Go-Ahead's buses beat its trains in summer slowdown
Sunday 02 September 2012
Buses-to-trains transport group Go-Ahead will this week reveal how the slowdown in the UK economy has hit its returns.
While the group is expected to report profits for the year edging up at around £114m, of closer interest will be how its Southern train arm has fared given the strain on passengers' wallets.
Southern is one of the UK's busiest rail networks, connecting central London to the South coast, East and West Sussex, Surrey and parts of Kent and Hampshire, and had 162 million passenger journeys last year. It is also the firm behind the Gatwick Express, which is likely to have been hit by the summer slowdown as people stayed in London to enjoy the Olympics.
For the rest of the business, rising fuel costs are also a concern, with City analysts saying travellers' finances are so tight it is hard for firms to automatically pass on these increases in higher fares.
Analysts at Deutsche Bank said the Southern franchise “remains the key” and points out that it is ineligible for revenue support until 2012: “We would argue that risk is currently to the downside.”
But the bus arm is likely to be doing well: “Go-Ahead continues to deliver a strong UK bus performance; an excellent outcome when the headwinds (economic, fuel, reduced subsidies etc.) are taken into account.”
Other City watchers note that the firm's balance sheet under new CEO David Brown, remains strong and hint that a rise in the dividend is possible, though the stock is already yielding 6.2 per cent.
Some bankers think Go-Ahead should make a bid for Thameslink to solidify its London position. Peel Hunt said in a note to clients: “The outlook is probably stronger than is at first apparent, given that Thameslink is the only current bid prospect, while Go-Ahead is more dependent on rail income than any of its peers. However, it has the opportunity to rebid existing franchises before 2014.”
- 1 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 2 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
- 5 This crazy skiing video will leave you feeling queasy
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
Greece elections: Syriza and EU on collision course after election win for left-wing party
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...