Economic weakness dents Go-Ahead

The company, which operates the Southern, Southeastern and London Midland rail franchises, reported a pre-tax profit of £94.2m for the year to the end of June. Revenues rose 5.5 per cent in £2.43bn.

Go-Ahead, which maintained its full year dividend at 81p per share, said the new year had started well, despite struggles at its rail unit.

Chief executive David Brown said the performance of Southern had been hit by increasingly tough economic conditions, which were worse than it had previously forecast at the time of bidding for the rail franchise. Go-Ahead was expected to report an averge full year pretax profit of £92.5ms.

The company said sales had been boosted by strong passenger revenue growth at its deregulated bus unit and new contract wins at its London bus business.

Go-Ahead, which has been shortlisted to bid for the new Thameslink rail franchise, said it was confident it would pick up more rail contracts with 12 franchises up for grabs over the next four years.