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Alexander Dennis wins ‘biggest ever orders’ for 1,000 buses worth £220m

Colin Robertson, CEO of Alexander Dennis Limited

Colin Robertson, CEO of Alexander Dennis Limited

  • by PETER RANSCOMBE
 

ALEXANDER Dennis yesterday landed what is believed to be the UK bus industry’s largest-ever group of contracts after unveiling deals to supply more than 1,000 vehicles worth a total of £220 million.

As revealed by The Scotsman on Saturday, the deals include the company’s biggest overseas order to date, consisting of 532 “next-generation” buses and 109 of its current models for four operators in Hong Kong.

The Falkirk-based firm will deliver the buses, which can seat 135 people each, over the next 18 months, with some of the vehicles being built in China and others being assembled from chassis and body kits made in Scotland.

The bumper round of orders also includes contracts to supply 175 mid-sized buses to a host of UK operators – including FirstGroup, National Express and Stagecoach – along with 150 hybrids.

A deal to supply 71 coaches to the Ministry of Defence for transporting troops was also unveiled at a major trade show in Birmingham.

On Monday, Perth-based transport giant Stagecoach announced that it would buy 11 of Alexander Dennis’ 15-metre long coaches, the biggest in the UK, for its Megabus inter-city routes.

A spokesman for the bus builder said that the latest deals would secure 2,100 jobs at the company, including 900 posts in Scotland, although they were unlikely to directly create any jobs.

The firm has hired an extra 300 staff over the past six years and has grown its turnover to about £500m. Exports have grown from 20 per cent of sales to 40 per cent this year.

Bill Simpson, corporate affairs director at Alexander Dennis, said: “I can’t remember a bigger round of contracts than this and neither can anyone else in the industry. This is a big success story for British manufacturing.”

Chief executive Colin Robertson had hinted to the Institute of Directors’ Scottish conference on Friday that the large export order was looming, but had remained tight-lipped over the details of the deal.

The clutch of contracts marks the latest step in the turnaround of the company following the financial difficulties of its ex-owner.

A consortium of senior figures from Scotland’s business community bought Alexander Dennis from the collapsed remains of former parent Mayflower in 2004.

The investors, who paid £90m to bring the company out of administration, include metal magnate and former Rangers Football Club owner Sir David Murray; Stagecoach founder Sir Brian Souter; Souter’s sister, Ann Gloag; and merchant banker Sir Angus Grossart.

In June, Alexander Dennis bought Sydney-based Custom Coaches, extending the company’s reach in the southern hemisphere.

The firm is thought to have paid about £20m for Custom Coaches, which has a 24 per cent share of the Australian bus market. The deal builds on existing joint ventures in Hong Kong, New Zealand and North America.

The addition of Custom’s £55m in annual sales will push turnover at Alexander Dennis to just shy of the £500m target that it didn’t originally expect to achieve until 2015. The firm now aims to turn over £1 billion a year by 2020.

 

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