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This is all probably for the benefit of the shorters. Watch them conveniently exit whilst the price is hammered
Good article on £2 bus fare. Operators worried that it will be a severe increase when / if govt reduces funding
https://www.route-one.net/news/operators-mixed-feelings-after-latest-2-bus-fare-cap-extension/
GLG short further reduced....Good news. Are the MM helping them exit?
There is not a chance of shares being bought back after the divi cancellation. That will happen with a tender offer, hopefully after the NA sale.......exactly as FGP did
In the first group latest accounts it shows the UK bus division is doing well. Their margins for YE march 23 were up on prior year. Looking through the Internet there is an endless stream of price rises across their operations.
Their pay agreement was 18.5% too.
Fgp isn't the only one. Wood group recently disposed of the built environment business. On completion the group MC was £900m. The disposal was for $1.8b on a multiple of 17x ebitda. The disposal represented 20% of group revenues.
Thanks fish. No probs. It shows me 2 paras only and asks me to subscribe.
If anyone has the full article, can you please copy any paste? Thanks
Hopelessvalue I agree with your thinking on valuation. I see a range of $1.2b to $1.5b. First student must be dying to get their hands on this jewel to completely solidify their market position. I also think student transport of anerica would also very very attracted to it as it would move them from 3rd largest student transport provider in the US to joint 1st.
When first group sold first student and first travel for $4.6b the whole company had a market cap of £1.1b (with debt also). So I don't see the worries around our market cap and the attributable value for NA.
It will not get approved for sale by shareholders if they don't get a very good valuation. The board know this. The First Student sale was marginally approved only as they felt it was significantly undervalued at 8.9x Ebitda.
It will either go for far in excess of £300m or not at all.
FY 2023 EBIT now expected to be in the range of £175m to £185m
No they are forecasting ebit at 175 to 185. Not ebitda.
Have a look at the hy presentation. They did a bridge of operating profit ((ebit) £57.5 h1 to £207.5 for the full year.
That 200 to 215 estimated ebit now reduced to 175 to 185.
They are still very cash generative. Ebitda should be 400m gbp or 489 usd.
I think the group delivered a total ebitda of £167m in H1 with an ebit of £57.5m. They are forecasting an ebit of £120m ish in H2 or the equivelant of £230m ebitda in H2.
Full year group ebitda should be c£400m or $484m usd
Their already shot reputations will be dragged further through the sh*t if they don't deliver on this for a respectable value.
I'm very thankful the refinancing was done as others have mentioned
Paddboy. First student was sold on 8.9x ebitda. They fetched $3.6b (when excl first transit) for $2.5B of annual sales and 43000 buses. We operate 22,000 buses, revenue of $1.3billion and ebitda of over c$160 to c185m (subject to shuttle clarification).
Nearly half across of these metrics. There also appears to be a lot of consolidation in the school bus sector
I'd be surprised if conversations hadn't already taken place rather than going into this review blind.
I'm not sure an ev / pbt is a fair valuation. In this case you are double counting the debt. If you are assuming another party would pay the debt as part of the price (hence enterprise value), I don't think its then fair to compare to earnings after the interest in that same debt.
This is why typical valuations would be ev / ebitda or PE ratio. Both of which would not double count the debt.
The more I look at this the more I feel positive. I really can see debt being cleared with any sale. We are then left with a very cash generative business with a mcap of only c£350m!
Student transportation of America is the 3rd largest school bus company in the US with 16000 vehicles. It was acquired in 2018 with only 13.500 vehicles for $1.1billion.
We currently have in excess of 20,000 vehicles
https://www.goodmans.ca/expertise/case/student-transportation-acquired-for-us1-1-billion-by-a-group-of-investors-led-by-cdpq
Last year NA delivered $84.7m operating profit on sales of $1.3b. $84.7m was after depreciation.
Deprecation for the group was $264m for the year on sales of $3.36b.
A broad brush allocation of depreciation would therefore be $102m fir NA
Hence $84.7 + $102m depreciation added back is broad brush $186.7m ebitda. @ 8
9x multiple would be $1,661m sale value or £1,384m.
Not sure how much of this is shuttle
When first group sold its us school bus business it did so at 8.9x ebitda.
It was sold during covid but with the ebitda value being related to its march 2020 results (I.e normalised prior to the impact of covid).
Larger shareholders were very unhappy with this
Marybr190 exactly what I was thinking. 888 all over again.