FirstGroup has announced another bus disposal to Stagecoach as it continues to reposition its UK bus division.
FirstGroup, which last week warned it would freeze its interim dividend and review the final payout due to the upheaval in the rail franchise market, is selling its Birkenhead and Chester bus operations to Stagecoach for £4.5 million.
Three depots along with 110 vehicles and 290 employees will transfer to the Perth-based group.
A fortnight ago, FirstGroup announced the sale of its operations in Wigan to Stagecoach for £12m. That prompted questions from some analysts over First's avowed strategy of selling off underperforming businesses in its UK bus division, where it has promised to raise £100m from sales in the current financial year to April 2013.
Stagecoach revealed the Wigan business had revenues of £13.2m and an operating profit of £1.5m, a margin in line with FirstGroup's UK bus average. FirstGroup, however, said it was letting go of "geographic orphans" and was on track in its disposal plans.
Yesterday, Stagecoach said the Birkenhead and Chester operations had revenues of £11.9m and an operating profit of £600,000, a margin well below the average.
Les Warneford, managing director of Stagecoach UK Bus, said: "We believe there is significant scope to develop these businesses and improve their financial performance by investing in the quality of the bus fleet."
Stagecoach already has 300 buses and 900 staff in Merseyside and South Lancashire.
Giles Fearnley, First's managing director, UK Bus, said the businesses had lower than average margins. "They fit better with Stagecoach's existing portfolio in the area and also allow us to realise efficiencies in support costs," he said. "The sale of these operations marks further progress in disposing of selected assets and businesses."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article