Go-Ahead on track despite profit slump

City A.M. Reporter
TRANSPORT group Go-Ahead said yesterday that it does not expect the economy to recover until 2011, but that its business is healthy enough to keep it on track until then.<br /><br />The firm, which operates bus companies and runs three London rail franchises, saw full year pre-tax profit fall 60 per cent from last year, to &pound;42m and held its dividend payment at 81p per share.<br /><br />Finance director Nick Swift said the group was cautious about the economy but that business is robust.<br /><br />&ldquo;It&rsquo;s easy to get over-optimistic, so we are staying cautious. 2010 will be fairly stable, while in 2011 things will be ready to pick up,&rdquo; he said, adding that the group&rsquo;s bus network was proving resilient.<br /><br />Go-Ahead said it had cut its debt to &pound;91m from just under &pound;200m.<br /><br />It&rsquo;s profit fall was largely due to a poor performance in its UK rail business, which has been hit by a slowdown in passenger growth.<br /><br />Swift said he expected rail to remain profitable in the current year but at a lower level.<br /><br />Go-Ahead also runs bus companies and has an aviation services arm. It has bought two small regional bus companies since July for a combined &pound;10m, and Swift said he hoped to secure more deals.<br /><br />British bus operators are set to be investigated by competition regulators due to concerns a single player dominates a particular area, which Swift said was &ldquo;puzzling&rdquo;.<br /><br />He declined to comment on whether Go-Ahead would consider entering the bidding for rival National Express, which is being stalked by a consortium including CVC Capital Partners.