Shares of Newcastle-based transport group Go-Ahead Group fell more than 13% after it said half year results to December 31 were in line with management expectations but that its full year expectations had been lowered due to repeated strike action at Southern rail and a slowdown in regional bus passenger numbers. 

Go-Ahead owns 65% of the Govia Thameslink Railway (GTR) that runs the Southern rail contract.

“While operating profit in bus increased against the same period last year, as expected, overall group performance has been significantly impacted by a reduction in rail profitability due to losses from our GTR franchise, as a result of ongoing industrial action on Southern,” said Go-Ahead chairman Andrew Allner.

“Looking to full year profitability, the board has lowered its expectations in both bus and rail.

“Bus profits are expected to be impacted by slowing passenger volumes in regional bus.

“Rail profits will be affected by losses in GTR owing to additional costs and delays to expected efficiencies as a result of the impact of industrial action.”

Go-Ahead shares fell to around 1,978p to give it a current stock market value of around £850 million.

Six month revenue rose 3% to £1.71 billion — but profit before tax fell 11.7% to £67 million.

The firm said it was awaiting the outcome of bid competitions in UK rail, German rail and Singaporean bus markets and was exploring opportunities in targeted international markets including Scandinavia.

In its outlook, Go-Ahead said: “Our expectations for the full year have lowered in both bus and rail.

“Our expectations for full year regional bus division profitability have lowered as a result of the slowdown in passenger volumes across the business, most notably in the north east and Oxford.

“Performance in our London bus business is in line with expectations for the full year although securing profitable growth in this market, as always, remains challenging.

“In rail, the long-running industrial relations issues in GTR have introduced additional costs and delays to expected efficiencies which will result in lower than anticipated profits in the full year …

“Management’s judgement of these outcomes is that, relating to events up to 31 December 2016, the impact on rail profitability is likely to be within a range of plus or minus £10 million.

“Given the continuing uncertainty, our expectation for the full year is that this range will increase to plus or minus £15 million.”