Go-Ahead on track for growth in first half revenues

David Brown, chief executive at Go-Ahead.

David Brown, chief executive at Go-Ahead. - Credit: Archant

Public transport operator Go-Ahead yesterday hailed new contracts in both bus and rail but said its full-year expectations remained unchanged.

In a pre-close update ahead of its first half results, for the six months to December 27, Go-Ahead said the first half had seen successful bids for a 25-route bus contract in Singapore and for two German rail contracts, in addition to a direct contract from the Department for Transport (DfT) extending its London Midland rail operation from March 2016 to October 2017.

Group chief executive David Brown added: “Following the Government spending review, we are encouraged that the DfT has confirmed the Bus Service Operators Grant will be protected until at least 2020/2021.”

Go-Ahead said second quarter trading within its UK regional bus business, which includes the Hedingham, Chambers, Anglianbus and Konectbus fleets in Essex, Suffolk and Norfolk, had followed the trend of the first three months of the year, with first half revenue expected to show growth of 1.0%.

Its London bus services were expected to achieve first half revenue growth of 2.5%, despite an adverse impact on Quality Incentive Contract revenue from congestion resulting from roadworks, it added.

Within the group’s rail business, operated through Govia, its 65% owned joint venture with Keolis, revenues from the Southeastern, London Midland and Thameslink franchises are expected to show first half growth of 6.0%, 12.0% and 6.0% respectively.

“Overall, current trading is satisfactory and we remain on course to meet our full year expectations for both the bus and rail divisions,” Go-Ahead added.

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“The group remains in a good financial position with strong cash generation and a robust balance sheet, supporting our progressive dividend policy.”