Transport group Go Ahead on track to profit
TRANSPORT operator Go Ahead said it remains on track to deliver a first-half profit despite fearing that earmings from its rail business will crash by half.
But the Newcastle-based company, which operates the Southern, Southeastern and London Midland rail franchises, also said that its bus division’s half-year profits were now expected to be slightly ahead of last year’s haul of £31.4m.
The company, which has a fleet of 3,500 vehicles and a 21% share of the London bus market, forecast further progress in the second half of the financial year. It said revenues in deregulated bus operations, such as those serving the North East, Oxford and southern England, were up 7% with passenger numbers ahead 5%.
And it expects its bus operations to remain strong in the second half of this year and to benefit from a full year of acquisition contributions, and a fully hedged reduction in fuel costs of around £6m, in the next financial year.
Finance director Nick Swift said: “There’s still a lot of volatility in rail at the moment but we hope to offset that by cutting around £20m in costs in the first half and £40m in the second half.”
The rail operation performed in line with expectations in the six months to January 2, although Go-Ahead said profits will be broadly half last year’s £34.9m due to a reduction in government franchise subsidies.
Go-Ahead said passenger revenues were up 10% in Southern and London Midland and by 4% in Southeastern. This reflected a 3% to 4% rise in Southern and London Midland passenger numbers and a 2% reduction at Southeastern.
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