CEO Johnny Copelyn hints at expansion for the iconic Cape Town-based commuter service after listing.

The proposed separate listing by Hosken Consolidated Investments (HCI) of subsidiary Golden Arrow Bus Services could signal “an expansive view of transport” for the iconic Cape Town-based commuter service.

Speaking at the HCI annual general meeting on Wednesday, CEO Johnny Copelyn said that after the listing, Golden Arrow’s operations might not be limited to passenger transport services in the Cape Town metropole. “We might not only look at operating in the Western Cape … and perhaps we won’t only be limited to buses.”

He said there was no reason that Golden Arrow, which has a strong management team, could not move into freight or other transport niches.

To facilitate the listing, HCI is selling Golden Arrow to unlisted subsidiary La Concorde, which is cash flush after selling off the operating assets of KWV.

Copelyn said a due diligence was under way at Golden Arrow but he confirmed the transaction would not carry a high earnings multiple to reflect the risks inherent in the business.

“Public transport is a vital component for SA. But it is a rough operating environment. The city impounds some taxis … it has nothing to do with us. But by operating our service, it undermines the [ensuing] taxi strike, and our buses get burnt.”

Copelyn believed Golden Arrow could look at acquiring other companies. “There might be bus companies where owners have had enough. Many bus companies are family-owned.”

HCI’s latest annual report showed that Golden Arrow generated revenue of almost R1.7bn and increased profit before tax 11%, to R332m. It chipped in more than R230m to HCI’s headline earnings.

The proposed listing values Golden Arrow, which has generated strong profits for HCI in the past three years, at about R1.8bn. HCI bought it in early 2004 for about R250m and has since invested roughly R1.5bn to recapitalise the fleet with about 1,000 new buses.