Go-Ahead Group PLC said on Thursday that it had narrowed its pretax loss but noted issues with the UK Department for Transport regarding its London & South Eastern Railway operations.
The Newcastle, England-based public transport company reported a narrowed pretax loss after exceptional items of £6.9 million for the year ended July 3. This was from a loss of £39.5 million the previous year.
Revenue for the year grew by 4.1% to £4.06 billion from £3.90 billion the previous year. UK Rail operations comprised of 70% of the total revenue and remained largely consistent with prior year at £2.83 billion against £2.81 billion the previous year.
International Rail operations comprised 3.5% of total revenue and doubled during the year to £140.2 million. Go-Ahead said this was due to the results including a full year of Norway operations which commenced in December 2019.
Regional Bus comprised 11% of revenue and increased by 4.6% in the year to £427.7 million. The company said this increase reflected the first full year of operation of contracts in Cornwall, a full year of Covid-19 Bus Service Support Grant receipts and an element of prior year Covid-19 Bus Service Support Grant funding recognised in the current year.
The company, however, reported issues with the UK Department for Transport regarding its London & South Eastern Railway franchise which is now no longer part of Go-Ahead.
On September 28, the UK Department for Transport announced its decision to take over delivery of passenger services on the Southeastern franchise when LSER’s existing contract expired. This was as a result of an independent committee concluding that serious errors had been made in relation to the LSER franchise with respect to engagement with the DfT over several years.
In particular, the committee said that Go-Ahead had failed to notify the DfT of overpayments or monies due to the DfT, resulting in LSER breaching contractual obligations of good faith contained in the agreements.
The DfT has the power to impose a financial penalty. As a result, Go-Ahead said it has included a provision for £30 million in the financial statements of the year, reflecting its current best estimate of any penalty. To date, a total of £49.2 million has been paid by LSER to the DfT.
Chief Executive Christian Schreyer said: ‘It’s been a very challenging year for Go-Ahead and our shareholders, for which I apologise, on behalf of the Board. The group’s operating performance is strong and we are seeing a reassuring recovery in passenger volumes across bus and rail following the impacts of Covid-19 with our trading expectations for 2022 unchanged. In relation to London & South Eastern Railway, we are optimistic that the outstanding matters will soon be settled with the DfT.’
Shares were untraded at 667.00 pence on Thursday afternoon in London.
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