Go-Ahead shares up as financial outlook improves

Shares of Newcastle-headquartered international rail and bus giant Go-Ahead Group rose about 8% on Thursday after it published a trading update for the period from June 28 to December 2, 2020.

“Overall, our financial outlook for the 2021 financial year has improved, with an increase in our expectations in the London & International bus division, and no change in the rail division,” said Go-Ahead.

“While regional bus is expected to make a positive contribution in the year, ongoing uncertainty relating to the recovery of passenger demand prevents us from providing meaningful full year financial guidance for the division at this stage.  

“Worldwide government recognition of the importance of public transport in enabling social and economic recovery, coupled with our resilient business model and disciplined financial management, mean we can continue to support our business as we look towards the future.”

The firm said it is “working towards paying a dividend at an appropriate level” in the 2021 calendar year.

Go-Ahead employs around 30,000 people and is one of the UK’s largest bus operators, with a strong presence in London.

Outside London, it serves high-density commuter markets including the North East, Greater Manchester, East Yorkshire, East Anglia, South East and South West England. Internationally, it operates a bus contract in Singapore and two bus contracts in Ireland.

Go-Ahead’s rail division operates two franchises in the UK, three contracts in Germany and one in Norway. In the UK, Southeastern and GTR (Govia Thameslink Railway) operate through its 65% owned subsidiary Govia, which is 35 per cent owned by Keolis.

It is the largest rail operation in the UK, responsible for around 30% of all UK passenger rail journeys through its rail franchises.

Go-Ahead Group CEO David Brown said: “As set out by the Prime Minister in his ten-point green plan, public transport is vital to achieving the country’s net zero ambitions while supporting economic growth.

“This, combined with public transport’s ability to support the health and wellbeing agenda, underpins my confidence in the prospects of the group.

“As a private operator of public transport, we have the experience and skills to help communities thrive by connecting people to jobs, education, shops, family and leisure facilities.

“Prior to the second lockdown, we were pleased to see passenger journeys reaching nearly 60 per cent of pre-crisis levels in some regions, showing people’s desire to travel once restrictions are eased.

“With enhanced vehicle cleaning, the provision of hand sanitiser and mandatory use of face coverings, passengers can travel confidently on our services that are safe and clean.

“I am immensely proud of the commitment of our 30,000 people and all they have achieved during such a difficult time.”