London Midland owner on target for growth
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LONDON Midland parent The Go-Ahead Group has reported good performance in its bus and rail businesses.
In a pre-close trading update for the year ending June 28 it said it expects revenue to be up by 3.5% and passenger journey numbers to be up by 2%.
David Brown, group chief executive, said: “Overall performance in our bus and rail businesses is good.
“Our full year expectations for our bus operations remain unchanged and we now expect the rail division to deliver operating profit ahead of our previous expectations, with second half profits slightly lower than first half.
“In May, we were delighted to be awarded the Thameslink, Southern and Greater Northern franchise by the Department for Transport and we are working hard to prepare for the start of the contract in September 2014. We look forward to delivering customer improvements and value for money for taxpayers through this important and complex franchise.
“Our regulated and deregulated bus operations continue to deliver a consistent performance and we remain on course to achieve our operating profit target of £100m by 2015/16.”
Go-Ahead said that as a result of lower energy costs and better than expected operational performance in the fourth quarter, it now expects second half rail operating profit to be ahead of previous expectations, with second half profits slightly lower than first half.
It expects London Midland passenger revenue to be up by around 7% and passenger journey numbers to be up by around 4%.
“As we reported in May, the rate of passenger revenue growth in the London Midland franchise is beginning to slow as a result of increased competition,” it said.
“London Midland has been awarded a seven-month extension which will run to March 2016, continuing on its original contract terms. We look forward to working with the DfT regarding the longer planned extension to June 2017.”