THE UK’s economic woes have dented profits at one of the North East’s leading plcs, it will be announced this week.
Newcastle-based transport group Go-Ahead, which runs Southern, Southeastern and London Midland rail services as well as 3,900 buses, is expected to report a 4% fall in operating profits to £110.5m in the year to June 30.
The drop will be caused by weaker trading in its rail division, which accounts for nearly 30% of all UK journeys, as passenger growth has been slowed by the UK’s double-dip recession.
The group’s rail arm benefited from average regulated fare rises of 6% at the start of this year but its growth has disappointed the City. Revenues at Southern and Southeastern’s revenues were up 8.5% and 10% respectively after passenger growth of 1.5% in both cases.
And London Midland’s record remained strong, with full-year expectations for a 13.5% rise in revenues and 8% in usage, meaning it will not require revenue support from the Government despite it becoming eligible in November.
Go-Ahead has warned its rail operations will continue to be affected by the weak economy next year, while it is also facing £6m of bid costs during a busy period for the re-letting of franchises.
However, its bus business has put in a resilient performance, with passenger journey growth of 3% over the year as stronger demand from fare-paying passengers is offset by a weaker performance in concessionary fares.