Engineering work slows London Midland revenue growth

LONDON Midland parent The Go-Ahead Group has revealed that the train company’s passenger revenue grew by around 2.5% in the first quarter.

Passenger journeys were up by 1%.

In an interim management statement covering the period June 29 to October 24, Go-Ahead said trading had been robust.

It said the London Midland franchise has been severely affected by engineering works during the quarter.

“This has had no impact on profit but has resulted in lower than expected revenue. Adjusting for this, revenue growth would have been around 5.5%,” it said.

It said the the franchise will continue on its original contract terms for the remainder of the year, and will begin a seven-month extension on the same terms in September 2015.

“We look forward to working with the DfT regarding a potential direct award contract from March 2016 to June 2017,” it said.

David Brown, group chief executive of Go-Ahead, said: “Trading in the first quarter has been robust and our full year expectations for both bus and rail operations remain unchanged.
 
“This has been a busy period for our rail business, during which we launched GTR and began Southeastern’s direct award contract. Our experienced teams are focused on working closely with industry partners to deliver high quality services for our passengers.
 
“Delivering excellent levels of customer service is important to us and I’m proud our bus division achieved its highest ever satisfaction score of 92%. Even at these levels, there is always room for improvement and we will continue to listen to customers and local community groups to keep on improving our services.”
 
“Our London and regional bus operations continue to perform well and we remain on course to achieve our operating profit target of £100m by 2015/16.”
 
Go-Ahead said it remains in a good financial position with strong cash generation and a robust balance sheet.