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

Be nice to see it up by more than the spread!

I'll second that! It will be interesting to hear what Optare have to say about the state of play later this month with maybe a word or two regarding the Bonito. New registrations figures out tomorrow.

Contract Win

Optare is pleased to announce that it has delivered 18 of its Versa models pursuant to a purchase order with First Cymru for operation in South Wales. The contract is valued at £2.66 million.

Two versions of the low-weight midibus model are being supplied: nine are the 11.1 metre model and nine are the new 11.7 metre model, with seating capacities of 36 and 40 respectively.

First Cymru have specified a high standard of passenger comfort on their new Versas with features such as leather-trimmed Esteban Civic V2 seats and free Wi-Fi connectivity. There are two spacious wheelchair/buggy bays, one on each side of the bus, each with three inward facing tip up seats to optimise the carrying capacity, and which can be accessed immediately on entry by means of a robust 'book leaf' type fold-out ramp. Hanover LED destination equipment is fitted to the front, side and rear.

Final Results

Operational Highlights

· Winning the prestigious society of motor manufacturers and traders (SMMT) award for innovation for fast charging Electric vehicle (EV) technology.
· Launch of 3 exciting new products, Metrocity, Versa 11.7m and Bonito.
· Completed 10,000th bus since Optare formation in 1985.
· Investment in a new paint shop and engineering systems to continue to deliver high quality engineered products.
· Successfully completed the export of 177 Solo kits to the City of Cape Town, this is the highest ever export order achieved by the company.

Financial Highlights

· Revenue for the period is £75.9m a growth of 6% over prior period of 15 months to 31 March 2012.
· Direct labour costs were 7.6% of revenue a reduction of 6.0% compared to 13.6% over the previous period.
· Pre-exceptional gross profit was 6.9% of turnover over the 12 month period (4.9% for 2011-12, 15 month period).
· Pre-exceptional administration costs were 11.6% of turnover over the 12 month period (15.0% for, 15 month period from 31 December 2011 to 31 March 2012).
· EBITDA Pre exceptional losses were £3.6m (£6.8m for 15 month period from 31 December 2011 to 31 March 2012).
· Exceptional costs of £1.8m were for continued Blackburn site closure, redundancy and restructuring costs.
· Loss per share reduced from 1.4p per share to 0.3p per share.
· New increased banking facilities established with three year term loan and one year overdraft facility.

Overall, not quite as bad as I had feared, there is still life in Optare land but why are they taking so long to replace Jim Sumner? I might apply for the job if they don't sort it soon!

Still slipping.
+ There has to be something wrong with this Co . . . but what?

It seems that whatever contracts they win, the sp is soon sliding.

Do they have massive Debt?
Do they have Pension Liability?

...Anyone...?
EDIT(6Jan2014)- see RNS....seems there was a huge debt, which is "fixed" by £20m overdraft facility - just hope that doesn't spell DfE if the Bank has a wobble!. . . They are concentrating on "Overseas Markets" - but IMHO it looks like desperation - and it's very difficult for us Punters to value. We can't see the export busses, etc. A new double-decker ( 2014), might look good, but on the streets of London - that would be a shop-window for their Exports . . . how about it, Optare?
EDIT (25Feb2014)-sp abt 0.25 pence OOps! compared with Much that long ago. I read (DYOR) a new Director appt. it reads that he's finance and batteries . . . .I wonder if someone sees this as an opportunity?
EDIT(6Oct2014 )- sp 0.17 - is this yet worth a punt?

I've still got some of these - worth about the price of a decent Christmas dinner!

Mine are worth the price of a Christmas pud! Still, the company has something to celebrate - they have just sold 2, yes 2 buses! Oh, and one of them is electric. Happy days at Optare! 😝

Contract Win



Optare is in receipt of a purchase order for 10 Versa and 27 Solo SR, Euro 6 vehicles at a value of £4.9 million from Ulsterbus Limited.

Versa deliveries will commence in August 2014 with the Solos to follow in September 2014.


Will they make a profit on the sales though?!!

I'm only 60% down now!

Contract Win

Optare is pleased to announce that has received an order for a total of 17 Solo electric buses at a value of £3.6 millionfrom Nottingham city Council. The order was partially funded by round 4 of the Government's Green Bus fund.

Delivery of the vehicles will commence in July 2014.

The last 2 orders are more than Optare's market cap! Let's hope that they have their sums right and make a profit. You may find yourself at break even and maybe in profit Skinny!

Is that an April fool!

Lol!

Contract Win

Optare has received an order for a total of 13 Versa hybrid buses and 3 Versa electric buses at a total value of £3.5 million from Transport for Greater Manchester. The order was partially funded by round 4 of the Government's Green Bus fund.

The vehicles are expected to be delivered in July. The three Versa electric buses will be the first fully electric low-entry buses to operate in Manchester.

Well, you wait for ages for an order to come, then along come three! 😀

Surreal!

Telegraph has revealed the new double decker from Optare, at 3:30pm today.

article with images


Boris Johnson, the Mayor of London, said this was “an important development in the bus manufacturing industry and is testament to the hard work the Hinduja Group has achieved since taking control of Optare”.


PS: Astute observers spotted it yesterday on the Facebook page of Sparrow Recovery, who showed off their low-loader with this (thinly disguised) bus on the back, on the way to its launch in London today.

They are a little late with their RNS!

http://www.moneyam.com/action/news/showArticle?id=4817182