There’s something that unites archrivals Wilts & Dorset and Transdev Yellow Buses and that’s their poorish financial results. This in spite of a tourist honeypot and economic hotspot, where you’d expect better.
The recent accounts featured in two editions of Transit magazine. Both saw margins squeezed. Both posted operating losses. Yet for both, up to 2004, financial performance had been more-or-less consistent—W&D sparkled while TYB lacked lustre but was keeping its collective head above water.
So, what’s gone wrong?
First, margins are sliding throughout the industry, not just in Dorset. Witness previously unconquerable Brighton & Hove. Pockets of growth can no longer mitigate huge fuel, labour and pension increases. For the entire industry, it’s almost a case of running up the down escalator and getting nowhere. It’s difficult to see how deregulation will change that.
Secondly, as regards Dorset, no matter how impressive the W&D more product, it’s susceptible. Increases in passenger numbers only come with increases in costs. And since July 2006, Transdev has its house in order and has followed this will further changes, from July 2007.
| It's almost a case of running up the down escalator and getting nowhere |
While in a short time TYB has turned round the operator around, a loss is still a loss. We’ve said on here before that we felt that two quality operators side-by-side along the Poole-Christchurch corridor would be good for growth. Have these days gone before they arrived? In the present climate, are battles of this nature doomed to failure, with a no-win situation? Overall passenger growth there no doubt is, but increased passenger numbers don’t always feed into growth in profits when split between two operators.
W&D posted for the year July 2006; TYB to December 2006. Information from Transit magazine.
| Wilts & Dorset | Transdev Yellow Buses | |
| Fleet size | 320 | 120 |
| Turnover | £28.9mil | £12.9mil |
| Turnover change | +7.1% | +40.0% |
| Operating Profit | -£335K | -£376K |
| Profit/loss for year | £919K | -£413K |
| Operating profit margin | -1.2% | -2.9% |
| Return on capital | 6.3% | 7.9% |
| Fixed asset value | £24.5mil | £16.8mil |
| Net worth | 11.3mil | £6.6mil |
4 comments:
yes but these accounts are over a year old (for Wilts) and nearly a year (11 months) for TYB. No-one could have expected Transdev to turn around Bmth in a year, particularly with the social dividend commitment. I happen to know that the numbers are much better than that at YB now. Also Wilts only made a 'profit' in these set of accounts because they took out accum profits from previous years, so your numbers look odd! Finally why not include figures for capital investment - YB's went up by 1000% in this period according to transit mag.
I must say that W&D has not prospered since the purchase by Go-Ahead.
The old W&D was consistantly profitable, but has been said by commentators to have been a company merely managing decline and making profits by very strict cost control. Go-Ahead have introduced many more new full size buses and have marketed the services much more vigourously than the old W&D, but have suffered huge cost increases as a result. As ever, it will be interesting to watch the development of both these companies, particularly as wilts' commercial team now seem to have turned their attention to reviving the Solent Blue network, which is suffering similar cost pressures and therefore also shows a loss.
I agree with Anonymous that TYB has turned the company around. It will be interesting to see next year's accounts.
The ineresting figure for me was the growth in turnover at 40%. If that's sustained, TYB will be well in the black by now.
The issue remains, though, of two operators slugging it out along a single lucrative corridor. Lucrative, that is, for one operator only. Can't see either pulling back, though.
Just wait until you see the effects of a full year on Concessionary Free travel with dodgy reimbursement rates ... that'll sort the men from the boys...
Post a Comment