On 6 Jul, 13:10, Steve Broadbent wrote:
In article ,
"Paul Scott" wrote:





"chunky munky" wrote in message
oups.com...
On Jul 6, 11:36 am, Steve Broadbent wrote:
In article . com,

wrote:
There are suggestions going round that whilst Chiltern is doing very
well on punctuality etc. there are many problems to do with other "key
performance indicators" linked to retaining the franchise that need
very urgent attention. (suggested as one reason behind the change of
MD recently announced) - so whilst it may seem to be doing very well
it could be that there are issues that need to be resolved elsewhere
in the company that we aren't aware of.

Tony

and this weeks Transit magazine shows chiltern's latest financial
figures, indicating that the previous year's decent profit has been
turned into a reasonable loss....

SB

I spy a bank or venture capitalist firm lurking about...!

What isn't clear is if Henderson is selling Laing Rail, which is Chilterns
parent, or just Chiltern.

If they are selling Laing Rail division, is there any reason why GoVia, the
second placed for the London Rail concession, couldn't buy it? I thought
they were in with a shout for the Ovewrground, if only because there will be
a lot of interaction between the ELL/WLL and other GoVia/Southern routes.
Same applies to services through Snow Hill now as well of course with West
Midlands...

any body can buy it, another TOC's parent, a would be TOC, merchant
bank, Sainsburys, but what is it worth... Transit says the company net
worth is £3 million, it is making a loss and has 15 years to run as a
franchise, so £50 should easily buy it?? Plus, if relevant, the half
share in London Overground.


Just to clarify, the share in London Overground belongs to John Laing
Group, not Chiltern Railways, so it will not necessarily be included
in any sale of the latter.

Also, as far as I am aware, it has not been stated that the split
between John Laing and MTR in the London Overground Consortium is
50/50. It might be 60/40 or 40/60 for all we know. Or 10/90 ... etc.

The Gerrards Cross fiasco has cost Chiltern dear. Apparently, during
the blockade, many Chiltern passengers found viable alternatives and
have not returned to rail in the numbers expected. The nearby M40 is
not such a bad option, either by coach or by car.

In addition, at long last, the Virgin Trains service between
Birmingham New Street and London Euston has experienced a strong
revival. At least some of the passengers using this must have moved
back from Chiltern Railways' services between Snow Hill/Moor Street
and London Marylebone. Anyway, the result is that the Birmingham
traffic on Chiltern, which experienced explosive growth, only to be
cut short by the Gerrards Cross blockade, is now being hit by
competition from a much faster (although vastly more expensive) Virgin
Trains service, and is therefore growing much more slowly than
expected.

The ownership of John Laing Group by Henderson was always going to
mean changes. Whereas Laing had always taken a longer-term view, and
made strategic decisions, Henderson Global Investors Limited is
unashamedly focused on shareholder value, which means that
underperformance will not be tolerated for long.

It will be interesting to see who buys Chiltern. In my view, a trade
sale to another transport operator is far more likely than a sale to
another finacial institution. A Train Operating Company is unlikely
to appeal to a private equity firm, for example, as there are few
assets that can be realised and the scope for rapidly increasing
profit performance simply does not exist because of the inertia that
is built into the franchise agreement.

My money will be on one of the TOCs that will have been disappointed
in the current tound of franchise awards. National Express Group is
one possibiity, but there are others.