Go-Ahead profits down, although bus division remains stable

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Overall bus division operating profit down £0.5m, while revenues are up 4.5%

Go-Ahead Group has released full year results for the 12 months ended July 1, 2017.

While revenues increased by 3.6% to £3.48bn, operating profit was down 7.4%, decreasing from £162.6m to £150.6m, with profit margin falling 0.5% to 4.3%. Profit before tax decreased by £8.2m to £136.8m.

Basic earnings per share decreased by 4.8% to 207.7p, though Go-Ahead raised the full year dividend per share by 6.5% to 102.08p.

Go-Ahead bus operations in the UK proved very stable. Regional bus operations saw profit fall from £48.5m to £47.1m, though this was partly offset by a £0.9m increase in London operating profit, which stood at £43.6m.

David Brown, Group Chief Executive, commented: “Looking back on the year, our resilient business model has enabled us to operate through challenging market and trading conditions in our bus and rail businesses. If not for some one-off costs in regional bus, we would have seen profit growth, rather than the consistent performance delivered year on year.

“In London bus, we saw profit in what is a highly competitive market. While it was disappointing to be unsuccessful in our bid to retain London Midland, progress in our international strategy will see some of the lost revenue from the franchise replaced with contracts in the targeted markets of Singapore bus, Dublin bus and German rail.

“Go-Ahead’s regional bus operation received the highest levels of customer satisfaction in the sector, up to 90% in the latest survey and exceeding the levels of satisfaction achieved by some of Britain’s best-loved brands. Our local bus businesses are focused on improving customer experience, including making it easier to pay for travel. During the year, the latest contactless technology was introduced across a number of our operations. We plan for contactless payments to be available to every Go-Ahead bus customer by the end of the year.

“Our international development strategy is progressing well and, with five contracts won in three new markets, we are announcing a target of 15% to 20% of Group profit to be generated from international operations within five years. We will continue to bid in markets that match our investment criteria, and where we can use our skills and experience to improve local transport services.”