The Go-Ahead Group plc today announces its pre-close trading update for the year ending 27 June 2015 ahead of its full year results announcement on 3 September 2015.
David Brown, Group Chief Executive of Go-Ahead, said: “Our full year expectations remain unchanged. In rail, we continue to work closely with Network Rail and other industry partners to minimise the impact on passengers of the major infrastructure works associated with the Government’s £6.5bn Thameslink Programme, including at London Bridge. Our locally-run bus companies work in partnership with local authorities and are focused on the needs of the communities they serve, responding quickly to their changing requirements.”
Rail:
Our rail division operates the GTR, Southern (including Gatwick Express), Southeastern and London Midland franchises through our 65% owned subsidiary Govia.
Southern’s trading performance has remained in line with our expectations. The franchise will continue to receive revenue support until July 2015 when it will be integrated into GTR.
Trading in the Southeastern franchise continues to outperform our expectations.
Discussions with the DfT are underway regarding a potential direct award contract for London Midland from March 2016 to June 2017. The franchise continues to perform in line with our expectations.
GTR continues to incur incremental costs as a result of inherited operational challenges and changes in its operating network. As previously reported, this may lead to lower margins in the short term but any shortfall in profit is expected to be recoverable over the life of the franchise, as normal industry contract remedies are employed to help mitigate these costs over time.
Outlook:
Our expectations for the full year are unchanged. We remain committed to our strategic target in our bus division and continue to focus on delivering efficiencies across this business. Overall, trading in our rail business is in line with our expectations.
In the first quarter of next year we expect the DfT to announce the successful bidders for the Northern and TransPennine Express franchises for which we are bidding.
The Group remains in a good financial position with strong cash generation and a robust balance sheet, supporting our progressive dividend policy and allowing flexibility to pursue value-adding opportunities.
