26th Apr 2007 07:01
Go-Ahead Group PLC26 April 2007 For release at 0700 am on 26 April 2007 The Go-Ahead Group plc ("Go-Ahead" or the "Group") Trading update Go-Ahead announces its trading update for the third quarter ended 31 March 2007. Overall trading during the third quarter has been strong. Trading in the bus division has been robust despite the recent increase in fuelprice, driven by revenue growth and contributions from new acquisitions. InLondon, the business has continued to perform strongly and win new contracts ina competitive market. Our operations continue to deliver a high quality ofservice, recognised in the quality incentive bonus scheme, and achieve costefficiencies. In the deregulated bus business, we have seen the continuedbenefit of passenger growth (excluding concessionary fare schemes), albeit atlower levels in this last quarter. We have also continued to make progress withnetwork design and marketing initiatives geared to increase revenue and reducecosts. Transition costs persist in the West Midlands although these are expectedto decrease following the launch of the new commercial strategy at the end ofthis month. The performance of the Group's rail business has been particularly strong,benefiting from continuing high levels of passenger volume growth in Southernand Southeastern (up 9.6% and 6.4% respectively in the quarter compared to thesame quarter last year) despite fare increases in January. Accordingly, Southernis now accruing profit share payments due to the Department for Transport("DfT") at a rate of 80%. Southeastern's performance is also significantly aheadof plan as revenue growth is exceeding the phased increase in operating costsneeded to deliver franchise commitments. In addition, a number of one-offcontractual issues have been, or are expected to be, favourably resolved to thebenefit of the year's result. Notwithstanding current buoyant market conditions, the declining subsidy profileand cost pressures, such as traction electricity charges, will have an impactgoing forward. Through ATOC, the Group has negotiated a new basis of charge forelectricity with Network Rail. The annualised increase from this month is nowapproximately £3.5 million (down from the previously reported figure of £16million) and accrued compensation by the Group to Network Rail of approximately£7 million will be treated as an exceptional item in the current financial year. Detailed discussions are continuing with Transport for London and the DfTregarding both the London Rail Concession and West Midlands franchiserespectively, where Govia is one of two short listed bidders for bothfranchises. Govia has also commenced detailed contractual negotiations with theDfT for the incorporation of the Gatwick Express franchise into the Southernfranchise from May 2008. Market conditions in aviation services remain difficult and, in the light ofthis, together with a number of contractual delays and disappointments with newcustomers, management's expectations for the remainder of the year have beenreduced. Whilst aviance's discussions with Air Canada have now been terminated,the contractual negotiations with British Airways regarding the outsourcing ofits ground handling services at Aberdeen, Edinburgh, Glasgow and Manchesterairports are at an advanced stage. Meteor continues to refocus its businesstowards off-airport services and a small acquisition was completed in thequarter expanding its security services. As a result of the good performance in rail and non-recurring benefits outlinedabove, the outturn for the full year is expected to be ahead of management'sprevious expectations. A pre-close trading update will be announced in late June. For further information, please contact: The Go-Ahead Group plcKeith Ludeman, Group Chief Executive 020 8929 8650Ian Butcher, Group Finance Director 0191 232 3123 Weber Shandwick Financial 020 7067 0700Richard Hews/Rachel Taylor/Hannah Marwood Note to Editors: BUSThe group's bus division operates over 3,600 buses, providing over 505 millionpassenger journeys and covering around 236 million vehicle kilometres each year.Operations fall into four main geographical areas: deregulated services in northeast; deregulated services in West Midlands; deregulated services in south east/ southern England; and regulated services for Transport for London in thecapital. The newest additions to this division are Dockland Minibuses andMarchwood buses acquired during the half year. RAILThe group's rail division operates a fleet of 630 trains on which over 280million passenger journeys are undertaken. Concentrated in the south east ofEngland both our franchises, Southern and Southeastern, operate a mix ofsuburban commuter and mainline routes throughout south London, Kent, Surrey andSussex. The Southeastern franchise will include the operation of new high speedtrains on the domestic Channel Tunnel Rail Link into St Pancras from 2009. AVIATION SERVICESThe group's aviation services division undertakes a wide range of supportservices for national and international airlines. Services provided includecargo handling, passenger check-in, baggage handling, information desks,executive lounges, ground handling and customs clearance. In the last year 45million passengers were handled as well as over half a million aircraftmovements. The division includes Meteor Parking which is the second largestparking company in the UK, managing over 58,000 parking spaces predominantly atBAA airports, with a range of customers, including BAA, local authorities,retail outlets, NHS trusts, hotels and rail stations. Well known brands include'Pink Elephant', 'Park 1' and 'eparking'. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GOG.L