Go-Ahead reports full year revenues ahead of expectations

Go-Ahead Group, which operates a huge bus network and several big rail franchises, has beaten expectations for full-year revenue but admits its Southern rail franchise is suffering in the downturn.

Revenue for the year was £2.424bn, 5.5% ahead of the previous year with the company pointing to "strong passenger revenue growth" in the deregulated bus and train divisions as the driver for the upturn. The market consensus had been for revenues of £2.389bn.

Go-Ahead's operating profit came in at £110.2m, down on the 2011 figure of £115.1m and slightly behind the market consensus of £110.5m. Go-Ahead says, excluding income of £13.0m from a one-off rail contract last year, underlying operating profit was up £8.1m.

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Profits before tax came in at £94.2m, 3.4% down on the prior year's figure of £97.6m.

The final dividend has been set at 55.5p per share, the same as last year, leaving the the total dividend for the year unchanged at 81.0p.

The Southern rail franchise is facing "challenges" because the bid model which was put together in 2009 "assumed stronger underlying economic growth rates than are currently being experienced".

Go-Ahead is, however, in the bidding shortlist for the new combined Thameslink, Southern and Great Northern franchise.

Commenting on the outlook, David Brown, Go-Ahead's Chief Executive said: "... the new financial year has started well and trading is in line with the board's expectations."

The market appears content enough, shortly after the open the stock had risen 1.1%.

BS