McGill's targets trebling turnover

Published on Thursday 17 March 2011 16:53

BUS group McGill's is planning to more than treble in size in the next two years through acquisitions, says managing director Ralph Roberts, who predicts the firm will be a £50 million business by 2014.

Roberts, who came to the family-owned bus firm last April from transport giant Arriva Scotland, aims to grow the firm from 95 buses to 350, making it a major operator in the West of Scotland. By June, it will have 150 buses running and Roberts expects to have a turnover this year of 17m.

He said a 20 per cent rise in the price of fuel is driving customer demand for buses, but the Inverclyde area is also ripe for consolidation almost three decades after bus services were deregulated.

Roberts said: "The businesses we are picking up have old vehicles and in order to keep going would mean investing in their fleet. If they had more than drip fed investment over the last 12 years they wouldn't be in the predicament they are in. We all knew they would have to do something drastic - either sell, fold or invest."

He said the firm would remain a smaller operator than corporate rivals such as Stagecoach and First Bus and this would allow it to continue competing. "If rivals do come back to compete against us on one of the routes we bought, we will not take it lying down. We will compete aggressively. If we choose to run a route at break-even we can do that."

Roberts said he would not want to grow beyond the 50m turnover mark as bus firms then become "shackled" by legislation and competition issues.

Recently the firm invested in ten new double-decker buses. Acquisitions until now have been funded through the firm's own balance sheet and parent company Arranglen, which is owned by the Easdale family.

Roberts said: "We have been investing out of working capital but the time will come that we will have to rely on debt facilities."

Last year the Traffic Commissioner for Scotland fined McGill's 60,200 for "lapses" in services.

Roberts said this was a result of the firm's rapid expansion in 2008. "If you grow at the wrong pace you will end up in trouble," he said.