Go-Ahead blames North East weakness and disruption for growth slowdown

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Go-Ahead Group’s bus business saw revenue and passenger journey growth continue to slow into the fourth quarter, with ongoing economic weakness in the north east affecting operations, while roadworks in Oxford and Brighton significantly impacting services in those areas. The news was came last week in the firm’s pre-close trading update for the year ending June 27, 2015, ahead of its full year results which will be announced on September 3.

The group’s expected growth rates for the full year are a 3% increase in revenue and a 1% decrease in passenger journeys.

In London, mileage increased in the fourth quarter as new contracts began during the period. Excluding the impact of the BSOG reallocation, the group expects revenue to be broadly flat year on year. Also in London, Quality Incentive Contract revenue continues to be impacted by roadworks and congestion, which is expected to cost the group at least £3m in the second half of the year. Roadworks and congestion are expected to continue in the capital for the foreseeable future. Over the full year, revenue is expected to be up 1.5%, with mileage down 1%.

David Brown, Group Chief Executive of Go-Ahead, said: “Our full year expectations remain unchanged. Our locally-run bus companies work in partnership with local authorities and are focused on the needs of the communities they serve, responding quickly to their changing requirements.

“In rail, we continue to work closely with Network Rail and other industry partners to minimise the impact on passengers of the major infrastructure works associated with the Government’s £6.5bn Thameslink programme.”