Rail operating profits at Go-Ahead (GOG) more than halved during the first six months of its financial year to £17.6m. But this was better than expected. Its London Midland franchise expired in December 2017, while a settlement with the Department for Transport (DfT) over the Govia Thameslink (GTR) service also dented profits. Govia Thameslink – a franchise that runs until 2021 – has since recovered from chaotic timetable changes made last May. But a profit sharing mechanism with the DfT means margins will only land between 0.75 and 1 per cent. More positively, improved profitability from the Southeastern franchise has continued into the second half now that services have resumed through London Bridge.
Go-Ahead is also branching out into alternative transport. It’s working with PickMeUp, the on-demand mini-bus service in Oxfordshire that launched last June. The service now has 20,000 registered users and provides 3,000 weekly rides, and a similar project is being trialled in Sutton. While chief executive David Brown said it had been a "steep learning curve", it could be key to Go-Ahead’s strategy to invest in "the future of transport".
Analysts at broker Investec expect pre-tax profits of £106m during the year to June 2019, giving EPS of 170p, compared with £123m and 181p in FY2018.
| GO-AHEAD (GOG) | ||||
| ORD PRICE: | 1,953p | MARKET VALUE: | £842m | |
| TOUCH: | 1,952-1,956p | 12-MONTH HIGH: | 2,100p | LOW: 1,310p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 574p* | NET DEBT: | 93% | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 1.83 | 79.7 | 116 | 30.2 |
| 2018 | 1.92 | 44.2 | 60.7 | 30.2 |
| % change | +5 | -45 | -47 | - |
| Ex-div: | 28 Mar | |||
| Payment: | 12 Apr | |||
| *Includes £101m of intangible assets, or 234p a share | ||||
