Transport

Yellows in the black: Bus operator reverses seven years of losses with £591,000 profit

By Staff Reporter [email protected]

Published: October 17, 2021 | Updated: 18th October 2021

Yellow Buses has moved into the black for the first time in seven years.

The locally owned and managed company – bought out by its management in 2019 – made a pre-tax profit of £591,000 in the year to March 31, 2021.

That compares with a pre-tax loss of £2.656m in the previous 15 months.

Turnover fell by 18 per cent to £15.61m, period on period, due to a decline in passenger numbers caused by the pandemic.

The results reverse years of losses at the company which has a 130-strong bus and coach fleet and operates services across Bournemouth, Poole, East Dorset and West Hampshire.

Its last pre-tax profit – £799,000 – was recorded in 2014.

In the intervening years it racked up losses totalling more than £6.5m.

David Squire, Managing Director, pictured, told Dorset Biz News: “Despite the effect of Covid, we’re very pleased to have held our own and achieved this figure.

“A lot of hard work has gone into these results and I pay special tribute to our staff who have done an amazing job in the most difficult of circumstances.”

In its annual accounts, filed with Companies House, the company attributes the turnaround in its financial fortunes to significant changes in its bus network as well as cost reductions.

It also benefited from government funds totalling £1.74m during the pandemic to keep bus services running.

The money moved the network from loss-making to breakeven.

The coach and private hire businesses received no financial support from the government.

The company previously operated the 035 Bournemouth to London coach service for National Express.

After a decision by the transport giant to take the service in-house, a termination payment was agreed which netted a profit.

An exceptional item of £2.44m in the accounts relates to the Management Buyout in July 2019.

Highlights during the year including the establishment of a profitable commercial engineering business and the securing of contracts with megabus and Golden Tours.

David was joined in the 2019 management buyout by colleagues Phil Pannell, Service Delivery Director, and Simon Newport, Commercial Director, pictured.

Between them the busmen have more than a century’s experience.

The business was previously owned by French company RATP Group.

It acquired the former council-owned bus operator from another French company, Transdev, in 2011.

David said: “The speed and agility we now have as a management team allows us to act – and react – quickly when required.

“It benefits the business enormously and, without doubt, has contributed to these results.

“We can take decisions and move quickly in a way that could never have been done before under previous owners.”

Noel Smith, Director of Finance, who joined Yellow Buses – the trading name for Bournemouth Transport Limited – three months after the MBO said the company had been rigorous in its cost reductions.

“As we were going through things we were finding that every stone we lifted up had financial savings to be made.

“It was literally a case of pick up a stone, find a problem and then solve it,” he said.

The new National Bus Strategy – dubbed Bus Back Better by the government – is expected to deliver extra funding as well as new partnerships with local authorities and other bus operators.

David said: “The strategy is designed to reduce traffic in favour of the bus, which is greener and helps to take more traffic off the roads.

“We know that Bournemouth has significant traffic congestion and the plan aims to make bus services more reliable and punctual.

“Politicians need to be brave and put bus first and traffic second.

“We have just three and a half kilometres of bus lanes in the whole BCP Council area.

“I really hope that we’re seen as a solution to the whole question of traffic congestion and not the problem.”

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