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Go-Ahead welcomes UK rail review

The transport company saw rail operating profits fall following the expiration of its London Midlands franchise
September 6, 2018

Just days before Go-Ahead Group’s (GOG) full-year results, reports emerged of another upcoming governmental review of the UK rail sector. Chief financial officer Patrick Butcher said he’d welcome the move, but urged any report should be compiled by an independent party. Over the past year, operating profits from Go-Ahead’s rail business fell by a quarter to £44.5m following the expiration of the London Midland franchise in December. The company was unsuccessful in its re-bid.

IC TIP: Hold at 1813p

Meanwhile, as commuting readers may have noticed, a timetable change at Govia Thameslink Railway (GTR) in May suffered serious teething problems. Mr Butcher said an improved timetable - in effect from July - had proved more successful.

The bus division, especially when it comes to regional services, is adapting to changes in customer behaviour as more people work from home and shop online, by cutting mileage and focusing on London. Total operating bus profits rose 1 per cent to £91.4m as routes across the capital made up for a decline in regional profits. 

Analysts at Investec expect pre-tax profits of £94.7m during the year to June 2019 giving EPS of 157p, compared to £123m and 181p in FY2018.

GO-AHEAD GROUP (GOG)  
ORD PRICE:1,813pMARKET VALUE:£ 781m
TOUCH:1,808-1,814p12-MONTH HIGH:2,004pLOW: 1,310p
DIVIDEND YIELD:5.7%PE RATIO:9
NET ASSET VALUE:668p*NET DEBT:90%
Year to 30 JunTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20142.709116485
20153.227912290
20163.3614521896
20173.48137208103
20183.46146207103
% change-1+7--
Ex-div:08 Nov   
Payment:23 Nov   
*Includes £91.5m of intangible assets or 212p per share