London Midland owner eyes lucrative franchises in the capital

LONDON Midland parent company Go-Ahead Group says it is working hard to win Docklands Light Railway and Thameslink franchises.

In a pre-close trading update for the year ending June 29, the firm said it is continuing to perform resiliently and its overall full year expectations remain the same.

It expects to see a year on year revenue increase of 8% overall and a 12% revenue hike within London Midland.

David Brown, group chief executive said: “I am pleased to report continuing resilience across our operations. Both our bus and rail divisions have seen improved growth in passenger numbers in recent weeks, following the effect of adverse weather previously reported in the third quarter.

“Our bus division continues to trade well and is on track to deliver a better than expected result for the full year as we start to see the benefits of cost initiatives coupled with continued revenue growth. We are making good progress towards our target to organically grow bus operating profit to £100m by 2015/16.  

“In rail, our team is working hard to deliver strong bids for both the Docklands Light Railway and Thameslink franchises.

“We also look forward to working with the Department for Transport in the coming months to agree terms for the full franchise extensions for Southeastern and London Midland announced in March.

“Whilst our overall expectations for the full year remain unchanged, we now expect a greater proportion of group operating profit to come from the bus division.”

The firm said bus operations outside London continue to perform well and revenue growth remains sector-leading. 

Underlying volume growth has slightly improved in recent weeks following the adverse weather previously reported in the third quarter but greater increases in fare-paying passengers continue to be partly offset by weaker concessionary performance.