Short and Long View13 Jun 2025 09:35
Ive taken a few weeks out and away from the noise. Mosquitos buzzing around here, annoying and pointless but here never-the-less.
The business has been badly managed and run, with PI's and no doubt IIs not being informed of the real situation until it is now too late.
I haven't sold anything (my bad) . But other than a poor valuation for NASB and ongoing pain from mess of the German Contract , not a lot has changed with the long term view.
The Board only has one job now, to settle or refinance the Hybrid. Unlikely to refinance without a raise and unlikely to do a raise at these prices, so they will have to repay it by selling something!
1. The best course of action in my view, as it was nearly 2 years ago, is to sell the UK business for whatever it can get. Bus and Coach plus assets. This wont raise a lot but it might potentially be enough. West Midlands will need the assets (depots and vehicles, people and equipment, knowledge...) for their franchise model. There is some value in the coach business too. Break these two up and sell them to First Group and Flix etc....
2. Then there will be some improvement to the German books at some stage in the next 12 months or so. The full £200m wont be recovered no doubt but expect something, maybe £50m - £100m?
Realistically then from 1 and 2, I think that they could achieve £200m +.
Add to the NASB cash and theres enough to repay the Hybrid.
Leaving the regular debt of c. £900m. Which is historically the kind of debt managed over many years.
ALSA and WeDriveU value c. £2b (£1.6 and £0.4 respectively)
Net Result = 8-10 x current SP.
There is the potential that if this starts to happen then there will be or could be a quick realisation that things have gone too far. More likely it will play out over the next year or two.
Either way there is too much potential to sell at the minute. Lets see if the management can deliver.
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