sell its operations in South Devon to Stagecoach. On completion of the sale, expected to conclude by 6 September 2015, the Plymouth bus depot, outstations at Tavistock and Dartmouth and 253 staff will transfer to Stagecoach. First will continue to operate services up to and including 5 September.
The agreed sale is conditional on the successful registration of a new network of bus routes that has been submitted to the Traffic Commissioner and will now go through the 56 day registration process. The sale also includes the transfer of the Dartmouth Park & Ride contract operated by First Hampshire & Dorset Ltd. Vehicles are not included in the acquisition and it excludes First’s Torpoint facility. First has started a consultation process with its employees, with efforts being made to minimise the impact of the planned changes on staff. Following the consultation period, workers will transfer to Stagecoach South West under TUPE arrangements.
MD of First Bus, Giles Fearnley, said, ‘In 2012 we launched our transformation plan which has seen great success in a huge number of our local businesses, as we reported in our full year results in June. We continue to see passenger and revenue growth across FirstBus and we have a wide range of actions to be implemented throughout this year to further benefit our customers and maintain growth. However, despite the hard work and focus on our services in South Devon, we have not been able to make the progress we have sought and the business has underperformed over a number of years.’
‘I’m pleased we’ve negotiated an agreement to sell and therefore help protect jobs and key services. The sale does not, in any way, reflect the commitment of our employees in the area who have worked tirelessly to provide the best possible service to local communities. I’d like to thank them for their hard work and loyalty. We will be fully supporting them as they transfer to their new employer. We’re proud to have served the South Devon community and would like to thank customers for travelling with First South West over the years.’
Stagecoach South West MD, Bob Dennison, said, ‘This acquisition will allow us to further expand our successful bus operations in the South West of England where we currently employ around 1000 staff and operate around 310 vehicles over 136 routes across Devon and into Somerset and Cornwall. We have a strong track record in the South West region of attracting more people to bus travel and we will continue to focus on providing good value, high quality bus travel for people in the area.’
…and releases annual report
Stagecoach’s annual report to the year ending 30 April 2015 has shown that its revenue has risen 9.4% to £3,204.4m (2014: £2,930m). The company’s profit before taxation was £165.2m (2014: £158m), with a full year dividend per share of 10.5p (9.5p). The proposed final dividend would be payable on 30 September 2015 to shareholders on the register at 28 August 2015.
Stagecoach’s regional UK Bus operations achieved revenue of £1,045.5m (2014: £1,012.8m), a 3.2% increase, whilst its operating profit fell 4.3% to £141.1m (2014: £147.4m). This decline includes the effects of its expanding megabus.com inter-city coach services in continental Europe. It said the decrease was offset by a strong performance in UK Rail, particularly from its Virgin Rail Group joint venture. As a result, it achieved its overall earnings per share target for the year. The sharp reduction in oil prices during the year resulted in a fall in car operating costs. It said the ‘increased competitive advantage’ this gave to cars affected the profitability of some of its businesses, particularly its megabus.com inter-city coach operations in North America.
Revenue in Stagecoach’s London bus operations amounted to £260.6m (2014: £244.9m), a 3.2% rise. Its operating profit added up to £26.3m (2014: £23.9m), a 10% increase. The operator says the division continues to perform well and it is satisfied with the rates of return it achieves in the capital.