UK Bus Industry

Part
01
of four
Part
01

UK Bus Operators - Acquisitions and Fleet Numbers

Six recent bus operator acquisitions in the United Kingdom were identified. They include Stagecoach acquiring South Gloucestershire Bus and Coach in September 2019, Rotala acquiring Central Buses from CEN Group Limited in February 2018, Stagecoach acquiring Wessex Bus Ltd. in September 2018, and Hotel Hoppa being acquired by Rotala in November 2017 for £2m. An analysis of four reports from the Department for Transport showed that the number of bus operator's fleets has mostly remained at the same level of 35,000 buses for the years 2015/16, 2016/17, and 2017/18, down from 36,000 buses for the year 2014/15. Detailed information is in the next section.

Acquisition of Central Buses By Rotala

  • A description of the acquisition: Rotala acquired Central Buses from CEN Group Limited in February 2018. The acquisition extended Rotala's network of bus services in north Birmingham.
  • The size of the fleet acquired: The size acquired was a 31 — vehicle fleet.

Acquisition of Hotel Hoppa by Rotala

  • A description of the acquisition: Rotala acquired Hotel Hoppa from National Express in November 2017 for £2m. Rotala said the acquisition would radically strengthen its operations around Heathrow airport.
  • The size of the fleet acquired: The size acquired was a 32-bus fleet.

Acquisition of bus operations of Go Goodwins Ltd by Rotala

  • A description of the acquisition: Rotala acquired the bus operations of Go Goodwins Ltd. for £692,500. At the time, Rotala said that the acquisition would enable the company to hugely grow its operations in Manchester and potentially double its bus capacity.
  • The size of the fleet acquired: The size of the fleet that was acquired was 18 buses.

Acquisition of Hansons (Wordsley) Ltd by Rotala

  • A description of the acquisition: Rotala acquired Hansons Ltd. for £575,000 which was paid to Hansons' owners and £1 million which was set aside for working capital and expenditure related to the acquisition.

Stagecoach Acquired South Gloucestershire Bus and Coach

  • The size of the fleet acquired: The size was a fleet of 53 PCVs.

Stagecoach Acquired Wessex Bus Ltd

  • Parties Involved: The parties involved were Stagecoach and Wessex Bus Ltd.
  • A description of the acquisition: In September 2018, Stagecoach acquired Rotala’s Wessex Bus Ltd. At the time, Stagecoach said that the acquisition was going to allow it to further expand its bus operations in the west of England.
  • The size of the fleet acquired: The size acquired was nine vehicles.

Are Bus Operator's Fleets Increasing or Decreasing?

Research Strategy

To find recent acquisitions of bus operators in the United Kingdom, our first strategy was to search for relevant information from websites of bus operators in the UK. This strategy led us to sources such as rotalaplc.com and Stagecoach which provided information on acquisitions by the companies. Our second strategy was to search in reputable industry databases such as Bus & Coach Buyer and Coach and Bus Week Ltd. for relevant information. This strategy was successful as we found examples of recent acquisitions. We chose those that were finalized in the past 24 – 36 months and included them in our findings.

To provide an analysis whether the bus operator's fleets are increasing or decreasing in the United Kingdom, we searched for relevant data from industry databases. This strategy led us to annual reports from the Department for Transport for the years 2014 to 2018 which provided annual bus statistics in the UK, including the number of bus fleets. We used information from these reports to analyze whether the bus operator's fleets are increasing or decreasing in the United Kingdom.
Part
02
of four
Part
02

Competitive Landscape - Rotala, Nottingham City Transport, and Go Ahead

Rotala Plc, Nottingham City Transport, and Go Ahead are the leading bus operators in the U.K. and have buses ranging from 700 to more than 5,000 in number. All three companies have mobile ticketing apps on Android as well as iPhone. Below is an overview of the findings.

Rotala

  • Rotala Plc is an AIM-listed company that manages commercial and privatized bus routes for businesses, local authorities, and the private and public sector. The company "provides local bus services under contract to local authorities and commercial bus routes, which are undertaken by various depots throughout the United Kingdom."
  • Rotala operates four bus lines: Diamond Bus Ltd, Diamond Bus North West, Hallmark Connections Ltd, and Preston Bus.
  • The company operates a fleet of more than 712 buses and coaches. [see calculation below]
  • Rotala's revenue for the financial year ending in November 2018 was £62.4 million, which is a 19% increase from 2017.
  • The company's staffing headcount for 2018 was 1,481 employees in total, consisting of 85 management staff members and 1,396 direct employees.
  • Rotala's Diamond Bus line has a mobile ticketing app for both Android and iPhone. Its app allows the user to track their bus and plan their journey when making use of "Diamond services in the West Midlands, Worcestershire, and the North West. "

Nottingham City Transport

  • Nottingham City Transport (NCT) is the largest local authority-owned operator in England and provides an extensive network of services in Nottingham City seven days a week.
  • The company tracks all of its buses by satellite and feeds live departure information to bus stops, its website and its apps. Each bus has Wi-Fi. All customers have access to substantial discounts if they own an Easyrider smart card, individuals under the age of 18 have access to discounts with a value pass, students receive a discount of 20%.
  • NCT has a fleet of 320 vehicles and operates on 67 principal routes.
  • The company employs around 800 drivers.
  • NCT's estimated turnover is £53.22 million.
  • NCT's mobile ticketing app is called NCTX Buses and is available for both Android and iPhone. The app can be used for purchasing mobile tickets, to browse and view bus stops on the map, and to plan journeys by checking bus timetables.
  • The app also has a favorite menu where the user can store frequently used journey details and can easily get real-time service updates on the mobile app.

Go-Ahead

  • Go-Ahead is a fully-owned commercial bus business that has nine bus operations in the U.K. Its regional bus operations are focused on urban areas. Its strategically located bus depots in London are a competitive advantage for the company.
  • The company operates nine bus lines. It has a fleet of over 5,224 buses in the U.K. which are distributed as follows Go-Ahead London has a fleet of 2,169 buses, Go South Coast has 803 buses, Go North East has 679 buses, Brighton and Hove has 438 buses, the Oxford Bus Company has 286 buses, East Yorkshire has 292 buses, Plymouth City Bus has 190 buses, Go East Anglia has 190 buses, and Go North West has 177 buses. [see calculations below]
  • Go-Ahead's total (bus) revenue for 2019 was £1,002.2million.
  • Its revenue for UK bus operations only, thus excluding Ireland (with a revenue of £16.5 million) and Singapore (with a revenue of £59.6 million) operations, would be £926.1 million. [see calculations below]
  • The total headcount for Go-Ahead's UK bus operations is 15,506 employees who are distributed as follows Go-Ahead London has 6,955 employees, Go South Coast has 1,923 employees, Go North East has 2,086 employees, Brighton and Hove has 1,513 employees, the Oxford Bus Company has 841 employees, East Yorkshire has 696 employees, Plymouth City Bus has 557 employees, Go East Anglia has 372 employees, and Go North West has 563 employees. [see calculations below]
  • The Go-Ahead Group has mobile apps with features such as M-Ticket purchasing, information on real-time departures, live tracking, and planning journeys, that are helpful for its customers.

Research Strategy

We were able to find company overview details, numbers on the fleet size, annual revenue figures, and an overview of mobile applications for Rotala, Nottingham City Transport, and Go Ahead from each company's web pages and annual report.

Some figures were triangulated, such as the number of buses, revenue details, and employee count for Rotala and Go- Ahead. The calculations used are provided below.

Rotala
Total number of buses
Number of buses Diamond Company = 242 buses
Number of buses Diamond Northwest = 250 buses
Number of buses Hallmark Connection = 100 buses
Number of buses Preston = 120 buses
Total number of buses = 242 + 250 + 100 + 120 = 712

Go- Ahead
Revenue
Go-Ahead's total bus revenue for 2019 = £1,002.2 million
Go-Ahead Ireland revenue = £16.5 million
Go-Ahead Singapore revenue = £59.6 million
Go-Ahead's UK Bus Operations Revenue = £1,002.2 million - (£16.5 million + £59.6 million) = £926.1 million

Go-Ahead's fleet of buses for its U.K. bus operations = 5,224 buses
This was calculated as the sum of:
Go-Ahead London = 2,169 buses
Go South Coast = 803 buses
Go North East = 679 buses
Brighton and Hove = 438 buses
Oxford Bus Company = 286 buses
East Yorkshire = 292 buses
Plymouth CityBus = 190 buses
Go East Anglia = 190 buses
Go North West = 177 buses

Go- Ahead's employee total headcount = 15,506 employees
This was calculated as the sum of:
Go-Ahead London = 6,955 employees
Go South Coast = 1,923 employees
Go North East = 2,086 employees
Brighton and Hove = 1,513 employees
Oxford Bus Company = 841 employees
East Yorkshire = 696 employees
Plymouth CityBus = 557 employees
Go East Anglia = 372 employees
Go North West = 563 employees

We were not able to find the number of drivers for Rotala and Go-Ahead, hence we expanded the scope to the total number of employees for these companies. As both Rotala and Go-Ahead operate many lines of business (4 and 9 respectively), we assumed that this might be the reason they do not track the number of drivers but instead list the number of employees for each line of business.

To find the marketing spend for each of these companies our first strategy was to search for this information in their financial reports as most of the companies list their marketing spend or advertising spend in their financials. We found both companies' annual reports but neither mentioned this information.

Next, we turned to press releases from the company's websites and the public domain as many companies highlight their financial information in press releases. This, however, was not fruitful as most of the press releases contained information on innovations and acquisitions, but nothing on advertising spend.

We searched through market research reports such as IBIS, PRNews for industry-related marketing spend and relevant information on the marketing spend for these companies, but that also did not yield results.


Part
03
of four
Part
03

Competitive Landscape - Blackpool Transport, Stagecoach, and First Group

Blackpool Transport operates 140 buses with annual revenue of $26 million while Stagecoach and First Group operates 8,400 buses and 5,700 each.

Blackpool Transport

Number of Buses

  • Blackpool Transport has about 140 buses in operation.

Annual Revenue

Marketing Spend

  • We were unable to identify the marketing expenditure of Blackpool Transport.

Number of Bus Drivers/Employee

  • Blackpool Transport has about 130 employees.

Mobile Application

Stagecoach

Number of buses

  • Stagecoach Group has a total of 8,400 buses and coaches in their fleet.

Annual Revenue

Marketing Spend

  • We were unable to identify the marketing expenditure of Stagecoach.

Number of Bus Drivers/Employee

  • Stagecoach Group has around 26,000 employees.

Mobile Application

  • Stagecoach Group's mobile application is known as Stagecoach Bus and is compatible with both android and iOS operating systems.
  • The app can plan customers journey, view live arrival and departure times, check nearby locations, save customers favorite buses & routes, and customers can purchase tickets from the app.
  • The app is number 17 in travel on Apple iOS and is rated 3.4 out of 5.0 by 260 reviewers.
  • The app currently launched some new features on its latest version 2.0 on Apple iOS

First Group

Number of Buses

  • First Group has a fleet of 5,700 buses.

Annual Revenue

Marketing Spend

  • We were unable to identify the marketing expenditure of First Group.

Number of Bus Drivers/Employee

  • The company employs about 16,500 people.

Mobile Application

Research Strategy

To provide a competitive analysis of Blackpool Transport, Stagecoach, and First Group, we began by conducting a thorough search through the websites of each company to find out information about the number of buses in their fleets, annual revenue, their marketing spend, the number of their bus drivers, and an overview of their current mobile applications. Our search was fruitful as we identified most of the required information. Unfortunately, we were unable to locate the marketing spend and the number of bus drivers of the companies.

In order to find the marketing spend and the number of bus drivers of Blackpool Transport, Stagecoach, and First Group, we first searched through the website of the companies for any of the required information. Our search revealed that the three companies were publicly listed, so we sort for the companies annual reports and financial statement. This strategy was futile as the annual reports had no information about the marketing expenditure or the number of bus drivers any of the companies had. The annual reports only had details of the commercial and marketing revenue generated by the companies through advertisements done on their fleets. We decided to provide the number of employees of the companies since the drivers are part of the employees.
Next, we searched through the public domain for news articles, publications, press releases, and through other trusted media sources for the required contact information. This strategy was to find out if the companies made mention of their marketing or advertising expenditure during an interview or statement. This step also yielded no result as most of the information available were about their employment history and expenditures on new fleets and route maintenance. Furthermore, we resorted to the social media channels (LinkedIn, Facebook, and Twitter) of these companies but none of them provided any information on their marketing spend.
Lastly, we resorted to other third party sources such as business directories that are reputable in providing company analysis. We looked into the profile of each company on sources such as Hoovers, Zoominfo, and Crunchbase for any mention of the marketing, commercial, or advertising expenditure. These sources only provided revenue insight about the company. We further searched through the various transportation organizations and agencies in the UK such as Freight Transport Association, Road Haulage Association, Department for Transport, and The Chartered Institute of Logistics and Transport but still found no information about marketing expenditure of transport organizations.

Part
04
of four
Part
04

Competitive Landscape - Arriva, National Express West Midlands and One Additional Competitor

Centrebus is a competitor in the UK bus operator market and has about 210 buses in its fleet. Arriva has over 5,900 buses and National Express West Midlands has over 1,600 buses in their fleet.

Arriva

  • Arriva is a large bus operator in the UK. The company provides its services in the northwest, northeast, southeast of England, Yorkshire, the midlands, and Wales.
  • Arriva also operates Wardle Transport, Hinkley Bus, Network Colchester, Yorkshire Tiger, and Green Line.
  • The company has over 5,900 buses in its fleet.
  • The company's 2018 revenue was €5.4 billion.
  • The company has between 5,001 to 10,000 employees.
  • The Arriva Bus app helps customers to find out the time of bus travel, bus stop information, and real-time updates. The features available on the app include trip planner, live map with real-time info, timetables, m-tickets, and service updates.

National Express West Midlands

  • National Express West Midlands is a subsidiary of National Express Group. The company was founded in 1986 and provides its services in Coventry, the West Midlands, and Dundee. The company serves more than 2.5 million people.
  • The company has over 1,600 buses in its fleet.
  • National Express West Midlands parent company's 2018 revenue was £2.45 billion.
  • The company has between 5,001 to 10,000 employees.
  • The National Express Bus App helps customers to track buses live, use and purchase mTickets, and plan their journey.

Centrebus

  • Centrebus is a private bus company. It provided services in Stevenage, Corby, Luton, Grantham, and Leicester. Centrebus operates contracted and commercial bus services.
  • Centrebus has 210 buses in its fleet.
  • Centrebus' estimated revenue is $13.1 million.
  • The company has an estimate of 65 employees.
  • The Centrebus app helps customers to purchase m-tickets, track buses, and receive up-to-date service announcements.

Research Strategy

We were unable to provide marketing spend and the number of drivers for these companies. To find the number of drivers, we searched through the companies' websites, news articles, and press releases. For Arriva, we only found the number of drivers in Teesside, County Durham. Centrebus and National Express West Midlands, we only found adverts for bus driver jobs.

To find the marketing spend for these companies, we started by scouring through these companies' websites, regulatory filings, and presentations, as companies may list their expenditure on their websites and in their annual reports. On their websites, we fund information on routes, the number of buses, and locations. Annual reports were not readily available for all the companies because Centrebus and National Express West Midlands are privately held.

Our next approach was to search for this information in market reports on the UK bus operator market. We wanted to capture any mention of these companies across various market research reports such as KPMG, IBIS World, PRNewswire, DfT, among others. Nonetheless, most of the information concentrated on market size and trends.

We then searched through media sources, news articles and publications such as Forbes, Business Insider, and The Guardian. This strategy yielded no result as the only available information about the companies were about their services. Furthermore, we searched through business directory sites such as Crunchbase and Pitchbook for information about this information. This strategy only provided us with estimated revenue for the companies with no news of data about their marketing spend.
We finally attempted to triangulate the marketing spend of these companies by searching for available metrics on the percentage of expenditures that represent the marketing spend of these companies. This strategy failed as we lacked enough data to triangulate their marketing spend.


Sources
Sources

From Part 01
Quotes
  • "Rotala is pleased to announce a further acquisition, from CEN Group Limited trading as Central Buses ("Central"), of its entire bus business, bus brand and 31-strong vehicle fleet."
Quotes
  • "The number of buses used by local bus operators in England has remained at similar levels since 2004/05 at around 35,000 buses. Over a quarter of buses were in London. "
Quotes
  • "AIM-listed transport company Rotala has completed the acquisition of Heathrow airport passenger link service Hotel Hoppa from National Express for £2m."
Quotes
  • "The acquisition includes the right to use the business name, the goodwill of the business and the novation of the underlying contracts, together with the fleet of 32 buses."
Quotes
  • "The company has agreed to acquire 18 buses and a freehold property in the Manchester area, together with goodwill and the benefit of TfGM bus service contracts, for a cash consideration of £692,500."
Quotes
  • "Stagecoach has acquired South Gloucestershire Bus and Coach. South Gloucestershire Bus and Coach’s owners have decided to step down and a mutual agreement has been made to buy the business and its assets."
Quotes
  • "Rotala’s Wessex Bus operation is to be taken over by Stagecoach, following 11 years of serving Bristol and Bath."
Quotes
  • "The number of buses used by local bus operators has remained at similar levels over the last 10 years at around 36,000 buses. Around a quarter of buses were in London."
Quotes
  • "The number of buses used by local bus operators has remained at similar levels over the last 10 years at around 35,000 buses. "
Quotes
  • "The number of buses used by local bus operators in England has remained at similar levels since 2004/05 at around 35,000 buses."