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Annual Results

Go-Ahead operating profits fall

07 September 2017 08:15

Go-Ahead Group's operating profits fell by 7.4% to £150.6m in the year to the end of July.

The group said the results were in line with its forecasts with bus and rail operating profit at £90.7m (2016: £91.2m) and £59.9m (2016 restated: £71.4m), respectively.

Revenues were up 3.6% at £3,481.1m and the full-year dividend of 102.08p is up from 95.85p last time.

Group chief executive David Brown said: "Looking back on the year, our resilient business model has enabled us to operate through challenging market and trading conditions in our bus and rail businesses.

"If not for some one-off costs in regional bus, we would have seen profit growth, rather than the consistent performance delivered year on year.

"In London bus, we saw profit in what is a highly competitive market. While it was disappointing to be unsuccessful in our bid to retain London Midland, progress in our international strategy will see some of the lost revenue from the franchise replaced with contracts in the targeted markets of Singapore bus, Dublin bus and German rail

"The UK rail network is one of the busiest in the world, with the number of annual passenger journeys more than doubling since privatisation in the 1990s.

"That is why significant investment is being made in infrastructure improvement projects, such as the Thameslink Programme, which we are delivering through Southeastern and GTR, to ensure network capacity grows and reliability improves.

"Unfortunately, as with any large-scale improvement programme, some disruption is inevitable before the long term benefits to improve the daily journeys of hundreds of thousands of people are delivered.

"We apologise to our Southern passengers who have been inconvenienced for many months by disruption caused by industrial relations issues.

"Service levels are beginning to improve but there is still a lot of work to be done to provide the level of service we and our customers expect.

"Our primary aim is to improve the experience for our passengers and we are resolute in this commitment.

"Go-Ahead's regional bus operation received the highest levels of customer satisfaction in the sector, up to 90% in the latest survey and exceeding the levels of satisfaction achieved by some of Britain's best-loved brands.

"Our local bus businesses are focused on improving customer experience, including making it easier to pay for travel. During the year, the latest contactless technology was introduced across a number of our operations.

"We plan for contactless payments to be available to every Go-Ahead bus customer by the end of the year.

"Our international development strategy is progressing well and, with five contracts won in three new markets, today we announce a target of 15% to 20% of Group profit to be generated from international operations within five years.

"We will continue to bid in markets that match our investment criteria, and where we can use our skills and experience to improve local transport services.

"In addition, we're looking at opportunities that address future transport needs, complementing our existing operations and utilising our expertise and assets. This includes deploying our spare depot capacity in new ways and delivering new services for our customers.

"As one of the UK's largest providers of public transport, Go-Ahead plays a vital role in building a thriving economy and connecting communities. By providing essential bus and rail services, we help people connect with each other and get where they want to go.

"We believe in creating shared value for our many stakeholders. We strive to deliver high quality services for our customers and sustainable returns for our shareholders.

"Our 29,000 employees, who are at the heart of the communities we serve, are key to our success and we believe in taking care of them.

"Effective partnership working is vital to delivering efficient transport systems; we work closely with key strategic partners to deliver improvement and change.

"The Group remains in a good financial position, with a robust balance sheet, allowing us to invest in our core UK businesses and providing flexibility to pursue value-adding opportunities in new and existing markets."

At 8:15am: (LON:GOG) GoAhead Group The PLC share price was -64.5p at 1688.5p

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