Go-Ahead to beat profit expectations

Transport giant Go-Ahead (GOG) is set to deliver full-year operating profit ahead of expectations as commuters abandon their cars in favour of public transport.

The FTSE 250-listed firm said that since the depth of the recession in 2008, it had enjoyed solid growth thanks to a combination of improving quality, better marketing of its services and the higher costs of motoring forcing the public on to buses.

Incoming chief executive David Brown, who will take over from Keith Ludeman on 5 July, said: "The business is trading strongly and has a solid foundation for the future. We aspire to be the premier quality transport operator in the UK, driving value for both passengers and shareholders."

The company;s deregulated bus division saw solid growth over the past year, with full-year passenger revenue expected to increase by over 4% on a like-for-like basis and passenger numbers to see growth of around 2%.

The picture is less impressive within Go-Ahead's regulated London businesses, with like-for-like full-year operating revenue likely to fall by 2%, although growth is forecast for next year following contract gains.

Meanwhile, the company's Southern rail franchise has continued to perform in line with bid assumptions, prompting it to anticipate like-for-like passenger revenue and number growth of around 9% and 3% respectively.

Southeastern also fared well during the year, with passenger revenue and numbers on track to hit 9% and 4% growth respectively, while London Midland's has continued to see an improvement in figures too.

But despite the strong set of numbers, Go-Ahead added that it remains "suitably cautious on the medium term wider economic outlook".