TIDMGOG
RNS Number : 8790X
Go-Ahead Group PLC
30 November 2017
The Go-Ahead Group plc 4 Matthew
Parker Street, London, SW1H 9NP
Telephone 020 7799 8999
PRESS RELEASE
30 November 2017
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
TRADING STATEMENT
FOR THE PERIOD FROM 2 JULY 2017 TO 29 NOVEMBER 2017
Full year expectations unchanged
The Go-Ahead Group plc today announces its trading update for
the period from 2 July 2017 to 29 November 2017. The next scheduled
market update is the Group's half year results for the six months
ending 30 December 2017 on 22 February 2018.
The growth rates reported in this statement are for the
four-month period from 2 July 2017 to 28 October 2017.
Overview
-- Full year expectations unchanged in bus and rail
-- Regional bus trends in line; contactless payment
option introduced and new bus app due to launch
-- London bus trends in line; Quality Incentive Contract
bonuses strong in the period
-- ASLEF members end longstanding industrial dispute
-- Good financial position with robust balance sheet
Go-Ahead's Chief Executive, David Brown, said:
"Overall trading for the first four months of the year has been
in line with our expectations.
"In Bus, regional revenue and passenger trends are in line with
expectations and London revenue, mileage and peak vehicle
requirements are as anticipated, reflecting small net contract
losses. We continue to engage with Transport for London around key
issues for the capital, such as congestion and air quality. Both in
and outside of London, we believe buses are the solution to these
problems in our towns and cities.
"In Rail, trading has been satisfactory in the period. Following
the end of ASLEF's longstanding dispute with Southern, we are
wholly focused on further improving the service for passengers and
supporting the completion of the Thameslink Programme.
"We welcome the strategic vision for the railways announced
yesterday by the Secretary of State for Transport. We are pleased
to see proposals to strengthen the partnership between the public
and private sector, aimed at further improving services for
customers. We look forward to working with the Government to
understand the strategy in more detail.
"Our international strategy is focused on delivering long-term
value for shareholders by building a portfolio of low-risk
businesses with limited capital requirements in stable and
attractive markets. There are additionally good long-term pipelines
of work in all of our target markets.
"The Board remains confident that the Group will deliver full
year results in line with its expectations."
Bus
Regional
Year to date underlying growth rates*
Revenue Passenger journeys
-------- -------------------
c.0% c.(1)%
-------- -------------------
* Revenue and passenger journey growth rates exclude the
significant impact of a programme of route restructuring (estimated
at -0.5%). This principally reflects reductions to the route
network in East Anglia.
Revenue and passenger journey growth trends in regional bus
remain in line with our expectations. Across the division we
continue to see growth in some regions being offset by softer
performance in other areas.
The roll-out of contactless payment options across our regional
bus business is well advanced, with all of our fleet in Oxford, Go
North East, Plymouth and Go South Coast now accepting this form of
payment. Following the introduction of contactless technology in
Oxford in June, over 20% of on-bus payment is now made through this
channel. Also aimed at improving convenience for customers, our new
bus app will enable passengers to receive real-time information,
track bus locations and be notified of the best value ticket for
their journey.
We expect regional bus profit for the first half of the year to
be slightly lower than last year, more than offset by a stronger
second half as one-off costs in Oxford in the prior period
reverse.
London
Year to date growth rates
Revenue Mileage Peak vehicle requirement
(PVR)*
-------- --------- -------------------------
c.0% c.(1.5)% c.(0.5)%
-------- --------- -------------------------
*Peak vehicle requirement is the number of vehicles required to
operate the highest service frequency on a route. This measure
provides a useful indication of the volume of contract work being
operated from one year to the next.
In London bus, growth trends in revenue, mileage and peak
vehicle requirement were down slightly as expected reflecting the
timing of small contract losses. This effect on revenue was
partially offset by strong Quality Incentive Contract bonuses in
the first part of the year with around GBP3m received to date
compared with GBP2m in the same period last year.
Through the contract tender process, we have secured the
majority of work expected for 2017/18. The market remains very
competitive and mileage will continue to be under pressure as a
result reductions in Transport for London funding. However, we
maintain strong financial discipline in contract bidding, which is
supported by our network of strategically located depots.
Our bus operation in Singapore, reported within the London bus
division, continues to perform well, delivering high levels of
punctuality on behalf of the Land Transport Authority.
As previously disclosed, the first half of the year is expected
to deliver stronger profitability than the second half due to the
timing of small contract losses.
Rail
The rail division currently operates the Southeastern, London
Midland and GTR franchises through our 65% owned subsidiary Govia.
On 10 December 2017, London Midland will cease operation, following
the Department for Transport's (DfT) franchise award decision,
announced on 10 August 2017.
Southeastern
Year to date growth rates
Passenger revenue Passenger journeys
------------------ -------------------
c.2.5% c.(1)%
------------------ -------------------
Southeastern's passenger journey growth rate is consistent with
that reported at the full year, while revenue growth slowed
further, as expected.
The DfT yesterday published the invitation to tender for the new
South Eastern franchise, scheduled to begin in April 2019, for
which Govia is shortlisted. We are confident that we will submit a
deliverable and attractive bid for customers, the DfT and
shareholders.
GTR
In GTR, on a moving annual average basis train performance has
consistently improved since the period of intense industrial action
ended in January 2017. In Southern, the number of cancellations has
fallen by 8% and punctuality levels have improved by 16% in the
11-month period. Earlier in the month, we were pleased that ASLEF
members ended their industrial dispute. GTR's management team can
now solely focus on improving performance levels for our
customers.
Discussions with the DfT regarding a number of contractual
variations are ongoing; management's judgement around these
discussions and the potential impact on current year rail
profitability remains consistent with previous guidance of plus or
minus GBP5m.
London Midland
Trading in the period has been in line with expectations.
Demobilisation of the London Midland franchise is well underway
ahead of 10 December, when it ceases to operate.
International development
The mobilisations of our Dublin bus contract and German rail
contracts are well underway ahead of their respective 2018 and 2019
start dates.
S
For further information, please contact:
The Go-Ahead Group
David Brown, Group Chief Executive 020 7799 8971
Patrick Butcher, Group Chief Financial Officer 020 7799 8973
Holly Gillis, Head of Investor Relations 020 7799 8984
Citigate Dewe Rogerson
Michael Berkeley/Chris Barrie/ Angharad Couch/ Eleni Menikou/Toby Moore 020 7638 9571
GO-AHEAD
Go-Ahead is a leading UK public transport operator, providing
high quality services in the bus and rail sectors. Employing around
29,000 people across the country, over one billion passenger
journeys are undertaken on our services each year. We are committed
to operating our companies in a safe, socially and environmentally
responsible way and are proud to have been accredited with triple
Carbon Trust Standard for reductions in carbon, water and waste. In
addition to the travelling public, our customers include the
Department for Transport, Transport for London (TfL) and local
authorities.
BUS
Go-Ahead is one of the UK's largest bus operators. With a fleet
of around 5,200 buses, we carry over two million passengers every
day. Our operations are focused on high density commuter markets.
We have a strong presence in London, with around 24 per cent market
share, where we provide regulated services for TfL. Outside London,
we operate services in Oxford, East Anglia, the South East,
Southern and north east England. In September 2016, the Group began
operating a bus contract in Singapore, on behalf of the Land
Transport Authority.
RAIL
The rail operation, Govia, is 65 per cent owned by Go-Ahead and
35 per cent by Keolis. It is the largest rail operation in the UK,
responsible for over 30 per cent of all UK passenger rail journeys
through its rail franchises: GTR (Govia Thameslink Railway)
Southeastern and London Midland.
Disclaimer
Certain statements included in this press release contain
forward-looking information concerning the Group's strategy,
operations, financial performance or condition, outlook, growth
opportunities or circumstances in the sectors or markets in which
the Group operates. By their nature, forward-looking statements
involve uncertainty because they depend of future circumstances,
and relate to events, not all of which are within the Group's
control or can be produced by the Group. Although the Group
believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Nothing in this press
release should be construed as a profit forecast and no part of
these results constitutes, or shall be taken to constitute, an
invitation or inducement to invest in The Go-Ahead Group plc or any
other entity, and must not be relied upon in any way in connection
with any investment decision. Except as required by law, the Group
undertakes no obligation to update any forward looking
statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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