Optare is one of the most respected names in the UK bus industry. Our parent, Ashok Leyland, part of the Hinduja Group, is ranked within the top five global bus manufacturers. We design, manufacture and sell single deck and double deck buses, and offer a comprehensive after sales service.

Building on a history of innovation, we have developed a range of low-carbon buses using enhanced diesel technology, alternative fuel options and hybrid systems, and even full electric drivelines which are available across our entire product range. And with reduced weight designs and optimised drive systems we set the benchmark for fuel economy and CO2 reduction.

Our buses operate not only in the UK but in Continental Europe, North America and further afield. We also supply complete vehicles, CKD or SKD kits, technology transfer and licensing agreements worldwide.

Optare’s integrated design is unique and features an easily demountable power pack. This allows our buses to be future proofed, giving operators peace of mind since, with continued rapid advances in low carbon technology, Optare buses can be upgraded to whatever is the best system over the 10 to 15 year life of the bus.



ROUTE ONE MAGAZINE ARTICLE - FEBRUARY 2012 ( including download link )

THE GAME CHANGER

By Mel Holley

Route One Magazine - February 2012


A new factory, a new finance arrangement and new products mean that as Optare heads toward the end of its three-year turnaround plan and a return to profit there's a renewed new mood of confidence for the UK bus builder.

Consistency has been the key feature of Optare CEO Jim Sumner’s three year turnaround plan.The business has been through the mill in many ways, but this is water under the bridge as with a new single-site assembly plant, new financing arrangements and new products on the way, there’s much to smile about.And trying to achieve all this in the midst of the biggest downturn in the UK new bus market of recent years is no mean feat. Yet, Optare held its own in the declining market, with 269 vehicles registered in 2011, just 10 down on 2010 (routeone, Big Story, 19 January). But this is only part of the picture and in 2012, the new Sherburn in Elmet assembly plant, just off the A1 near Pontefract, is expected to produce 800-900 buses, including 190 completely knocked-down kits (CKD) of Solo SRs for South Africa.

This has only been made possible by the deal that, earlier this month, saw Indian-based Ashok Leyland take a 75% controlling stake in Optare,having taken an initial 26% stake around 12 months previously. And, this financial backing has other key implications - all positive. Optare previously banked with Lloyds TSB/Bank of Scotland, and the taxpayer owned bank is notoriously riskaverse.The Ashok deal has seen Optare pay off its remaining debts, close its Lloyds account and switch to Ashok’s bankers,HSBC.

So, having gone from a position where Optare owed £9.5m, down to £1.2m last year, it now has new banking arrangements and credit lines, opening more opportunities - such as immediate access to Ashok’s purchasing arrangements with suppliers such as Cummins.The final part of the jigsaw is completion of the sale of the remainder of the Rotherham site (clearing the £1.2m debt) with part of the site leased back to continue the Aftercare business.“Without Ashok’s backing and the re-financing deal, we couldn’t have won the South Africa order,”adds Mr Sumner. Not only are bidders’ financial positions examined in careful detail - to establish that they can deliver the order and provide the ongoing support - the export market is not the place for minnows. With Ashok being the fifth-biggest bus builder in the world, it’s no minnow.There are other considerations too, for example, the South Africa order will require £3m-£4m of
working capital, to cover goods in transit etc. Again, Ashok’s backing is vital in this arena.

Further proof of the seriousness of the export drive, was the unveiling last week of an Ashok Leyland-badged Solo at the Delhi Auto show (see news pages) where it received very strong interest. It also returned the famous fluid-flywheel ‘L’ logo to the front of a British-built bus.This use of Optare’s intellectual property is another aspect of the leveraging that is now possible.And, more products will follow. Last week’s announcement of a new Optare Bonito low-floor minibus will fill a vital gap in the range. Meanwhile, the doubledecker project proceeds, with more accumulation miles and testing of the prototype, even though it has not yet been decided to put it into production.The outcome of the London Mayoral elections in May, and what Transport for London’s future double-decker buying policy will be, is one aspect that is being looked at. However, again Ashok is also interested in the vehicle for its domestic market.

It’s still a case of ‘wait and see’, “the product is up our sleeve,” says Mr Sumner, but while the time may not be right yet, neither is the project dead. The Versa is also of interest to the Indian market, says Mr Sumner.The rationalisation of the Solo range, to just the SR model, was inevitable. “In a recession you need to keep as many products available as possible. With the move to the new factory, and greater integration with the Versa range, the time had come to trim the range,” says Mr Sumner. “Also, the SR is the only model that will sell to the export markets.” This autumn’s Euro Bus Expo will be a key show for Optare; there will be news on products - although what exactly isn’t being revealed. The only clues are that the Versa is involved with a facelift, and that Optare is planning to enter the 10.7m market - traditionally ‘Dart’ territory - with a “blockbuster product,” says Mr Sumner.There are four key elements to
Optare’s three-year turnaround strategy, of which six months remain. Firstly, to make the factory move, secondly to re-bank, thirdly to return to profit, and fourthly business development by growing the order book and winning exports.Having started with three sites building buses (Leeds, Blackburn and Rotherham) the transfer to a single assembly plant delivers all kinds of efficiencies. To call it’s a factory move is not entirely accurate, as little of the old factories, save for some small plant and tools, have actually moved. The new factory employs 290 staff, of which 200 are on the manufacturing side, and this total will rise to around 350.

Optare retains a small contingent of staff at Blackburn, although these are about to move, along with its aftercare and service centres at Rotherham and Thurrock, bringing the total workforce to around 500. The major investment is £750,000 in two low-bake spray booths/ovens, while other new equipment includes vehicle lifts, mezzanine flooring and cranes. With everything in a single production hall, the benefits of starting with a new, empty building, are clear. Not only do the offices house all the functions together, so people can now talk to each other faceto- face, rather than being split across several sites, the vast, modern, production hall is designed to allow for any future layout changes to be made easily. Outside, is an adjacent test track used by brake component manufacturer Mintex, which Optare is able to use. The production hall is set up with two u-shaped production lines,with about 50 vehicles in progress when we visited last week. The bus frames are now built by the WEC Group Ltd. This management-owned fabrication and engineering specialist previously based in Darwen, Lancashire, supplied Optare with kits of components to manufacture structures over the last two years.

With the move and a new contract with Optare, WEC commissioned its own new factory adjacent to Optare’s Sherburn bus assembly operation. It now delivers complete bus structures, ready for component fitting. Optare has also installed new IT systems and introduced Gemba - a Japanese quality and improvement process that promotes lean manufacturing and continuous improvement ideas. Commonly used in the car industry, along with Kaizen (change for the better), it means that productivity and quality will continue to improve. The result is that, currently, Sherburn complete three buses, per day, on a single shift (i.e. 15 per week). This gives the factory a capacity of 750 buses on a single shift, or 1,200-1,500 on two shifts. Currently, slightly more buses are in progress than usual as there a large number of hybrids - mainly the Greater Manchester order - all of which will be delivered by the 31 March deadline.

This brings another aspect to Optare’s development, as this contract is repair-and maintain, which gives Optare the opportunity to experience first-hand the real-life challenges of operations, and feed improvements back into product development. Mr Sumner praises the approach of Ashok: “I’ve worked for Anglo-American companies which have a command-and control type of management approach,” says Mr Sumner, “but Ashok is empowering us and enabling us to develop. It’s a different culture, and one that’s very refreshing. And, if you want an example of what that can produce you only need to look at another Indian firm, Tata, which owns Jaguar among others.” Other things in Optare’s sights are its renewed focus on looking at whole-life vehicle costs - especially where fuel consumption is concerned - and the possibility - again thanks to Ashok’s backing - to enter the direct finance and leasing market. Together, the factory move, rebanking and Ahsok’s’ involvement, are the biggest positive things to ever happen to Optare.

Concludes Mr Sumner: “It’s a game changer, by anybody’s standards.”

----------------------

Route-One Comment:


Already a number of operators have had the chance to see the new production hall at Sherburn for themselves, with more having the opportunity in the coming weeks.There are clear efficiencies being gained from the new site, which means that Optare will be able to remain competitive on price. Mr Sumner is direct: "The business will be in profit for the financial year to the end of 2012", by when the bold three-year turnaround period will have ended.

Optare has long won its market share thanks to innovative products meeting specific market needs. But, now part of a major global player, this Ashok Leyland Group company, has set its sights on new markets that wetre previously not within its reach.Make no mistake, this is a positive watershed moment,which means that Optare will be ideally positioned for growth, just as the economy starts to come round.

http://www.mediafire.com/?0o11q2utcaq05aj

Looking good



http://www.noodls.com/viewNoodl/13934033/optare-plc/optare-supplies-39-hybrid-school-buses-to-tfgm

Nice to see the BBC news today showing Optare's electric bus gliding along smoothly in Coventry. Pity the same can't be said of the sp!

As long as it wasn't on the back of a low loader! :-)

:o)
No, it was looking good, splashing through the rain! 30 minutes re-charge time and it saves £120 per bus per day in fuel. Apparently! It does have 56 batteries costing about £1,000 each but it is expected that they will last up to 5 years. That, however, is not known!

http://www.bbc.co.uk/news/business-18409830

should do well in Bombay then!

Indeed, plenty of stop/starting to keep that flywheel working!

Woosh, whir, hmmmm, or whatever noise an electric bus makes!

With results due within the next two weeks it was interesting to see a late buy of 1m shares after hours ... first late buy I have ever seen for Optare in my 4 years of holding. Hope someone knows something positive is coming our way.

Optare plays part in Ashok Leyland’s bus export drive

Ashok Leyland, parent company of Britain’s Optare bus making business, is targeting five country clusters — West Asia, Africa, Russia, Asean and Latin America — to either export to or start local operations.

A nice ride up to 1p and beyond maybe?!

It appears that besides the Coventry electric buses now in service there are also Optare electric buses now in service in Dorset, running from Poundbury to Dorchester. Having been on trial they clearly proved to be a success and are now up and running. The potential for councils up and down the country to take up this clean, quiet and environmentally friendly form of transport is immense.

The chart is starting to look interesting.

Final Results

Operational Highlights

· Major operational and business restructuring complete, with closure of the Leeds and Blackburn facilities along with the sale of the Rotherham site.

· Move successfully completed to new factory in Sherburn in Elmet.

· Over 150 new Hybrid and Electric buses now in operation in UK and export markets.

· Europe's first 11.1m Electric bus launched.

· Major export success achieved in South Africa with initial £18m order.

· Ashok Leyland increased its stake in Optare to 75.1% in January 2012 and committed to maintaining its AIM market listing.

· Board strengthened by the appointment of four new Non-executives including Jorma Halonen, former Chairman of Volvo Bus corporation.

Financial Highlights

· Revenue for the 15 month period £72m.

· Capital investment of £2.2m made in new Factory.

· Direct labour was 13.6% of revenue over the 15 month period (14.3% 2010), this compares with the last three months run-rate at the new Sherburn facility of 9.4%, demonstrating the significant efficiency improvements of the new single site.

· Administration costs pre-exceptional were 14.4% of revenue over the 15 month period (14.7% 2010). This compares with the last 3 months of 9.0% with the full impact of the Blackburn closure yet to be fully reflected.

· EBITDA losses for the 15 month period were £6.8m pre-exceptional. Management estimate this includes around £2.9m of costs that could have been avoided had it not been for needing to stagger factory closures and outsourcing activities, undertake major site clearance work and retain skills during production transfers.

· Exceptional costs for restructuring, redundancies, relocation and the factory moves totalled £4.6m.

· Loss per share reduced from 2.1p per share to 1.4p per share

· Remaining term debt with Lloyds Bank of Scotland paid down and all fixed and floating charges released.

· New working capital facility agreed with HSBC and supported by Ashok.

· Tax losses at current corporation tax rates equivalent to approximately £9.3m will be useable when the Group achieves profitability.

· Order book stood at £45.7m at year end 31st March 2012.

Moving up on good news. Optare broke back into EBITDA profit during the summer, chief executive Jim Sumner has revealed. Also they will be launching a new model Optare Bonito alongside an entirely new model which is still a closely guarded secret. It's about time we had some news!

Just realised that the Bonito has already been launched. Doh!

So not that secret then! :-)

There is, allegedly, another "secret" model skinny! Shhh! Don't tell anyone! :o)

Lol!

kim yes there are details on this in various reports :-)