Southern Rail owner Go-Ahead's profits hit by train strikes

 
Alys Key
Follow Alys
BRITAIN-TRANSPORT-STRIKE
Go-Ahead has been hurt by strike action (Source: Getty)

The owner of Southern Rail has reported a slide in annual profits as industrial action ate into its bottom line.

Go-Ahead Group was also affected by a wider reduction in bus passengers.

Read more: There was a strike on Southern rail today but hardly anyone noticed

The figures

Revenue increased 3.6 per cent to £3.5bn in the year to the beginning of July, but pre-tax profits dropped 5.7 per cent, coming in at £136.8m.

In the rail arm of the business, which includes Southern's parent company Govia and Southeastern, operating profits fell 16 per cent to £59.9m.

Bus profits were broadly flat at £90.7m, as London profitability grew but regional operations fell.

Shares in the company fell 3.2 per cent this morning.

Why it's interesting

Go-Ahead is now counting the cost of strikes by RMT members and the drivers' union which have caused disruption and subsequent compensation for passengers.

But chief executive David Brown said service improvements are underway and that the group's agreement to a £13.4m government fine to fund upgrades had reduced financial uncertainty.

But the prospect of more industrial action is still on the horizon, this time among cleaners on GTR and Southeastern trains.

Brown turned down a pay bonus for the second year in a row on account of the strikes.

What Go-Ahead Group said

Chief executive David Brown said: "The group remains in a good financial position, with a robust balance sheet, allowing us to invest in our core UK businesses and providing flexibility to pursue value-adding opportunities in new and existing markets."

Chairman Andrew Allner added: "While continuing difficulties at Southern have negatively impacted shareholder returns, strong financial performance in our other franchises has enabled us to deliver value through the rail division."

Read more: Fresh September strikes have been announced for three train operators

Related articles