Go Ahead Profits update - looking good!

Go Ahead profits in line with expectations

THE transport firm that bought Plymouth Citybus is set to announce a profit of more than £30million on its bus business for the past six months. The giant Go-Ahead Group plc paid £20.2million for Citybus earlier this month. The firm's pre-close trading update today said it expects the first half operating profit in its bus operations to be slightly ahead of that made in the first half of 2008/9: £31.4million. The report said the firm had made "significant operational achievements" and that trading was "in line with expectations". A Go-Ahead spokesman said: "We are pleased with these achievements, which mark significant progress in delivering our strategy. "We remain on track to report a profit before tax and exceptional items for the first half of the year in line with our expectations." The firm said revenue from its regulated London bus operations had risen by between six and seven per cent, in the past six months and is expected to be slightly ahead of the 2008/9 total: £6.7million. "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 £6million, in the next financial year." He added: "Our cashflow and balance sheet remains strong and underpins our dividend policy, and our financing is secure through to 2012. "We will continue with our focus on service quality, cost savings and financial discipline and remain confident in the underlying strengths of our business." This is Plymouth Go Ahead's own press statement for the Bus Division: Our bus operations continue to perform well and the first half operating profit* is now expected to be slightly ahead of the first half of last year (H1 2008/9: £31.4m). In our regulated London bus operations, first half revenue growth is anticipated to be 6-7% and mileage to be up around 5%, of which contribution from acquisitions represents around 1 percentage point since completion on 1 October 2009. Underlying growth is benefitting from an increase in mileage, in part due to the phasing of contract wins and losses. Quality incentive targets continue to become more challenging, although our performance to date has been particularly strong and quality incentive revenue for the first half of this year is likely to be slightly ahead of the first half of last year (H1 2008/9: £6.7m). Our deregulated bus operations are also performing well, with first half revenue growth expected to be around 7% and passenger numbers to increase by approximately 5%, of which around 1 percentage point is due to the acquisition of Plymouth CityBus from 1 December 2009. Underlying demand continues to grow from both concessionary passengers and fare paying passengers. Fuel costs are fully hedged for this year at 47 pence per litre (ppl) compared to 43 ppl last year. This will produce a first half cost increase of around £2m given we consume around 110m litres of fuel pa. We continue to recover the additional fuel cost from fares and consumption improvements. The cost of providing for accident claims is slightly below the same period last year, offset by slightly higher pension costs. Overall, cost control remains firm and we continue to make good progress with our cost saving initiatives. Go Ahead

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