London Midland operator confident as passenger numbers grow
LONDON Midland operator, the Go-Ahead Group, said trading in its third quarter had been solid and its full-year expectations remained unchanged.
The company said the London Midland franchise had seen strong passenger revenue growth of over 13% with passenger numbers up around 8%.
In a statement covering the period from January 1 to April 25, 2012, David Brown, group chief executive of Go-Ahead, said: “I am pleased to report continued growth in both our bus and rail divisions.
“In bus, our focus of operating in urban areas, predominantly in the South East, combined with our strategy of local management and marketing has continued to deliver growth. Our rail businesses continue to perform well and we were delighted to have been shortlisted for the Thameslink franchise.
“Whilst we continue to be cautious about the wider economic outlook, we remain confident that we will deliver a full year result in line with our expectations.”
The firm operates the Southern (including Gatwick Express), Southeastern and London Midland rail franchises through its 65% owned subsidiary Govia.
In the year to date Southern achieved growth in passenger revenue of approximately 9% and in passenger journeys of over 2%. In Southeastern, passenger revenue was up over 10% and passenger journeys increased by almost 2%.
Following the integration of Southern in 2015, Thameslink will be the largest rail franchise in the UK, with annual revenue expected to be around £1bn. It is anticipated that the successful bidder will be announced in May 2013, with the contract commencing in September 2013.
The group expects bid costs in the rail division will be around £6m in the next financial year.
“The group remains in a good financial position with strong cash generation and a robust balance sheet, underpinning our dividend policy and allowing flexibility to pursue further value-adding opportunities.
“Due to recent acquisitions in our bus division, year-end net debt is expected to be higher than previously anticipated at around £95m,” added the statement.
It said while Q3 trading had been solid, it continued to be cautious about the wider economic outlook. However, it remains confident of delivering a full year result in line with expectations.
