| CATEGORY: NEWS AND ANNOUNCEMENTS SECTOR: TRAVEL & LEISURE |
Go-Ahead rail arm under pressure |
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Tue 15 Dec 2009
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LONDON (SHARECAST) - Bus and train group Go-Ahead expects interim profits from its rail business to halve though its bus business is doing better.
Rail profits are expected to slide as growth in passenger numbers across its three franchises will not be sufficient to offset the reductions in net franchise subsidies from the government. Go-Ahead expects that first half operating profit will be broadly half of the first six months of last year's 34.9m.
First half operating profit from its buses will be slightly ahead of the first half of last year's £31.4m. In the regulated London bus operations, first half revenue growth is anticipated to be 6-7% and mileage to be up around 5%. Unregulated revenue will be up by 7%.
Aviation Services, most of which has recently been sold, will break even in the half, but there will be first half exceptional charges of around £41m (H1 2008/9: £58.4m), consisting of the impairment charge for aviation services of around £35m and around £6m of restructuring costs to date.
'At this stage of the year, we have not changed our expectations for the full year results. We continue to believe that the economic climate will remain difficult and we will take management action accordingly,’ Go-Ahead said.
'We expect our bus operations to remain strong in the second half of this year and to benefit from a full year of acquisition contributions, and a fully hedged reduction in fuel costs of around £6m, in the next financial year. In rail, we expect revenue growth before initiatives to be modest in the second half given the low fare increases in January 2010,'it added.
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