Go-Ahead sees growth slowdown in third quarter

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Combination of factors see regional passenger journeys decrease

The Go-Ahead Group plc announced its third quarter trading statement for the period from December 28, 2014 to April 29, 2015. The figures in this statement are reported on a year-to-date basis from June 29, 2014 to March 28 2015.

David Brown, Group Chief Executive of Go-Ahead, said: “The overall trading performance of both our bus and rail businesses has been satisfactory and our expectations for the full year remain unchanged.

“We continue to make progress in our bus division and remain committed to our strategic target. During the period we welcomed the results of the independent statutory watchdog Passenger Focus’ national bus customer satisfaction survey which named Go-Ahead as the best performing large operator, with our regional bus companies achieving an average satisfaction rate of 90%.”

>Regional bus

As expected, revenue growth slowed in the third quarter to 3% due to the lapping of contract gains in the same period last year. Passenger journey growth continued to slow to -1%, with ongoing economic weakness in the north east affecting Go-Ahead’s operations, and roadworks in Oxford and Brighton significantly impacting its services in those areas.

>London bus

Growth in London bus revenue slowed to 1.5% and mileage declined to -1.5% year-on-year due to the timing of known contract losses. Excluding the impact of the BSOG reallocation, revenue in the year to date was similar to the prior year. Full year mileage is expected to be broadly flat year-on-year, with new contracts beginning in the fourth quarter.

Roadworks and congestion in the capital have impacted QICs revenue, with a year-on-year reduction of around £1m in the third quarter, expected to repeat in the fourth quarter. Roadworks and congestion are expected to continue for the foreseeable future.

Some revenue was lost as a result of strike action early in the quarter, impacting profitability by around £1m.