Highlights
Financial strength
- Overall profits up 11.1%, slightly ahead of our expectations as a result of a stronger performance in rail
- Record bus profits, up 6.6%
- Improvement in rail profits albeit at historically low margins
- Continued strong free cashflow and robust balance sheet
- Proposed full year dividend up 6.5% to 90.0p in line with our progressive policy
Strategic and operational progress
- Continued progress in bus division with sector-leading customer satisfaction in regional bus operations
- Expect to deliver £100m of bus operating profit in 2016/17, a year later than originally anticipated
- Record passenger numbers in rail division
- Group’s net increase in contributions to the DfT in the year was £191.9m, up to £255.9m
- Challenging start in GTR – working closely with industry partners to improve performance and manage contract changes
- Submitted bids for Northern and TransPennine Express rail franchises and shortlisted for the London Overground contract
- Continue to explore selective opportunities in overseas markets
Financial summary:
| FY’15 £m |
FY’14 £m |
Increase/(decrease) £m |
Increase/(decrease) % |
|
| Revenue | 3,215.2 | 2,702.4 | 512.8 | 19.0 |
| Operating profit* | 114.7 | 103.2 | 11.5 | 11.1 |
| Operating profit margin | 3.6% | 3.8% | (0.2ppts) | |
| Net finance costs | (18.1) | (18.3) | 0.2 | 1.1 |
| Profit before tax* | 96.6 | 84.9 | 11.7 | 13.8 |
| Profit before tax | 78.7 | 91.2 | (12.5) | (13.7) |
| Adjusted earnings per share | 150.8p | 148.6p | 2.2p | 1.5 |
| Basic earnings per share | 121.6p | 164.0p | (42.4p) | (25.9) |
| Proposed dividend per share | 90.0p | 84.5p | 5.5p | 6.5 |
| FY’15 £m | FY’14 £m | Increase/(decrease) £m | |
| Cashflow generated from operations | 431.4 | 184.3 | 247.1 |
| Free cashflow | 383.7 | 89.6 | 294.1 |
| Net (cash)/debt | (292.9) | 42.7 | |
| Adjusted net debt | 244.7 | 260.0 | |
| Adjusted net debt/EBITDA | 1.32x | 1.45x+ |
Notes:
* Excludes amortisation, goodwill impairment and exceptional items
+ Adjusted for the impact of IAS 19 (revised)
David Brown, Group Chief Executive, commented:
“I am pleased with the Group’s financial performance in the year; with overall operating profit of £114.7m, slightly ahead of our expectations.
“Through our regional bus operations, Go-Ahead has continued to keep people in cities and towns across the UK moving over the last three decades and we have heavily invested in our operations over this time. In the last five years alone, we have invested over £180m in our regional bus services. This focus on delivering high quality bus operations has improved services for our passengers and we are proud of our high levels of customer satisfaction, which remain the best in the sector at 90%.
“Despite facing a number of headwinds in the year, including lower passenger volumes and congestion in London as a result of infrastructure improvement works, we were pleased to deliver another year of record bus profits. We now expect to deliver £100m of bus operating profit in 2016/17, a year later than originally anticipated. We expect some of the headwinds experienced over the past year to reverse over time and this, along with reduced fuel costs, gives us continued confidence in the prospects for the bus division.
“We continue to play a key role in the delivery of the Government’s £6.5bn Thameslink Programme. While an investment programme of this scale will inevitably result in disruption while infrastructure improvements are made, it will ultimately improve services for passengers in the long term. During the year we have worked closely with our industry partners to minimise the impact of this disruption and we will continue to focus our efforts on delivering improvements to services. Overall for rail, the Board’s expectations remain unchanged as a stronger performance in Southeastern continues to offset underperformance in GTR.
“During the year, we submitted bids for the Department for Transport’s Northern and TransPennine Express rail franchises and were pleased to be shortlisted for TfL’s London Overground contract. We look forward to hearing the outcome of these franchise competitions. Overseas, we await the result of a bid submitted in the Singaporean bus market, while our business development team continues to explore other opportunities for the Group, particularly in the German rail market.
“At Go-Ahead we are committed to being a responsible business. Our net increase in contributions to the DfT in the year was £191.9m. Our continuous efforts to improve environmental performance throughout all of our operating companies have contributed to the achievement of our best ever Carbon Disclosure Project score. As a socially responsible organisation, transparency and openness are important to us. Go-Ahead is one of only two FTSE 350 organisations to have been awarded the Fair Tax Mark in recognition of our responsible approach to UK corporation tax. We were also pleased to be recognised by the Prompt Payment Code during the year for our commitment to our suppliers.
“The Group remains in 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. This strong position underpins the Board’s decision to propose an increased final dividend for the year, in line with our dividend policy.”
