Go-Ahead issues positive update

Jun 20 2008 by Graeme King, The Journal

IN THE regional portfolio, bus and rail operator Go-Ahead Group announced a positive trading update to the market.

The group confirmed trading has been ahead of expectations and the full year numbers are likely to be significantly better than last year’s figures.

Go-Ahead Group stated that the bus division has recorded a robust performance and profit margins have improved despite higher fuel costs.

Management confirmed the bus division’s fuel requirements are 100% hedged for the next financial year and that any extra costs should be recovered through the introduction of higher fares and more efficient fuel measures.

The rail division also recorded an equally strong performance.

Go-Ahead Group’s share price motored higher by some 12% to finish the day at 1707p.

Elsewhere in the market, investment house Morgan Stanley upgraded water company Pennon Group from equal-weight to overweight, stating that UK water stocks should perform well.

The news boosted Northumbrian Water which rose by 2.75p to close at 316p.

Sofa retailer Land of Leather confirmed that it plans to raise £15m from the market in order to strengthen its balance sheet and warned that without a fresh injection of capital it will struggle to continue trading in its current form.

Locally based ScS Upholstery has been marked lower since the beginning of the week following confirmation that it is also looking to raise extra capital. ScS finished the day 1.38p higher at 6.63p.

Anthony Peart Anthony.Peart@Brewin.co.uk