Southampton busmen set to cash in

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The Independent Online
A group of South Coast bus drivers who bought out the company three years ago are set to walk away with pounds 12,000 each - a tenfold profit on their original investment - after FirstBus, Britain's biggest bus operator, made an offer for the business, writes Michael Harrison.

A total of 320 employees invested an average of pounds 1,200 each when Southampton Citybus was bought from the city council in 1993. A total of pounds 420,000 was raised in equity from the employees towards the pounds 3m cost of the buyout. Total equity in the company is pounds 1.2m

The average windfall for each employee is the equivalent of a year's take-home pay. The company's bus drivers earn pounds 14,500 a year before tax for a 45-hour week. FirstBus would not disclose the price it had offered to pay but on past deals in the bus industry, the business is likely to sell for pounds 5m to pounds 10m.

Last year Southampton Citybus made a pre-tax profit of pounds 600,000 on a turnover of pounds 12m. It has debts of pounds 4.5m to pounds 5m. Its managing director, Ian Philips, said that a large element of the borrowings had been used to upgrade the fleet of 160 buses.

The company is the largest operator of gas-fired vehicles in the country. It has a fleet of 16 buses running on compressed natural gas and has its own gas filling station on site.

All of the employees from Mr Philips down received the same allocation of shares at the time of the buyout. A portion of the shares are held directly and the rest are held in a trust fund. Staff at the company were being told yesterday that the average payout was likely to be around pounds 12,000.

Last week employees at the Dundee-based bus company Taybus, came into a windfall worth an average of pounds 22,000 each after National Express, the coach operator, agreed to buy the business.