Private Investor: Memo to Mr Souter: show M&S how to rescue a business
Saturday 26 June 2004
Do you ever have the feeling that you've missed the bus? I certainly did when I heard last week that the
Stagecoach bus company was going to return some serious capital to shareholders. The issue of redeemable "B" shares amounts to the equivalent of a special dividend of 18p per share, against a current share price of about 85p. More to the point, that is a return of 18p per share on each of the shares I bought last year at 15p and 22p. When they rose to 30p, however, I decided to take my profits.
Do you ever have the feeling that you've missed the bus? I certainly did when I heard last week that the Stagecoach bus company was going to return some serious capital to shareholders. The issue of redeemable "B" shares amounts to the equivalent of a special dividend of 18p per share, against a current share price of about 85p. More to the point, that is a return of 18p per share on each of the shares I bought last year at 15p and 22p. When they rose to 30p, however, I decided to take my profits.
So, although the shares had doubled, I missed out on the subsequent tripling of the share price. What's worse, I decided to plough the proceeds into Marks & Spencer which I was then keen on, although of course I now know that the pleasing news coming out of the organisation then was but another false dawn. I bought M&S at 317p, and it is only thanks to the intervention of Philip Green that they are much above that level today. Had they kept up with Stagecoach's pace they'd be around £10 and not even the most energetic bidding war for control of the group is going to see them there any time soon.
All of which has to set me thinking about recoveries. Brian Souter, the co-founder of Stagecoach, started his business from scratch in 1981, buying an old bus and running a few routes in Scotland just as bus deregulation was getting under way. It cannot have been an easy way to make a living, but his adventurous way of doing business, which his critics regard as a little too aggressive, brought him, his co-founder and sister, Ann Gloag, and his company to a stock market flotation in 1994. That was when I clambered aboard, one of, I believe, 60,000 small shareholders who have since been treated to quite a rocky ride.
I still have the original shares, which I bought then, although they are now parked in an Isa and they are worth a lot more than their notional flotation price of about 13p (adjusting for share recapitalisations, rights and suchlike). However, they are also worth a lot less than their peak of 227p or so. That was before Mr Souter got into trouble with some of his overseas adventures, notably Coach USA. It did seem for a time that it was all going to be over for the company and that even its profitable UK buses and South West trains businesses would be overwhelmed by the mess in the US. Hence the shares' collapse to near penny shares levels when I threw caution to the wind and bought some more.
Fortunately for me, Mr Souter and his team managed to stabilise the business by selling virtually everything they ran outside the UK, including one quixotic operation in Malawi, where I suppose Mr Souter was following in a long tradition of Scottish explorers and missionaries.
In any case, Stagecoach has now achieved such a turnaround that it can happily redistribute more than £60m to its owners, although it's safe to say my share of that will be rather less than the £33m (from a 13.5 per cent stake) Mr Souter will receive or the £27m (from 11.1 per cent of the business) that Ms Gloag will see coming through the letterbox of her castle.
I don't know what Mr Souter would do with Marks & Spencer, but I hope he will treat this as an informal request for him to drop a line to Baker Street with a few tips on how to rescue a business from disaster.
It does make me wonder, though, as a taxpayer as well as a shareholder, about how an industry that is supposed to be in crisis can provide quite such healthy returns. I appreciate that, post-Hatfield, the industry was bound to bounce back and that the Government and London's Mayor, Ken Livingstone, have done wonders for the buses, but I do wonder precisely how much of that £60m came from the pockets of hard-working taxpayers in the first place. Still, it's nice to be able to find a way of making the most of the chaos that is the British public transport system. If I was Alastair Darling, the Secretary of State for Transport and Scotland, I would ask my fellow Scot Brian Souter some searching questions about how his business is going.
What else? Well, Vodafone is proving as disappointing as it heads down to 120p. Just as well that I'd started buying into BT, nudging 200p for the first time in recent memory.
- 1 Woman accidentally shoots herself in the head while posing for a selfie
- 2 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 4 Female Muay Thai champion hustles coaches to give them a beating
- 5 16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...
Day In a Page
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof