(Alliance News) - Go-Ahead Group PLC on Thursday said the outlook for its current financial year has improved, in its London & International bus unit in particular, and the transport firm added that it is "working towards" paying an annual dividend.
Go-Ahead did not declare a final payout for its year ended June 27 and suspended its interim dividend that financial year.
"We understand how important financial returns are to our shareholders and appreciate their loyalty throughout this crisis, enabling us to continue delivering essential services to our communities. The board is working towards paying a dividend at an appropriate level in the 2021 calendar year," Go-Ahead added.
The promising news over a dividend comes as its "financial outlook for the 2021 financial year has improved". Go-Ahead said it has increased its expectations in its London & International bus division.
"This division remains resilient and continues to trade well in all three geographies. We continue to work in close partnership with our transport authority clients to support the delivery of reliable bus services throughout the crisis. Our expectations for the year ending July 3, 2021 are now ahead of previous guidance, with the majority of the upside expected to be recognised in the first half of the financial year," Go-Ahead explained.
The company added that the unit benefited from the timing of income from London's quality incentive contract. The division generates revenue solely through contracts, giving the firm "good visibility" for the rest of the year.
Its regional bus businesses saw a recovery in passenger numbers earlier in the year, reaching as high as 50% of pre-health crisis levels before the recent England lockdown. Since then however, commercial bus passenger numbers fell by "around 15 percentage points over the past four weeks".
"Due to the ongoing uncertainty around levels of passenger demand as a result of the pandemic, we remain unable to provide meaningful full year financial guidance for regional bus. However, we do expect this division to make a positive contribution in the year," Go-Ahead added.
Finally, at its Rail unit, Go-Ahead said its Southeastern and GTR, or Govia Thameslink Railway, divisions "are performing well".
In Germany, its performance is "stable" and in Norway, trading is also promising, Go-Ahead said.
For the whole of the Rail division, Go-Ahead said its expectations are unchanged.
"Worldwide government recognition of the importance of public transport in enabling social and economic recovery, coupled with our resilient business model and disciplined financial management, mean we can continue to support our business as we look towards the future," the company added.
Go-Ahead shares were 4.5% higher at 896.98 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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