East Anglia: Increased first half profits for Hedingham, Chambers and Anglia Bus owner Go-Ahead

David Brown, chief executive at Go-Ahead David Brown, chief executive at Go-Ahead

Thursday, February 20, 2014
12:23 PM

Bus and train operator Go-Ahead said today it was “making good progress” towards achieving a three-year plan to boost annual operating profits at its UK bus business to £100million.

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The update came as Go-Ahead reported increased first half profits of £51.1million for the six months to December 28, up from £42.1m for the corresponding period a year earlier.

Operating profit from its bus services grew by 14.7% overall to £40.6m on revenue 4.1% higher at £397.0m, including growth in both commercial and consessionary travel.

The group’s deregulated bus services, which in East Anglia include the Hedingham, Chambers and Anglia Bus operations, saw operating profits rise 26.3% to £20.2, with revenues 2.9% up at £174.3m.

Regulated bus services also performed well, slightly ahead of expectations, with operating profits rising by 5.2% to £20.4m on revenues 5.1% higher at £222.7m.

First-half operating profits within the group’s rail division, which includes the Southeastern, Southern and London Midland franchises, also improved, from £6.7m to £10.5m, on revenues 6.3% higher at £973.0m.

However, Go-Ahead warned that the division was “not expected to generate material profits” in the second half of the year as a result of increased franchise premium payments.

Group chief executive David Brown said: “In October 2012 we set out a three year plan of growth and business improvement with the aim of raising the performance of our UK bus business to £100m in operating profit.

“We are making good progress, and 16 months into that timetable, our planning assumptions remain valid and we are on course for our target.

“Meanwhile we maintain our long-term commitment to rail and were pleased to have submitted our bids for the Thameslink and Crossrail franchise competitions during the period.

“The sustained efforts of our 23,500 people, backed by substantial targeted investments in technology, fleet and new facilities, are strengthening our business by improving services for all our customers.

“Our use of smart and mobile ticketing data helps deepen our understanding of our customers’ needs and allows us to continue to develop and improve our capabilities, to make our bus and rail services more attractive and more convenient.

“With record passenger numbers, effective cash management and a strong balance sheet, Go-Ahead is in good shape with excellent growth prospects.”

He added: “Overall our full year expectations are unchanged. In the second half of the year, we anticipate a similar bus performance as in the first.

“As previously indicated, the rail division is not expected to generate material profits in the second half of the year as our premium profile will become more challenging and Southeastern will commence a seven-month extension period, which is expected to be unprofitable.

“We remain confident in our ability to deliver our £100m bus profit target by 2015/16 and continue to make progress in securing our rail portfolio.”

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