Strong half year results for Go-Ahead

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Go North East has recently branded its X9 and X10 routes as ‘Tyne Tees
Go North East has recently branded its X9 and X10 routes as ‘Tyne Tees

Go-Ahead Group has reported a 14% rise in operating profit to £115.1m (2010: £101.0m) in its half-year results for the year to July 2.

The Group’s total dividend for the year is maintained at 81 pence per share and it continued strong cash management results. It said the new financial year had started well and that trading was in line with its expectations.

However, analysts claim Go- Ahead will have to continue with acquisitions of other bus operations to maintain the scale of its financial performance.

Overall revenue increased by £129.7m, or 6.0%, to £2.297bn (£2.167bn for the same period of 2010) and Go-Ahead’s statement added that results for the deregulated bus and rail divisions more than offset a slight 1.3% reduction in its regulated London bus division. The Group expects London operations to improve with a number of new routes having been tendered.

Adjusted earnings per share increased by 6.5% to 135.2p (2010: 126.9p). Basic earnings per share, including exceptional items and discontinued operations, was 157.1p (2010: 40.1p) and profit attributable to members was £67.4m (2010: £17.2m). Go-Ahead is proposing a final dividend of 55.5p per share (2010: 30p) to maintain the total dividend for the year at 81p (2010: 81p).

Chairman, Sir Patrick Brown, said: “I am pleased with the performance of the Group this year.

“Despite facing challenging economic conditions in the last 12 months and the adverse weather in the first half of the year, all of our operations have seen growth in like-for-like passenger revenue and passenger journeys.

“Our bus and rail operations remain fundamentally strong and have benefited from passengers leaving their cars at home and choosing better value public transport alternatives.

“Our outlook for the next financial year has not changed since our trading update in June 2011. We are assuming the broad underlying operating trends experienced to date will continue throughout the financial year to June 30, 2012 and that around £13m of the rail contract management benefits achieved in 2011 will not recur.

“In bus, we anticipate the performance of the business will remain strong despite the reduction in the Bus Service Operators Grant (BSOG) in April 2012 which will impact on the last quarter of the next financial year. Our fuel requirements are fully hedged for the next year at 41p per litre, in line with the cost in the financial year just ended.

“Our balance sheet, cash flow and financing are strong and we continue to view the maintenance of the dividend as a priority.

“We have started the new financial year well and trading has been in line with expectations.”