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Go-Ahead expects strong finish

City analysts are expecting a strong finish from transport operator Go-Ahead, which releases full-year results on 4 September
August 26, 2014

Go-Ahead (GOG) has dominated the transport headlines since it won the hotly contested Thameslink franchise in May. We will get its official numbers for the year to 28 June on 4 September, but analysts at Investec are expecting pre-tax profits of £83m and EPS of 151p.

IC TIP: Hold at 2,260p

Those forecasts were upgraded after a bullish trading update at the end of June revealed a good year for Go-Ahead's rail division. Underlying revenue growth is expected to be 6.5 per cent across both the Southern and Southeastern franchises and 7.5 per cent at London Midlands. Lower energy costs and a better operational performance in the fourth quarter should lead to an even better bottom-line performance.

The bus business is also faring well, and Go-Ahead is on track to meet its £100m operating profit target by 2016. Excluding the effect of the Olympics, bus revenues should be up 4 per cent for the full year outside of London, and 6.5 per cent within London.