(Alliance News) - Transport operator Go-Ahead Group PLC on Thursday said it has apologised to the UK government after admitting to errors and failings in the way it ran the Southeastern rail franchise.
However, Go-Ahead still faces a potential fine, and its shares will be suspended from trading at the start of the new year, as its review of the situation means it will miss the deadline for publishing its results.
Go-Ahead shares were down 21% at 555.50 pence early Thursday in London.
Go-Ahead said the review of London & South Eastern Railway franchise with the UK government found that "serious errors" were made by LSER in its dealings with the Department for Transport over several years.
Go-Ahead said it has accepted that by "failing to notify the DfT of certain overpayments or monies due to the DfT, LSER breached contractual obligations of good faith contained in the franchise agreements." As a result, the company has apologised to the DfT.
The government department is considering enforcement action, Go-Ahead said, including a financial penalty.
Go-Ahead promised to enhance "certain aspects" of its corporate governance in order to better safeguard and assure compliance obligations of complex long-term rail contracts.
Go-Ahead also has delayed annual results due next week until January, so that auditors Deloitte can consider the implications of the LSER review. As result of missing the deadline for publication, shares will be suspended from trading, starting January 4.
Go-Ahead said it expects adjusted operating profit for the rail division to be ahead of previous expectations, partly due to the accounting treatment of some non-recurring items. Expectations for the company's bus divisions are unchanged, it said.
By Tom Waite; thomaslwaite@alliancenews.com
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