1st May 2014 07:00
The Go-Ahead Group plc 4 Matthew Parker Street, London, SW1H 9NPTelephone 020 7799 8999 |
Press Release
1 May 2014
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
INTERIM MANAGEMENT STATEMENT
Good performance in bus and rail;
in line with management expectations
The Go-Ahead Group plc today announces its Interim Management Statement for the period from 29 December 2013 to 30 April 2014. The figures in this statement are reported on a year to date basis from 30 June 2013 to 29 March 2014.
David Brown, Group Chief Executive of Go-Ahead, said:
"I am pleased with the overall performance of both our bus and rail businesses and our expectations for the full year remain unchanged.
"We continue to make good progress in our bus division and are on course to achieve our operating profit target of £100m by 2015/16. Our focus remains on achieving cost efficiencies in all areas of the business and driving revenue growth through our high quality operations. During the period we welcomed the results of the independent statutory watchdog Passenger Focus' national customer satisfaction survey in which Go North East achieved 90% satisfaction.
"In our rail division overall underlying trading remains in line with our expectations. We await the outcome of the DfT's Thameslink franchise competition and our bid team continues to work on upcoming opportunities."
Bus:
Deregulated:Solid underlying revenue growth in our deregulated bus operations has been driven by good growth in passenger numbers and increased mileage, as previously reported. Both commercial and concessionary travel continue to grow on our network.
Year to date growth rates*:
Revenue | Passenger journeys | ||
Total(including Olympics) | Underlying(excluding Olympics) | Total(including Olympics) | Underlying(excluding Olympics) |
c.3.5% | c.4% | c.2%# | c.2% |
#The Olympic contract was on a gross cost basis. Passenger journeys were not recorded.
Regulated:Our London bus operations have delivered a strong performance with further mileage growth in the third quarter due to continued higher levels of rail replacement work. Following on from an extended period of stronger than expected QICs performance, bonus payments declined slightly in the quarter.
Year to date growth rates*:
Revenue | Mileage | ||
Total(including Olympics) | Underlying(excluding Olympics) | Total(including Olympics) | Underlying(excluding Olympics) |
c.6% | c.8% | c.2% | c.2.5% |
Rail:
Our rail division operates the Southern (including Gatwick Express), Southeastern and London Midland franchises through our 65% owned subsidiary Govia.
Underlying revenue growth in the overall rail division remains solid and in line with our expectations. Passenger journey data across all companies continues to be impacted by changes in Travelcard allocations, inflating growth rates.
Year to date growth rates*:
Passenger revenue | Passenger journeys | |||
Total(including Olympics) | Underlying(excluding Olympics) | Total(including Olympics) | Underlying(excluding Olympics) | |
Southern | c.7% | c.7.5% | c.4% | c.4.5% |
Southeastern | c.4.5% | c.6% | c.4% | c.6.5% |
London Midland | c.8% | c.9% | c.5.5% | c.6% |
Trading in the Southern franchise remains in line with our expectations and as previously reported, the franchise is expected to enter revenue support in the fourth quarter of the year.
During the quarter Southeastern commenced a seven-month extension period on the original franchise terms. As previously reported, this will have a negative impact on rail profitability in the second half of the year.
We continue to invest to improve operational performance, however the rate of passenger revenue growth in the London Midland franchise is beginning to slow as a result of increased competition on the west coast mainline.
Against a backdrop of reduced subsidy receipts, more challenging trading conditions and higher operational costs, London Midland has carried out a reorganisation to reduce the number of management and administrative staff, in order to reduce costs. This reorganisation will result in an exceptional charge in the current financial year.
Outlook:Overall, trading in both our bus and rail businesses in the year to date has been solid and we remain confident that we will deliver a full year result in line with our expectations.
The Group remains in a good financial position with strong cash generation and a robust balance sheet, underpinning the dividend policy and allowing flexibility to pursue value-adding opportunities. We continue to focus on our key strengths of providing high quality, locally-focused and innovative transport services.
N.B. Our £100m bus operating profit target excludes amortisation and exceptional items
\* The Olympic and Paralympic Games impacted on growth rates in the first quarter of the prior financial year. They have therefore been excluded for comparative purposes in these underlying figures. ENDS
Go-Ahead will be hosting a series of calls with analysts throughout the day.
For further information, please contact:
The Go-Ahead Group | |
David Brown, Group Chief Executive | 020 7799 8971 |
Keith Down, Group Finance Director | 020 7799 8973 |
Holly Birch, Head of Investor Relations | 07837 612 661 |
Citigate Dewe Rogerson | |
Michael Berkeley | 020 7638 9571 |
Chris Barrie | |
Eleni Menikou
|
GO-AHEADGo-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. Employing around 23,500 people across the country, over one billion passenger journeys are undertaken on our services each year. We are committed to operating our companies in a safe, socially and environmentally responsible way and are proud to have been reaccredited with Carbon Trust Standard after taking action on climate change. In addition to the travelling public, our customers include the Department for Transport, Transport for London (TfL) and local authorities.
BUSGo-Ahead is one of the UK's largest bus operators. With a fleet of around 4,400 buses, we carry nearly two million passengers every day. Our operations are focused on high density commuter markets. We have a strong presence in London, with around 24 per cent market share, where we provide regulated services for TfL. We operate deregulated services in Oxford, East Anglia, the South East, Southern and North East England. We also have a small yellow school bus joint venture in North America.
RAILThe rail operation, Govia, is 65 per cent owned by Go-Ahead and 35 per cent by Keolis. It is the busiest rail operation in the UK, responsible for nearly 30 per cent of all UK passenger rail journeys through its three rail franchises: Southern (which includes the Gatwick Express), Southeastern and London Midland. In December 2009, Southeastern began operating the UK's first high speed domestic rail service between Kent and London, significantly reducing journey times.
Legal disclaimerCertain statements included in this press release contain forward-looking information concerning the Group's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which the Group operates. By their nature, forward-looking statements involve uncertainty because they depend of future circumstances, and relate to events, not all of which are within the Company's control or can be produced by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Nothing in this press release should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in The Go-Ahead Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. Except as required by law, the Company undertakes no obligation to update any forward-looking statement.
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