FirstGroup offloads two bus businesses for £4.5m

By GARETH MACKIE
Published on 12/11/2012 07:53

Transport giant FirstGroup today said it has agreed to sell its bus operations in Birkenhead and Chester to Perth-based rival Stagecoach for £4.5 million.

Today’s deal is the second in as many weeks between the two groups – on 31 October, Stagecoach said it would pay £12m for FirstGroup’s Wigan bus business, which has around 120 vehicles and 300 employees.

Giles Fearnley, managing director of Aberdeen-based FirstGroup’s UK bus arm, said the company was repositioning the division to focus on areas that offer the greatest potential for growth, and margins at its Birkenhead and Chester businesses, which employ around 290 people, were lower than average.

He added: “They fit better with Stagecoach’s existing portfolio in the area and also allow us to realise efficiencies in support costs. The sale of these operations marks further progress in disposing of selected assets and businesses as we review the scope and scale of our portfolio and reposition it for the longer term.”

In the 12 months to 31 March, the two divisions generated an operating profit of around £600,000 on revenues of £11.9m.

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, as well as offering customers our good value fares and attractive network tickets.”