(1888PressRelease)
May 02, 2009 - Britain's Go-Ahead Group (GOG.L) said on Thursday that increased demand for its trains and buses helped it to achieve third-quarter trading in line with its expectations.
Go-Ahead, which runs buses in Oxford, Brighton, the north east and London, said revenue and passenger numbers in its deregulated bus operations outside London rose at a similar pace to the 6.6 percent and 3.6 percent rises, respectively, achieved in the first half of the year.
Finance Director Nick Swift told Reuters in an interview that the group's bus business was resilient to the recession and was benefiting not only from state-supported concessionary fare travel, but also from more passengers paying full fares.
The group, which also runs the Southern, Southeastern and London Midland rail franchises though its 65 percent-owned subsidiary Govia, said like-for-like growth in rail passenger revenue ranged from more than 5 percent in Southeastern to close to 10 percent in London Midland.
Passenger numbers rose in all three franchises, ranging from a small increase in Southeastern to close to 5 percent in London Midland.
Swift said the franchises, which carry commuters into London, were holding up reasonably well in spite of the economic downturn.
The Southeastern rail business was planning to introduce new services this December between south east England and London's St Pancras station on the UK's high speed line between London and the Channel Tunnel.
Swift said the services, which will be quicker than conventional services, would be more expensive, although the company would consider economic conditions when it sets fare levels.
"People are more price sensitive than they were a year ago and it's going to be a difficult time to bring in a premium service," Swift said.
The company said its aviation services unit achieved third-quarter results similar to the first two quarters of the year, in spite of lower demand, and it continued to make good progress with restructuring plans.
Swift said ground handling and cargo volumes had dropped significantly and the business was "standing still", although Go-Ahead remained committed to it.
"It's not particularly synergistic with rail and bus, and it's hard work, but I think there's more to do," he said.
At 0904 GMT, shares in Go-Ahead were up 4.58 percent to 1255 pence per share.
Broker Investec, which is advising investors to sell the shares, said in a note that the risk of future weakness in the group's rail business was behind its caution.
"However, we acknowledge that the (group's) robust balance sheet, healthy dividend and positive trading should provide support," the broker said.
Go-Ahead said in its trading statement: "Overall, the group's third quarter trading was in line with our expectations and has reinforced our confidence in our expectations for the full year to June 2009."
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