THE GO-AHEAD GROUP PLC ("Go-Ahead" or the "Group")
INTERIM MANAGEMENT STATEMENT
Solid trading; full year expectations unchanged
The Go-Ahead Group plc today announces its Interim Management Statement for the period from 1 January 2012 to 25 April 2012. The figures in this statement are reported on a year to date, like-for-like basis from 3 July 2011 to 31 March 2012.
Trading in the third quarter has been solid and our expectations for the full year to 30 June 2012 remain unchanged.
David Brown, Group Chief Executive of Go-Ahead, said:
"I am pleased to report continued growth in both our bus and rail divisions.
"In bus, our focus of operating in urban areas, predominantly in the South East, combined with our strategy of local management and marketing has continued to deliver growth. Our sector leading London bus business performed strongly in the quarter and we were pleased to announce the acquisition of the Northumberland Park depot in North London, demonstrating our long term confidence in this market.
"Our rail businesses continue to perform well and we were delighted to have been shortlisted for the Thameslink franchise.
"Whilst we continue to be cautious about the wider economic outlook, we remain confident that we will deliver a full year result in line with our expectations."
Since our last update in February, we have completed three acquisitions in our bus division. We acquired First London East's Northumberland Park bus depot in Tottenham, Essex-based company Hedingham Omnibuses and, most recently, Anglian Bus based in Suffolk.
Outside London, year to date revenue (excluding acquisitions) increased by around 4% and passenger numbers were up around 3%, with stronger growth in fare-paying passengers being partly offset by recent weaker concessionary performance.
Passengers continue to take advantage of value for money period passes and smartcards. As expected, this has reduced the average yield per customer but provides the opportunity for long term growth. Following the Government's decision to reduce funding through the Bus Service Operators' Grant (BSOG) and as a result of increasing fuel prices, our bus companies will be reviewing fares and targeting cost efficiencies in our fourth quarter.
Our London bus business performed strongly in the quarter. Excluding acquisitions, year to date revenue and mileage rose by over 4% and 2%, respectively. The depot acquisition, in addition to other contract wins, will result in strong mileage growth continuing into the next financial year.
Our rail division operates the Southern (including Gatwick Express), Southeastern and London Midland franchises through our 65% owned subsidiary Govia.
In the year to date Southern achieved growth in passenger revenue of approximately 9% and in passenger journeys of over 2%. In Southeastern, passenger revenue was up over 10% and passenger journeys increased by almost 2%. London Midland saw strong passenger revenue growth of over 13% with passenger numbers up around 8%.
The Group was delighted to be shortlisted for the Thameslink franchise during the quarter. Following the integration of Southern in 2015 it will be the largest rail franchise in the UK, with annual revenue expected to be around £1bn. It is anticipated that the successful bidder will be announced in May 2013, with the contract commencing in September 2013. We expect bid costs in the rail division of around £6m in the next financial year.
The Group remains in a good financial position with strong cash generation and a robust balance sheet, underpinning our dividend policy and allowing flexibility to pursue further value-adding opportunities. Due to recent acquisitions in our bus division, year end net debt is expected to be higher than previously anticipated at around £95m.
Overall, trading in the third quarter has been solid and, whilst we continue to be cautious about the wider economic outlook, we remain confident that we will deliver a full year result in line with our expectations.
We continue to focus on our key strengths of providing high quality, locally focused and innovative transport services.
For further information, please contact:
The Go-Ahead Group
David Brown, Group Chief Executive 020 7821 3920
Keith Down, Group Finance Director 020 7821 3922
Holly Birch, Group Investor Relations Manager 07837 612 661
Catherine Robertson, Group Investor Relations Manager 020 7821 3929
Citigate Dewe Rogerson 020 7638 9571
Notes to Editors
Go-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. Employing around 22,000 people across the country, over one billion passenger journeys are undertaken on our services each year. We are committed to operating our companies in a safe, socially and environmentally responsible way and are proud to have been awarded the Carbon Trust Standard after taking action on climate change. In addition to the travelling public, our customers include the Department for Transport, Transport for London (TfL) and local authorities.
Go-Ahead is one of the UK's largest bus operators. With a fleet of around 3,900 buses, we carry, on average, around 1.7 million passengers every day. Our operations are focused on high density commuter markets. We have a strong presence in London, with around 20% market share, where we provide regulated services for TfL. We operate deregulated services in Oxford, East Anglia, the South East, Southern and North East England. We also have a yellow school bus joint venture in North America.
Our rail division operates the Southern (including Gatwick Express), Southeastern and London Midland franchises through our 65% owned subsidiary Govia. It is the busiest rail operation in the UK, responsible for nearly 30% of all UK passenger rail journeys. In December 2009, Southeastern began operating the UK's first high speed domestic rail service between Kent and London, significantly reducing journey times.
Certain statements included in this press release contain forward-looking information concerning the Group's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which the Group operates. By their nature, forward-looking statements involve uncertainty because they depend of future circumstances, and relate to events, not all of which are within the Company's control or can be produced by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Nothing in this press release should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in The Go-Ahead Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. Except as required by law, the Company undertakes no obligation to update any forward-looking statement.
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