A swath of asset write-downs pushed transport operator Go-Ahead (GOG) into a net loss, as the coronavirus pandemic flattened bus and rail travel. That’s despite the UK government offering support to rail and bus companies, which has averted “material losses” in Go-Ahead’s regional bus division.
Rail returns will be harder to come by after the government trimmed the fee cap on management contracts, from 2 per cent of an operator’s fixed cost base to 1.5 per cent earlier this week. Bus companies will continue to receive weekly backing for as long as it is deemed necessary. Go-Ahead’s bus operation has broken-even since March, and the company expects bus funding to be available until December 2020.
Challenges in the UK and Germany, where Go-Ahead’s rail activities have been hampered by higher than expected costs and rail penalties, have prompted £57.1m in costs linked to restructuring and impairments. The inclusion of £649m in lease liabilities on Go-Ahead’s balance sheet, in accordance with new accounting standards, propelled the group into a net debt position, although cash at hand has since risen from around £230m at the close of the year to £240m.
Broker Peel Hunt forecasts full-year 2021 adjusted pre-tax profits and earnings per share of £33.5m and 37p respectively, rising to £59.8m and 89.6p in 2022.
| GO-AHEAD GROUP (GOG) | ||||
| ORD PRICE: | 648p | MARKET VALUE: | £ 280m | |
| TOUCH: | 648-672p | 12-MONTH HIGH: | 2,309p | LOW: 390p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 537p* | NET DEBT: | £498m | |
| Year to 27 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 3.36 | 145 | 218 | 96 |
| 2017 | 3.48 | 137 | 208 | 102 |
| 2018 | 3.46 | 146 | 207 | 102 |
| 2019 | 3.67 | 97.0 | 137 | 102 |
| 2020 | 3.90 | 56.9 | -66.5 | nil |
| % change | +6 | -41 | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £96m, or 222p a share | ||||
