ComfortDelGro Corp (CDG) through its wholly-owned subsidiary CityFleet Networks has acquired UK-based ground transport management and accommodation network specialist CMAC Group for GBP80.2 million   ($135.4 million).

 

CMAC has an extensive network of approved and certified suppliers to provide around-the-clock specialised pre-planned and on-demand emergency passenger transport and accommodation solutions to businesses in the rail, travel, healthcare, corporate and public sectors. 

 

Its operations cover the UK, France, Spain, Portugal, Greece and the Netherlands, managing disruptions and journeys for close to three million travellers annually on behalf of airlines, ground handlers, train operators and companies. 

 

Through its Suntransfers brand, CMAC also manages private and ride-share transfers to over 500 airports, bus and train stations and ports worldwide.

 

CDG managing director and group CEO Cheng Siak Kian says the acquisition is aligned with CDG&rsquo s strategy to expand its point-to-point mobility services and offerings. 

 

&ldquo As an established player in providing wide-ranging emergency passenger transport services to businesses, CMAC is complementary to our operations in the UK and Europe, allowing us to expand our business-to-business offerings in the region,&rdquo he adds.

 

In addition to the services provided by CMAC, CDG also owns and operates taxis and private hire vehicles through its CityFleet Networks in Aberdeen, Liverpool and the Northwest region. It also operates Metroline buses and Westbus coaches in London, Adventure Travel buses and coaches in Wales, as well as the Megabus, Scottish and Irish Citylink intercity coach services.

 

With the acquisition of CMAC Group, CDG now provides mobility services in 12 countries worldwide.

ComfortDelGro Corporation substantial shareholder Silchester International Investors increased its deemed interest in the company to above the 7.0 per cent threshold on Jan 29.

 

This follows the London-based investment management company increasing its deemed interest above the 6.0 per cent threshold on Dec 1, and emerging as substantial shareholder of ComfortDelGro Corporation on Nov 7.

 

Silchester acts as investment manager for certain commingled funds and in acting for its clients.

 

The investor manager has maintained that it is given full discretion over its client investments and is empowered to vote on their behalf.

 

However, Silchester maintains it does not act as the client&rsquo s custodian and therefore shares are not held in its name but in the name of each client&rsquo s custodian bank.

 

Aside from Jardine Matheson Holdings, ComfortDelGro also ranked among the 10 stocks that booked the highest net institutional inflow in January.

 

Like 2023, the global land transport leader has so far booked the highest net institutional inflow this year for the large contingent of non-STI stocks.

 

On Jan 24, ComfortDelGro announced that its joint venture with the Go-Ahead Group, Connecting Stockholm, had been awarded a contract by the Stockholm Public Transport Administration, Trafikforvaltningen, to operate and maintain the Stockholm Metro.

 

This represents ComfortDelGro&rsquo s first rail contract in Sweden and will be its largest rail passenger operation outside of Singapore. ComfortDelGro holds a 45 per cent stake in Connecting Stockholm.

 

ComfortDelGro is expected to report its FY23 (ended Dec 31) financial results before the end of February.

 

For its H1FY23 and FY22, Singapore operations contributed 58 per cent of the group&rsquo s revenue.

 

In line with the group&rsquo s strategic focus, ComfortDelGro introduced a new segmental reporting framework effective H1FY23, which comprises public transport, taxi & private hire vehicle (PHV), other private transport, inspection & testing services and other segments.

Connecting Stockholm, the joint venture (JV) between ComfortDelGro C52 0.71% (CDG) and Go-Ahead Group, has been awarded the contract to operate and maintain the Stockholm Metro. CDG owns 45% of the JV.

 

The contract, which was given to the JV by the Stockholm Public Transport Administration, Trafikfö rvaltningen, will be CDG&rsquo s first rail contract in Sweden.

 

The contract is for 11 years with operations starting from May 2025. The JV will operate and maintain all of Stockholm Metro&rsquo s seven lines. This includes 100 stations, six depots and 107km of track.

 

The JV&rsquo s role will include providing customer service and the planning and delivery of rail services. The JV will also oversee the maintenance of the fleet of the trains, station and depot facility.

 

In addition, the contract caters for the JV to provide project support for Trafikfö rvaltningen to further develop and expand the Stockholm Metro in the future.

 

MAYBANK Securities has raised its target price for ComfortDelGro : C52 -0.71% to S$1.60 from S$1.55 on better earnings prospects.

 

The target increase came with a maintained &ldquo buy&rdquo call, following ComfortDelGro&rsquo s recent measure to increase its taxi booking commissions by two percentage points with effect from Jan 1, 2024.

 

Maybank analyst Eric Ong noted on Tuesday (Jan 2) that the research house is positive on the transport operator&rsquo s surprising move to increase the booking commission, while making the existing 10 per cent rental waiver permanent for its drivers, despite competition from peers.

 

&ldquo The higher taxi revenue should help to more than offset the rising cost of maintaining and upgrading technology systems, as well as financial charges for cashless transactions,&rdquo said Ong.

 

He also expects ComfortDelGro&rsquo s taxi and private hire segment to continue to grow as inbound tourism to Singapore recovers.

 

Ong raised the earnings forecasts &ndash driven mainly by higher contribution of the company&rsquo s taxi business &ndash by 2 per cent for FY2024, and by 3 per cent for FY2025.

 

Additionally, Maybank is also positive on the company&rsquo s earnings with the acquisition of Australian taxi network provider A2B Australia, announced on Dec 22 last year.

 

He noted that ComfortDelGro&rsquo s management believes in the deal&rsquo s potential to scale its point-to-point mobility business in Australia, and that the deal, when completed in the first half of 2024, can add about 2 per cent to its bottom line on a full-year basis.

 

&ldquo However, we have not factored the incremental contribution into our assumption as the transaction is still subject to approval from A2B&rsquo s shareholders, an Australian court and clearance from the Australian Competition and Consumer Commission,&rdquo he added.

TRANSPORT operator ComfortDelGro will increase its commissions from cabbies to 7 per cent from 5 per cent from Jan 1, 2024. This will be applicable to app and phone-booked rides.

 

The hike was reported by Chinese language daily Lianhe Zaobao on Dec 26 and follows a fare increase and extended surcharge hours aimed at helping taxi drivers defray higher operating costs.

 

The Business Times has reached out to ComfortDelGro for comment.

 

The raising of commissions goes counter to ComfortDelGro&rsquo s ride-hailing rivals. Gojek has cut commissions to 10 per cent to at least the end of 2024, while Ryde will be forgoing commissions altogether until the end of next year.

 

In its recent Q3 2023 results, ComfortDelGro&rsquo s taxi and private hire operating profit saw a boost from platform fees introduced for Singapore taxis on Jul 1. Operating profit excluding non-recurring items hit S$28.5 million in the third quarter, up from S$25.8 million in the second quarter despite having similar booking volumes of 8.1 million.