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

Exporter of the Month - Optare

http://www.insidermedia.com/productsandservices/archive/ybi/february_2012/exporter_of_the_month_optare/index.html

It’s quite simple really,” explains Jim Sumner, “you just follow the money.” The bus manufacturer, based in Sherburn, has just secured a large order in South Africa, won after the chief executive of Optare decided to target the country because of the infrastructure developments surrounding the football World Cup.

Exporter of the month - OptareThe deal for 190 vehicles heralds a new chapter in the company’s history and is just an appetiser for many other contracts in the pipeline across the globe. It’s a very different story to three years ago when Optare was battling to avoid bankruptcy.

Established in Leeds as part of the British Leyland empire, Optare was formed in 1985 when the factory workers funded a management buyout with their redundancy payouts as Leyland was broken up. In 2008, the business was acquired by Roy Stanley and was floated on AIM. However, the effects of the recession and a new and inexperienced management team meant the business began to struggle and contract.

With customers looking elsewhere as they feared for the future of Optare, Sumner was recruited in early 2009 and immediately set about a three-year turnaround strategy.

“When I joined, Optare was very close to collapse. It was a good company, but it desperately needed modernising. I realised what I was getting into and I enjoy a challenge, but the real motivation was not wanting to see another quality British manufacturer going to the wall,” he says.

Sumner set out three objectives that would be crucial to turning the business around during a recession. He decided the business needed one modern efficient site, a new strategic partner with a global presence and to be repositioned as a low-carbon manufacturer and exporter.

In late 2009 Sumner sought out new investors to help him achieve his goals. He gained the backing of Ashok Leyland, a group owned by Insider’s Rich List regulars the Hinduja brothers, who took a 26 per cent stake and provided the capital needed to cut historic debts and invest in the business.

“The market was very tough during 2010 and it was challenging for us,” says Sumner. “However, we carried on doing what we believed in and we continued investing in the business and our products.

“We just didn’t have the capacity we needed to be able to cope with big orders at the old site, which meant we couldn’t chase fleet orders. We desperately needed to consolidate on one site and increase our capacity.”

With the support of Ashok Leyland, Sumner secured a new site in Sherburn-in- Elmet. He says the move enabled the business to “jump light years ahead” in terms of manufacturing, reducing costs while also dramatically improving productivity. Such has been the success of the move that Ashok Leyland has now taken a 75 per cent stake in the business and has placed it at the centre of its global business strategy.

Sumner says: “When I joined we had a £7m order book and that was dropping all the time. Today we have a £60m order book and that is increasing every day. All of our objectives will be achieved by the time I reach my third anniversary in June and we will make a profit this year.”

Sumner is now working closely with the Ashok Leyland group to introduce Optare buses to markets worldwide and, in addition to the successes in South Africa, the company is already making an impression in India, Israel and the Middle East.

Exports will account for a third of Optare’s turnover this year, but international trade is the most important factor in developing the business over the coming years. “The UK is a modest market and the only way to ensure our future is to be a substantial exporter – there just isn’t a big enough slice of the pie to sustain us at home,” says Sumner.

One of the biggest challenges Optare faces when it comes to exports is the product itself. The logistics of shipping such a large item can make it costly and inefficient, so Optare is using the Ashok Leyland group’s network of workers and facilities to assemble the buses in the destination country.

In the case of South Africa, most of the parts are shipped out and then assembled in the country, but in India the bus frames are shipped out and locally made using Ashok Leyland engines to make the buses more cost effective.

Sticking with the mantra of “follow the money”, Sumner says the group is looking to acquire a suitable manufacturer in Brazil at the moment, which can be used to produce Optare’s products in the country before it hosts the World Cup and the Olympics in the coming years.

“We’ll use the contacts of local companies to break into the market and then use them to sell and produce the Optare products,” he says. “It’s proved successful in other countries and it’s a model we’ll replicate as we export the brand.”

Optare is also targeting Europe, despite austerity measures sweeping across the continent and money being in short supply. However, Sumner has a back-up mantra: “Follow where the cost savings need to be made.”

He adds: “There’s not a lot of money in Europe at the moment as most of it is in deposit accounts in Asia. However, a lot of countries are looking at how they can save money and that means smaller, more efficient buses.

“There’s no real competition for us on the Continent and the austerity measures are creating a lot of interest in our products. We are seeing record levels of interest in exports.”

Optare has buses on trial in Holland, Sweden and Malta at the moment and is receiving a lot of positive feedback. Despite the different requirements in each market, Optare’s modular approach to buses means each can be quickly and cheaply modified to suit.

Looking to the future, Sumner believes a commitment to research, development and green technologies will guarantee success for Optare on the global stage.

“We are bringing new technologies to the market and we have something different to offer. That means we aren’t going in to a country and shouting ‘me too’. You need to be able to offer something different because you will not be able to compete on price alone,” he says.

“Exports will not only be crucial for the future of our business, but for the whole country. If the government wants to rebalance the economy, then we must move more towards manufacturing but also make sure we are exporting and making the most of the overseas markets.”

Found some further contract wins for optare, i spoke to the company last week
and asked the obvious question why not release news in RNS ? i was told they
prefer to issue updates during every business quarter. So we should get a bumper
update soon not only confirming the current £60m order book but also additional
contracts won in the last month or so. Things hotting up here ?

http://menmedia.co.uk/manchestereveningnews/news/business/s/1485952_stagecoach-to-spend-60m-on-greener-vehicles?all_comments=1

http://www.epsomcoaches.com/index.php/optare-solo-sr-for-route-470

http://focustransport2011.blogspot.co.uk/2012/03/blazefield-orders-for-2012.html

Maybe a good week ahead for optare !

Nice to see a thread started for an interesting company. Been invested here for years and things are now looking up. Optare expect to make a profit this year with backing from Ashok Leyland. Breaking into new overseas markets with quality buses. The only downside I can see is the huge amount of shares now in circulation ...

TWO NEWS ITEMS FOR OPTARE ON FRIDAY - Here is the first


£101 million bus boost for passengers - More low carbon buses and better partnerships to increase growth and cut emissions.

http://www.dft.gov.uk/news/press-releases/dft-press-20120323a/

Commuters and bus passengers across England will see more eco-friendly buses on the roads, congestion reduced and services upgraded, thanks to a new £101 million package of improvements approved by Local Transport Minister Norman Baker.

Today’s announcement will see:

£31 million spent on 439 low-carbon buses, part of the Government’s Green Bus Fund which aims to bring down fuel emission and air pollution levels and encourage bus operators and local councils to make the switch to hybrid-electric, fully electric or gas buses.
Winning local authorities across England will also receive a share of £70 million under the Better Bus Area (BBA) fund to boost growth, improve partnerships with bus companies and increase bus passenger numbers.

Local Transport Minister Norman Baker said:

“This funding means a better deal for passengers and encourages more people to travel by bus. It updates and improves services and infrastructure, reduces congestion, gives quieter journeys and with the introduction of new carbon friendly buses, reduces fuel costs and CO2 emissions, creating a greener network.”

The £70 million will be shared between 24 local authorities who have impressed the Department with their bid for funding. They will benefit from up to £5 million each. This will support a range of targeted improvements including:

* smarter multi-operator tickets
* traffic lights that can help buses beat the queue
* real time information; and
* improvements to shelters and stops

Following a two month bidding process the department has also provided funding for 439 new eco-friendly buses for 2012/2013. Passengers will see 128 single-decked and 311 double-decker buses in service from spring 2013, saving over 9,000 tonnes of carbon dioxide (CO2) emissions per year. The 26 bus operators including Stagecoach, Arriva and First are receiving more than £22 million, with more than £8 million split between five local authorities.

Five bus manufacturers will benefit from orders for their eco-friendly hybrid, electric and gas buses. They comprise: Volvo, Wrightbus, OPTARE, MAN and Alexander Dennis Limited, all of which are based in, or partly in, the UK.

By switching to low-carbon buses, the winners will also be eligible to claim additional government subsidy through the Bus Service Operators Grant to run these buses. Bus operators and local authorities will be given six pence per kilometre to support them with operational costs.

Notes to Editors

For further information, to organise an interview with Local Transport Minister Norman Baker or to request a regional fact sheet with a breakdown of all the winners, please email melanie.purkis@dft.gsi.gov.uk or call 0207 944 4342.

1. Better Bus Area Fund: For further information on the winners, the projects and funding breakdown go to http://www.dft.gov.uk/publications/better-bus-areas-fund.

2. The Department has made available an additional £20 million on top of £50 million to improve local bus services under the Better Bus Area fund.

3. All bids were assessed on how well they promoted growth, reduced carbon and encouraged partnerships between local authorities and bus operators. The projects were also assessed for deliverability, financial sustainability and value for money.

4. Green Bus Fund: For further information on the winners and projects go to http://www.dft.gov.uk/publications/green-bus-fund-round-3/

5. The local councils who will receive funding include: Nottingham City, Transport for London and Greater Manchester, Milton Keynes and Nexus.

6. Round three was launched on the 19 December 2011. The closing date for bids was the 10 February 2012. Scotland is holding a separate £2 million competition.

7. The budget for Round Three of the Fund was increased from £20 million to £31 million with the additional funding coming from savings and under spend found elsewhere in Government.

8. This is the third round of the Government’s Green Bus Fund and operators were allowed to bid for up to 80 per cent of the cost difference between the low-carbon bus and its diesel equivalent. Round one was launched in 2009 and paid up to 100 per cent of the difference, with round two paying up to 90 per cent. The number of bids received has increased each time with councils and operators realising the long-term financial, practical and environmental benefits of low-carbon buses. For further details on round one and two go to http://www.dft.gov.uk/topics/public-transport/buses/green-bus-fund/

9. By switching to low-carbon buses, the winners will also be eligible to claim additional government subsidy through the Bus Services Operation Grant to run these buses. Bus operators and local authorities will be given six pence per kilometre to support them with energy and fuel costs. These payments are set to continue in 2013.

10. A diesel hybrid electric bus runs on a combination of diesel and a battery. Gas buses funded through the Green Bus Fund will run on 100% biomethane.

11. The total grant amount offered to operators and councils is £30,931,160. For grant offered broken down by operator or local authority go to http://www.dft.gov.uk/publications/green-bus-fund-round-3/

12. Each year, every low-carbon bus in London saves around 26 tonnes of CO2 compared with its diesel equivalent, with buses outside London estimated to save around 22 tonnes.

Second piece of news i found on friday, a further £2.2m contract win announced in
latest issue of route one magazine.

http://www.route-one.net/e-books/currentIssue/index.html#/32/

OPTARE PLC - Advancing Under Ashok Leyland

Since Ashok took a controlling interest in Optare during 2011, the company has undergone a total facelift and restructuring and now looks poised to explore the global export market, alongside increasing market share in the Uk. Historically optare has always had a decent presence in the sector, but since the Ashok Leyland takeover the company are moving from three premises into one state of the art modern plant at Sherburn in Elmet ( Nr Leeds ).

The move from three premises into one has large cost saving implications alongside a greatly increased manufacturing capability of some four times higher its previous levels.

In february 2012 the company was heralded " exporter of the month " after securing a large export contract in South Africa, and also have a number of models on test in countries such as Malta , Holland , and Sweden . The company are also expected to gain decent contract awards under the UK governments Green Bus Fund that has recently been confirmed by the Department of Transport.

The company are also eyeing a great opportunity in the small bus market, where they have a brand new model up their sleeve that is already creating quite a "buzz" in the industry. Optare also have a number of leading edge Hybrid and Green buses that could not only be popular in the UK, but also has potential to take "market share" in many countries where emmisions legislation is favourable for new generation low emission buses at an affordable cost.

Backing of a Giant

Ashok Leyland is part of the Hinduja Group of companies and have a global footprint.

http://www.ashokleyland.com/



Hinduja Group

The Hinduja Group is a multi-billion dollar, transnational conglomerate. The Group was founded by Shri P.D. Hinduja in 1914 whose credo was "My duty is to work so that I can give."

The Group's activities span across three core areas: Investment Banking, International Trading and Global Investments. It also supports charitable and philanthropic activities across the world through the Hinduja Foundation. As part of its Global investments, the Group owns businesses in Automotive, Information Technology, Media, Entertainment & Communications, Banking & Finance, Infrastructure Project Development, Chemicals & Agri business, Energy, Real Estate, Trading and Healthcare. With operations across 40 countries, the Group employs over 40,000 people worldwide.

http://www.hindujagroup.com/

http://www.stockopedia.co.uk/content/optare-plc-advancing-under-ashok-leyland-64996/

Direct Link to stockopedia article

http://www.stockopedia.co.uk/content/optare-plc-advancing-under-ashok-leyland-64996/

Just had a small dabble here.

Going well!

Bumpy ride, but what would you expect from a bus?! To be fair buses are a lot more comfortable these days and I am comfortable holding these shares. A good bit of info from Glen. I am adding this little bit because I think it highlights the possible value of Optare:-

Alexander Dennis decided last December not to pursue a possible takeover of Optare because " Ashok Leyland said it had "no intention of selling its stake in Optare to anyone at any price".

If you squint you can see a seminal golden cross :-)

I've gone cross-eyed!

http://www.hindujagroup.com/

Breaking news - March production is up 147%

http://issuu.com/statsonline/docs/march2012-data

SMTT links for march stats.

Online ( XLS )

http://www.smmt.co.uk/2012/04/encouraging-first-quarter-for-bus-and-coach-market-with-registrations-up-56-5/

View in PDF here

http://issuu.com/statsonline/docs/march2012-data

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