Go-Ahead outlines new strategy
A new business strategy has been announced by the Go-Ahead Group.
The plan is aimed at delivering profitable growth and a sustainable future for the business in what it describes as a dynamic market for public transport. The strategy follows a business review led by Christian Schreyer, Group Chief Executive.
The company will reinstate its pre-Covid dividend policy of paying a dividend to shareholders equivalent to between 50% and 75% of underlying earnings per share from FY22.
Entitled ‘The Next Billion Journeys’, the new strategy has three priorities: performance improvement, to grow organically and externally and to progress new opportunities by leveraging existing capabilities and resources.
The Group is to target growth in existing geographies, notably the UK regional bus market, as well as in other areas. It hopes to replicate its London and International Bus business model in selected international markets.
Go-Ahead aims to explore new urban mass transit modes, including bus rapid transit, as well as new services within the mobility value chain with existing capabilities and resources, such as zero emission services, Mobility as a Service (Maas) operation and property utilisation. It also wants to accelerate in the B2B market, such as in airport transport and rail replacement services.
To achieve, these objectives, Go-Ahead’s management team aims to prioritise five enablers:
- Strengthening governance and transparency
- Improving digital and data capabilities
- Consolidating Zero Emission capabilities
- Rebuilding post-Covid confidence with passengers and clients
- Enhancing people engagement and collaboration
The Group is aiming for an increase in annual Group revenue to around £4 billion, up by around 30%, in the medium-term. It also targets an increase in annual Group operating profit to at least £150 million in the medium-term.
The Group has reaffirmed its commitment to reduce carbon emissions by 75% by 2035.
“We plan to strengthen, digitalise and decarbonise our operations” – Christian Schreyer, Group Chief Executive
“Transport is at a tipping point as we recover from the Covid-19 pandemic” – Christian Schreyer
Christian Schreyer, Group Chief Executive, said: “This is an exciting moment for Go-Ahead. My review of the business has found fundamental strengths in the business, and has identified areas where we can deliver improvements and sustainable growth. We plan to strengthen, digitalise and decarbonise our operations, delivering greater profitability and stronger returns to investors alongside improvements for our customers and communities.
“Transport is at a tipping point as we recover from the Covid-19 pandemic. The importance of mass transport is growing, reflecting trends in climate change, digitalisation, urbanisation and demographics around the world; and there are increasing opportunities for private operators to bring their expertise to public transport markets. Go-Ahead’s core strength is in commuter transport and we see opportunities to grow by encouraging people to leave their cars at home, by winning new contracts and through carefully selected acquisitions.
“Today, we’ve set ambitious, but deliverable, targets. It has been a challenging two years for public transport but there is an exciting future ahead for Go-Ahead.”