TRANSPORT group Go-Ahead said yesterday that first-half profit at its rail unit would be 50 per cent down on last year due to reductions in government subsidies, but added that its bus business was performing well.
The company, which operates its commuter rail franchises through majority-owned joint venture Govia, expects operating profit at its rail unit to be broadly half the £34.9m it reported last year.
“We continue to believe that the economic climate will remain difficult and we will take management action accordingly,” Go-Ahead’s chief executive Keith Ludeman said.
“We expect our bus operations to remain strong in the second half ... in rail, we expect revenue growth before initiatives to be modest in the second half given the low fare increases in January 2010,” he added.
The group also said passenger numbers were growing steadily across the rail business.
The firm, which operates bus companies and runs three London rail franchises, said first-half bus revenues would be seven per cent higher than last year but that its fuel costs for the year were hedged at 47 pence per litre compared to 43 pence last year.
Go-Ahead said it would likely spend around £70m on acquisitions and investments in the full-year.