London Midland parent sees buses powering on but rail sector is “challenging”

LONDON Midland parent company Go-Ahead Group has reported record passenger levels across both its bus and rail divisions.

The group has also seen its revenue increase by £148m.

Announcing its full year results for the year ended June 29, the firm said it is making good progress towards its £100m bus profit target.

Revenue for the year was £2.57bn compared to £2.42bn in 2012 but profit before tax was down 8% from £94.2m to £86.2m.

David Brown, group chief executive, said: “I am very pleased with the group’s performance this year. We are reporting a set of good results, slightly ahead of the board’s expectations, and are progressing well towards our bus operating profit target.

“At the core of the group is our bus division, which has performed exceptionally well in the year, delivering record operating profit of £78.2m, up 11.4%.

“Increasing our profits ensures that we can continue to invest in the business and improve service quality for our passengers. Once again, we have invested in our bus fleet, spending £45.3m on 251 new buses in the year. This improves customer satisfaction and helps drive growth in passenger numbers.”

But he said it had been a challenging year for its rail operations.

“As our rail franchises near the end of their original terms, performance has become more challenging as the assumptions set out in the franchise bid no longer reflect the current economic conditions,” he said.

“In line with the franchise bid profile, our payments to the Government in the year increased by £85.9m, despite our rail profits falling by £15.7m.
 
“The new financial year has started well, with trading in line with the board’s expectations. In the bus division, we are on course to deliver our £100m target by 2015/16.”

The firm has announced that after more than ten years on the board, Rupert Pennant-Rea will retire as a non executive director on  October 24 at the end of the annual general meeting.