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Telling sells London operation to NatEx

IN A MOVE which has taken industry observers by surprise, Tellings Golden Miller has agreed to sell its London bus operations to National Express for £20.4million.

Less than two years ago Steve Telling was bullish about opportunities for expansion in the London bus business when TGM was floated on the Alternative Investment Market.

Now the company is saying that it was unable to expand by acquisition, and that it feels opportunities to secure new tenders are constrained by rising labour costs and the growing influence of larger operators in the capital.

The new focus is to be in expansion outside London. In a statement TGM says that it sees “significant opportunities for growth in its regional coach and bus businesses in 2006 and beyond by acquiring complementary businesses and extending existing contracts with its strong client base”.

In the year ended 31 December 2004, turnover of TGM’s London Bus Division was £23.9million, operating profit was £2.1million and net assets were £4.8million. The purchase price of £20.4 million represents around 89p per share. The majority of the cash proceeds arising from the sale will be paid to shareholders by way of a special interim dividend of 60p per share.

The sale will leave TGM with 30 coaches in Twickenham, and with subsidiaries which include Tellings Golden Miller Coaches operating from Portsmouth as a subcontractor to National Express, Burtons of Haverhill, Classic Coaches of Annfields Plain, and Linkline Coaches in London.

All these businesses combined produced a turnover of £14.5million with a £1.3million operating profit for the year to December 2004.

Steve Telling says: “I am delighted to have secured an attractive price for the sale of our London Bus Division and to be able to return a substantial cash sum to our shareholders. Our remaining business offers good potential for growth and we look forward to enhancing shareholder value in the coming years.”

The acquisition of the TGM bus business by National Express is expected to be completed in mid-June, and will add 16 London contracted services and various operations in Surrey to NatEx’s Travel London business, along with 183 buses, 500 employees, and depots at Twickenham, Hayes and Byfleet.

It doubles the size of the Travel London operation, which was set up in February 2004 to take over the Connex bus business in south London.

www.tellingsgoldenmiller.co.uk 
www.nationalexpress.com



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