Go-Ahead (GOG) put its UK rivals in the shade last year when it snapped up the hotly-contested Thameslink (GTR) franchise. But the new contract hasn't had the best start. Reporting on the first six months of the financial year, finance director Keith Down admits the group has "inherited some operational issues" having taken control of the franchise. This included a flood in a Farringdon rail tunnel, which caused a week of delays for North London commuters. But management says it is working closely with Network Rail to minimise disruption to passengers while it gets the new GTR line up and running.
Go-Ahead's bus business tells a better story. Operating profit rose 8.4 per cent to £45m in the first half, on a 50 basis point increase in operating margins to 11 per cent. Mr Down says maintaining these margins will be crucial to meet the company's £100m operating profit target from the bus division in 2016.
In the meantime, any surplus cash will be directed towards a new international initiative. Management is looking into new contract opportunities in Germany and Singapore to expand its international footprint and diversify the business model.
Analysts at Investec expect pre-tax profit of £96m this year, giving EPS of 153p. This is up from £85m and 147p in 2014.
| GO-AHEAD (GOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,452p | MARKET VALUE: | £1.05bn | |
| TOUCH: | 2,442-2,452p | 12-MONTH HIGH: | 2,655p | LOW: 1,813p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 143p* | NET CASH: | £169m | |
| Half-year to 27 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 (restated) | 1.4 | 40.3 | 78.4 | 25.5 |
| 2014 | 1.6 | 44.7 | 71.8 | 26.6 |
| % change | +14 | +11 | -8 | +4 |
Ex-div: 26 Mar Payment: 10 Apr *Includes intangible assets of £88.6m, or 206p a share | ||||
