Bus and rail group Go-Ahead reports a robust financial performance for the year to 2 July with overall results slightly ahead of management expectations.
The group said it achieved its £100m bus target with adjusted operating profit up 8.0% to £100.4m.
Regional bus adjusted operating profits were up 9.4% to £53.3m with passenger growth in the second half of the year.
London bus adjusted operating profits were up 6.3% to £47.1m despite a significant reduction in QICs income.
Rail adjusted operating profit was £57.0m with a margin of 2.3%. Contribution to the DfT in the year of £222.4m.
Statutory operating profit in bus and rail was £91.2m (2015: £80.7m) and £26.2m (2015: £16.1m) respectively.
The proposed full year dividend is increased by 6.5% or 5.85p to 95.85p.
Group chief executive David Brown said: "I am pleased with the Group's financial performance in the year; with overall adjusted operating profit of £157.4m, slightly ahead of our expectations.
"It has been a year of financial progress in all three divisions. Our market positions have been strengthened, with organic growth supported by contract wins and extensions. As part of a targeted programme, we are pleased to have won new business in Singapore and Germany. We continue to explore similar opportunities in these and other selected markets.
"We've had a record year of profits from our bus division, achieving our £100m target as planned. Our regional bus business has sector leading margins and an industry leading customer satisfaction score of 89%. Go-Ahead remains the largest bus operator in London, retaining our 24 percent market share. We continued to invest in our business with £72m spent on over 300 new buses and £13m on new depots.
"The £6.5bn Thameslink Programme is a once in a generation opportunity to respond to the 40 percent passenger growth on Southern over the past five years and address the long term underinvestment in infrastructure.
"Customers will see gradual improvements over the next two years but the capacity of the network remains restricted until the end of 2018, when the ultimate benefits of this huge investment programme will be delivered.
"A large part of the role of the GTR franchise is to introduce three new train fleets and modernise working practices. During this period of change, Southern services have been disrupted by restricted network capacity, strike action and increased levels of absence.
"We apologise to the people whose lives have been affected during this time. We continue to work closely with the DfT, Network Rail and other suppliers and partners to operate the best service possible while delivering the long term improvements.
"Our rail division has delivered a robust financial performance, with strong results in Southeastern and London Midland offsetting weakness in GTR.
"Go-Ahead is committed to operating our business in a responsible manner and being a key part of the communities we serve. Over the past year Go-Ahead has made a significant contribution to the UK economy through the 27,500 people we employ, the £222.4m generated by our rail operations for the Government, and £24.8m paid in corporation tax. We are also pleased to have introduced the voluntary Living Wage across the entire Group.
"The Group remains in a good financial position, with strong cash generation and a robust balance sheet, allowing flexibility to pursue value-adding opportunities. This strong position underpins the Board's decision to propose an increased final dividend for the year, supported by increased profits in our bus business."