The Go-Ahead Group plc has announced its Interim Management Statement for the period from 2 January 2011 to 4 May 2011.
Overall, the Group’s third quarter trading, to 2 April 2011, was strong and they now anticipate that the Group will deliver full year operating profit which is ahead of previous expectations.
The Group say they continue to see impressive growth across all of our businesses. In the quarter, passenger numbers on our deregulated bus services were up by 7.2% and on rail by 5.8%.
This is a result of effective marketing, a continuing shift away from cars and onto buses and trains, and initiatives such as smartcard ticketing which have begun to roll out across all of the Group’s operations.
Keith Ludeman, Group Chief Executive of Go-Ahead, said:
“Once again, we have seen a strong performance across our businesses. The continued growth in bus passenger numbers demonstrates that the public are increasingly leaving their cars at home. The public is struggling with the current high levels of fuel pricing and many are now choosing the better value alternative of the bus.
“The growth in passengers on our trains – many of which serve London – also suggests that employment levels and discretionary journeys remain robust in the capital.
“While there is much to be positive about in today’s trading update, we continue to remain cautious about the medium term prospects for the wider economy.”
In the Rail division, Go-Ahead reported that:
Revenue continued to grow in line with expectations, which operates the Southern, Southeastern and London Midland franchises through the 65% owned subsidiary Govia.
The Southern franchise continues to perform well and in line with the bid assumptions. Third quarter passenger revenue growth was 11.6%, with a 2.3% increase in passenger numbers being driven by ongoing franchise initiatives such as marketing (particularly around our off peak services), and ticketing innovation.
Gatwick Express, part of the Southern franchise, saw healthy growth in the quarter.
In Southeastern, third quarter growth in passenger revenue and numbers was 7.5% and 7.6% respectively. During the quarter, Govia was pleased to accept the invitation from the Department for Transport (DfT) to continue operating the Southeastern franchise for a further 24 months. The franchise will now run until March 2014.
As previously reported, Southeastern has been in 80% revenue support since 1 April 2010 and is expected to remain so for the remainder of the franchise.
In London Midland, passenger revenue grew at a rate of 11.2% in the third quarter, with passenger number growth of 11.0%. The Go-Ahead Group say they are pleased with the improvement in the operational performance of this franchise and remain focused on cost control.
The Group say they are delighted to be shortlisted for the Greater Anglia franchise during the quarter.
It is good to see a British train and bus operator reporting strong growth but unlike First Group and National Express, they do not have any interests within Continental Europe and do not even seem to have any such ambitions. However, like Stagecoach, they do have a presence in the USA, albeit a small one. Therefore, as Go-Ahead is the smaller of the big four, they will have to be on their guard, as they could soon be targetted by one of the “bigger boys” from Europe, such as SNCF who are definitely looking for a foothold in the UK rail network. Even Deutsche Bahn, who already own a large slice of Britain’s train companies, may be looking to expand their empire even further.