Great Western Coffee Shop

From the Daily Mail (https://www.dailymail.co.uk/news/article-7358467/Three-companies-raked-1BILLION-five-years-leasing-train-carriages-rail-firms.html) today


Yes - a billion pounds is a lot of money, but is it a lot of money out of proportion to what they do, or is it a big number because of what a lot they do? 

Taking the most recent data, 1.75 billion passenger journeys were made by train in the last year, and the Rolling Stock compansies (RoSCos) made a profit of aroun £200 million pound between them. Each single passenger journey brought an income of around £2 (House of Commons Briefing Paper (http://www.firstgreatwestern.info/SN06384.pdf)) - total revemue £3.4 billion pounds.  That's around 6% of passenger fares - 12p per journey in £2.

Having put the money roughly into proportion in your train fare - is it reasonable?  Does that profit allow for the RoSCos to invest into the new capital trains needed for a bigger fleet for a bigger (passenger number) railway, or is it payout to shareholders?  How much of that profit comes back to you and me, the British taxpayer, from profit taxes on the companies?

I am not a financier - so I don't know the answers to my further questions.  I worry about assumptions in my school boy arithmetic; I have assumed all trains owned by the RoSCoS (but I know First Group own some trains) and I have assumed that the National Rail train leasing business is the only business of the RoSCos (but do they lease also to TfL, Tyneside Metro, etc).

Another way to look at this is return on investment ROI.

From a review on Wikipedia they appear to own around 12,000 vehicles and if I assume an average cost of £750,000 this equates to an investment of £9,000 million.  £200 million profit represents 2.22% ROI which is not unreasonable for a very stable long term business.

I would be interested to see the figures from anyone who has better base data than me.