Trains and buses running on time is a rare thing in the UK, so perhaps that’s why the market has cheered the latest results from Go-Ahead (GOG).

Or it might be the fact the transport company has raised its full-year expectations in its London and international bus division, and is currently trading ahead of expectations in Dublin and Singapore.


The transport company’s share price is up over 10% today to around £20.84 after Go-Ahead reported high levels of punctuality across all divisions and record customer satisfaction in its regional bus business.

The latest share price rise comes on top of a 6% increase yesterday after the firm gave its interim chief financial officer, Elodie Brian, the job on a permanent basis.

In the year to date, Go-Ahead says it has seen growth in passenger numbers and revenue across all its regional bus businesses, while its Southeastern rail franchise has continued to perform well.


Like-for-like revenue in the London and international bus division grew 0.5%, and Go-Ahead now anticipates a stronger financial performance in the division than last year.

While in its Southeastern rail franchise, revenue is tracking 6% ahead in the year to date and passenger journeys have risen by 4%. Go-Ahead says it remains in discussion with the Department for Transport to extend the current contract.

This performance has offset the struggles facing Govia, the train operator which runs the Thameslink, Southern and Great Northern franchises through Govia Thameslink Railway (GTR) and is 65%-owned by Go-Ahead.

GTR’s performance has improved considerably with punctuality at record levels and cancellation rates at an all-time low, but is not expected to make a profit contribution this year. GTR has problems ahead with public trust damningly low according to several customer satisfaction surveys.


Indeed, it can be argued Thameslink and Southern’s ongoing punctuality problems make Southeastern look like a Japanese rail company in comparison.

While the public have suffered problems with train companies, investors in these stocks have also suffered issues with rail franchises and in particular volatile earnings growth.

AJ Bell investment director Russ Mould says it’s therefore a ‘pleasant surprise’ to see Go-Ahead issue a bullish trading update with revenue growth in all three of its business divisions.


Interesting to note, he adds, is that Go-Ahead’s service innovation appears to be paying off.

Its experimental on-demand minibus sharing service in Oxford, PickMeUp, has grown in popularity after it launched in June 2018. Around 25,000 people are now registered to use the app-based service, which has made over 130,000 journeys with most trips costing £2.50.

Mould says, ‘On one hand this sort of innovation is necessary for Go-Ahead to compete against the likes of Uber and other ride-hailing start-ups; on the other it is giving customers something that makes their lives easier which has to be good for its business longer-term.’

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Issue Date: 06 Jun 2019