Train operator Go-Ahead (GOG) has continued its strong performance with trading in the year to 30 June exceeding expectations thanks to a strong performance in its rail division.
Operating profit of £135.9m beat analysts’ forecasts of £131.2m by approximately 4%.
Shares in the Southern and Southeastern operator surged 14.4% to £18.70.
Pre-tax profit is up 6.5% at £145.7m. Profit was constrained by the expired London Midland franchise, but one-off disposal gains and cost benefits at Southeastern led to a better than expected performance.
Jefferies analyst Joe Spooner says the company’s efficiency programme is paying off, flagging that profits at Southeastern advanced £10m year-on-year.
POTENTIAL IMPACT OF TIMETABLE HAVOC IN MAY
While GoAhead has enjoyed robust trading, Govia Thames Railway (GTR), which runs Southern with partner Keolis, failed to meet ‘contractual thresholds.’
Revised timetable changes in May were delayed leading to significant disruption.
If GTR is seen as largely responsible for issues implementing the timetable, it could face a remedial plan, penalties - or could even have its contract terminated.
‘We look to the £20m performance bond (aims to compensate the costs of re-letting a franchise) to frame a worst case for that outcome,’ comments Spooner.
In Go-Ahead’s bus division, sales increased 3.6% to £934.2m as a good performance in London offset difficulties in the regional bus business.
