Rail operation problems knock profits at Go-Ahead

Transport group Go-Ahead posted an 1.8 per cent fall in first-half profit, hit by operational problems at parts of its rail business.

The bus and rail operator yesterday reported a pre-tax profit of £43.2m for the six months to December 29, 2012, in line with analyst forecasts. Revenues were up 8.1 per cent at £1.3bn. The company, which operates the Southern, Southeastern and London Midland rail franchises, said profit at its rail unit fell 14.5 per cent after operational problems at Southern and London Midland.

Go-Ahead said profit at its bus business rose 5.4 per cent during the period and that it was on track to grow profits at the division to £100m by 2016. “Looking ahead to the full year, our overall expectations remain unchanged ... we now expect a greater proportion of operating profit to come from the bus division,” the company said in a statement.

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Go-Ahead is expected to post an average pre-tax profit of £83.5m for the year to the end of June, according to a Thomson Reuters poll of 17 analysts. Go-Ahead maintained the half year dividend at 25.5p per share.

David Brown, chief executive, said: “I am pleased to report a good set of results for the first half of the financial year.

“Our focus on running high quality, convenient services and our industry leading marketing strategy have continued to attract more passengers on to our value for money services.

“These good results underpin my confidence in our ability to achieve our target of £100m bus operating profit by 2015/16.”

Go-Ahead said the second half of the year is expected to remain “challenging” for the rail division, mainly due to weakness to the Southern franchise.