GC Cabs sale a Black & White move

NEW P2P Transport CEO Greg Webb says he will cast his vote to sell Gold Coast Cabs to rival A2B next month as part of a strategy to launch its Black & White Cabs brand on the Coast.

Next month Gold Coast Cabs shareholders will consider a proposal from A2B Australia Ltd, which runs the 13CABS brand, to acquire its business, including its booking and dispatch service, for $2.5 million.

It comes as P2P is claiming damages from Gold Coast Cabs in a Supreme Court case concerning restriction of services.

P2P Transport Ltd operates 157 taxis on the Gold Coast under the Gold Coast Cabs banner.

The company claimed yesterday Gold Coast Cabs, which dispatches bookings to P2P cabs, has restricted app bookings, account customers and other work flowing through to its cabs.

It said this as well as competition in the Melbourne market, where it has ended its relationship with 13CABS, has hit earnings in its fleet services business by $2.8 million.

“P2P has incurred significant legal and staff costs in dealing with these issues,” P2P said.

The feud with P2P has come in the wake of that company installing a secondary dispatch service from Black & White Cabs in two thirds of its Gold Coast taxis.

Its new FY19 guidance is for pre-tax earnings of between $7.8 million and $8.2 million, down from $16.1 million to $16.8 million issued in December last year.

Investors punished the company after the news, sending shares down 7¢, or 18 per cent, to close at 30¢.

Mr Webb, who was appointed interim CEO yesterday in the wake of Tom Varga stepping down, told the Bulletin yesterday that he was a shareholder in Gold Coast Cabs and would vote for the sale to A2B, despite it being a rival of P2P.

“If that goes ahead we can get our fleet out of Gold Coast Cabs and set up Black & White Cabs on the Gold Coast. That is what we want to do,” he said.

“We want to be a player on the Gold Coast. We do a lot of work there.”

The sale of Gold Coast Cabs, which is owned by Regent Taxis Limited does not include the company’s property at Helensvale nor its 23 taxi licences.

Mr Webb said Gold Coast Cabs needed to sell to A2B to ensure the viability of the operation.

“They need to sell and pay off a lot of debt,” he said. “They have taxi licences and a property they can rent out to the new owner of the business.”

Regent Taxis declared an after-tax loss of $772,207 for FY18, significantly worse than the $292,508 loss for the previous period.

Gold Coast Cabs executive general manager Benjamin Lee did not returns calls seeking comment yesterday.

Mr Webb said P2P applied in the Supreme Court in Brisbane for an injunction in January against the restrictions imposed by Regent Taxis, which was declined.

He said the case was deferred for two weeks to hear P2P’s claims of damages.

However, the company has been able to mitigate losses in the Gold Coast market by taking bookings through the Black & White Cabs secondary dispatch network.

P2P said the overall utilisation for its taxis fell from 80.7 per cent in the second quarter to 73.9 per cent, in what is traditionally a quiet time of year in January and February.

Despite the hit to earnings in the Gold Coast and Melbourne markets, revenue for the three months to March 31 rose 65.9 per cent to $16.1 million. The company said it was on track to deliver revenue between $77 million to $80 million for FY19. Revenue was also impacted by problems with its digital ads business.

P2P has a fleet of 1087 vehicles across Australia, with Sydney its biggest market. The number of vehicles it provides network services to has increased to 2040.