Go-Ahead on track despite profit slump
TRANSPORT group Go-Ahead said yesterday that it does not expect the economy to recover until 2011, but that its business is healthy enough to keep it on track until then.
The firm, which operates bus companies and runs three London rail franchises, saw full year pre-tax profit fall 60 per cent from last year, to £42m and held its dividend payment at 81p per share.
Finance director Nick Swift said the group was cautious about the economy but that business is robust.
“It’s easy to get over-optimistic, so we are staying cautious. 2010 will be fairly stable, while in 2011 things will be ready to pick up,” he said, adding that the group’s bus network was proving resilient.
Go-Ahead said it had cut its debt to £91m from just under £200m.
It’s profit fall was largely due to a poor performance in its UK rail business, which has been hit by a slowdown in passenger growth.
Swift said he expected rail to remain profitable in the current year but at a lower level.
Go-Ahead also runs bus companies and has an aviation services arm. It has bought two small regional bus companies since July for a combined £10m, and Swift said he hoped to secure more deals.
British bus operators are set to be investigated by competition regulators due to concerns a single player dominates a particular area, which Swift said was “puzzling”.
He declined to comment on whether Go-Ahead would consider entering the bidding for rival National Express, which is being stalked by a consortium including CVC Capital Partners.