Transport: Bus and train operator Go-Ahead lifts full-year forecast

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

Thursday, June 19, 2014
12:00 PM

Bus and train operator Go-Ahead said today that its rail business is heading for a better second half than previously expected while prospects for its bus operations remain unchanged.

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In a pre-close statement ahead of its results for the year to June 28, the group said that full-year revenues from its deregulated bus services, which include Anglian Bus, Chambers, Hedingham and Konectbus in Essex, Suffolk and Norfolk, were expected to be up 3.5% in total and 4% ahead stripping out the effect of the Olympics in 2012 unchanged from its last update covering the period up to March 29.

“Solid underlying growth in revenue and passenger journeys has continued into the fourth quarter, with growth in both commercial and concessionary travel,” Go-Ahead said.

Annual revenue growth for its regulated bus services in London is now expected to be 5% up on the previous year in total and 6.5% higher excluding the effect of the Olympics.

This represents a slow-down from figures of 6% and 8% respectively at the end of the third quarter, which Go-Ahead said reflected the timing of contract renewals.

Full-year revenue growth at the group’s Southern, Southeastern and London Midland rail franchises is now expectd to come in at 6% (6.5% excluding the Olympics), 5% (6.5%) and 7% (7.5%) respectively.

This represents a strong final quarter for Southeastern, where growth stood at 4.5% (or 6% excluding the Olympics) after the third quarter, but a slowdown for Southern (which includes Gatwick Express) and London Midland, which recorded nine-month figures of 7% (7.5%) and 8% (9%) respectively.

However, Go-Ahead said: “As a result of lower energy costs and better than expected operational perfomrance in the fourth quarter, we now expect second half rail operating profit to be ahead of previous expectations, with second half profits slightly lower than first half.”

And chief executive David Brown added: “Overall perfomrmance in our bus and rail businesses is good. Our full year expectations for our bus operations remain unchanged and we now expect the rail division to deliver operating profit ahead of our previous expectations.”

Looking ahead to next year, Go-Ahead said it expected its bus division to continue to make “good progress” towards its target of £100million in operating profit by 2015-16 while its existing rail businesses were expected to deliver a similar performance.

Last month, Go-Ahead beat rival FirstGroup to win the new Thameslink, Southern and Great Northern (TSGN) franchise which will replace the existing Thameslink and Great Northern franchise, currently operated by FirstGroup as First Capital Connect, from September this year.

It will also include Go-Ahead’s South Central franchise (Southern and Gatwick Express), when it expires in July 2015, with a small number of services and stations also transferring from the South Eastern franchise (Southeastern) from December this year.

The seven-year deal will cover services currently carrying 273million passengers a year and linking locations including Cambridge, King’s Lynn, Peterborough, Bedford and Luton to destinations such as Brighton and Gatwick Airport, as well as providing links to the high speed Channel Tunnel line at St Pancras and to the new Crossrail service at Farringdon.

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