Go-Ahead flags tougher rail outlook
The transport group behind nearly 30% of all UK rail journeys has warned it expects economic conditions to hit profits at its train arm next year.Go-Ahead, which runs the commuter lines Southern, Southeastern and London Midland through its 65%-owned Govia subsidiary, is also facing £6 million of bid costs during a busy period for the re-letting of franchises.
The Newcastle-based firm said it had performed well in the financial year due to end on June 30, with passenger revenues from its deregulated bus operations up by 4%, helped by the stronger take-up of smart-cards.
In its rail division, which benefited from average regulated fare rises of 6% at the start of this year, Southern and Southeastern's revenues were up 8.5% and 10% respectively after passenger growth of 1.5% in both cases.
London Midland's record remains 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.
Referring to Southern, Go-Ahead said the economic climate was weaker than it expected at the time it bid for the franchise in 2009.
It added: "Looking ahead to the next financial year, we expect the performance of our bus business to remain strong.
"In rail, we expect slower than assumed economic growth rates to impact performance and, as stated in April, £6 million of rail bid costs are forecast next year."
Shares opened more than 3% lower on Thursday.
The company is one of the UK's largest bus operators with a fleet of around 4,000 vehicles carrying on average around 1.7 million passengers a day.
Referring to Southern, Go-Ahead said the economic climate was weaker than it expected at the time it bid for the franchise in 2009.
It added: "Looking ahead to the next financial year, we expect the performance of our bus business to remain strong.
"In rail, we expect slower than assumed economic growth rates to impact performance and, as stated in April, £6 million of rail bid costs are forecast next year."
Shares opened more than 3% lower on Thursday.
The company is one of the UK's largest bus operators with a fleet of around 4,000 vehicles carrying on average around 1.7 million passengers a day.
© 2013 Press Association