Aggressive GRT expects pounds 5m profits: Scottish group eyes London bus operations

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THE SCOTTISH-BASED bus and coach group GRT, coming to the market next month, expects to make operating profits of about pounds 5m in the year to 26 March, according to its pathfinder prospectus published yesterday.

The flotation, by way of a placing on 27 April, should raise pounds 15m- pounds 20m and give GRT a market size of pounds 40m- pounds 50m. About pounds 10m of the funds raised are for paying off borrowings, with the rest to be used for expansion.

GRT is likely to have an aggressive acquisition programme and Robert Duncan, managing director, said the company was interested in four of the 10 London bus and coach subsidiaries being sold off.

The company will be ungeared after the placing and have bank facilities of pounds 20m. Mr Duncan said equity funding later on was also likely to boost the takeover programme.

Operating profits are pounds 1.2m higher than last year and include an almost six-month contribution of pounds 800,000 from two recent acquisitions, Leicester CityBus and Northampton Transport. GRT's turnover was pounds 39.7m against pounds 32m, including pounds 6.5m from Northampton and Leicester.

GRT was a management buyout in 1989 from Grampian Regional Council, with backers including Royal Bank of Scotland. The management owns 51 per cent, the employees 39 per cent and the rest is held by the financial backers. The managers are expected to sell 10 per cent of their holding.

Since the buyout the business has grown from 242 buses to 723, with about 1,850 employees.

The company will join Stagecoach and Badgerline on the stock market, but be substantially smaller. In the summer the Gateshead-based bus group Go-Ahead is also expected to seek a full listing.