The UK’s biggest train operator Go-Ahead Group has admitted to serious errors and failures in the way it ran the Southeastern rail franchise.
The company, which operates one in four British trains, had the route stripped from it by the Department for Transport after failing to declare it had received more than £25m of taxpayer funding.
With the FTSE-250 company facing heavy fines from the regulator it has today said it will be unable to complete its annual audit ahead of an 03 January deadline. With the trading of shares expected to be suspended until the results are published investors dumped the stock today causing it to crash by 14.89 per cent.
Go-Ahead said a review into its conduct had found that “serious errors were made by LSER with respect to its engagement with the DfT over several years.”
“The group accepts that, by failing to notify the DfT of certain overpayments or monies due to the DfT, LSER breached contractual obligations of good faith contained in the franchise agreements.
The company added that “the group and Deloitte have concluded that additional time is required to consider the implications of the report’s findings for the FY21 results and that it will not be possible to complete the audit before Jan 3.”
It comes as the company also faces losses in Norway and Germany where it operates rail services.
Go-Ahead said it had been unable to secure funding from the government in Oslo and said that “a material provision would be required in the FY21 results for potential losses in our rail contract in Norway.”
In Germany, where the company has already received a provision for £25.9m in the first half of the year, Go-Ahead said it is expecting a further provision of £10m to cover losses this year.
In the UK, Go-Ahead still manages the Govia Thameslink line in conjunction with Keolis, which co-owned 35 per cent of the Southeastern franchise.
The company has said issues with the Southeastern franchise will not affect its ability to deliver Govia Thameslink services, which include Southern, Thameslink, Great Northern and Gatwick Express going forward. However, a new contract will need to be agreed by March 2022.
Go-Ahead said it believes it has a good corporate governance structure in place but that it will look at ways to improve it.