Go-ahead Share Discussion Threads

[trt] 18/2/2011 07:30

Go-Ahead raises full year guidance

By John Harrington

Fri 18 Feb 2011

GOG - Go-Ahead Group


LONDON (SHARECAST) - More people are leaving their cars at home and taking the bus, according to Keith Ludeman, the chief executive of public transport group Go-Ahead.

"Whilst rail remains difficult to predict, we now expect our full year operating profit across our rail and bus businesses to be higher than we previously anticipated and around the same as achieved last year (FY'10: £101.0m)." Ludeman said.

The group saw revenue rise 6.0% at the interim stage to £1,132.2m from £1,068.4m in the second half of 2009.

"Like-for-like passenger numbers increased by 1.7% to well over one billion per annum. Our bus operating profit is at record levels and is a strong indication of people leaving their cars at home and taking the bus," said Ludeman.

Profit before tax in the six months to 1 January 2010 edged up 1.4% to £50.7m from £50.0m the year before.

Underlying profit was slightly ahead of management's expectations at £59.0m, up 8.9% from £54.2m in the latter half of 2009, despite the 2010 period being one week shorter than the 2009 period.

Net debt fell to £71.6m at the end of the reporting period from £88.3m at 3 July 2010.

The bus division saw revenue rise to £320.6m from £314.3m, while operating profit climbed to £36.9m from £34.3m. Operating margin improved to 11.5% from 10.9%.

The rail division's revenue rose to £811.6m from £754.1m. Underlying operating revenue jumped to £22.1m from £19.9m, while the margin ticked up to 2.7% from 2.6%.

The group expects first half rail revenue growth trends to continue in the second half.

[trt] 18/2/2011 07:28

Excellent results yet again !!

[trt] 17/2/2011 16:16

Could see the usual pattern with market makers marking up the share price from the off 08.00hrs tomorrow morning after the results are released at 07.00hrs - last chance for me to top up today with only 15mins to go until the close.

[trt] 17/2/2011 15:48

Yes Keran, looking good !

[keran] 17/2/2011 13:54

I expect we may well see an increase in the dividend payout as well tomorrow

[keran] 17/2/2011 12:14

Looks like the market has got wind of a bumper set of results for tomorrow !!!

[trt] 09/2/2011 16:05

So a target price of £16 says the broker upgrade note - fair price short term.
Very timely upgrade ahead of the Interim results on the 18th Feb

[nellie1973] 09/2/2011 14:17

Broker upgrade again

[trt] 31/1/2011 08:41

Loolking forward to the Interim results on the 18th Feb. GOG said at the last update profits may well exceed market expectations - if that happens could get very exciting share price wise !!

[bunnji] 20/1/2011 11:58

The 12 analysts offering 12 month price targets for Go Ahead Group Plc (GOG:LSE) have a median target of 1,248, with a high estimate of 1,470 and a low estimate of 950.00. The median estimate represents a -3.67% decrease from the last price of 1,295.

[trt] 14/1/2011 11:39

Topped up today - want to get in before the Interim results in early Feb

[trt] 05/1/2011 13:09

Go-Ahead Group raised to buy from hold at Liberum, target price 1934p

[nellie1973] 05/1/2011 12:30

Broker note out-upgrade

[trt] 15/12/2010 08:23

DAILY TELEGRAPGH

Questor share tip: Go-Ahead in good shape after its roller-coaster ride
Yesterday's update from rail and bus operator Go-Ahead was reassuring.

Go-Ahead Group
£12.80 +7p
Questor says BUY

Go-Ahead Group

The company said that it expects first-half operating profit to nudge ahead of its expectations, driven by its rail unit, but it maintained its full-year targets given the economic uncertainty.

This followed a roller-coaster year for the sector, as valuations were hit hard by worries over reduced subsidies from central government. However, things did not turn out too bad in the end - and bus and rail groups such as Go-Ahead remain solid dividend plays


The Comprehensive Spending Review was expected by many to result in a slashing of bus subsidies, but this did not happen. This is to ensure that services are run on routes that would otherwise not have been viable.

The Bus Service Operator Grant, which refunds part of fuel duty, will be maintained until 2012 and then cut by 20pc over three years. This is a far better outcome than expected.

Rail fares were also allowed to rise to 3pc above the retail price index (RPI) for the three years from 2012 to support investment in the networks. The rise is based on RPI in July, which was 4.8pc.

All of this means that the company's dividend looks secure and the shares are yielding a very healthy 6.3pc. "Our cashflow and balance sheet remains strong and underpins our dividend policy," Go-Ahead said.

Passenger journeys at its bus operations are rising. In deregulated bus operations, the underlying passenger and revenue growth trends of 3pc to 4pc seen in the first quarter had continued.

First-half mileage in regulated London bus operations is expected to be similar to last year and revenue to be around 7pc lower. This was expected because of previously announced lower contract prices.

Fuel costs are fully hedged for this year at 41p a litre compared with 47p last year, which will lead to a saving in fuel costs of £3.5m compared with last year.

Half-year revenue in its rail unit Southern is expected to be around 6pc higher than last year because of a 4pc growth in passenger journeys.

Revenue growth in the London Midland franchise is expected to be around 7pc for the first half.

Nick Swift, finance director, said he would consider bidding for the East Anglia railway franchise. "We prefer higher-density, commuter-type of operations. East Anglia fits into that category, so East Anglia would be of interest," Mr Swift said. The franchise is currently run by National Express but it expires next year.

Obviously there are pressures on the business in the short term as economic activity is not out of the woods and the network still needs substantial investment, but things are not as dire as the market feared a few months ago. The most important thing to note is that the dividend does not appear at risk – and this is the main reason to own the shares. Investors who bought in on the initial recommendation should have locked in a yield of 6.6pc, which is exceptional.

The shares were first recommended at £12.15 on June 11 and are now 5pc ahead compared with the FTSE 100 up 14pc.

Trading on a June 2011 multiple of 11.4 times, the shares remain a buy for the income.

[bunnji] 14/12/2010 10:01

RNS Number : 8693X
Go-Ahead Group PLC

14 December 2010

7am, 14 December 2010

The Go-Ahead Group plc ("Go-Ahead" or "the Group")

PRE-CLOSE TRADING UPDATE

Good first half trading, no change to full year expectations

Go-Ahead is one of the UK's leading providers of public transport. We employ around 22,000 people and over one billion passenger journeys are made on our buses and trains each year.

Go-Ahead announces its pre-close trading update for the six months ending 1 January 2011, ahead of its half year results which will be released on Friday 18 February 2011.

Overall:

Overall trading in the period has been good and our first half operating profit* is likely to be slightly ahead of our previous expectations, primarily in rail. However, we continue to anticipate challenging economic conditions in the near term and therefore believe it is prudent to maintain our full year expectations as previously reported.

Keith Ludeman, Group Chief Executive of Go-Ahead, said:

"We continue to see growth in patronage on both our rail and bus operations. This, combined with a programme of investment in our services and a strong local market focus, mean Go-Ahead is well placed to benefit from any improvement in the economy."

Bus:

Our bus operations have enjoyed a good period and the first half operating profit* is expected to be slightly ahead of the first half of last year (H1 2009/10: £34.3m), including around £1m of first half contribution from last year's acquisitions.

Our deregulated bus operations continue to perform well, maintaining the underlying passenger and revenue growth trends of 3-4% experienced in the first quarter. The majority of growth is from fare paying passengers, with the number of concessionary passengers similar to the same period last year.

Our regulated London bus operations performed as anticipated. First half mileage is expected to be similar to last year and revenue to be around 7% below, as previously reported. The reduction in revenue is due to lower contract prices and less revenue from quality incentive contracts (QICs) which are expected to halve compared to the first half of last year (H1 2009/10: £7.4m). This is the result of more challenging targets and the withdrawal of QIC2 which accounted for approximately £2.5m of QIC revenue in the first half of last year.

Fuel costs are fully hedged for this year at 41 pence per litre (ppl) compared to 47 ppl last year, saving around £3.5m against the same period last year. Cost control remains a priority, with savings in energy consumption, labour utilisation and procurement offsetting increases in fuel duty, accident claims and pension costs.

In North America, our Yellow School Bus joint venture is performing as expected and we continue to believe that this provides a good platform for our strategy of cautious growth in this market.


Rail:

Rail has performed ahead of our expectations in the period, largely due to procurement savings, and we now expect first half operating profit* to be close to that achieved in the first six months of last year (H1 2009/10: £19.9m).

Southern continues to perform in line with bid. Half year revenue is expected to be around 6% above last year, supported by growth in passenger journeys of approximately 4%, and we continue to make good progress with our bid initiatives, franchise commitments and cost savings.

In Southeastern, revenue growth is expected to be up 6% against the first half of last year. This increase includes revenue generated by the full high speed service which started on 13 December 2009. As previously reported, the franchise is in 80% revenue support and is expected to remain so until the end of the franchise in March 2014. We have also achieved further procurement cost savings in this franchise during the period.

Revenue growth in our London Midland franchise has continued to be good and is expected to be around 7% for the first half, benefitting from strong operational performance and an increase in passenger numbers of around 4%. We continue to seek further cost savings to restore earnings in this franchise.

Other items:

Exceptional items are expected to be minimal for the first half compared to last year (H1 2009/10: £31.9m - primarily related to the aviation services division which has since been sold)

Cash management remains strong and capital expenditure is anticipated to be in line with our expectations at around £30m for the first half and approximately £75m for the full year. The full year and half year tax rate is expected to remain at around 27%, and the weighted average number of shares remains at 43.0 million.

Outlook:

Our operations are proving resilient with continued passenger growth across our bus and rail operations. However, we continue to anticipate challenging economic conditions in the near term and therefore believe it is prudent to maintain our full year expectations as previously reported.

Our bus division is expected to remain robust, with second half revenue in our London operations returning to similar levels to last year and modest growth assumed outside London. We continue to look for bolt-on acquisitions in the UK and cautious expansion in North America.

In rail, fares are due to increase in January 2011 in line with Government policy, based on a relatively high RPI of 4.8% following minimal increases in January 2010. Rail remains difficult to forecast and, at this stage, we are assuming that Southern continues in line with bid and that we achieve modest returns from Southeastern and London Midland for the second half. We welcome the Government's recent commitment to rail investment and industry reform.

Our cashflow and balance sheet remains strong and underpins our dividend policy. We will continue with our focus on service quality, cost savings and financial discipline and remain confident in the underlying strengths of our business.

*operating profit before exceptional items and amortisation

- End

[trt] 07/12/2010 11:24

Just grabbed a few more !!!

[trt] 07/12/2010 08:26

Pre close trading update on 14th December

[phil140158] 06/12/2010 15:05

Anyone think of any other reason for the nice lift?

[bunnji] 28/11/2010 21:47

LOL
hope the fine enhances the profits.

And remember there is always the bus ;-)

[trt] 11/11/2010 11:54

Took advantage and topped up today

[enami] 11/11/2010 11:08

Down to close the gap as expected (post 626).
200MA at 1262 next target.

[steve517499] 10/11/2010 16:39

Any ideas why none of the British companies have expressed an interest in acquring Arrivas' German Business ... seems it is just the 3 French companies and Abellio of Holland?

[trt] 09/11/2010 15:48

Trading update on the 14th December should make very good reading indeed especially after the management statement back in October.