RE: Bus Depot Figures6 Feb 2026 14:21
Genghis - the maths looks good to me on the rest of the depots. Should be £24m of depots remaining based upon 2024 book value, and leasehold shouldn't risk discounting for remedial work as that is the freeholder's problem. Remaining budget for all-in depot purchase costs for WMCA should now be £43.7m, with National Express I think having the most depots in the region. Those numbers seem to align okay. So far it looks on track to get close to the £140m book value for the buses and depots (assuming there's not something else pushing up that book value).
Lorenzo - personally I disagree on WeDriveU. Mistakes in decision making and negotiations have been the issue - and the operating environment has exposed the stronger vs weaker parts of the business in terms of decision making (e.g. they couldn't enforce that German rail clause as easily as the old CEO suggested, so it was false confidence to rely on it). But ALSA seems to in general not get much wrong, and hopefully they are finally getting that standard of decisions rolled out group-wide. If you can achieve that, why not have a US arm alongside a European arm. At the end of the day, it's all about whether you can evaluate a contract that carries elements of risk correctly - get that right and you have good business.
Otherwise my view is UK has progress in being tidied up (the sold coaches I have at £31m in adjusted operating losses over 3 years plus £33m in exceptional losses in 3 years, years when ALSA had already recovered earnings - although some of the adjusted operating losses may just move to National Express coach if they stem from loss making routes). Germany I'm hopeful will be good from H2 (ie not losing money any more). Cash in from West Midlands will help cut down debt a bit even if they don't fully get book value - although I wouldn't turn down a £140m special dividend if they got book value, as who doesn't like the entire market cap paid out in one dividend. More ALSA growth would be nice, but even if they just hold earnings there if the operating environment gets tougher, it's still enough. NA I'd like to see grown out, but with better risk management - i.e. don't grow at the cost of risking a bad deal, because one bad deal can kill you.
So for me it's all basic operational principles, which already exist in part, but not all, of the business - and on it's own you'd pay a massive multiple for ALSA due to that strong management performance. Instead sentiment is very low, and German looking like it will add £25m in cash in 2026 and £50m in 2027 vs the 2025 position adds £11m in market cap. Personally I've bought more and might buy a bit more next week if it stays low.
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