TIDMGOG
RNS Number : 7694C
Go-Ahead Group PLC
20 April 2017
PRESS RELEASE
20 April 2017
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
THIRD QUARTER TRADING STATEMENT
Trading in line
with management expectations
The Go-Ahead Group plc today announces its third quarter trading
statement for the period from 1 January 2017 to 19 April 2017. The
year to date figures in this statement reflect the period from 3
July 2016 to 1 April 2017.
Our full year expectations for both bus and rail divisions are
unchanged from the update given at the half year results on 28
February 2017. The Group remains in a strong financial position,
with good cash generation and a robust balance sheet.
Bus
Regional
Adjusted year to date growth rates*
Revenue Passenger journeys
-------- -------------------
c.1.5% c.0.0%
-------- -------------------
*Adjusted for the estimated impact of Easter falling in Q4 FY'17
and across Q3 and Q4 in FY'16
Regional bus has continued to deliver increasing revenue in line
with expectations and, although subdued, passenger volumes are
outperforming the wider industry, with growth in some regions
offsetting declining volumes in other operating areas. The adjusted
year to date growth rates are more indicative than the unadjusted
figures because of the timing of bank holidays around the half year
end and the timing of Easter.
Our local management teams are focused on attracting more
passengers onto our buses by delivering frequent, reliable, value
for money services and by making bus travel easier and more
appealing. Our first contactless ticketing pilot scheme will
shortly be introduced in Oxford, to be followed by a similar scheme
in the north east in the summer. We look forward to rolling out the
latest contactless technology across all our operations throughout
this calendar year, bringing benefits to customers and efficiencies
to our business. We continue to invest in WiFi and USB charging
points, and ticketing and journey planning apps.
London
Year to date growth rates (excluding Singapore bus
operations)
Revenue Mileage
-------- ---------
c.2.5% c.(1.0%)
-------- ---------
Mileage operated and revenue growth in our London bus operations
are in line with our expectations. We are pleased to have secured
95% of expected revenue for 2017/18, through the normal bidding
cycle.
While our ability to operate reliable services on behalf of
Transport for London (TfL) continues to be impacted by congestion
in London, revenue generated through Quality Incentive Contracts
has stablised. We continue to engage with TfL and the London
Assembly regarding the ongoing issue of congestion in the capital
and play our part in the successful implementation of an ultra low
emission zone by 2019.
Our bus operation in Singapore is performing well, delivering
high levels of punctuality on behalf of the Land Transport
Authority.
Rail
Our rail division operates the Southeastern, London Midland and
GTR franchises through our 65% owned subsidiary Govia.
Year to date growth rates
Passenger revenue Passenger journeys
--------------- ------------------ -------------------
Southeastern c.3.0% c.(0.5%)
--------------- ------------------ -------------------
London Midland c.6.0% c.4.0%
--------------- ------------------ -------------------
GTR c.(5.0%) c.(3.5%)
--------------- ------------------ -------------------
As previously reported, passenger growth in Southeastern has
been slowing. A cost efficiency programme has been implemented to
offset the revenue shortfall over the remainder of the contract,
until December 2018. The franchise continues to contribute to the
Department for Transport (DfT) through a profit share mechanism,
although now at a lower level. The DfT has begun the tender process
for the forthcoming South Eastern rail franchise competition with
the publication of its public consultation document.
London Midland continues to deliver a strong performance, with
good levels of growth in revenue and passenger journeys. The
franchise is expected to make profit share payments to the DfT for
the remainder of the contract, to October 2017. We await the DfT's
announcement regarding the outcome of the West Midlands franchise
competition, for which we are shortlisted along with one other
bidder.
GTR
Service levels have stabilised following the previous periods of
industrial action, delivering more reliable rail services to
customers. Discussions between GTR and the ASLEF and the RMT unions
continue with the aim of resolving the ongoing industrial disputes.
GTR remains fully committed to resolving these issues so as to
provide improved service for customers and reduce uncertainty for
our stakeholders.
Discussions are ongoing with the DfT regarding a number of
contractual variations; management's judgement around these
discussions and the potential impact on rail profitability for the
full year remains consistent with the guidance outlined at the half
year results.
Bidding and mobilisation
Bid activities in targeted international markets continue as
planned and the mobilisation of our German rail contracts, due to
commence in 2019, is progressing well.
Financing
We have begun the process of refinancing our GBP200m sterling
bond ahead of its maturity in September 2017. As a result of lower
interest rates, we anticipate finance costs to reduce in the
financial year to June 2018.
ENDS
For further information, please contact:
The Go-Ahead Group
David Brown, Group Chief Executive 020 7799 8971
Patrick Butcher, Group Chief Financial Officer 020 7799 8973
Holly Gillis, Head of Investor Relations 020 7799 8984
Citigate Dewe Rogerson
Michael Berkeley/Chris Barrie/ Eleni Menikou/Toby Moore 020 7638 9571
GO-AHEAD
Go-Ahead is a leading UK public transport operator, providing
high quality services in the bus and rail sectors. Employing around
29,000 people across the country, over one billion passenger
journeys are undertaken on our services each year. We are committed
to operating our companies in a safe, socially and environmentally
responsible way and are proud to have been accredited with triple
Carbon Trust Standard for reductions in carbon, water and waste. In
addition to the travelling public, our customers include the
Department for Transport, Transport for London (TfL) and local
authorities.
BUS
Go-Ahead is one of the UK's largest bus operators. With a fleet
of around 5,200 buses, we carry over two million passengers every
day. Our operations are focused on high density commuter markets.
We have a strong presence in London, with around 24 per cent market
share, where we provide regulated services for TfL. Outside London,
we operate services in Oxford, East Anglia, the South East,
Southern and north east England. In September 2016, the Group began
operating a bus contract in Singapore, on behalf of the Land
Transport Authority.
RAIL
The rail operation, Govia, is 65 per cent owned by Go-Ahead and
35 per cent by Keolis. It is the largest rail operation in the UK,
responsible for over 30 per cent of all UK passenger rail journeys
through its rail franchises: GTR (Govia Thameslink Railway)
Southeastern and London Midland.
Disclaimer
Certain statements included in this press release contain
forward-looking information concerning the Group's strategy,
operations, financial performance or condition, outlook, growth
opportunities or circumstances in the sectors or markets in which
the Group operates. By their nature, forward-looking statements
involve uncertainty because they depend of future circumstances,
and relate to events, not all of which are within the Group's
control or can be produced by the Group. Although the Group
believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Nothing in this press
release should be construed as a profit forecast and no part of
these results constitutes, or shall be taken to constitute, an
invitation or inducement to invest in The Go-Ahead Group plc or any
other entity, and must not be relied upon in any way in connection
with any investment decision. Except as required by law, the Group
undertakes no obligation to update any forward looking
statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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