Stagecoach head riding high

When Brian Souter catches a bus in Auckland, he does not have to wait long at a stop. As co-founder, chief executive and part-owner of Stagecoach, he can phone the depot and have one arrive outside the door.

In this case, it is useful prop for a photograph - one of Stagecoach's fleet of 20 new low-rider, three-axle, air-conditioned vehicles now plying the busy streets of Auckland.

Souter visits the New Zealand operation twice a year and was in town yesterday showing off the new bus to Auckland Regional Council transport planners.

He says the company has invested $200 million since arriving here in 1992 and has yet to take a dividend.

Souter's story and the history of Stagecoach is one that is often used to illustrate what can happen when two canny investors catch the right wave.

In 1980, Souter and his sister, Anne Gloag, invested the severance pay of their bus-conductor father. They bought two used buses that ran long-distance routes between Scotland and London.

The company has grown into a global concern, with a fleet of 10,000 buses and annual sales across the group of £2 billion ($5.3 billion).

Souter speaks highly of the New Zealand business and the kind of Government support that is needed to keep public transport viable.

"There are good opportunities to reinvest the money. We've had good passenger growth.

"We find New Zealand a good place to do business. From a public transport perspective, the Government's got some good policies to encourage modal shift [transport speak for people getting out of their cars and on to buses and trains]."

Souter predicts that double-decker buses could soon be hitting roads here, although there is not yet a firm schedule for their introduction.

Stagecoach is listed on the London Stock Exchange. Souter and his sister still own 26 per cent of the company and were reported by the Aberdeen Journal to have a fortune worth at least $864 million.

But it has not all been plain sailing. Stagecoach made a disastrous multi-billion-dollar foray into the United States market, leading to the forced sale and writedown of hundreds of millions of pounds in value.

At one stage, the Stagecoach share price on the LSE fell so low that many thought Souter and his sister would buy it up and make it private again.

Much of the company's wealth and success has also stemmed from buying former publicly owned assets, sometimes controversially privatised in the 1980s and 1990s. This includes the bus companies in Auckland and Wellington.