Go-Ahead Group has announced its trading update for the period from December 31, 2017, to May 23, 2018, ahead of its full year results for the year ending June 30, 2018, which will be released on September 6, 2018.
Go-Ahead’s regional bus operations saw negligible change in revenue, but a 2% decline in patronage.
It said revenue and passenger journey growth trends remain subject to challenging market conditions with the adverse weather dampening growth rates since the half-year.
There is growth in some regions, and the company expects regional bus profit for the second half of the year to be close to the previous year’s level.
In London, revenue grew by 3% with no significant change in mileage a 1% reduction in peak vehicle requirement.
Continued improvements in operational performance resulted in strong Quality Incentive Contract income.
However, the timing of some contract losses means that full year mileage is likely to be down by up 1%.
The group said it has fewer contracts coming up for renewal over the next two financial years, and therefore expects significantly lower levels of capital expenditure and a corresponding increase in free cash flow in those years.
Go-Ahead stated that its bus operation in Singapore, which is reported within the London bus division, continues to perform well, delivering high levels of punctuality on behalf of the Land Transport Authority.
The second half of the year is expected to deliver operating profitability at London bus that is comparable to the first half, representing an improvement on our previous expectations, the company added.
Go-Ahead Group Chief Executive, David Brown, said: “In a challenging market environment with reduced retail footfall and pressures on local authority budgets, our businesses have performed well overall.
“In bus, our London operations have seen an improvement in service performance resulting in higher Quality Incentive Contract income. Revenue and passenger trends remain mixed across our regional bus businesses.
“In rail, trading has been good in the period, largely due to efficiency improvements and helped by the resumption of full Southeastern services through London Bridge station.
“The board is confident the group will deliver full year results that are slightly ahead of its previous expectations.”
