Go-ahead rail arm gathers pace

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Transport group Go-Ahead said its rail division will contribute to Treasury coffers from April after seeing growth in its three commuter franchises.

Its London Midland service has been eligible for revenue support from the UK government’s Department for Transport (DfT) since November but Go-Ahead said this has not been required after passenger revenues on the commuter line jumped 13 per cent in the six months to 31 December.

Go-Ahead, whose joint venture with Keolis runs the Southeastern and Southern franchises, said its rail division will be a net contributor to the DfT from April, although Southeastern remains in revenue support.

Across the rail arm, which benefited from average regulated fare rises of 6% at the start of last year, profits were up 25 per cent to £16.5 million when £9m of one-off contracts are excluded from last year’s figure.

Passenger revenues leapt 9.6 per cent to £699.8m, which Go Ahead said reflected the continued shift away from car usage and better marketing. Passenger volumes rose 3 per cent on Southern and Southeastern and by 11.5 per cent on London Midland.

Go-Ahead expects revenues trends to continue into the second half but with January’s latest fare increases causing more modest growth in passenger numbers.

The period will see the start of a busy period for the UK rail market, with many franchises due for renewal and Go-Ahead working with Keolis on bidding for the Thameslink and Essex Thameside services.

Newcastle-based Go-Ahead described the performance of its bus division as robust after revenues increased by 4.7 per cent to £335.7m in the half year, with passenger journeys up 3.6 per cent. Profits were down 2.7 per cent to £18m as a result of implementation costs on a new contract.

The company is one of the UK largest operators with a fleet of around 3,900 buses carrying on average around 1.7 million passengers every day. It is the biggest operator in London and has secured two contracts to provide specific Olympic services this summer.

Across the group, profits were 13.2 per cent lower at £44m, reflecting the one-off contract boost in the rail arm last year and lower bus profits.