Summer 2022 has seen Britain’s domestic transport sector become the unlikely interest of investors, aided by revenues that were indirectly related to inflation and, in many cases, supported by UK Government contracts.
Recent statistics show that British transport operators have provided rich pickings for both private equity buyers and international trade investors. An example of this trend is Stagecoach Group PLC, the Scottish transport operator, which changed tack on a planned merger with National Express Group PLC to instead accept a private bid offered by the investor DWS Infrastructure owned by Deutsche Bank.
Additional activity has also been recorded with recent approaches and bids from pension infrastructure, private equity and pension funds for FirstGroup, Nobina and Go-Ahead, highlighting substantial interest in UK transport assets like rail and bus companies.
UK consumers keen to put funds into infrastructure often look to wealth managers for investment advice in Shropshire, Cheshire and other counties. As independent financial advisors, they can offer unbiased and expert guidance on potential investments in specific sectors.
Experts have commented that the reasons behind this increased interest in domestic transport stems from the relative insulation against price rises and, in some cases, the benefits awarded by them.
Domestic transport represents an asset base that is infrastructure-like in its design. Investments in public infrastructure are often financially supported by contracts that are underwritten by the government allowing them to offer greater stability.
During high inflation periods like the current international climate, operators in the domestic transport sector are also benefitting from fare increases, enabling many to bounce back from the financial losses over the pandemic.
