Go-Ahead announces announces lower than expected turnover
The Go-Ahead Group has announced its pre-close trading update for the six months ending 31 December 2016 and has forecasted that revenues will be lower than previously predicted for its rail business.
The company’s full year expectations for the rail division are slightly below its previous estimates due to higher than expected costs associated with the GTR franchise and increased bidding activity in targeted markets overseas.
The business’s rail division operates the GTR, Southeastern and London Midland franchises through its 65% owned subsidiary Govia.
Expected half-year growth rates are now estimated at 2.5% for Southeaster, 5.5% for London Midland, and -4% for GTR.
London Midland continues to trade well and is expected to make profit share payments to the Department for Transport (DfT) for the remainder of the franchise.
Go-Ahead recently submitted our bid for the new West Midlands franchise, due to commence in October 2017. The DfT is expected to announce the winner of the competition in early summer.
In Southeastern, which also continues to make profit share payments to the DfT, the rate of revenue growth is slowing in line with national industry trends. Last week, the DfT indicated that it will extend the term of the Southeastern franchise by 24 weeks, to December 2018, on existing terms.
The bus division remains in line with previous expectations.
The group said it remains in a good financial position, with strong cash generation and a robust balance sheet. The figures were released ahead of its half-year results, which will be published in February 2017.
Source : Chroniclelive