Go-Ahead’s bus plan impresses as revenues rise

Marion Dakers
SHARES in transport group Go-Ahead leapt 5.8 per cent yesterday as it reported strong trading and ambitious growth plans for its UK bus business.

The firm told investors that it aims to organically grow operating profits in buses to £100m over the next three years, up from the £70m it generated this year.

Go-Ahead also reassured the market with a fresh commitment to the UK rail industry, in spite of ongoing delays to all franchise competitions in the wake of the West Coast Main Line cancellation.

“Go-Ahead looks forward to working with the review team to help shape the future of UK rail franchising,” it said in an update.

Go-Ahead’s rail business saw an uptick in passengers during the Olympics, though the firm said it would not give a lift to profits.

Its Southern franchise reported nine per cent revenue growth between 1 July and 17 October with no rise in passenger journeys, while Southeastern posted a 16 per cent jump in revenues on nine per cent more passenger journeys.

London Midland delivered 17 per cent passenger revenue growth on seven per cent more journeys.

London bus services also saw a big boost during the Olympics. Total revenues jumped 21 per cent, or 13 per cent excluding acquisitions. Go-Ahead said that stripping out the effect of the Games, revenue rose 14 per cent.

The FTSE 250-listed company’s bus business outside London posted nine per cent year-on-year revenue growth, or five per cent excluding acquisitions.

“Go-Ahead has given a clear unambiguous message that should allay any investor concerns about what happens after rail,” said Investec analyst John Lawson.