If I had the money, I’m not entirely sure whether I’d buy Preston Bus for the best part of £3½mil. There are a number of reasons for this.
- It is, after all, purely an urban, short-route operator without the range or depth of services that can easily be developed for growth. Short distance city services are notoriously flat in terms of prospects.
- It doesn’t appear to rank with the Bournemouths of this world, where a thorough overhaul of a neglected and unco-ordinated network might bring immediate benefits.
- It never sparkled financially under former Preston Bus ownership and there were believed to be structural, financial problems, even before the Stagecoach bus war caused an outright collapse.
No change to the Preston Bus website this morning, in spite of the announcement yesterday.
Preston Bus is nevertheless an interesting recent purchase (by Rotala, announced yesterday, for £3.2mil, in case you’ve not heard). It’s one of a diminishing number of medium sized independents and it’s also very much in the spotlight post Competition Commission enforced sale.Rotala, at least, seems upbeat about Preston Bus’ prospect. It cites the opportunities associated with a new city centre development and bus station. But am I alone in recalling that either the brakes have been applied to these, or that they’re smaller than initially conceived? A case of over-optimism for Rotala?
You can’t expect Rotala to sit on its hands, though, the more so since war torn Preston Bus lately returned an unhealthy loss of £132,000 on a turnover of £7¾mil. Plenty of scope there, then. Rotala appears to see Preston Bus as a bridgehead for further expansion on the north west. It might be that Rotala has aspirations for other independents, contracts or commercial competition. If the last of these, there might be retaliatory consequences, though Stagecoach in particular needs to beware. Things may yet settle into comfortable co-existence.
Still, I just wonder why Preston Bus didn’t get gobbled up by any of the big players, such as Arriva or Go Ahead, who declared as interested in operators like this, both of which conceivably have no major market dominance issues.
4 comments:
Perhaps the other 'big' players have better clairvoyants advising them - not sure anyone would welcome paying out hard cash so as to have Brian Souter looking over their shoulder, or bringing in some new competitive routes.
the big players clairvoyants only look short term!of course its a risk at this moment in time given that we are about to hit another recession,.however the north west is still good bus country.god luck to rotala.
Stagecoach leave professionally, well run operators alone. They haven't competed head to head with Fishwicks in the city, after all. They command a great deal of customer loyalty.
They haven't competed with Trent Barton, who it can be said are a professional, well run operation.
Preston Bus was making an operating loss some 14 months prior to Stagecoach's arrival on the citi network in Preston. Stagecoach didn't help them to get to a position where PB lost money, they did that by themselves.
They simply looked at the numbers and concluded the business couldn't have survived. Some say that's predatory, but what you would do if you were the incumbent interurban operator, and your offer to buy, given the assessment of their numbers was refused.
I am sure Rotala will be acquiring the rest of Stagecoach Preston in the fullness of time, and they will expand their commercial operations by tendering for work, to the expense of the small independents in the city.
It'll be interesting to see how Bob Dunn deals with the municipal mindset PB had which alienated their customers and encouraged them to catch a Stagecoach bus when they offered an alternative....
I imagine Preston will become another stable oligopoly like Middlesbrough. Solid money but nothing special.
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