Go-Ahead warns of little growth until 2011

Go-Ahead warned of a difficult year ahead as it reported annual results showing a 14.7 per cent drop in profits yesterday.

The company predicted no "significant" growth until 2011 as the recession drags on in the transport sector.

Although the £124m of operating profits came in ahead of expectations, pre-tax profits were pulled down to £42m by a £38m writedown of the value of the company's aviation services unit.

The division, which provides cargo and ground handling services at a number of UK airports, posted an operating loss of £4.5m, compared with £1.5m in profits in 2008. It has suffered from the downturn in the aviation sector, as has Go-Ahead's Gatwick Express rail service.

The group said its three rail franchises – Southern, Southeastern and London Midland – put in a "robust" performance given the difficult economic conditions. Overall, the division reported £61.5m profits, 20 per cent down on the previous year. Southern managed a 2.2 per cent rise in passengers, but Southeastern's traffic dropped by 1.7 per cent, reflecting the downturn in the London jobs market.

The stellar performer was Go-Ahead's bus division, which saw record profits of £66.2m.

The company reported revenues up 6.7 per cent at £2.35bn.