A 12 per cent decline in Go-Ahead's underlying operating profit was largely blamed on the group's rail business, which suffered a 25 per cent fall in profits to just £16.5m. Still, exclude the £9m one-off contract management benefit received the previous year and profits here actually rose by a fifth.
Revenue from the London Midland, Southern and Southeastern rail commuter franchises increased by 6.4 per cent to £864m, despite a £32.9m drop in net subsidy receipts. This was driven by like-for-like passenger revenue growth of 9.6 per cent, but expect more modest growth going forward as January's fare hikes kick in. The outlook for rail is "difficult to predict" especially as contenders for the Thameslink and Essex Thameside franchises will be confirmed in April and competition will be fierce.
On the buses, revenue increased 4.7 per cent to £335m, led by 5 per cent growth in deregulated business. The cost of implementing a new contract trimmed profits to £18m, while a smaller incentive bonus from Transport for London (TFL) cut regulated bus profits by 6.5 per cent to £17.2m. Despite this, Go-Ahead remains on track to hit full-year forecasts. Analyst Paul Hickman at broker Peel Hunt expects full-year underlying pre-tax profit of £95.9m and adjusted EPS of 144p (£97.6m and 135.2p in 2011).
GO-AHEAD (GOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,290p | MARKET VALUE: | £555m | |
| TOUCH: | 1,290-1,293p | 12-MONTH HIGH: | 1,606p | Low: 1,190p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 56p* | NET DEBT: | 163% | |
| Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.13 | 45.0 | 69.9 | 25.5 |
| 2011 | 1.20 | 39.2 | 61.4 | 25.5 |
| % change | +6 | -13 | -12 | – |
Ex-div: 21 Mar Payment: 13 Apr *Includes intangible assets of £96.8m, or 225p a share | ||||
