First Group yesterday announced it would spend £70million on a new bus fleet as criticism of the firm’s corporate strategy mounted.
The Aberdeen Group said the order for 425 buses was the “biggest ever” by a transport firm outside London. The spending announcement came as the board of First prepared for a grilling over claims the company has been poorly managed.
Yesterday, stockbrokers Shore Capital released a significant research note which claimed that FirstGroup has “suffered from some poor management decisions since the debt-laden acquisition of Laidlaw”, its US business, in 2007.But the announcement that First was investing in its UK bus fleet was expected to quell the criticism published by the UK analysts.
Shorecap wrote that the firm’s UK bus fleet was, on average, over nine years old, which the firm said was “right at the heart of First Group’s problems”.
Shorecap said First’s decision to cut back on capital expenditure (capex) in its UK bus division had proved “disastrous”.
The firm added: “The dangerous thing with cutting back capex is that it can take years for the impact to show through in the financial results.”
In an analysis of customer complaints, the analysts added that: “FirstGroup’s bus service and its buses are repeatedly described as expensive, old, dirty and unreliable, while their drivers have been described as untidy and rude.”
A First Group spokesperson said: “Over the last four years we’ve introduced 2,000 new vehicles and the average age of our fleet will reduce going forwards because of that.
“This underlines our commitment to growing our business and encouraging more people to use our services.
“At First Aberdeen for example our investment in the fleet is helping to attract more customers – indeed year on year First Aberdeen is moving 1,000 extra customers per day.”
All but six of First’s new buses will be manufactured in the UK with Ballymena based Wrightbus winning the largest contract.
Falkirk-based ADL has secured a contract for 97 vehicles including 60 double-deckers.
Leeds company Optare will manufacture 21, including six electric vehicles, and Volvo Group UK will build six coaches.