Profit falls at Go-Ahead despite £3.48bn revenue

Newcastle-based rail and bus group Go-Ahead Group said revenue for the year to July 1 rose 3.6% to £3.48 billion — but pre-tax profit fell 5.7% to £136.8 million amid disruption to its Southern rail franchise and a fall in rail operating profit.

Nonetheless, Go-Ahead proposed a final dividend increase of 6.5%, resulting in a full year dividend of 102.08p.

Go-Ahead said it is making progress towards a new target for international operations to contribute 15% to 20% of group profit within five years and that it is actively exploring further bus and rail opportunities in Nordic region and Australia.

Go-Ahead CEO 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 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.”