Optare Share Discussion Threads

[m4rtinu] 17/7/2014 09:32

Have a look at this article, written by Australasian bus and coach, but posted on Optare's Australian website.

It is quite long and covers the launch of the MetroDecker, but the interesting part is at the end, in the section Plans for Australia. The represenatatives are "intend(ing) to have sold a MetroDecker in Aus at the BusVic conference in 2015. (Yes JSB it probably will only be one!!)

There are also comments from Hinduja brothers about finance for Optare turn around coming from Ashok. Says "will make Optare the hub of its global bus strategy." Sound like a company that will be around for a while.

Also comments from Glenn Saint about developments with other bodybuilders around the world based on Metro chassis. (Quick paraphrase so check the detail.)

Cheers MU

[kimoldfield] 16/7/2014 15:09

I would like to think they require extra staff but a little voice at the back of my head says "Are you having a laugh?"! It is just possible though I suppose.

[m.t.glass] 16/7/2014 14:37

There were several other similar vacancies a few months back. Are these extra staff? Or did previous appointees move on?

[kimoldfield] 16/7/2014 13:18

I have not seen any specific current vacancies on Optare's site recently but I note that these are now listed:-

Customer Service Manager.

This role is a senior position with responsibility for increasing the sales of all Optare products, including parts, service, training and contact maintenance at an acceptable profit margin and assisting in enhancing the levels of customer service provided. Achievement will be either through personal intervention or via the efforts of other team members. This position is field based and will report to the Sherburn office. Salary: £33.5K PA

PSV Technician vacancies

The After Sales team at Optare are currently recruiting for PSV Technicians to join their team.
There are currently vacancies at the following sites:
4 x Trafford Park , Manchester (days/afters),
1 x Thurrock, London (days/afters)
2 x Field based ,York (days/afters)
Main Duties
• Ensure that the customer is handled politely and kept fully aware of the situation in a timely manner.
• Attention must be paid to safe working practices at all times and the required health and safety paperwork completed for each task.


Better than notifying us of redundancies!

[m.t.glass] 16/7/2014 09:38

07/16/2014 | 02:48am US/Eastern

Optare Plc is the bus-making subsidiary of Ashok Leyland Ltd (ALL) in UK in which it holds 75 percent stake. Optare is looking at further integration of ALL's resources in order to reduce costs of operations through lean manufacturing in 2014-2015. The move is likely to help Optare in further leveraging markets in Europe, West Asia and East Asian countries.


(

[m.t.glass] 16/7/2014 07:46

It maybe suits them to hang onto a stockmarket listed brand (and access to punters' money if called for) - even if they eventually use it for some other purpose, such as marketing imported indian vehicles other than buses. Ashok Leyland have a range of Dost cheap vans, pickups and trucks, including ownership of Avia.

[abergele] 15/7/2014 22:00

JSBach,
thanks very much for your honesty,
Perhaps it does'nt mean that at this level it may not be the right time to turn about the shareprice, to wait till it doubles,means half the quantity bought,but less profit another day.
The matter I want to ask,which bothers me,
with all the cash that the Hinduja family have,why not buy out Optaire now?,
as its so cheap.
the market cap is so low for them not to worry over a figure they can scoff at..

This was a question I would have liked to ask off a bb board,as it brings negativity to the thread,a message I did not want to infer..tia

[jsbach123] 15/7/2014 21:44

abergele I cannot say if the turnaround of Optare is here. All I can write (as I have written on this thread before) is that interpreting information within the public domain IMHO it seems unlikely that Optare will break even this current financial year.

[abergele] 15/7/2014 21:37

JSBach123,
I've been reading and wanting to buy in for ages,but thank goodness ,I am at this thought stage,other than suffering a great loss.

Can you say if the turnaround of Optare is here?

[jsbach123] 15/7/2014 21:28

New record low (I think) touched today.

[m.t.glass] 15/7/2014 13:59

Here in the lanes of north Herefordshire, almost all local buses are Optare Solo.(Lugg Valley Primrose Travel, based in Leominster)

[m4rtinu] 15/7/2014 13:39

One thing I notice is South and West Devon is that Optares seem to go on forever. Lots of old ones around. Maybe they are too robust :)

[m.t.glass] 15/7/2014 13:30

thanks ;o)

[steve517499] 15/7/2014 13:11

MTG ... They are making a 10%+ gross profit margin (approx £13-4k per vehicle) ... This would indicate to me the pricing is about right.

If defects outweigh this sum I would be surprised if they got any repeat business ... Which they do.

As with any fleet ... You will normally get a runt of the litter that is more troublesome than the rest ... even though they are all supposed to be identical.

[m.t.glass] 15/7/2014 11:27

I agree. Hence my inclusion of a reference to anecdotal info - by which I mean casual feedback from owners and drivers. They wouldn't know what it's costing the company of course, but might offer some insight into the nature and frequency of problems (if any) and whether they are trivial ones or expensive ones. If Optare are winning orders by perilously low pricing, they can't afford to do so if footing a significant bill for defects. If cutting corners in production to price low, the possibility of defects increases ;o)

I've got no reason to presume negative rather than positive comparisons with other makes.

[steve517499] 15/7/2014 10:55

MTG - I would be very surprised if that information was made publicly available by any company ... if you really wanted to find out - sure you could submit a FOI request - but could be rejected for being commercially sensitive

[m.t.glass] 11/7/2014 07:41

Is any detailed (or anecdotal) evidence available of how much time and money Optare spend in correcting defects? Is it any more or less than other makers?

[m4rtinu] 10/7/2014 19:22

Mercedes seem to be doing well in that sector.

[steve517499] 10/7/2014 16:43

Badly timed, but Bluebird, the compnay that produced the Orion/Tucana ... the main sellers in the Bonito sector has gone into administration and ceased trading

[m4rtinu] 10/7/2014 16:10

JSB, Steve thanks for comments. I don't have any industry knowledge, so my views are based on available stats and press releases. I feel I have spent rather too much time following this company, considering my investment is less than 1m shares. And as you might imagine, it is down about 50%.

So my views for what they are worth. I can't really make any forecasts, as there is not much pattern to Optare's UK sales (new reg) figures. We are currently (q1 14/15) producing 23 units/ month. This compares with 25 u/m (FY 13/14) and 31 u/m (FY 12/13). So my optimism for the coming FY is a bit diminished. Though sales in Australia may offset this. The sector of the market that Optare has recently concentrated on (8-12 tonnes) is down 25% in the calendar year to date. Whereas the larger sectors of single decker (13-16 t) is down 10% and double decker is down 8%.

So at least Optare have now got products in these larger market sectors (MetroCity and MetroDecker) and of course, they have EVs. So (stating the obvious I suppose) it depends how these new buses do.

As Steve has said, the revenue may improve with a different sales mix, but clearly not if units / month decreases. In the recent final results, Optare said order intake (a good stat for them to spin?) in FY 13/14 was up 33%, and although not historically high, the order book at £28m (at Mar 31 2014) was well up on the corresponding figure £12m (at Mar 31 2013). But last year they quoted the figure for Mar 31 and a "current" order book figure (of £20m). So anyone might well ask, why not give a "current" order book update this year.

There have been some changes to personnel, but I don't know if the new guys are better than the ones moving on. If they are, then with the new products and targeting of new markets abroad, then things could improve. But we have been told of good times ahead before and the good times haven't materialised.

And, as both of you have said, debt is growing.

I am telling myself to give the company another 18 months (from Mar 31 2014). Things have not got off to a great start.

So those are my views. This fence I'm sitting on is getting a bit uncomfortable

Cheers

MartinU

[steve517499] 09/7/2014 16:00

June 2015 when the current £8m overdraft facility expires could be a key date

[jsbach123] 09/7/2014 15:12

Thanks for your insightful comment Steve. I would simply add that another important factor to consider is the debt-trap spiral the company now seems to be in: given m4rtinu's numbers and even speculating optimistically that say 50% more buses are being built for export than are recorded in SMMT domestic numbers then debt added to liabilities for Q1 may be about £500,000. Even with a good (ie achieving the company estimate of 40 sales) contribution from the new decker later in the year I cannot see that the company can achieve break even for this financial year. Which prompts the question as Optare have never ever made a profit, and indebtedness increases month by month, how long can this continue? All IMHO and DYOR.

[steve517499] 09/7/2014 11:27

My feelings on this are that OPE now have their variable costs under control ... they just are not producing enough to cover their fixed costs.

A 10% profit margin and a £4m loss, means they need approx £40m more in sales to break even. They sold approx £60m in the last financial year ... so the breakeven point for OPE requires sales of £100m pa ... or £8.33m per month - which currently equates to 60-70 vehicles per month depending on the model spread. If the decker sells in numbers - this figure would reduce.

So the big question re your investments is - Can you see OPE producing this level of production on a regular basis?

[jsbach123] 08/7/2014 17:46

Thanks for Q1 number m4rtinu. I fear that you may be optimistic in hoping that the company will publish more detailed information/update on orders and exports in the Annual Report (but nothing wrong in hoping for more helpful information!) Why not share your interpretation and projections (for this current financial year - or a different time-scale) m4rtinu? It's always interesting to read the opinions and insights of investors who follow companies closely and/or have in-depth trade knowledge.

[m4rtinu] 07/7/2014 15:46

We now have the q1 "sales" figures (units) for FY 14/15. That is: 68 units (compared to 76 units for same period last year). In addition, we know that up to end of FY 13/14 there were 15 units sold to Australia, with orders for 30 more. Also, as at Mar 31 2014, order book was £28.4m (compared to £12.3m at the same time last year). I am hoping that the annual report will give us more detail and update us on orders and exports.

Any views?