Public transport operator uses Lloyds TSB Commercial Finance’s hire purchase for the 30th year running

One of the UK’s largest public transport operators, Stagecoach, has utilised Lloyds TSB Commercial Finance’s hire purchase facility for the 30th year running to provide passengers with a modern, accessible and sustainable bus fleet.

The Perth-based business, which was established in 1980, currently operates around 13,000 buses and trains, and originally approached Lloyds TSB Commercial Finance in 1981 for finance to purchase two new Volvo Duple coaches which were the flagship vehicles for the Perth-to-London express service.

The latest round of funding, worth £40 million, will ensure the business can continue to renew its fleet of buses and coaches, and invest in the latest technologies.

Hire purchase is ideal for firms like Stagecoach which have an ongoing requirement for up-to-date equipment. The facility’s scheduled payments simplify cash flow forecasting and ensure that the outright purchase of vehicles does not put pressure on liquidity.

Ross Paterson, Director of Finance & Company Secretary at Stagecoach, said: “Historically we have grown both organically and by acquisition. We are now a leading international public transport group, offering greener, smarter and better value travel to a growing number of customers."

“Our relationship with Lloyds TSB Commercial Finance has been intrinsic to our growth over the past 30 years, from funding one of our first deals for new coaches with our founders, Brian Souter and Ann Gloag, to financing our new coaches and buses which we have invested £200 million in over the past three years.

“It is essential we have the financial liquidity to invest in technological advances to ensure our fleet is as sustainable as possible. We are leading the way in investing in the latest hybrid-electric vehicles; with 30% lower carbon emissions than standard buses.

“The hire purchase facility allows us to do this without disrupting our day-to-day cash flow.”

Gordon Caldwell, Development Manager Lloyds TSB Commercial Finance, said: “Stagecoach has expanded dramatically over the years, now owning extensive operations in UK, US and Canada where it operates bus, coach, train and tram services.

“The company has been using our hire purchase facility since 1981, renewing on a regular basis to enable it to complement its long-term growth strategies.

“As the scheduled payments are over a fixed period, hire purchase facilities also assist in effective budgeting for the future, which is of particular benefit in the current economic environment.”

April 2011