London Midland operator pleased as revenues grow 12%

LONDON Midland rail operator Go-Ahead has said it remains confident of delivering results in line with expectations after a year of resilient trading.

The group said it remained in good financial shape with strong cash generation and a robust balance sheet. This underpinned the dividend policy and allowed flexibility to pursue value-adding opportunities, it added.

“We continue to focus on our key strengths of providing high quality, locally-focused and innovative transport services,” it said in a trading update covering the period from December 30, 2012 to April 24, 2013.

It said its three rail franchises – Southern (including Gatwick Express), Southeastern and London Midland – performed satisfactorily despite being impacted by the adverse weather in the third quarter.

Revenue yield in the quarter was more modest than in the first half of the year, as January 2013 fare increases were lower than last year.

Over the year, London Midland revenue grew around 12%; this despite the severe difficulties encountered by the business towards the end of last year when it was forced to cancel trains because of driver shortages.

David Brown, Group Chief Executive of Go-Ahead, said: “I am pleased to report a resilient performance across our operations, with all of our companies seeing growth in commercial revenue in the year to date.

“At the end of March the DfT announced its long-term plans for rail franchising. I am pleased that the Government intends to restart the Thameslink franchise bid process in September this year and I welcome the opportunity to agree extended contract terms for London Midland to June 2017 and Southeastern to June 2018.

“Overall, I am pleased with the group’s performance and remain confident that we will deliver a full year result in line with our expectations.”