TIDMGOG
RNS Number : 7803I
Go-Ahead Group PLC
22 June 2017
The Go-Ahead Group plc 4 Matthew
Parker Street, London, SW1H 9NP
Telephone 020 7799 8999
PRESS RELEASE
22 June 2017
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
PRE-CLOSE TRADING STATEMENT
Overall expectations unchanged
The Go-Ahead Group plc today announces its pre-close trading
update for the year ending 1 July 2017, ahead of its full year
results announcement on 7 September 2017.
Overall expectations for the full year are unchanged. The Group
remains in a strong financial position, with good cash generation
and a robust balance sheet.
Bus
Regional
Expected full year like for like growth rates
Revenue Passenger journeys
-------- -------------------
c.1.0% c.0.0%
-------- -------------------
Regional bus continues to deliver revenue growth broadly in line
with our expectations and slightly ahead of wider industry trends.
Strong growth in passenger journeys in some regions has been offset
by softer performance in other operating areas. Growth in revenue
and passenger numbers is also slightly subdued as a consequence of
the restructuring of selected route networks to match passenger
demand and reduce costs.
Through regular engagement with our customers we understand that
people are looking for greater convenience when travelling by bus
and in response we are continually developing our payment channels
to give people more choice and flexibility. We continue our
programme of implementing contactless payment options across the
regional bus business with systems now operational in Oxford and
parts of the north east. The first phase of roll out of the
contactless system focused on these areas to respond to competitive
pressures impacting performance. The initial customer response has
been very positive, with strong take-up of this new payment channel
which will be rolled out across our regional operations over the
coming months; with contactless ticketing available on 2,000
Go-Ahead buses by the end of the calendar year.
London
Expected full year like for like growth rates
Revenue Mileage
-------- ---------
c.1.0% c.(1.5)%
-------- ---------
Reflecting the timing of known contract renewals, revenue growth
slowed and mileage operated fell slightly, in line with our
expectations for the full year.
Our bus operation in Singapore continues to perform well,
delivering high levels of punctuality on behalf of the Land
Transport Authority.
Rail
The rail division operates the Southeastern, London Midland and
GTR franchises through our 65% owned subsidiary Govia.
Expected full year like for like growth rates
Passenger revenue Passenger journeys
--------------- ------------------ -------------------
Southeastern c.3.0% c.(0.5)%
--------------- ------------------ -------------------
London Midland c.4.5% c.4.0%
--------------- ------------------ -------------------
GTR c.(4.0)% c.(4.0)%
--------------- ------------------ -------------------
In Southeastern, passenger growth has continued to slow, putting
pressure on passenger revenue. As previously reported, this
pressure has been offset by a cost efficiency programme. The
franchise continues to contribute to the Department for Transport
(DfT) through its profit share mechanism. The DfT has started the
tender process for the South Eastern franchise and Govia has
expressed an interest.
London Midland's financial performance remains strong; revenue
and passenger numbers are growing ahead of the wider industry. This
strong performance has enabled the franchise to continue making
profit share payments to the DfT; which are expected to continue
for the remainder of the contract, to October 2017. We await the
DfT's announcement regarding the outcome of the West Midlands
franchise competition, for which we are shortlisted along with one
other bidder.
There has been no significant industrial action on Southern
services in the last five months and, consequently, service and
performance levels have stabilised, allowing the company to deliver
more reliable rail services to customers. Disappointingly, the
ASLEF union has called for an overtime ban for Southern train
drivers which, if it goes ahead, will result in unnecessary
disruption for customers. GTR remains fully committed to resolving
these issues to provide improved services for customers and reduce
uncertainty for our stakeholders.
Progress is being made in the ongoing discussions with the DfT
regarding a number of contractual variations; management's
judgement around these discussions and the potential impact on rail
profitability remains consistent with previous guidance.
Bidding and mobilisation
Earlier this month, we were pleased to be awarded a 13-year rail
contract by the Transport Ministry of Baden Württemberg in Germany.
Operation of the commuter route, which will generate around EUR20m
of annual revenue, will commence in December 2019, providing
important links between Stuttgart and Nuremberg. This contract is a
valuable addition to our growing portfolio of German rail
businesses. The mobilisation of the two German rail contracts
previously won and due to commence in 2019, is progressing
well.
Bid activities in targeted international markets continue as
planned; we are working on a bid for the latest bus contract to be
announced for tender by the Land Transport Authority in Singapore,
due to be awarded in late Autumn; and are considering a number of
other opportunities in existing and new markets.
Financing
The process of refinancing our sterling bond is well underway
and is scheduled to be complete later this month, ahead of its
maturity in September 2017. As a result of lower interest rates, we
anticipate finance costs to reduce in 17/18.
ENDS
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/ 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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