Matt Evans is Managing Director of Centrebus, a substantial independently-owned business built up partly through the acquisition of largely tendered bus operations over 18 years. He talks to Andy Izatt about the challenges of running it successfully and profitably within the constraints emposed by the current economic climate
Leicester-based Centrebus employs 524 people and operates 230 buses on local services and contracts primarily in eight counties across a broad swathe of central England. Annual turnover is around £18m with a further £5.6m generated by Centrebus-managed High Peak Buses which is an equal joint venture with Wellglade.[wlm_nonmember][…]
By subscribing you will benefit from:
- Operator & Supplier Profiles
- Face-to-Face Interviews
- Lastest News
- Test Drives and Reviews
- Legal Updates
- Route Focus
- Industry Insider Opinions
- Passenger Perspective
- Vehicle Launches
- and much more!
“I must say that I enjoy every minute of working here,” explained Matt Evans who joined Centrebus as Managing Director in April 2015 after a long career with Arriva and Stevensons of Uttoxeter before that. “I didn’t realise until I was a way from the ‘plc’ environment just how much bureaucracy I’d had to deal with.
“I knew the previous Centrebus Managing Director, Peter Harvey, fairly well. Peter was Finance Director of Midland Fox and as well as holding other positions within Arriva was my divisional director when I worked in Crosville Wales, which became Arriva Cymru in 1998. Of course I knew Julian Peddle who was Stevensons’ Managing Director and part owner and who is Centrebus’ major shareholder and chairman.
“Centrebus has to be a tightly run business. There continues to be a real squeeze on tendered work which is what this firm has been largely built on although we do now run a number of commercial services and in addition, we continue to healthily compete with Arriva Mid-Shires in Luton and First Midlands in Leicester. There are at least 15 local authorities that we deal with so you can imagine how many concessionary fares schemes we’re involved in.
“We’re very lucky to have Bijel Mistry as our Commercial Manager. She was originally recruited by David Shelley when he was Centrebus Commercial Director and is really good. In recent times we have started using Phil Lasford who is a consultant, but who previously worked for EP Morris on concessionary fares. A lot of local authorities now use consultants and he speaks their language although I have to say that despite supposedly being no better or worse off, it seems and feels like we’re worse off more often than not these days.”
Disparate business
Continued Matt: “Our PVR (Peak Vehicle Requirement) is 188. In Hertfordshire we have a depot at Stevenage with 31 vehicles. Luton in Bedfordshire has 45 while there are 12 at Corby in Northamptonshire. Saxby near Melton Mowbray in Leicestershire has had a 26-vehicle allocation, but is due to close in mid-October with a number of the buses going to Grantham in Lincolnshire where a similar number of vehicles are based. That will take Grantham’s allocation to around 30 and there will also be an outstation for parking 10 buses at Coston which is slightly nearer to Grantham than Saxby.
“We realised that we had to rationalise what we were doing in the Melton Mowbray area because of rising costs, falling passenger numbers and worsening congestion. We’ve worked with Leicestershire and Rutland County Councils to try and minimise the impact, but a casualty has been our Five Counties route between Peterborough and Nottingham which has had to be split. The RF1 service now covers part of it, creating a new link between Melton Mowbray and Corby. We made the route changes in August, although the remaining Lincolnshire County Council CallConnect work we did from Saxby was handed back in July.
“Leicester, where our head office is located, has an allocation of 42 while there are 50 buses with High Peak Buses, our equal joint venture with Wellglade which we’re responsible for running and is based at Dove Holes near Buxton. High Peak’s highest profile routes are the Transpeak Derby to Manchester service and Skyline 199 linking Buxton with Manchester Airport.
“Generally there’s an Operations Manager at each depot which are treated as separate cost centres. Head office, vehicle depreciation and leasing costs are apportioned accordingly. We normally depreciate over 10-12 years with leasing and finance paid off over five to seven years.
“In terms of profitability each depot is holding its own, but because of the nature of the mostly tendered work we do, margins are modest. Another reason we decided to close Saxby is that it had become quite costly to run. It’s in a rural location where there’s no mains sewerage and we were spending a lot on cleaning and recycling waste water. The lease comes to an end in December this year.
“While it’s not a requirement, if any of our Operations Managers have the acumen we’re happy for them to get involved in the commercial development of their depots. Mick Rossiter who is now in charge at Luton is a recent example of this. I knew him first as a General Manager at Arriva, Wigton, but he’s worked for several bus companies.
“Another is Chris Moseley who runs our Leicester depot. He also worked for Arriva, but has been with Centrebus for 14 years. Our long term Grantham manager, Alan Humphries, has just retired and been succeeded by John Murray who was at Saxby. John is also responsible for the Coston outstation. All our managers work really closely with Operations Director Dave Brookes who liaises with them every day and holds a weekly conference call to run through our KPIs (Key Performance Indicator).
“There are workshops at all our depots and Engineering Director Keith Haywood does the same with his people. He’s very pro training and as well as a number of apprentices some of our skilled engineers have gone through IRTE (Institute of Road Transport Engineers) irtec accreditation. Over the 12 months to April our first time MOT pass rate was over 95%. We operate 10.5m miles annually, but all four of our O-Licences are ‘green’ OCRS (Operator Compliance Risk Score) rated with an average of 2.77 points.
“Spare vehicle coverage is around 20% which reflects the spread out nature of our operation. Every bus comes at a cost and we’re mindful of that. Of course we know we have to make a profit to reinvest, but I’m lucky to have a Chairman (Julian Peddle) who has been in the industry a very long time and is realistic about what is required to do the job properly and cover our mileage wherever possible. Again, it’s why I like working for a non plc.”
Commercially flexible
“Julian is quite heavily involved in the commercial development of the business,” said Matt. “We talk regularly and he attends our monthly board meetings where we go through the numbers and the KPIs. Each of the directors makes and presents their reports including Chris Brown, our Finance Director.
“A commercial meeting normally follows the board meeting. Being proactive is as important as being reactive and taking pre-emptive action is what we did in the case of Saxby. Local authority budgets are being squeezed all the time and even when a threat to cut support is withdrawn we can be sure that it will not have gone away for long. Like it or not, there’s a pattern. We look at our local bus patronage every month and unfortunately the decline is there. From what I hear it’s pretty much the same across the whole bus industry.
“Because of that we look everywhere for work. Keith Myatt is our Business Development Manager. He used to be at Arriva and is a very knowledgeable person who has done all sorts of things within the industry. I can remember him when he was at Stevensons and although he’s employed by Centrebus, he works for a few other companies and we share out his costs.
“Notable contracts we already fulfil include providing staff buses for TUI in Luton. We also work for the University of Bedfordshire at its Luton campus and in Leicester we provide a shuttle bus for Derwent Students. A route we’re particularly proud of is the UHL Hospital Hopper which links Leicester Royal Infirmary with Leicester General and Glenfield Hospitals. Patronage has been built up over six years using dedicated vehicles with internal lockers so documents and other items can be securely transported and we are very pleased to have secured a further renewal of this contract.
“Works contracts particularly suit us because of the shift patterns and we’re hopeful of securing some from Amazon and the like. Keith is happy to talk to any organisation that wants to develop green travel plans. It’s all about being responsive to what is a constantly changing marketplace.
“Centrebus and High Peak Buses have separate websites with Find My Bus doing the latter. Our Commercial Assistant, Thomas Manship is working on a new one for Centrebus that we’re hoping to launch in January. We’ll try and keep it low cost and as easy to maintain as possible.
“The reliability of our local bus routes is something that we take very seriously. It’s key to effective service delivery. It’s no good having something that looks good on paper. If you want people to catch your buses you have to run to the published timetable and we’ve instigated numerous registration changes over the past two years to improve punctuality.
“Trade union Unite has full recognition at Centrebus. We work in partnership to get the message across to drivers that running early is simply not acceptable. If a timing point is in the wrong place, we move it. Our Operations Director David Brookes and our Scheduler Andrew Huggon work together on this. It’s not an exact science so will keep tweaking until it’s right.
“The complexity of our ticketing is a reflection of the number of different areas we operate in, but we are trying to simplify what we offer. All our fare tables are on the website and returns are capped, currently at £6.80. We have our own non-ITSO smartcards called Carbonara and Pecorino which can be topped up on the bus. We sell a lot of those particularly in Leicester and Luton.
“Over the last two years I have spent a fair amount of time looking at the feasibility and justification of mobile ticketing, but in a sense the world may have moved on with the advent of contactless payment. We’re members of ALBUM (Association of Local Bus Company Managers) which is an excellent sharing vehicle. When we go down the contactless route I would like to see members stick together to keep the back office costs in check.
“We’re also members of the FTA (Freight Transport Association) and CILT’s (Chartered Institute of Logistics and Transport) BusMark. I’m a personal member of IRTE.”
People focused
Said Matt: “We pay different rates at each of our depots, but with inflation starting to rise, so are expectations. Since I’ve been Managing Director, there have been pay rises every year. It’s what we want to do, but the money has to come from somewhere. When we put up fares, we invariably don’t see the increase in revenue we would like.
“I established a Central Negotiating Committee that meets twice a year. I would hope that individual garage teams sort out matters locally, but if it’s a company-wide issue, there’s a mechanism in place to deal with it.”
Of Centrebus’ 524 staff, 114 are migrants. Of those 81 are from 10 European Union countries while a further 33 come from places as diverse as India, South Africa, Russia, Bolivia, Oman and Zimbabwe.
“It means we have quite a diverse workforce,” observed Matt. “In Luton around 50% of our staff are Polish. In Stevenage we have a high proportion of Hungarians while in Leicester there’s a lot of different nationalities. It’s not so diverse at Dove Holes. All driving staff receive company uniforms that are supplied by EFD Corporate.
“With the value of the pound falling against the euro post the Brexit vote last year, some of the drivers we employed have gone home while others have found work elsewhere. However, there is an advantage in working for us in that we can generally offer more sociable hours than many operators. There are fewer late nights and weekend shifts.
“Introducing the GEM (Going the Extra Mile) awards is something I did to try and help encourage retention. Members of staff can recommend a colleague who they believe has gone above and beyond by filling in an online form. The merits of what they have done are assessed by the directors and if they’re successful they’ll receive a £25 gift voucher.
“Award winners are just one of the news items highlighted in our newsletter, Centrebus & High Peak News which is put together by Thomas Manship. New starters get a mention as well and there are details of the latest developments at all the depots. There’s also a Puzzle Corner.
“I’ve introduced ‘meet the directors’ meetings which are held in the evening once a year at each depot. Initially the response was mixed. It’s difficult to see all drivers because of the shifts they work, but hopefully these are proving worthwhile to all that attend.
“We’re also now looking at introducing long-term service awards because while Centrebus is still a relatively young business, there are those with long industry careers who have been TUPE’d across from operations we’ve acquired over the last 18 years.
“We do have female drivers, but not that many. Coming from a ‘plc’ background I think it’s important to measure diversity and encourager our operations managers to try and tap into the widest possible labour pool. We’ve also set up our own training bus (Wrightbus-bodied VDL SB200). So far it has trained at Stevenage, Saxby where our instructor who is also a driver is based, and Corby.
“If a driver needs remedial training, we’ll send him or her on a one day course. Driver risk management is undertaken by myself and Dave Brookes and again is something we take very seriously. While we self insure, we use QBE for our catastrophe insurance and it has been very helpful in trying to reduce our risk exposure, not least by providing collision investigation courses. Gallagher Bassett is our broker. We’re also members of BRAKE and we’re looking to take part in the forthcoming Road Safety Week which is planned for November 20-26, 2017 and we’re looking to roll out the BRAKE driver’s pledge in early 2018.
“There’s tracking on our vehicles through our Vix TP5700 ticket machines although Ticketer is used on some High Peak Buses vehicles. I’m pleased to say that we’ve now placed an order with Ticketer to replace the rest of the old Wayfarer TGX150s at High Peak by the start of November. Tracking data definitely helps with reliability. However, it was our broker, Gallagher Bassett that suggested we try Lytx DriveCam as a driver risk management tool and we’ve been trialling that at our Luton depot now for 12 months.
“When triggered, Lytx captures eight seconds of recording before a range of ‘events’ and four seconds afterwards. That data is then studied and graded. The value comes from coaching the driver about what he or she has done by showing them the images and explaining what they need to do to improve in the future. It needs to be done as quickly as possible and put across positively. It’s only as a result of the coaching that we see a benefit.
“What Lytx highlighted over a two month period was that 20% of the drivers being monitored represent 75% of the risk so it’s quite easy for a manager to see that if he or she concentrates on the worst, by default it’s going to make a difference. We’ve rented Lytx for three years and preventing just one accident annually will cover its cost. What I particularly like about it is the data is transmitted for analysis via the ‘cloud’. There’s no need to get hold of the bus and then do a download.
“Drivers know that with Lytx they have a button they can press to record a road rage incident if it happens. We’ve also introduced a £25 monthly prize draw to reward those with the lowest number of incidents so they can see we’re giving something back. We’re not just criticising. At High Peak Buses, because vehicles are equipped with GreenRoad, an accident-free bonus is paid twice a year.
“Lytx is not a substitute for onboard CCTV which is installed on all our vehicles at Luton. Not all depots have a fleet that’s 100% equipped, but it’s what we’re moving towards. We tend to use Synectics, but also Centrad and it is normally eight cameras on full-size single-deckers or five on a smaller vehicle like an Optare Solo.”
Right vehicles
Optare Solos and Alexander Dennis Enviro200s predominate in the fleet, but there are small numbers of older Plaxton Pointer-bodied Dennis Darts, VDL SB180, SB200 and MAN 12.240 Plaxton Centros, VDL SB200s bodied by Wrightbus, VDL SB180s with MCV, East Lancs and Wrightbus bodywork, and Scania and Wrightbus-bodied Scanias. Three Optare Tempos also operate and there’s a growing number of Versas. Nine double-deckers are a mix of older Dennis Tridents, Scania OmniCity Double-Deckers and recently acquired East Lancs-bodied Scania OmniDekkas.
“There has been heavy investment in the fleet over the past few years and we’ve worked hard to improve the quality of presentation inside and out,” said Matt. “Last year we started standardising our interior notices so all the vehicles that come into the fleet have a uniform appearance.
“We just put two new Optare Solos in to High Peak Buses which received three similar vehicles earlier in the year. We’ve also bought 12 Optare Versas – mostly former Transdev and Webberbus vehicles, but also a pair of 62-plate buses with wood-effect floors from Travel de Courcey that have been repainted in a new Peaks & Dales livery for route 65 between Sheffield and Buxton. High Peak Buses is taking over that service in its entirety in October. It’s two buses all day, seven days a week and was a Derbyshire tender that we’ve part commercialised.
“Fuel consumption is carefully monitored and mpg is improving as we replace older buses. Most have Mercedes-Benz or Cummins engines which are okay. It’s all about running the right vehicles for the route and that has been borne out by the Enviro200s we bought new for the Transpeak service which have larger six-cylinder engines that are better suited to the demands.
“Our heavy-duty Scania single-deckers are very good buses, but they do use more fuel. We use them on the Luton guided busway where it’s only really possible to have Volvos or Scanias because of the loadings placed on the front axles.
“We bought two former Stagecoach London Scania OmniCity Double-Deckers that had been refurbished for Scania by Hants & Dorset Trim a couple of years ago and they have just been joined by three high-capacity OmniDekkas from Nottingham City Transport that have replaced older Dennis Tridents. All our double-deckers are at Grantham where we carry reasonable loads on route X6 between Bottesford and Grantham because so many parents want to send their children to The King’s School.
“Roundwood Park School in Harpenden, Hertfordshire is another that’s really popular with parents and we have two routes to that as well. Our school services tend to be commercial rather than contracts with local authorities buying passes. Councils don’t need to put on bespoke buses if there’s a commercial route anywhere nearby and we are constantly trying to explore those opportunities.”
Strong foundations
Centrebus opened a new depot and head office in Leicester earlier this year that means it has been able to concentrate its three-site operation in the city on the one redevelopment of its previous main depot in Wenlock Way.
“The lease was coming to an end at our old garage in Wenlock Way and our landlord said the place next door was available,” explained Matt. “Were we interested? I said we could be if we could combine the two sites and knock down the old depot to create a parking area that would mean we no longer needed to have a separate parking yard. That’s what has happened.
“We now have a spacious five-bay workshop where there’s plenty of room to use vehicle lifts and we’ve installed a headlight aim tester, VLT brake tester and rolling road so we can carry out MOT preparations. It’s a nice facility that has been repainted, rewired and has new skylights and lighting. Our old workshop only had three bays and we struggled for space.
“The adjacent offices we’ve now occupied have also been reformed and refurbished. Head office staff were able to move in ahead of the workshop becoming operational and for all our people, the disruption was minimal.
“We take our environmental responsibilities very seriously. We’ve helped Leicester City Council make successful Clean Bus Technology Fund bids that have enabled us to retrofit HJS SCRT (Selective Catalytic Reduction Technology) systems and Grayson electric fans to 11 of our Leicester-based buses, but we’re also looking at introducing low consumption LED lighting at all our properties. The first, which is now completed, is Dove Holes and then we will possibly move onto Luton. We’re anticipating the big savings will be in our workshops and yard floodlighting. We are expecting a payback in two years.
“Centrebus has grown through acquisition and I continue to receive the occasional email about businesses that are for sale, but invariably what I’m sent wouldn’t be right for us.
“The industry is different now and there certainly isn’t a target list anymore. If the right business came up for sale then we would of course give it due consideration.
“We continue to be reasonably successful at securing work as tenders come up. There’s always something going on, but I can’t see the current political climate changing which does make me wonder where the industry will be in five years.
“I’m sure Centrebus will still be here and firing on all cylinders. It’s all I’ve known as well and as I said at the beginning, I really like working here. We have a great team.”[/wlm_ismember]
