Strong trading for Go-Ahead

In its full year results for the 12 months ended 29 June 2013, Go-Ahead reported strong trading in its bus business, with good progress towards its £100m bus profit target. Its overall results were slightly ahead of management expectations. At group level, its revenue amounted to £2,571.8m (2012: £2,423.8m). Its operating profit was £102.5m (2012: £110.2m) and its profit before tax was £86.2m (£94.2m).

Go-Ahead’s bus business revenue increased by 10.2% to £761.5m (2012: £691.3m) and a record operating profit of £78.2m (2012: £70.2m) was reported, which is up 11.4%. Its operating profit margin improved to 10.3% (2012: 10.2%). During the period, it purchased 11 residual TfL route contracts in Dagenham and 45 buses from First Capital East Ltd for a cash consideration of £0.7m.

In Go-Ahead’s deregulated bus division, revenue was £337.6m (2012: £312.9m), up 7.9%. Passenger numbers increased by 3.1%, with acquisitions contributing 2% and like for like growth 1.1%. Operating profit was £37.9m (2012: £35.4m), a 7.1% rise. In its regulated bus division in the capital, revenue grew by 12% to £423.9m (2012: £378.4m), of which 6.5% was on a like for like basis and 5.5% was from the First Northumberland Park operation previously acquired. Operating margins increased to 9.5% (2012: 9.2%), although when adjusting for revenue and operating profit associated with Olympic games contracts of £5.6m and £1.6m respectively, the underlying margin was 9.2%. Investment in its bus operations will continue, according to the company, with a total spend of around £50m expected in 2013/14.

Group Chief Executive, David Brown, said, ‘I am very pleased with the Group’s performance this year. We are reporting a set of good results, slightly ahead of the Board’s expectations, and are progressing well towards our bus operating profit target. At the core of the Group is our bus division, which has performed exceptionally well in the year, delivering record operating profit of £78.2m, up 11.4%. Increasing our profits ensures that we can continue to invest in the business and improve service quality for our passengers. Once again, we have invested in our bus fleet, spending £45.3m on 251 new buses in the year. This improves customer satisfaction and helps drive growth in passenger numbers. Strong take up of our smartcard, ‘the key’, has continued with over 400,000 cards now in issue and our advancements in mobile-ticketing (m-ticketing) also helped to grow our bus business, generating over £1m of revenue in less than 12 months.’

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Go-Ahead’s £1m m-ticketing milestone

Go-Ahead has reached the milestone of generating over £1m in revenue with its mobile phone fare payment scheme, m-ticketing, in less than 12 months. The service enables passengers to instantly pay for and download tickets through their smart phones. To date Go-Ahead has recorded 65,000 of these transactions. It was first trialled at Go North East for six months, before being introduced at Plymouth Citybus, More, Bluestar and more recently Brighton and Hove Bus. It has proved to be particularly successful on student routes.

Group Marketing Director at Go-Ahead, Gillian Singh, said, ‘Over 45% of the apps downloaded by our passengers lead to a sale. It’s clear that m-ticketing as a retail channel is proving hugely popular and will continue to grow as more passengers realise how easy it is to use. It complements our philosophy of designing new retailing channels for passengers on the move, as well as the development of our recently launched fully responsive bus websites showing information in layouts that vary according to the device that accesses them. These websites mean we are starting to move away from the requirement to update both desktop websites and mobile sites with new content. Traditional ways of displaying timetables and routes have been fully redesigned and built with smartphone screens in mind.’

‘Go-Ahead is also launching responsive emails from its CRM database as over 53% of all emails sent are now opened on a mobile device, compared to 12% back in 2010. Responsive designs will make full use of our integrated bus and rail CRM database which enables us to retail to four million online passengers.’

Go-Ahead achieves IiP first time

Go-Ahead has achieved the Investor in People (IiP) standard at its first attempt. IiP is the UK’s leading people management standard, which specialises in improving business performance through an organisation’s people. The standard was awarded following an independent review involving the operator’s staff based at the company’s London and Newcastle offices. The feedback from the IiP independent assessor said the Group had a strong team spirit, with individuals trusted and empowered to take responsibility. Communication within the organisation was open and honest and the workforce engaged.

Go-Ahead’s Group Chief Executive, David Brown, said, ‘I am really pleased with this accreditation. Achieving the standard demonstrates that the initiatives we have introduced to improve workplace culture, communications and people development are all making a difference.’

Go-Ahead’s ‘continuing resilience’

Go-Ahead has reported a continued strong performance in its latest pre-close trading statement, covering the year ending 29 June 2013. The company’s deregulated bus operations outside London continue to perform well and it claims its expected revenue growth for the full year of 8% remains sector leading, whilst passenger journeys are anticipated to go up 3%, with greater increases in fare paying passengers continuing to be partly offset by weaker concessionary performance. The bus division is expected to benefit from a number of small cost initiatives in the second half of the year. Some of these have been delivered ahead of plan and it believes the division is now on track to deliver a better than expected result for the full year. Go-Ahead’s London operations continue to perform strongly despite the expected slower growth in the second half. Its revenue growth for the full year is expected to be 12.5%, with a total mileage increase of 8%.

Group Chief Executive of Go-Ahead, David Brown, said, ‘I am pleased to report continuing resilience across our operations. Both our bus and rail divisions have seen improved growth in passenger numbers in recent weeks, following the effect of adverse weather previously reported in the third quarter. Our bus division continues to trade well and is on track to deliver a better than expected result for the full year as we start to see the benefits of cost initiatives coupled with continued revenue growth. We are making good progress towards our target to organically grow bus operating profit to £100m by 2015/16. Whilst our overall expectations for the full year remain unchanged, we now expect a greater proportion of Group operating profit to come from the bus division.’