Shares of Newcastle-headquartered international bus and rail giant Go-Ahead Group fell 33% on Thursday after it warned its “overall expectations for the full year have reduced slightly” and that the coronavirus has affected travel on some of its bus and rail services.
“While it is unclear how the situation relating to coronavirus will evolve in the coming weeks, travel patterns in the second half of the year are likely to be impacted,” said Go-Ahead as it announced half year results for the six months ended December 28, 2019.
The firm’s revenues for the period rose to £1.97 billion from £1.92 billion, but pre-tax profits fell to £49 million from £61 million.
Go-Ahead operates the GTR rail network in London and south east England, as well as London buses and buses in other parts of the UK.
“Around 70% of our revenue is generated through management contracts, limiting our exposure to the financial impact of reduced travel,” added the firm.
“The impact of this would be expected to have a greater impact on the financial performance of Southeastern and our regional bus businesses than other parts of the group.”
Go-Ahead Group CEO David Brown said: “Our London & International bus business is performing well and in line with expectations for the full year, while our expectations for our regional bus business have slightly reduced, reflecting cost pressures and adverse weather on passenger travel.
“In rail, while we await the outcome of the Williams review, our current UK operations are performing well and we are in the final stages of discussions with the Department for Transport regarding a potential direct award contract for Southeastern.
“The stronger than expected UK rail performance has offset the impact of operational challenges in the first six months of running our German rail contracts.
“We began running rail services in Norway in December and are delivering high levels of operational performance.
“In the second half of the year our focus will be on continued management of our regional bus cost base, integrating new contracts and recent acquisitions, and improving our German rail operations.
“While it is unclear how the coronavirus situation will evolve in the coming weeks, travel patterns are likely to be impacted in the second half of the year …”