Funding drives move to new routes and territories
Cumfybus is working with Santander to expand its passenger-friendly transport service across the North West
- Turnover: £7.5 million
- Sector: Transport
- Cumfybus run a bus services around Merseyside, using small, passenger-friendly buses on socially important routes.
- By 2010, Cumfybus had outgrown its three bus depots and needed a new site to consolidate operations, reduce costs and provide room for growth.
- With the department of transport cutting fuel subsidies by 20%, the company knew it also had to reduce its overheads – a new site would enable this.
- The company found a property in Aintree but needed £300,000 to enable the purchase and refurbishment.
- Santander’s personal approach and knowledge of the Cumfybus business meant it was offered a £140,000 loan for the purchase of the property, and a development loan of £160,000.
- An opportunity also arose to take on valuable new routes in Manchester so Santander put together a loan and asset finance package for the purchase of four new vehicles, refurbishment of new, leased premises and an increased overdraft facility. Santander worked hard to ensure the deal was agreed quickly to enable Cumfybus to take on the routes.
- The new site in Liverpool has allowed an additional revenue stream in bus and HGV MOTs, while the new route is moving the company towards its goal of expansion in the North West.
- Turnover has risen in the last year from £5 million to £7.5 million.
Managing Director Marshall Vickers founded Cumfybus in 1986 with his wife Patricia, after buying his first vehicle to serve nursing homes in the Southport area. With ongoing support from Santander, Cumfybus now has a £7.5 million turnover and offers cheap fares around Merseyside, using small, passenger-friendly buses on socially important routes that had previously been seen as untenable.
In 2010, Cumfybus decided it had outgrown its three bus depots around Merseyside, and started to look for a new site to consolidate operations, reduce costs and give them room for growth. Marshall’s daughter and Cumfybus Director, Penny Lyon, takes up the story. “We had always rented depots because it was difficult to get something that was the right size in the right place, and with the right facilities,” she says. “Eventually we found a derelict property in Aintree that we could buy and develop.”
Cumfybus had previously funded growth from within the business. However, this time it would require around £300,000. So it approached Santander Relationship Director, Neil Tweedle, and Asset Finance Adviser, Neil Kitchen.
Santander’s personal approach meant Cumfybus was in a positive position when seeking finance. “Because we got to know the business well, we were able to offer them a good deal,” says Neil Tweedle. The deal included a £140,000 loan for the purchase of the property, and a development loan of £160,000 for additional work.
Santander was impressed by the solid management team at Cumfybus and its sound financial reasoning. “It’s the hands-on nature of Marshall and Penny that impressed us,” says Neil Tweedle. “Plus, they knew their revenues from the department of transport fuel subsidy were due to be cut by 20% by 2012, and had been looking for two years for a site that would enable them to reduce their overheads while giving them room for future expansion.”
Cumfybus values its relationship with Santander. “The main benefit we have with Santander is definitely Neil, who is always there, is always eager to help and will do what he can to accommodate what we want,” says Penny.
“It’s an easy and relaxed relationship. Neil goes out of his way for us, and we do feel comfortable enough to ask his advice. If I’m struggling with something he will always help me out. It’s a good relationship.”
Shortly after buying the new depot, Cumfybus were awarded new routes in Greater Manchester, which would require a further depot in Bolton, four new buses and up to 20 new staff. “We had looked at Manchester as an area we would like to expand into for quite some time,” says Penny. “But it was difficult because you have to win [a tender], and have a group of buses operating in the same area to make it viable to open a depot, and that doesn’t come up very often.” If the deal was a success, Cumfybus would be invited to tender for more routes in Manchester; if it went wrong, they would have lost a valuable new territory.
Once again, the confidence Neil Tweedle and his team had in Cumfybus was a deciding factor in Santander financing the deal. Tweedle and Kitchen put together a loan and asset finance package for the purchase of four new vehicles and the new premises, and increased the overdraft facility to help the company set up the new site and take on further drivers.
“The great relationship with Cumfybus certainly helped,” says Neil Tweedle. “The finance deal was pushed through and completed within two weeks from talking to us, to the buses being purchased.”
Space to grow
The new depots and routes have allowed the business to grow quickly – turnover has risen from £5 million to £7.5 million in the last year. Additionally, the move to Aintree has created a new revenue stream, with the depot serving as a bus and HGV MOT centre for other companies.
Cumfybus’ plans for the future are to take on more of the North West market – it is already the largest independent in Liverpool. With Santander’s help, the new depots in Bolton and Aintree have already enabled the business to tender and win more routes in Manchester and on their traditional territories.
All lending is subject to status.
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Relationship Director Comments
The great relationship with Cumfybus certainly helped. The finance deal was pushed through and completed within two weeks from talking to us, to the buses being purchased.