Go-Ahead Group PLC GTR Contractual Variations (9130K)

TIDMGOG

RNS Number : 9130K

Go-Ahead Group PLC

13 July 2017

 
 The Go-Ahead Group plc 4 Matthew 
  Parker Street, London, SW1H 9NP 
  Telephone [phone] 
 

PRESS RELEASE

13 July 2017

THE GO-AHEAD GROUP PLC

("GO-AHEAD" OR "THE GROUP")

GTR contractual variations

The Go-Ahead Group plc (Go-Ahead) today announces that agreement has been reached with the Department for Transport (DfT) regarding the contractual variations and claims on the GTR franchise which relate to the impact of industrial action on train performance over the past 18 months.

In agreement with the DfT, GTR will fund a package of performance and passenger improvements worth GBP13.4m. This outcome is in line with the financial judgements made by management and consequently, expectations for the year ended 1 July 2017 remain unchanged.

Go-Ahead stated at its half year results in February that the range of uncertainty around profitability of the Group's rail division for the year to 1 July 2017 was +/-GBP15m. This range related to the outcome of discussions with the DfT regarding the impact of industrial action on train performance, and other contractual variations. The contractual discussions relating to the impact of industrial action on train performance have now been resolved and the outcome is very close to management's central judgements. The remaining range of uncertainty is +/-GBP5m, reflecting a number of other ongoing contractual variations; including rolling stock cascades and timetable specifications, which remain under discussion with the DfT.

This agreement resolves financial uncertainty relating to past industrial action and allows GTR to focus on improving services for Southern customers and delivering the significant passenger benefits associated with the Thameslink Programme.

ENDS

For further information, please contact:

 
 The Go-Ahead Group 
 Holly Gillis, Head of Investor Relations                  020 7799 8984 
  Sarah Boundy, Group Corporate Communications Director     020 7799 8983 
 
   Citigate Dewe Rogerson 
  Michael Berkeley/Chris Barrie/ Eleni Menikou/Toby Moore   020 7638 9571 
 

GTR FUNDING IMPROVEMENT COMMITMENTS

The DfT has determined how the GBP13.4m will be used:

-- GBP7m will be put into a fund for the DfT to allocate to projects and improvements that will directly benefit passengers

-- GBP4m will fund 50 on-board supervisors over the next two years (from January 2018) to improve access to staff for passengers on trains

-- The remaining GBP2.4m will target performance improvements. GTR is now required to submit a remedial plan under the franchise agreement.

GO-AHEAD

Go-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. Employing around 29,000 people across the country, over one billion passenger journeys are undertaken on our services each year. We are committed to operating our companies in a safe, socially and environmentally responsible way and are proud to have been accredited with triple Carbon Trust Standard for reductions in carbon, water and waste. In addition to the travelling public, our customers include the Department for Transport, Transport for London (TfL) and local authorities.

BUS

Go-Ahead is one of the UK's largest bus operators. With a fleet of around 5,200 buses, we carry over two million passengers every day. Our operations are focused on high density commuter markets. We have a strong presence in London, with around 24 per cent market share, where we provide regulated services for TfL. Outside London, we operate services in Oxford, East Anglia, the South East, Southern and north east England. In September 2016, the Group began operating a bus contract in Singapore, on behalf of the Land Transport Authority.

RAIL

The rail operation, Govia, is 65 per cent owned by Go-Ahead and 35 per cent by Keolis. It is the largest rail operation in the UK, responsible for over 30 per cent of all UK passenger rail journeys through its rail franchises: GTR (Govia Thameslink Railway) Southeastern and London Midland.

Disclaimer

Certain statements included in this press release contain forward-looking information concerning the Group's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which the Group operates. By their nature, forward-looking statements involve uncertainty because they depend of future circumstances, and relate to events, not all of which are within the Group's control or can be produced by the Group. Although the Group believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Nothing in this press release should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in The Go-Ahead Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. Except as required by law, the Group undertakes no obligation to update any forward looking statement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCLLFIRDSIFLID

(END) Dow Jones Newswires

July 13, 2017 02:00 ET (06:00 GMT)