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FirstGroup

 
Hoover's Profile: FirstGroup plc
(London:FGP)
Contact Information
FirstGroup plc
395 King St.
Aberdeen AB24 5RP, Scotland
Tel. +44-1224-650-100
Fax +44-1224-650-140

Type: Public
On the web: http://www.firstgroup.com
Employees: 105,685
Employee growth: 42.4%

FirstGroup was not the first group to get stakes in the UK's deregulated bus and train industries, but it is one of the nation's largest diversified transportation enterprises. The company operates the First Capital Connect, First Great Western, First ScotRail, and TransPennine Express railway franchises in the UK, and its trains carry about 270 million people annually. FirstGroup provides public bus services throughout the UK that carry some 3 million passengers daily. Its FirstGroup America unit provides school bus services, operates public bus systems, and manages vehicle fleets in North America. In October 2007 FirstGroup acquired Laidlaw International, North America's leading bus operator.

Key numbers for fiscal year ending March, 2009:
Sales: $8,791.5M
One year growth: (6.3%)
Net income: $203.6M
Income growth: (15.2%)

Officers:
Chairman: Martin J. Gilbert
Deputy Chairman and Chief Executive; Chairman Executive Safety Committee: Sir Moir Lockhead
Finance Director: Jeff Carr

Competitors:
Arriva
National Express Group
Stagecoach

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Company History: FirstGroup plc
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Incorporated: 1989
NAIC: 482111 Line-Haul Railroads; 485111 Mixed Mode Transit Systems; 485112 Commuter Rail Systems; 485113 Bus and Other Motor Vehicle Transit Systems; 485210 Interurban and Rural Bus Lines; 485410 School and Employee Bus Transportation; 488210 Support Activities for Rail Transportation
SIC: 4011 Railroads - Line-Haul Operating; 4111 Local & Suburban Transit; 4131 Intercity & Rural Bus Transportation; 4151 School Buses; 4013 Switching & Terminal Services

FirstGroup plc is an operator of public transportation systems. Based in Scotland, FirstGroup has bus and rail operations in the United Kingdom and North America. Altogether, the company transports more than two billion passengers per year, in addition to handling freight by train.

More than 260 million passengers ride its U.K. railways every year, while millions more ride on one of its bus lines. The company is also responsible for getting two million children in the United States and Canada to school every day. FirstGroup became the leading private school bus operator in the United States via its 2007 acquisition of Laidlaw International, which also gave it ownership of the famous Greyhound brand. Some of FirstGroup's smaller operations offer other transit-related services.

Scottish Origins

The 1985 Transport Act set out to improve the United Kingdom's busing system through competition. Six dozen different companies subsequently sprang up to take over most of the country's bus lines, which had until then been run by the government-controlled National Bus Company.

The first of the buyouts that created FirstGroup plc occurred in 1989, when a group led by Moir Lockhead acquired a local bus line near Aberdeen, Scotland, called Grampian Regional Transport, paying £4.5 million. Lockhead, would build one of the largest transport companies in the United Kingdom, had started his career at the age of 16 as an apprentice mechanic with United Buses.

Grampian had revenues of roughly £10 million and a fleet of 200 buses when it was bought out. The company quickly went on the acquisition trail, buying Midland Bluebird in 1990. Other early purchases included East Anglia's Eastern Counties Holdings, acquired for about £7 million in 1994. The renamed company, GRT Bus Group PLC, went public on the London Stock Exchange in 1994, when its annual turnover was more than £40 million.

Merger with Badgerline Group

In 1995 GRT merged with Badgerline Group to create FirstBus plc. Although GRT was half the size of Badgerline, the deal was structured as a merger rather than a takeover. GRT was more profitable, noted Britain's Financial Times, and it was hoped its techniques could boost operating margins at the combined company, while benefiting from better economies of scale.

Badgerline, based in Weston-super-Mare, Avon, had been formed in 1986 to take over some Bristol operations from the National Bus Company. By the time of its initial public offering in November 1993, it had a valuation of £100 million, twice that of GRT, and had a fleet of 2,300 vehicles concentrated in the south of England and Wales.

FirstBus had a market capitalization of £265 million after the merger. The combined fleet numbered 5,600 vehicles and there were more than 14,000 employees. Among U.K. bus operators, FirstBus was second only to Stagecoach, based in northern Scotland. A handful of other publicly traded companies dominated the rest of the market.

A pair of acquisitions in 1996 propelled FirstBus to the top of the U.K. bus industry. Greater Manchester Buses North was bought for £47 million in March of that year. FirstBus bought SB Holdings (SBH) of the Glasgow area for £110 million soon after, though it had to sell parts of SBH to satisfy antitrust regulators. After these purchases, combined revenues exceeded £500 million and there were 20,000 employees fielding a fleet of 8,000 buses. The company's debt was also large in relation to shareholder funds, but considered to be adequately covered by earnings.

Beyond Buses

As the period of consolidation in the U.K. bus industry ended, FirstBus turned its attention to organic growth and ventures in new industry sectors and geographical areas. Ten years after deregulation of the bus lines, Britain's passenger railways were being privatized, divided into 25 different franchises. The company entered the passenger rail business by acquiring a 24.5 percent holding in Great Western Trains in 1996 as it underwent a management buyout. The Great Eastern rail franchise was added in December 1996.

FirstBus was renamed FirstGroup plc in 1997, reflecting its broadened reach. The buying spree continued, with Southampton Citybus acquired for £11 million. This added 440 employees and more than 150 buses.

There were also a couple of short-lived detours. The company acquired a controlling interest in a small regional airport in Bristol in 1997, but sold it off in 2000. The company began operating a line of roughly 700 buses in Hong Kong in September 1998 via a partnership with New World Development. However, this was also divested a couple of years later.

By the end of the decade, FirstGroup had a fleet of 9,000 buses and a staff of 30,000 employees. Rail accounted for half of total revenues of more than £1 billion. The stage was set for a major acquisition that would bring the company to a vast new market across the ocean.

FirstGroup bought Ryder Public Transportation Services, Inc., for $940 million in 1999, giving the company the second leading position in the private school bus business in the United States. The unit, previously part of Ryder System, Inc., was renamed First Student. FirstGroup added a U.S. transit contracting and management business from a subsidiary of U.K. rival Stagecoach Group PLC in May 2003, paying $22.5 million.

The company also continued to build its rail business through acquisition, picking up freight line GB Railways in July 2003 at a cost of £22 million. GB was acquired to help FirstGroup to reenter the bidding for the Greater Anglia franchise; however, it lost out to rival National Express Group plc. In 2007, it was outbid for another key franchise, SouthWest Trains, by Stagecoach.

Buying Laidlaw in 2007

In 2007 FirstGroup agreed to buy Laidlaw International, Inc., for $3.6 billion (£1.8 billion) plus upwards of $700 million in assumed debt. The price was considered high by some analysts, but combining the businesses offered instant cost savings. Laidlaw, based in Chicago, owned Greyhound and also had the largest school bus operation in the United States. The buy raised FirstBus's number of school buses to 63,000.

There was much speculation that Greyhound would soon be sold if the Laidlaw deal were to be approved by antitrust regulators. Greyhound differed from FirstGroup's other businesses in that it was dependent on retail customers, and operated over long distances.

FirstGroup also made a smaller U.S. acquisition in 2007, buying Cognisa Transportation, Inc., an Atlanta-based operator of shuttles for airports and corporate clients. While FirstGroup was rapidly becoming a giant in the U.S. market, it was also bringing American concepts to the United Kingdom. It tested yellow school buses at a few communities in Britain in 2007, reporting positive feedback.

The growing global conglomerate sought more space for its administrative functions. A proposal to build a £10 million headquarters in the company's hometown of Aberdeen was scrapped in November 2006. Ironically, the approval process had stalled due to protesters voicing complaints about excessive traffic, one of the things the company was dedicated to improving through its efforts in public transportation. FirstGroup did not give up on Aberdeen as the site for its future headquarters, and submitted another proposal a few months later.

Principal Subsidiaries

CentreWest London Buses Ltd; First Aberdeen Ltd; First Beeline Buses Ltd; First Bristol Buses Ltd; First Capital East Ltd; First Capital North Ltd; First Somerset & Avon Ltd; First Cymru Buses Ltd; First Eastern Counties Buses Ltd; First Edinburgh Ltd; First Essex Buses Ltd; First Glasgow (No 1) Ltd; First Glasgow (No 2) Ltd; First Hampshire and Dorset Ltd; First Manchester Ltd; First Midland Red Buses Ltd; First PMT Ltd; First South Yorkshire Ltd; First Wessex Ltd; First West Yorkshire Ltd; First Devon & Cornwall Ltd; First York Ltd; Leicester CityBus Ltd; Northampton Transport Ltd; First Student Inc. (U.S.A.); FirstBus Canada Ltd; FirstGroup America Inc. (U.S.A.); FirstGroup USA Inc.; Cardinal Transportation Group Inc. (U.S.A.); Cardinal Coach Lines Ltd (Canada; 60%); First Transit Inc. (U.S.A.); SKE Support Services, Inc. (U.S.A.); First Capital Connect Ltd; First Great Western Link Ltd; FirstInfo Ltd; First/Keolis TransPennine Ltd (55%); Hull Trains Company Ltd (80%); GB Railfreight Ltd; First ScotRail Ltd.

Principal Divisions

UK Bus; UK Rail; North America.

Principal Competitors

Stagecoach Holdings plc; National Express Group plc.

Further Reading

August, Oliver, "Conditions on FirstBus Deal Suggest Clampdown," Times, January 25, 1997, p. 31.

Bagnall, Sarah, "Merger to Create £265M Bus Firm--Badgerline and GRT--FirstBus," Times, April 5, 1995.

Bain, Simon, "Travelling in Style--How Does the Road Ahead Look for Transport Company FirstGroup?" CA Magazine (Edinburgh), February 2000, pp. 48+.

Batchelor, Charles, "FirstBus Just the Ticket for Citybus," Financial Times, July 8, 1997, p. 23.

Bolger, Andrew, "Badgerline Float Price Set at 115p," Financial Times, November 11, 1993, p. 22.

Buxton, James, "First Class," CA Magazine (Edinburgh), September 2003, pp. 80+.

Calder, Colin, "Flotation to Win Millions for Busmen--GRT Bus Group--Scotland," Sunday Times, April 10, 1994.

"CEO Interview: Moir Lockhead; FirstGroup PLC," Wall Street Transcript Europe, February 8, 1999.

"CEO Interview: Moir Lockhead; FirstGroup PLC," Wall Street Transcript Digest, October 1, 2002.

"CEO Interview: Moir Lockhead; FirstGroup PLC," Wall Street Transcript Digest, August 18, 2003.

Clement, Barrie, "First Group Trounced by National Express in Anglia Franchise," Independent, December 23, 2003.

Duncan, Catriona, and Monia Mtar, "Determinants of International Acquisition Success: Lessons from FirstGroup in North America," European Management Journal, December 2006, pp. 396+.

Dyer, Geoff, "A Hunger for Life in the Fast Lane," Financial Times, May 20, 1995, p. 1.

------, "Only a Little Room Left Up Top," Financial Times, May 14, 1996, p. 22.

"End of the Line for Laidlaw; British Outfit FirstGroup Will Buy the Bus-Company Operator in a $3.6 Billion Deal," Business Week Online, February 12, 2007.

"FirstGroup Gets Up Steam As It Waits on US Antitrust Clearance," Citywire, May 16, 2007.

"FirstGroup Signals North American Expansion," AFX.COM, November 5, 2003.

Flynn, Julia, "FirstGroup to Buy Bus Unit of Ryder," Wall Street Journal Europe, July 22, 1999, p. 3.

Gresser, Charis, "FirstBus to Bid for Stake in Bristol Airport," Financial Times, August 22, 1997, p. 17.

Grimond, Magnus, "FirstBus Makes Good Headway," Independent, June 11, 1997, p. 26.

Hall, Liz, "Change Driver," People Management (London), September 1, 2005, pp. 42+.

Hawkins, Ross, "British Rail Companies Turn Profits on American School Buses," Evening Standard (U.K.), July 15, 2001.

"Merger Makes First Bus Britain's Second," Guardian, April 5, 1995, p. 21.

Mesure, Susie, "A Public Transport Boss Who Is Driving a Green Agenda," Independent, February 17, 2007, p. 56.

Milmo, Dan, "FirstGroup Catches America's School Buses and Greyhounds in £1.8Bn Deal," Guardian, February 10, 2007, p. 40.

Murden, Terry, "FirstBus Buys SBH to Take Lead in Britain," Sunday Times, May 12, 1996.

"New Rail Barons," Economist, December 7, 1996.

Osborne, Alistair, "FirstGroup Chief Defends Rail Privatisation As Subsidies Fall; Great Eastern Returns Cash to Taxpayer, but Infrastructure Is a 'Let-Down,'" Daily Telegraph, November 6, 2003.

Osborne, Alistair, and Richard Blackden, "FirstGroup Catches the Greyhound Bus," Daily Telegraph, February 10, 2007.

Pangalos, Philip, "Expansion Is Just the Ticket for Scottish Bus Group--GRT Bus Group," Times, June 29, 1994.

Rich, Motoko, "FirstBus Will Spend £80M to Update Fleet," Financial Times, November 6, 1996, p. 10.

Urquhart, Frank, "Setback for Transport Giant's Bid to Build Global HQ in City," Scotsman, October 21, 2005, p. 27.

------, "Transport Giant Drops £10m HQ Plan," Scotsman, November 9, 2006, p. 20.

Urry, Maggie, "Driving Force at the Head of the Herd," Financial Times, January 6, 2003, p. 18.

Welsh, Gordon, Leslie Davis, and Cliff Henke, "Big U.K. Companies Still Show Interest in U.S.; Merger Mania Continues in Private Bus Industry, but Latest Twist Is Transferring U.S. Ideas Back to 'Blighty,'" Metro, September/October 2000, pp. 86+.

West, Karl, "Greyhound Owner Not Quick Enough to Escape FirstGroup," Daily Mail, February 10, 2007.

Wright, Robert, "From Eastern Scotland's Lanes to the Open Plains of North America," Financial Times, February 10, 2007, p. 17.

— Frederick C. Ingram


Wikipedia: FirstGroup
Top
FirstGroup
FirstGroup.svg
Mosaic of services offered by First Group in Europe and North America.jpg
FirstGroup operates bus, rail, and tram transport in Great Britain, Denmark, and Sweden (Denmark and Sweden not pictured), and is an operator of bus service in the United States, Canada, and Ireland (Ireland not shown).
Info
Owner Publicly owned (LSE: FGP)
Locale
Transit type Local and express bus, intercity bus, franchised rail and tram, yellow school bus
Chief executive Moir Lockhead (CEO)
Martin Gilbert (Chairman)
Headquarters 395 King Street, Aberdeen, AB24 5RP, Scotland, UK
Operation
Began operation 1995
Operator(s) See below
First Group plc
Revenue £4,707.6 million (2008)
Operating income £360.1 million (2008)
Net income £133.3 million (2008)
Employees 105,685 (2008)
Website www.firstgroup.com

FirstGroup plc (LSE: FGP) is a British transport company operating in the United Kingdom, Ireland, Denmark, Sweden, Canada and the United States with headquarters in Aberdeen. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.[1]

Contents

History

FirstGroup originated from the deregulation of bus services in the United Kingdom, where private companies purchased former nationalised and municipal bus operators.

In 1989 the council-owned Aberdeen city municipal bus operator Grampian Regional Transport was purchased by its employees in a deal led by its then general manager Moir Lockhead, the future FirstGroup Chief Executive.[2] The company expanded through acquisition as the GRT Group purchasing six former nationalised bus companies in England and Scotland. Elsewhere in the UK, the Badgerline Group had similarly grown through acquisitions of former nationalised bus companies in England and Wales accumulating 12 companies, from similar beginnings to GRT from privatisation of the Somerset-based bus company Badgerline, sold to its management in 1986.

FirstGroup was formed as "FirstBus" in June 1995 through the merger of the Badgerline Group and the GRT Group, with fleets in England, Wales and Scotland.[3]

At the time of the merger, Firstbus had 5,600 buses, 4,000 of which came from Badgerline.[4] Badgerline's Trevor Smallwood remained as chairman of First for four years, while GRT head Moir Lockhead became deputy chairman and chief executive.[4]

FirstBus continued the policy of growth by acquisition acquiring former council owned operations and companies owned by the English and Welsh and Scottish nationalised operators. Post merger, First went on to acquire larger urban metropolitan operators by taking advantage of the privatisation of the PTE bus operations and the privatisation of London bus services. FirstBus acquired GM Buses North in Greater Manchester and Strathclyde Buses in Greater Glasgow in 1996, and Mainline in South Yorkshire and CentreWest in London in 1997, and Capital Citybus in London in 1998[4].

Post merger, the group began applying a standard corporate typeface to its fleet names with a stylised f logo. A new corporate white, pink and indigo livery was introduced for all new low-floor buses, nicknamed 'Barbie', now the UK bus company standard, while further bus company acquisitions continued. Inherited bus fleets were initially left in their original colours with First fleet names, with the intention that the Barbie scheme would stand for a set service quality. Laterly, older buses received a modified 'Barbie 2' livery, with fleets later still converted to full Barbie colours. By the late 1990s, the corporate colours of Firstbus, Stagecoach Group and Arriva were appearing in buses in all parts of the UK except London and Northern Ireland.

The company was renamed First Group plc following an Extraordinary General Meeting on 23 December 1998[5], when the company moved into railways with the privatisation of British Rail, gaining the Great Eastern franchise,[6] then purchasing Swindon based Great Western Holdings, holders of the North Western and Great Western franchises.[7] The change of name was due to the managing director of Great Eastern trains objecting to having FirstBus displayed on the side of his trains[4]. As Badgerline, First had originaly entered the rail market with a stake in Great Western Holdings, before the outright purchase of Great Western by First in 1998[4].

Soon after, they also began operating London’s Tramlink system under franchise from London Transport.[8]

In late 2000, FirstGroup sold its 26% stake in New World First Bus (NWFB), a joint venture established in 1998 to operate the Hong Kong Island routes formerly operated by China Motor Bus, to NWS Holdings Ltd, its joint venture partner.[3]

During 2004 First was awarded the ScotRail franchise to run trains in Scotland, in which it already operated the lion’s share of bus services, and took over the new TransPennine Express franchise in partnership with French transport company Keolis.[9]

The First North Western franchise was lost to Serco/NedRailways in December 2004. First North Western’s services in northern England were combined with those previously run by Arriva Trains Northern (and not part of the Transpennine network) to form the new Northern Rail franchise.[10]

In 2004 First lost First Great Eastern to National Express Group, which now operates it as National Express East Anglia.[11] In fact, they were banned from bidding for the franchise, despite being named Train Operator of the Year at the time.[12]

From 1 April 2006 First has operated a new rail franchise under the brand First Capital Connect, amalgamating Thameslink with the Great Northern line of WAGN.[13]

The Great Western franchise was extended in 2006 to also include the services of the former Wessex Trains and Thames Trains, and this new franchise was again awarded to First.[14]

In February 2007 FirstGroup agreed to buy the US-based firm Laidlaw, an operator of inter-city coaches and yellow school buses across North America, for £1.9 billion (US$3.7 billion). This also gave them a controlling stake in Greyhound Lines, the largest bus operator in North America. The Greyhound name and the names of Canadian subsidiaries of Greyhound Canada were retained, and all other Laidlaw-owned services in the United States and Canada were rebranded under the First or Greyhound names, except for Voyageur Colonial and Grey Goose in Canada.[15]

On 29 June 2009, FirstGroup said a takeover bid over fellow transport operator National Express Group, which was struggling with debt over the East Coast Main Line rail franchise at the time, had been rejected, National Express saying it didn't "consider it appropriate" at the time to discuss a takeover. FirstGroup believed that there was "significant industrial and commercial logic" over a merger, but National Express wished to focus on its own initiatives.[16]

Operations

FirstGroup plc is Britain's largest bus operator, running more than 20% of all local bus services. A fleet of nearly 9,000 buses carries some 2.9 million passengers a day in more than 40 major towns and cities. FirstGroup also run passenger and freight rail services in the UK. Passenger rail franchises consist of First Great Western, First Capital Connect, First TransPennine Express and First ScotRail. They also operate First Hull Trains (an 80% share), a non-franchised open access intercity passenger train service and provide rail freight services through FirstGBRf. First operated the Tramlink network carrying approximately 24 million passengers a year on behalf of Transport for London, although its contract has been cancelled and will be transferred wholly to TfL.[17]

In North America, FirstGroup has several divisions: First Student which runs school bus routes;[18] First Transit which holds many city and county public transport contracts;[19] and First Vehicle Services which maintains vehicles for many corporations, organisations and local governments, including the other First divisions and Greyhound lines.[20] Canadian operations are provided through their First Canada subsidiary which operates school buses and fulfils public transport contracts.

FirstGroup has always had a consistent brand and most of the names of its operations begin with the word First, such as First ScotRail, First Aberdeen, First Glasgow and First Bristol. The company has since removed all local branding for its local bus services - buses now simply carry the fleet name ‘First’ throughout the UK, although each company still operates independently. Its corporate colours are white, pink and blue, and many of its buses and trains are now liveried in these colours, except for buses and trams operating in the following services:

Similarly, in North America, all owned and operated services are operated under the First or Greyhound brands except in the Canadian provinces of Quebec and Manitoba for regulatory reasons, and vehicles operated under contract to public agencies, which carry the branding of the agency that owns the particular bus. All American subsidiaries of Greyhound Lines are now operated under the Greyhound name.[21]

First own and operate the Aircoach service in Dublin,[22] linking Dublin Airport with the Dublin southside, Greystones and Bray as well as long distance runs to Cork and Belfast. Aircoach also operate car park shuttles at Belfast and Dublin Airports. As of April 2008, Aircoach has started operating shuttle bus services for the Mater Private Hospital and Phoenix Park. Until 2009, Aircoach did not carry corporate branding although recently drivers had begun to receive standard FirstGroup uniforms with additional Aircoach branding. Buses introduced since January 2009 on Aircoach carry a revised livery, still predominantly blue, but with a pink and white stripe and FirstGroup logo alongside the Aircoach logo.

Senior management

First's senior management are as follows:[23]

  • Martin Gilbert - Non-Executive Chairman
  • Sir Moir Lockhead - Deputy Chairman and Chief Executive
  • David Leeder - Director of International Development and Marketing
  • Sidney Barrie - Commercial Director and Company Secretary
  • Nicholas Chevis - Finance Director
  • David Dunn - Senior Independent Non-Executive Director
  • James Forbes - Non-Executive Director
  • Audrey Baxter - Non-Executive Director
  • David Begg - Non-Executive Director
  • James Forbes - Non-Executive Director
  • John Sievwright - Non-Executive Director
  • Martyn Williams - Non-Executive Employee Director

Current operating companies

Rail services

A First Great Western Class 158 standing at Bristol Temple Meads railway station in the UK.

Passenger Operations

Freight Operations

Bus and coach services

UK


Ireland

USA

Canada

Denmark and Sweden

  • FirstGroup entered in a joint-venture bid with the Danish State Railways to operate trains on Kystbanen and over the Oresund Bridge to Malmö, Gothenburg, Växjö and Karlskrona and cities between. The bid makes them a 25% stakeholder on the Danish side and a 30% stakeholder on the Swedish side. They won this bid over SJ AB, Arriva, and Veolia Transportation. From January 11th 2009 DSBFirst operates trains along the eastern coast of Zealand and across the belt to Sweden, with connections to Westcoastline to Gothenburg, Southcoast to Karlskrona and to Växjö in Småland.

Fleet numbers

In 2003 First introduced the SemaVoyager system of fleet numbering across all its fleets within the United Kingdom. Vehicles carry five-digit fleet numbers, with the first digit denoting vehicle type, as follows:

Services formerly operated

References

See also

External links

Major Public Transport Companies in the United Kingdom
Arriva Group - ComfortDelGro Group - FirstGroup
Go-Ahead Group - National Express Group
Stagecoach Group - Transdev Group
Translink (Northern Ireland) - Veolia Transport
See also:
Transport for London - Passenger Transport Executive
Strathclyde Partnership for Transport

 
 
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Greyhound Lines, Inc. (Subsidiary Company)
Arriva plc (Public Company)
GB Railways

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