In its pre-close trading update for the six months ending 31 December 2016, Go-Ahead Group reports its bus division’s performance remains in line with previous expectations. This is despite its full year expectations for the rail division being slightly below previous estimates due to higher than expected costs associated with the GTR franchise and increased bidding activity in targeted markets overseas. The Group says it remains in a good financial position, with strong cash generation and a robust balance sheet.
Passenger revenue and journeys in its regional bus business are expected to be up slightly year on year in the first half of the year. Weakness in the north east continues to impact its operations in the region, supressing overall growth rates for the division. The expected half year growth rates for revenue in this part of its business was 1%, whilst passenger journeys are anticipated to increase 0.5%. Excluding the north east, its revenue growth is expected as 2% and passenger growth was 1%.
In its London bus operations, Quality Incentive Contract payments have reduced following a stronger than expected performance in the first quarter of the year. Expected half year growth rates for revenue in this sector is 2.5%, with mileage anticipated to increase 0.5%. Its bus services in Singapore are ‘operating well’. It looks forward to hearing the outcome of the latest contract tender in early 2017.