Thursday, 23 October 2014

Go Ahead Interim Management Statement October 2014

 Overall trading robust; full year expectations unchanged

Go-Ahead has announced its Interim Management Statement for the period from 29 June 2014 to 20 October 2014 ahead of its Annual General Meeting on 24 October 2014.
The first quarter growth rates reported in this statement are for the period from 29 June 2014 to 27 September 2014.
David Brown, Group Chief Executive of Go-Ahead, said:
“Trading in the first quarter has been robust and our full year expectations for both bus and rail operations remain unchanged.

“This has been a busy period for our rail business, during which we launched GTR and began Southeastern’s direct award contract. Our experienced teams are focused on working closely with industry partners to deliver high quality services for our passengers.
“Delivering excellent levels of customer service is important to us and I’m proud our bus division achieved its highest ever satisfaction score of 92%. Even at these levels, there is always room for improvement and we will continue to listen to customers and local community groups to keep on improving our services.”
“Our London and regional bus operations continue to perform well and we remain on course to achieve our operating profit target of £100m by 2015/16.”

Bus:

Regional:
Regional bus has seen good growth in revenue in the first quarter of the year. This has largely been driven by increased contract revenue, where associated journeys are not recorded. Commercial and concessionary passengers numbers are broadly flat year on year, with weakness in the north east, as previously reported.
During the period, the proposal for a bus contract scheme in Tyne & Wear was endorsed by the sub-committees of the North East Combined Authority. This remains an ongoing process and we continue to believe that a voluntary partnership agreement is the best outcome for passengers and taxpayers.
First quarter growth rates:

Revenue Passenger journeys
c.5% c.0%


London:
Revenue growth in London bus business of around 5% has been driven by the reallocation of bus service operators grant (BSOG) of 4.9%. Mileage operated fell in line with expectations, following the previous year’s good growth on the back of contract wins. Rail replacement work has been delivered at similar levels year on year. Due to known contract wins that will begin later this year, it is expected that mileage will increase and be broadly flat year on year.


First quarter growth rates:

Revenue Mileage
c.5% c.-2%

Rail:


The rail division operates the Southern (including Gatwick Express), Southeastern, London Midland and GTR (Govia Thameslink Railway) franchises through a 65% owned subsidiary Govia.
First quarter growth rates:
Passenger revenue Passenger journeys
Southern  c.6.5% c.2%
Southeastern  c.10% c.6.5%
London Midland  c.2.5% c.1%

Trading in Southern remains in line with expectations and is in receipt of 80% revenue support. The franchise will continue on existing terms for the duration of the current year before being incorporated into the GTR franchise in July 2015.
Southeastern has delivered a strong trading performance in the first quarter of the year, with strong underlying revenue growth of around 8.5%. Total passenger revenue growth includes the impact of one-off travelcard allocations. The franchise began operating under a direct award contract on 12 October, and is no longer receiving revenue support. The contract will run, under new franchise terms, until July 2018.
The London Midland franchise has been severely affected by engineering works during the quarter. This has had no impact on profit but has resulted in lower than expected revenue. Adjusting for this, revenue growth would have been around 5.5%. The franchise will continue on its original contract terms for the remainder of the year, and will begin a seven-month extension on the same terms in September 2015. The company look forward to working with the DfT regarding a potential direct award contract from March 2016 to June 2017.
GTR began operating on 14 September and, five weeks into the franchise, no significant variations to the bid model have been identified. Trading performance for GTR will be reported in February 2015, in our half year results.

Outlook:

Overall, trading across the Group has been robust and expectations for the full year are unchanged.
The Group remains in a good financial position with strong cash generation and a robust balance sheet, supporting progressive dividend policy and allowing flexibility to pursue value-adding opportunities both within and outside our traditional markets. The company continue to focus on key strengths of providing high quality, locally-focused transport services.

http://www.go-ahead.com/media/news/2014-news/21-10-2014.aspx

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