Go-Ahead still cautious about business growth
Sep 3 2010 by Iain Laing, The Journal
TRANSPORT giant Go-Ahead has said it is still cautious about the growth of its business in the next year as the Government prepares more spending cuts.
But despite lower sales at its rail unit and the announcement of a 24% drop in bottom line annual profits, the Newcastle-based firm’s earnings of £88.7m were still ahead of forecasts and led its share price to spike up 6% higher yesterday.
The group, which operates commuter rail franchises through its majority-owned joint venture Govia, said revenues had gone up 1% to £2.2bn for the year to the end of June since a year before.
The firm – which runs the Southeastern and Southern rail franchises in a joint venture with French company Keolis – said the outlook for the business was difficult to predict as the Government’s spending review looms in October.
Alongside a still weak economy, Go-Ahead fears possible deficit-busting measures could include reduced Government support for the bus industry, which is also facing a Competition Commission probe.
The group, which is growing its yellow school bus business in North America as the UK market tightens, held the final dividend at 81 pence but said it was wary about the year ahead.
“We continue to be cautious on the near-term prospects for the UK economy and the outlook for the next financial year remains difficult to predict, including any impact from the (UK) government’s comprehensive spending review expected to be announced in October 2010,” said chairman Sit Patrick Brown.
