Go-Ahead still cautious about business growth
Sep 3 2010 by Iain Laing, The Journal
The firm saw more than a billion passenger journeys across its business for the first time in the year to July 3 but nonetheless experienced a fall in profits due to lower rail subsidies from the Department for Transport.
This offset the higher revenues on its new high-speed services – but the drop was smaller than expected by the City due to lower electricity costs from operator Network Rail.
Sir Patrick aid the group was pleased with progress despite challenging conditions.
At Southeastern, revenues were up 7.5% over the year thanks to the boost from the premium fares from the introduction of the UK’s first high-speed rail service last December.
The franchise has also been entitled to revenue support since April as recession-hit turnover has not matched up to assumptions made when Go-Ahead bid for the deal in 2005.
Total revenues across the rail arm, which also includes the London Midland franchise, were down 0.9% to £1.54 billion while operating profits slid from £61.5m to £37.3m.
The group’s bus business posted better-than-expected profits and expects prospects to remain robust over the coming year, despite lower margins in London. Cheaper fuel costs should also help the firm make savings of £7m a year.
It also announced yesterday the latest move in the shedding of its baggage handling business with the sale of Meteor Aviation Services to Vinci Park Services for £11m.
The sale of the aviation business over the last year is largely responsible for its workforce falling in size from 27,177 a year ago to 22,570 today.
