Increased annual profit for bus and train operator Go-Ahead

David Brown, chief executive of Go-Ahead.

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

Bus and train operator Go-Ahead today reported increased underlying annual profits, helped by an improved performance from its rail business.

Its results for the year to June 27 also included record profits for its bus business, although the date for achieving its target for the division of a £100million annual operating profit has been put back to 2016-17, a year later than originally hoped.

Go-Ahead reported full-year revenues of £3.215billion, up 19% on the previous 12 months, with operating profit before exceptional items 11.1% higher at £114.7m.

Bottom-line pre-tax profit was 13.7% down at £78.7m but this largely reflected a one-off benefit from pension scheme changes the previous year. Pre-tax profit excluding exceptional items was 13.8% higher at £96.6m.

Total revenue from bus operations was 2.2% higher at £817.8m with operating profit 6.6% ahead at £89m.

The group’s regional bus operations, which include the Hedingham, Chambers, AnglianBus and KonectBus fleets in Suffolk, Essex and Norfolk, saw operating profit rise by 11.5% to £46.7m while its London bus business achieved an increase of 1.7% to £42.3m.

Go-Ahead said that passenger growth across its regional bus business fell 1.4% due to continued economic weakness in the North-East and the impact of roadworks in Oxford and Brighton.

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Roadworks and congestion also affected operations in London, but the group said it had maintained its market share and contract revenue had increased in line with expectations.

The group’s rail business, a joint venture with the French group Keolis, saw total revenue grow by 26.1% to £2.397bn, boosted by the start of the new Govia Thameslink Railway franchise in September 2014, joining its existing Southern, Southeastern, London Midland operations.

Operating profit grew by 30.5% to £19.7m, helped by 3.9% like-for-like growth in passenger journeys.

Group chief executive David Brown said: “I am pleased with the group’s financial performance in the year with overall operating profit of £114.7m, slightly ahead of our expectations.

“Despite facing a number of headwinds in the year, including lower passenger volumes and congestion in London as a result of infrastructure improvement works, we were pleased to deliver another year of record bus profits. We now expect to deliver £100m of bus operating profit in 2016/17, a year later than originally anticipated.

“We expect some of the headwinds experienced over the past year to reverse over time and this, along with reduced fuel costs, gives us continued confidence in the prospects for the bus division.”

He added: “We continue to play a key role in the delivery of the Government’s £6.5bn Thameslink programme. While an investment programme of this scale will inevitably result in disruption while infrastructure improvements are made, it will ultimately improve services for passengers in the long term.”

The proposed dividend will rise by 6.5% to 90p per share.