Half Year Results

THE GO-AHEAD GROUP PLC("GO-AHEAD" OR "THE GROUP")

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2011

Robust trading in bus and rail; results in line with management expectations

Business overview

Continued growth in bus volumes across all companies, helped by roll-out of smartcards

• Strong underlying rail performance with passenger journey growth in all franchises

• Underlying profit growth; previous first half included £9m of one-off rail contract management benefits

• Strong cash management and robust balance sheet

• Decrease in underlying net debt+ despite significant investment in new buses

• Maintained interim dividend at 25.5p

• Remain cautious about wider economic outlook

* Before amortisation and exceptional items

** H1'12 free cashflow and net debt figures are adjusted for a temporary rolling stock deposit which was reimbursed in January 2012. Actual free cashflow is £(36.6)m and actual net debt is £142.0m

+ Excluding a temporary rolling stock deposit which was reimbursed in January 2012

David Brown, Group Chief Executive, commented:

"I am pleased to report a good set of results for the first half of the financial year. Growth has continued across all of our businesses as the public seek high quality, convenient and value for money alternatives to the private car.

"In bus, our strategic focus of operating in more vibrant urban areas, predominantly in the South East, combined with innovative local marketing and the promotion of smart ticketing has continued to deliver passenger growth. We recently announced the acquisition of Carousel, a small bus business in High Wycombe, which fits perfectly with our strategy of acquiring bolt-on businesses which provide a solid basis for increasing passenger numbers.

 "As London's largest bus and rail operator we will play a significant role in providing transport services for the Olympic Games. We look forward to demonstrating the quality of our services and staff. In particular our high speed 'Javelin' rail services will transport spectators in an impressive seven minutes from St Pancras International to the Olympic Park.

"We have a very strong position in the UK rail market with our long term partner Keolis, with whom we have recently submitted initial bid documents for Thameslink and Essex Thameside. Together, we have been operating trains in the UK for 15 years, running around 5,500 services a day on our three franchises and carrying more passengers each year than on most European countries' rail networks.

"The Group remains in a good financial position with strong cash generation and a robust balance sheet.

"Looking ahead, whilst we remain suitably cautious about the wider economic outlook, in rail we expect first half revenue growth trends to continue in the second half and in bus we expect a solid performance despite an impact from the implementation of a new contract.

"Overall, we continue to anticipate the Group will deliver full year results in line with management expectations."

For further information, please contact:

David Brown, Group Chief Executive and Keith Down, Group Finance Director will be hosting a presentationfor analysts at 9.00am today (23 February 2012) at Investec, 2 Gresham Street, London EC2V 7QP,Tel: +44 (0) 20 7597 5970.

A live audio webcast of the presentation will be available on Go-Ahead's website - www.go-ahead.com.The presentation slides will be added to Go-Ahead's website at around 7:30am today.

CHIEF EXECUTIVE'S REVIEW

I am pleased to report a good set of results for the first half of the financial year. We have continued to see growth across all of our businesses as the public seek high quality, convenient and value for money alternatives to the private car.

Bus

In deregulated bus, our strategic focus of operating in more vibrant urban areas predominantly in the South East, combined with innovative local marketing has continued to deliver passenger growth. We recently announced the acquisition of Carousel, a small bus business in High Wycombe, which fits perfectly with our strategy of acquiring bolt-on businesses which provide a solid basis for increasing passenger numbers. In addition, our efforts to make travel cheaper and more convenient through our smartcard "the key" are being embraced by passengers.

First half operating profit was impacted by increased costs resulting from the implementation of a new contract in the deregulated business. We are taking the necessary management action to mitigate these costs going forward.

Our sector-leading London bus business has seen growth due to new contracts commencing in the period, although quality incentive bonuses are slightly down due to tougher targets and roadworks.

We are committed to providing our customers with high quality services and invested in a total of 318 new buses in the period, 33 of which are hybrid.

Rail

Our rail businesses performed strongly, with record passenger journey growth of over 11% on our smallest franchise London Midland. Although now eligible to receive revenue support from the Department for Transport (DfT), this has not been required by London Midland due to its strong performance, making it the only franchise of its time that is not in receipt of revenue support. From April 2012, overall the rail division will be a net contributor to the DfT.

Southern continued to deliver good revenue and passenger growth with profitability remaining in line with management expectations. Highlighting the strength of the franchise, Southern was recently awarded 'Rail Business of the Year' at the prestigious Rail Business Awards. Although Southeastern remains in revenue support the franchise continues to perform well, achieving the highest ever customer satisfaction and punctuality scores on the south eastern network since records began. December 2011 also marked the second anniversary of Southeastern's high speed service and progress remains good with passenger numbers up 18.4% year-on-year.

Olympics

As London's largest bus and rail operator we will play a significant role in providing transport services for the Olympic Games. In particular, our high speed 'Javelin' rail services will transport spectators in an impressive seven minutes from St Pancras International to the Olympic Park. We look forward to working with LOCOG1 and Transport for London in the run up to the Games and being able to demonstrate the quality of our services and staff.

Outlook

Our bus and rail businesses remain fundamentally strong and they continue to deliver revenue growth as passengers are attracted by our high quality and value for money services.

Looking ahead, in rail we expect first half revenue growth trends to continue in the second half and in bus we expect a solid performance despite the impact of the contract implementation costs.

Overall, we continue to anticipate the Group will deliver full year results in line with management expectations.

The second half of the financial year marks the beginning of a busy period for the UK rail market. Many franchises will be renewed over the coming years and we will carefully consider all opportunities. With our joint-venture partner Keolis, we have recently submitted initial bid documents for Thameslink and Essex Thameside and we expect the DfT to announce the shortlist around April 2012. We have a very strong position in the UK rail market, with a proven 15 year track record of successfully operating very busy and complicated networks. We are the busiest operator in the UK running around 5,500 services a day and carrying more passengers each year than on most European countries' rail networks.

The political and economic fundamentals of public transport remain strong and we are really encouraged by the potential of smart ticketing in generating organic growth. Whilst bringing many benefits to passengers, the use of smartcards and online sales enables public transport operators to think more like retailers; tailoring products to individual customers needs. Although we have already made significant progress, we are still at the beginning of the journey.

The Group remains in a good financial position. We have strong cash generation and a robust balance sheet to support further bolt-on acquisitions and maintain the dividend.

David Brown, Group Chief Executive

22 February 2012

1 The London Organising Committee of the Olympic and Paralympic Games (LOCOG) is responsible for preparing and staging the 2012 Games

Financial overview

The Group has delivered a good set of results for the first half of our financial year. We have achieved underlying growth in all of our bus companies and rail franchises, demonstrating that the public continues to seek high quality, convenient and value for money alternatives to the private car.

Revenue for the six months ended 31 December 2011, increased by £67.3m, or 5.9%, to £1,199.5m (H1'11: £1,132.2m), primarily due to like-for-like passenger revenue growth in deregulated bus of 5.0% in bus and 9.6% in rail.

Operating profit* was £51.7m (H1'11: £59.0m). When excluding the £9m of one-off rail contract management benefits in H1'11 underlying operating profit* was up £1.7m.

Adjusted earnings per share# were 67.4p (H1'11: 77.1p).

Dividends

The Board has maintained the interim dividend at 25.5p (H1'11: 25.5p), payable on 13 April 2012 to shareholders on the register at the close of business on 23 March 2012.

Dividends paid in the period represent the payment of last year's final dividend of 55.5p (H1'11: 30.0p), giving a total dividend in respect of the full year ended 2 July 2011 of 81.0p. We understand that our dividend policy is a key part of the investment decision for many shareholders. The Board remains committed to maintaining the dividend per share which is supported by the Group's strong balance sheet and cash generation.

Governance

In November 2011, the Board announced the appointment of Nick Horler to the Board as Non-Executive Director. Nick is currently on the board of Royal Mail Plc (unlisted) and is Chairman of KPMG's Energy & Natural Resources Advisory Board. Nick is the former Chief Executive Officer of Scottish Power and Managing Director of E.On Retail. He has a wealth of experience of working in regulated industries and will also bring valuable insights into Go-Ahead's development of social networks and digital marketing to attract new passengers.

In October 2011, we announced that Andrew Allner, Chairman of the Audit Committee, had been appointed Senior Independent Non-Executive Director. Andrew, who has been a Non-Executive Director since October 2008, replaces Rupert Pennant-Rea who, having served on the Board for nine years would no longer be considered as independent. Rupert Pennant-Rea continues to serve as a Non-Executive Director.

Corporate Responsibility

For Go-Ahead, corporate responsibility is about operating our trains and buses safely, reducing the impact of our operations on the environment and being passenger focused. It also means developing our staff and enriching our local communities while growing our business profitably for our shareholders.

Reducing carbon emissions

We remain committed to improving the energy efficiency of our bus and rail operations as this not only has important environmental benefits, but also helps to reduce operating costs. We continued to make good progress through our 'Driving Energy Further' scheme, building on the 12% reduction in carbon emissions per passenger journey achieved in September 2011. Our target is a 20% reduction by 2015.

We were pleased that our efforts to operate responsibly were recognised in November 2011, when Go-Ahead achieved the highest transport operator ranking in the Government's new Carbon Reduction Commitment league table, which scores businesses on their carbon reduction performance.

In October 2011, Southern became one of the few franchises to be awarded ISO 14001 for its Environmental Management System (EMS), an internationally accepted standard that certifies an organistation's commitment to achieving the balance between maintaining profitability and reducing environmental impact.

People focused

We commissioned Passenger Focus, an independent watchdog, to carry out research across our bus network. The results, released in October 2011, showed an impressive 91% overall passenger satisfaction rate. We continue to be the only major transport group to conduct an independent survey each year. Our rail franchises performed well with Southeastern achieving record breaking customer satisfaction and punctuality scores.

We continue to improve awareness of value for money bus and rail fares through the roll out of smart ticketing and marketing campaigns, driving passengers to our websites to help guarantee lowest available fares.

Demonstrating our commitment to staff engagement, we recently undertook our first employee survey across our three rail franchises, which showed very positive results.

In order to help identify continuous operational improvement, the European Foundation for Quality Management (EFQM) is now embedded within all three of our franchises. EFQM also helps to measure delivery against strategic goals, brings consistency to management style and drives innovation.

I would like to thank our employees for their continuing dedication and hard work to ensure we continue to be a strong and successful Group.

Sir Patrick Brown, Chairman

22 February 2012

* Before amortisation and exceptional items

# Adjusted earnings are net profit after tax on continuing operations attributable to members before amortisation and exceptional items

BUSINESS AND FINANCE REVIEW

REVENUE AND OPERATING PROFIT* BY DIVISION

SUMMARY INCOME STATEMENT

* Before amortisation and exceptional items

FINANCIAL HIGHLIGHTS

Revenue for the six months ended 31 December 2011, increased by £67.3m, or 5.9%, to £1,199.5m (H1'11: £1,132.2m), primarily due to like-for-like passenger revenue growth in deregulated bus of 5.0% in bus and 9.6% in rail.

Operating profit* was £51.7m (H1'11: £59.0m). When excluding the £9m of one-off rail contract management benefits in H1'11 underlying operating profit* was up £1.7m. Operating profit margin reduced by 0.9ppts to 4.3% (H1'11: 5.2%).

Profit before tax for the period was £39.2m, down £5.8m, or 12.9%, (H1'11: £45.0m) and adjusted earnings per share* were down 12.6% at 67.4p (H1'11: 77.1p), the reduction being primarily driven by the aforementioned contract management benefits. Net profit after tax for the period (including exceptional items and excluding discontinued operations in H1'11) was £30.6m (H1'11: £35.3m).

Cash generation remained strong and underlying net debt reduced from £69.8m at 2 July 2011 to £51.4m at the period end. In December 2011 Southern entered into a contract for the purchase of 130 new trains paying a temporary deposit of £90.6m (£75.5m plus VAT). This accounts for the increase in actual net debt of £72.2m to £142.0m. The deposit amount was reimbursed in January 2012.

BUS

* Before amortisation and exceptional items

** On a like-for-like basis, excluding acquisitions. H1'11 also adjusts for the 26 weeks in H1'10

Overall bus performance review

Overall, the performance of our bus operations was robust with strong underlying passenger growth in all of our deregulated businesses, reflecting high quality services, marketing and passengers seeking value for money alternatives to the private car.

Total bus revenue increased by 4.7%, or £15.1m to £335.7m. Operating profit* was £35.2m, down £1.7m or 4.6%, against record profits in H1'11. Thames Travel, acquired in May 2011, contributed £0.3m to operating profit. Total bus operation profit margin decreased by 1.0ppts to 10.5%, although in line with the last financial year (FY'11: 10.4%).

We are pleased to report that accident claim costs have begun to decrease as a result of effective management action across the bus division. Claims are down £0.8m on the previous period.

Capital Expenditure

We have seen strong investment in our bus operations in the first half, with net cash outflow from capital expenditure of £42.8m (H1'11: £13.9m), including £34.4m on 198 new buses. Around 65% of these are for use in London reflecting additional contract wins, with the remainder purchased to enhance our deregulated fleet. In addition, we leased 120 buses for London contracts.

Deregulated bus

Revenue

All of our operating companies reported continued underlying growth. Like-for-like revenues increased by 5.0% and like-for-like passenger journeys were up 3.6%, with growth from both concessionary and fare paying passengers. We have seen a continuing trend in passengers taking advantage of value for money period passes which has reduced the average yield per customer but provides the opportunity for long term growth.

Around 90% of deregulated revenue is generated from commercial services, limiting our exposure to cuts in local authority budgets. In addition, our strategic focus on more vibrant urban areas, mainly in the South East, helps to protect us from the challenges of the wider economic environment.

Operating profit

Operating profit was £18.0m, down £0.5m or 2.7%, largely a result of implementation costs in respect of a new contract. We are taking the necessary management action to mitigate these costs going forward. Operating margin decreased by 1.1ppts to 11.7% in the half year, albeit in line with the last full year (FY'11: 11.6%).

* Before amortisation and exceptional items

Regulated bus

Revenue

Our regulated bus operations performed well. Revenue increased by 3.0% and as expected, mileage was up 1.8% due to new contracts commencing in the period. We continue to perform well in the TfL performance league tables and operated 96.3% of our target mileage. QIC bonus payments totalled £3.1m, down £1.3m (H1'11: £4.4m) due to tougher targets and roadworks in central London ahead of the Olympic Games.

Operating profit

Operating profit was £17.2m, down £1.2m or 6.5% largely a result of lower QIC payments. Operating margin decreased by 1.0ppts to 9.5%, albeit in line with the last full year (FY'11: 9.5%).

North American Yellow School Bus

Our 50:50 joint venture with Cook-Illinois continues to perform in line with expectations, returning a small profit in the period. We are currently bidding in the 2012 tendering round.

Bus outlook

We expect a solid performance despite the impact of the contract implementation costs. We will continue to drive organic growth by providing high quality services and further promoting the use of smart ticketing.

We expect London bus performance to continue into the second half with mileage up around 3% for the full year. As the largest bus operator in the capital we are working towards the Olympic Games in the next financial year, and have secured two contracts to provide specific Olympic services. Whilst the financial impact of these will be marginal we look forward to being able demonstrate the quality of our services and staff.

We will remain focused on strong cost control. Our fuel requirements are fully hedged for the second half at 41ppl and over 74% hedged for FY'13 at approximately 49ppl. We will continue to invest in our bus operations with a total capex spend of around £65m expected for the full year.

In April 2012, the 20% reduction in BSOG will be enacted. This will result in a financial impact in the current financial year of around £1.6m, as the reduction in the grant will be partly offset by a smartcard subsidy of 8%. To mitigate these reductions going forward, contract tender bids in London will be adjusted and deregulated operations will introduce efficiency improvements and yield benefits to offset the reduced fuel subsidy.

In February 2012 we announced the acquisition of a small bus operator, Carousel, in High Wycombe and will continue to seek opportunities for further bolt-on acquisitions in the UK.

* Before amortisation and exceptional items

RAIL

Performance review

Our rail division operates the Southern (including Gatwick Express), Southeastern (including High Speed) and London Midland franchises through our 65% owned subsidiary Govia.

Our rail division performed well in the six months to 31 December 2011. All three franchises achieved strong underlying growth, in particular London Midland where passenger journeys were up 11.5%, benefitting from a continuous shift away from car usage and innovative marketing. Although now eligible to receive revenue support from the Department for Transport (DfT), this has not been required by London Midland due to its strong performance.

Southern continues to make good progress and profitability remains in line with management expectations. Southeastern remains in 80% revenue support.

Operationally, all three franchises performed to a high standard, with Southeastern achieving record breaking customer satisfaction and punctuality scores.

* Before amortisation and exceptional items

** On a like-for-like basis, adjusting for the 26 weeks in H1'10

+ Department for Transport's Public Performance Measure on a moving annual average basis

# Based on National Passenger Survey - results announced end of January

Revenue

Total revenue increased by 6.4%, or £52.2m, to £863.8m. This consisted of:

The decrease in net subsidy receipts of £32.9m is in line with franchise bid assumptions. In the case of Southeastern's subsidy, £55.9m is received to partly offset the additional cost of operating High Speed 1 (HS1).

Southern's premium payments are included in operating costs. As of April 2012, overall our rail operation will be net contributors to the DfT.

Operating profit

Half year operating profit* was £16.5m, ahead of last year's first half when excluding the £9m of one off contract management benefits received in that period (H1'11: 22.1m). Therefore, the underlying operating profit margin increased by 0.3ppts.

Capital Expenditure

Net capital expenditure was £4.5m (H1'11: £10.6m), of which £0.4m related to London Midland, £1.7m to Southern and £2.4m to Southeastern. Full year capital expenditure on franchise obligations is expected to be around £15m (FY'11: £18.4m).

Rail outlook

Whilst the outlook for rail remains difficult to predict, we expect the first half revenue growth trends to continue in the second half. Following January fare increases we are assuming a more modest rise in passenger numbers and a greater revenue yield. The second half of the financial year marks the beginning of a busy period for the UK rail market. Many franchises will be renewed over the coming years and we will carefully consider all opportunities. With our joint-venture partner Keolis, we have recently submitted out initial bid documents for Thameslink and Essex Thameside based on a 65% Go-Ahead majority and 49% Go-Ahead minority respectively.

We have a very strong position in the UK rail market, with a proven 15 year track record of successfully operating very busy and complicated networks. We are the busiest operator in the UK running around 5,500 services a day and more passenger journeys are undertaken annually on our three franchises than in most European countries.

* Before amortisation and exceptional items

OTHER FINANCIAL ITEMS

Bus pensions

Operating profit* includes the net cost of the Group's defined benefit pension plans for the period of £16.6m (H1'11: £19.6m) consisting of bus costs of £2.2m (H1'11: £2.5m) and rail costs of £14.4m (H1'11: £17.1m). Company contributions to the schemes totalled £22.1m (H1'11: £21.9m).

The net deficit after taxation on the bus defined benefit schemes was £31.4m (2 July 2011: £44.3m), consisting of pre tax liabilities of £41.9m (2 July 2011: £59.9m) less a deferred tax asset of £10.5m (2 July 2011: £15.6m). The decrease in deficit was largely due to an increase in asset values, primarily in our liability driven investing portfolio. The pre tax deficit consisted of estimated liabilities of £554.3m (2 July 2011: £529.7m) less assets of £512.4m (2 July 2011: £469.8m). The percentage of assets held in higher risk, return seeking assets was 39% (2 July 2011: 46%).

Rail pensions

The nature of the rail pension schemes means that we only recognise the share of surplus or deficit expected to be realised over the life of each franchise.

As reported previously, the rail pension schemes follow the Government's change from RPI to CPI. This change is expected to reduce the income statement charge by around £5m per annum over the remaining lives of the franchises beginning in the 2012/13 financial year. Until agreed with trustees as part of the December 2010 triennial valuation discussions, we have not assumed any corresponding reduction in cash contributions. On this basis, we record a pre-tax liability of £12.3m (2 July 2011: £17.0m), representing the discounted value of the additional cash contributions of around £5m per annum over the remaining lives of the franchises. If the future cash contributions were to be agreed in line with the income statement charge, this liability would no longer be required and both the income statement charge and the cash contributions would reduce over the remaining lives of the franchises.

Net Finance Costs

Net finance costs for the period reduced to £7.7m (H1'11: £8.3m), comprising finance costs of £9.0m (H1'11: £9.0m) less finance revenue of £1.3m (H1'11: £0.7m). During the period a credit of £0.5m (H1'11 £0.4m) relating to mark to market interest swaps was charged directly to income. The average underlying net interest rate for the period was 5.6% (H1'11: 5.1%) reflecting increased costs associated with the £275m revolving credit facility entered into on 3 February 2011.

Goodwill and Intangible Amortisation

The charge for the period of £4.8m (H1'11: £5.1m) represents the non-cash cost of amortising goodwill and intangibles including assets associated with pension accounting for the rail franchises and computer costs.

Exceptional Items

Exceptional items for the period were £nil (H1'11: £0.6m). All of the comparative £0.6m related to accelerated depreciation in respect of articulated London buses which were phased out in November 2011.

Taxation

Net tax for the period of £8.6m (H1'11: £9.7m) includes underlying tax on ordinary activities of £10.5m (H1'11: £11.8m) and is equivalent to an effective tax rate of 26.8%, slightly above the statutory rate for the period of 25.75% as a result of non-qualifying capital allowances. The lower net tax charge reflects a £1.9m credit in respect of the impact on deferred tax on the change in statutory rate.

Non-Controlling Interests

Non-controlling interests in the income statement of £4.3m (H1'11: £5.3m) arise from our 65% holding in Govia Limited which owns 100% of our current rail operations and therefore represents 35% of the profit after taxation of these operations.

* Before amortisation and exceptional items

Earnings Per Share

Adjusted earnings (net profit after tax on continuing operations attributable to members before amortisation and exceptional items) were £28.9m in the period (H1'11: £33.1m) resulting in adjusted earnings per share of 67.4p (H1'11: 77.1p).

The weighted average number of shares reduced to 42.8 million (H1'11: 42.9 million) due to the purchase of shares to fund the Director Long Term Incentive Plan. The closing number of shares in issue, net of treasury shares remained at 42.9 million (H1'11: 42.9 million).

Dividends

The Board has maintained the interim dividend at 25.5p (H1'11: 25.5p), payable on 13 April 2012 to shareholders on the register at the close of business on 23 March 2012.

Dividends paid in the period represent the payment of last year's final dividend of 55.5p (H1'11: 30.0p), giving a total dividend in respect of the full year ended 2 July 2011 of 81.0p. The overall dividend for the year ended 2 July 2011 was the same as 2010, in which a lower final dividend was paid to offset an increase in the interim dividend due to a one-off change in advance of the 1 April 2010 change to taxation.

Summary cashflow

+ Operating profit before interest, tax, depreciation, amortisation and exceptional items

++When adjusting for the temporary rolling stock deposit H1'12 free cashflow was £38.9m and net debt was £51.4m

Cashflow

Cashflow generated from operations before taxation was £110.9m, increasing by £42.5m compared with the same period last year (H1'11: £68.4m). Working capital and other items increased by £48.3m to £33.8m, with the majority of the increase due to the timing of rail contract payments. We expect around half of the positive working capital movement to reverse in the second half of the year.

Tax paid of £12.9m (H1'11: £11.5m) related to the final instalments of the 2010/11 tax year. Net interest paid was £13.0m (H1'11: £7.0m) higher than the net charge for the period of £7.7m (H1'11: £8.3m) due to accrued amounts in respect of interest on the sterling bond which is paid annually in September each year. Capital expenditure, net of sale proceeds in the period, was £46.7m (H1'11: £23.6m) primarily due to an increase in the purchase of new buses.

Dividends paid to parent company shareholders were £23.8m (H1'11: £12.9m) and dividends paid to non-controlling interests amounted to £11.4m (H1'11: £3.7m).

Capital structure

+ Operating profit before interest, tax, depreciation, amortisation and exceptional items

Net debt

Net debt at 31 December 2011 was £142.0m (H1'11: £71.6m). Underlying net debt was £51.4m, the difference being a temporary deposit of £90.6m for new rolling stock in Southern. The balance outstanding, net of VAT, is shown within assets held for resale. The deposit amount was reimbursed in January 2012 under a separate contractual arrangement with the DfT and this reimbursement is also shown as both a debtor and a creditor in the 31 December 2011 balance sheet.

Net debt consisted of the £200m sterling bond (H1'11: £200m), amounts drawn down against the £275m (H1'11: £280m) five year revolving credit facility of £77.0m (H1'11: £58.0m), amounts drawn down against the US$10m facility of £3.9m (H1'11: £3.9m), hire purchase and lease agreements of £3.4m (H1'11: £8.1m) less cash and short term deposits of £142.3m (H1'11: £198.5m).

Adjusted net debt, consisting of net debt plus restricted cash in our rail division of £138.7m (H1'11: £191.9m), was £280.7m (H1'11: £263.5m), equivalent to 1.77x EBITDA on a twelve month rolling basis (2 July 2011: 1.58x; H1'11: 1.69x). Adjusted net debt is unaffected by the temporary rolling stock deposit as this was paid out of restricted cash.

Risk Management

The risks and uncertainties described in the Group's annual financial statements for the year ended 2 July 2011 remain the principal risks and uncertainties for the Group.

The key risks and uncertainties can be summarised as:

• Group: Major accident or incident; inappropriate strategy or investment; political and regulatory changes; increased pension scheme funding requirements; insurance and claims

• Bus: Economic downturn affects demand for our bus services; bus fuel price increases; London bus contracts not renewed or reduction in existing revenues

• Rail: Economic downturn affects demand for our rail services; inaccurate or erroneous bid assumptions and loss of franchise

More details can be found on pages 28-31 of the "Directors' Report: Performance Review" section of the Group Annual Report and Accounts, available on our website at www.go-ahead.com

RESPONSIBILITY AND CAUTIONARY STATEMENTS

Responsibility statements

We confirm that to the best of our knowledge:

• the interim financial statements have been prepared in accordance with IAS34 'Interim Financial Reporting';

• the interim management report includes a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules ('DTR') 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

• the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

Cautionary statement

This report is addressed to shareholders of The Go-Ahead Group plc and has been prepared solely to provide information to them.

This half yearly report is intended to inform the shareholders of the Group's performance during the six months to 31 December 2011 and this report and the announcement under which it was released do not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Go-Ahead Group shares or other securities. This report contains forward looking statements based on knowledge and information available to the Directors at the date the report was prepared. These statements should be treated with caution due to the inherent uncertainties underlying any such forward looking information and any statements about the future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

By order of the Board

Keith Down, Group Finance Director

22 February 2012

INTERIM CONSOLIDATED INCOME STATEMENT

for the six months ended 31 December 2011

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 31 December 2011

Interim consolidated statement of changes in equity

for the six months ended 31 December 2011

INTERIM CONSOLIDATED CASHFLOW STATEMENT

for the six months ended 31 December 2011

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

for the six months ended 31 December 2011

1. Corporate information

The Go-Ahead Group plc is a public limited company that is incorporated, domiciled and has its registered office in England and Wales. Its ordinary shares are publicly traded and it is not under the control of any single shareholder.

2. Basis of preparation

The condensed financial statements for the six months ended 31 December 2011 have been prepared in accordance with the DTR of the Financial Services Authority and IAS 34, 'Interim Financial Reporting', as adopted by the European Union. The condensed financial information has been prepared using the same accounting policies and methods of computation used to prepare the Group's 2011 Annual Report as described on pages 86 to 91 of that report which can be found on the Group's website at www.go-ahead.com, except for the adoption of new standards and interpretations, noted below. The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union.

The following new standards or interpretations are mandatory for the first time for the financial year ending 30 June 2012:

• IAS24 'Related Party Disclosure (revised)'

• 'Improvements to IFRSs (May 2010)'

• IFRS1 'First-time Adoption of International Financial Reporting Standards - Limited exemption from comparative IFRS7 disclosures for first-time adopters'

• IAS32 'Financial Instruments: Presentation - Classification of rights issues (amendment)

• IFRIC14 'Prepayments of a minimum funding requirement (amendment)'

• IFRCI19 'Extinguishing financial liabilities with equity instruments'

The adoption of the standards and interpretations listed above did not have a material impact on the financial performance or position of the Group with the exception of the improvements to IFRICs (May 2010) which included an amendment to IAS34. The amendment to IAS34 requires a description of the changes in business or economic circumstances that affect the fair values of the Group's financial assets and financial liabilities (whether measured at fair value or amortised cost); disclosure of any transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments and changes in classification of financial assets in interim condensed financial statements. There is nothing to report in this respect.

In accordance with IFRS5 'Non-current assets held for sale and discontinued operations', the Group has classified the results of the residual ground handling activities at Heathrow Terminal 1 and Meteor parking operations as discontinued. The disposal of our aviation services division was completed during the year ended 2 July 2011.

In 2011, as part of the Group's regular review of reporting practises and policies, it was decided that uninsured claims and certain franchise commitments be reclassified as provisions rather than accruals. Developing trends relating to the nature of claims, the increasing time involved in their resolution and the estimation of costs led the Group to determine that there was no longer a sufficient degree of certainty to classify all of these liabilities as accruals. The Group believes that this change in presentation provides more relevant information and aids comparability with our peers in the industry. Accordingly, comparative amounts as at 1 January 2011 have been restated as disclosed in note 13.

The financial information for the six months ended 31 December 2011 and the comparative financial information for the six months ended 1 January 2011 has not been audited, but has been reviewed by the auditors. The comparative financial information for the year ended 2 July 2011 has been extracted from the 2011 Annual Report and Accounts. The financial information contained in this interim report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006 and does not reflect all of the information contained in the Group's Annual Report and financial statements. The annual financial statements for the year ended 2 July 2011, which were approved by the Board of Directors on 31 August 2011, received an unqualified audit report, did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

3. Risks and uncertainties

The Board of Directors approved this report including the condensed financial statements on 22 February 2012. The risks and uncertainties described in the Operating and Financial Review for the year ended 2 July 2011 remain the principal risks affecting the Group's business for the second six months of the financial year ended 30 June 2012. The key risks and uncertainties can be summarised as:

• major accident or incident; inappropriate strategy or investment; political and regulatory changes; increased pension scheme funding requirements; insurance and claims

• economic downturn affects demand for our bus services; bus fuel price increases; London bus contracts not renewed or reduction in existing revenues

• economic downturn affects demand for our rail services; inaccurate or erroneous bid assumptions and loss of franchise

The preparation of the financial statements requires the use of estimates and assumptions. Although these estimates are based on management's best knowledge, actual results ultimately may differ from these estimates. The key sources of estimation uncertainty are consistent with those disclosed in the Group's Annual Report.

The Group's operations do not suffer from significant seasonal demand fluctuations.

4. Segmental analysis

In the second half of the year ended 2 July 2011, management reviewed the basis for segment reporting and concluded that there should be four reportable segments, Deregulated Bus, Regulated Bus, Rail and Go-ahead North America. Operating segments within those reportable divisions are combined on the basis of their long term characteristics and similar nature of their products and services, as follows;

The Deregulated Bus division comprises bus operations outside of London.

The Regulated Bus division comprises bus operations in London.

The Rail operation, Govia, is 65% owned by Go-Ahead and 35% by Keolis and comprises three rail franchises: Southern, Southeastern and London Midland.

The Go-Ahead North America division comprises a 50% investment in a US school bus operation. The Group's share of the profit of this division is currently not material, and it is therefore not included within the tables below.

The information reported to the Group Chief Executive in his capacity as Chief Operating Decision Maker does not include an analysis of assets and liabilities and accordingly IFRS8 does not require this information to be presented. Segment performance is evaluated based on operating profit or loss excluding amortisation of goodwill and intangible assets and exceptional items.

Transfer prices between operating segments are on an arm's length basis similar to transactions with third parties.

The following tables present information regarding the Group's reportable segments for the six months ended 31 December 2011, the six months ended 1 January 2011 and the year ended 2 July 2011. Information relating to the six months ended 1 January 2011 has been restated to report separately our regulated bus operations in London.

Six months ended 31 December 2011 (unaudited)

Six months ended 1 January 2011 (unaudited) - Restated

Year ended 2 July 2011 (audited)

At 31 December 2011, there were non-current assets of £3.5m (2 July 2011: £4.1m) and current assets of £0.4m (2 July 2011: £nil) relating to US operations, being made up entirely of equity accounted investments in Go-Ahead North America, a 50:50 joint venture with Cook-Illinois which commenced trading in August 2010. For the half year ending 31 December 2011, segment revenue for this venture was £1.1m (H1'11: £1.1m) and segment profit was £nil (H1'11: £nil).

During the six months to 31 December 2011 the Group incurred capital expenditure of £47.3m (H1'11: £24.5m) on fixed assets of which £19.9m (H1'11: £6.9m) related to the deregulated bus division, £22.9m (H1'11: £7.0m) related to the regulated bus division and £4.5m (H1'11: £10.6 m) related to the rail division.

During the six months to 31 December 2011 the depreciation charge for the Group was £25.4m (H1'11: £23.9m) of which £11.5m (H1'11: £10.5m) related to the deregulated bus division, £8.1m (H1'11: £7.7m) related to the regulated bus division and £5.8m (H1'11: £5.7m) related to the rail division.

5. Exceptional items

Exceptional items are significant items of income and expense which are shown separately due to their nature or expected frequency. The following costs have been included within exceptional costs due to their relative size and management's anticipation of their non-recurring nature.

Six months ended 31 December 2011

There were no exceptional items in the six months ended 31 December 2011.

Six months ended 1 January 2011

Exceptional items on continuing operations for the period were £0.6m consisting of accelerated depreciation in respect of articulated London buses which were phased out in November 2011.

The discontinued exceptional income of £0.8m consists of net profit on the sale of residual elements of the ground handling operations and Meteor parking operations and adjustments to the provisions in respect of the pre-sale reorganisation costs which related to operations sold in the prior period.

6. Taxation

The total taxation charge including discontinued operations is made up as follows:

The taxation charge has been calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period after adjusting for exceptional items.

A reduction in the UK corporation tax rate from 26% to 25% with effect from 1 April 2012 was enacted during the period. The Government has announced its intention to further reduce the UK corporation tax rate to 23% by 2014. If this reduction had been enacted by 31 December 2011 the Group's deferred tax liability would have been reduced by a further £2.7m to £31.2m.

The Group's future tax charges will also be affected by the Government's intention to reduce the main rates of capital allowances from 20% to 18% and from 10% to 8% with effect from April 2012.

Tax on exceptional items represents the tax credits relating to the exceptional items in the income statement.

7. Earnings per share

Basic and diluted earnings per share

The weighted average number of shares in issue excludes treasury shares held by the company, and shares held in trust for the Directors' Long Term Incentive Plan.

No shares were bought back and cancelled by the Group in the period from 31 December 2011 to 22 February 2012.

There is no effect from potentially issuable shares and as such basic and diluted earnings per share are the same.

The effect of taxation and non-controlling interests on exceptional items and amortisation is shown on the next page for each of the periods.

Adjusted earnings per share

Adjusted earnings per share is presented to eliminate the impact of goodwill and intangible amortisation and non-recurring exceptional items to show a 'normalised' earnings per share. For continuing operations, this is analysed as follows:

* Exceptional items include the one-off impact of releasing a £7.8m deferred tax liability to the income statement, relating to the agreement of tax efficient financing by HMRC, and the impact of the rate change on the opening deferred tax balance.

For total operations, adjusted earnings per share is analysed as follows:

* Exceptional items include the one-off impact of releasing a £7.8m deferred tax liability to the income statement, relating to the agreement of tax efficient financing by HMRC, and the impact of the rate change on the opening deferred tax balance.

8. Discontinued operations

The disposal of our aviation services division was completed during the year ended 2 July 2011 with the sale of our Meteor Parking operations and the agreed sale of the residual ground handling activities at Heathrow Terminal 1 for a combined consideration of £11.2m. All of our aviation services division have been classified as discontinued.