Despite a small revenue uplift, Go-Ahead (GOG) revealed a 7.4 per cent drop in operating profit for the full year ending 1 July, in line with what chief financial officer Patrick Butcher termed a difficult and challenging market for UK transport. Perhaps it was no surprise, therefore, to see the shares fall in early trading.
Rail achieved a sales improvement of 3.2 per cent but margins are at “historically low levels”, dragged down by the GTR division – which includes Southern Rail, Gatwick Express, Thameslink and Great Northern. Discussions continue between GTR and the Department for Transport regarding service changes; Go-Ahead expects future rail profits could be impacted by plus or minus £5m as a result.
Total bus revenue rose by 4.5 per cent to £902m. The strong performance from London was dampened by challenges in Oxford, where multiple bus accidents lifted costs. And there were lower passenger numbers in the north-east region. But Mr Butcher says the bus division delivered sector-leading operating margins, specifically 8.3 per cent in London.
The group is also starting to target international expansion, with contracts already won representing £200m in potential annualised revenue.
Analysts at Investec forecast pre-tax profit of £110m and EPS of 178p for FY2018, down from £137m and 207p in 2016.
GO-AHEAD (GOG) | ||||
ORD PRICE: | 1,587p | MARKET VALUE: | £684m | |
TOUCH: | 1,585-1,587p | 12-MONTH HIGH: | 2,344p | LOW: 1,568p |
DIVIDEND YIELD: | 6.4% | PE RATIO: | 8 | |
NET ASSET VALUE: | 469p* | NET DEBT: | 126% |
Year to 1 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2013 | 2.57 | 63.1 | 108 | 81.0 |
2014 | 2.70 | 91.2 | 164 | 84.5 |
2015 | 3.22 | 78.7 | 122 | 90.0 |
2016* | 3.36 | 145 | 218 | 95.9 |
2017 | 3.48 | 137 | 208 | 102 |
% change | +4 | -6 | -5 | +51 |
Ex-div: | 9 Nov | |||
Payment: | 24 Nov | |||
*Includes intangible assets of £91.5m, or 212p a share **2016 figures restated |