Half year results for the six months ended 27 December 2014

Overall results in line with management expectations

Business overview

  • Overall results in line with management expectations. Full year expectations are unchanged
  • Bus operating profit up 8.4% to £45.1m, in line with strategic target
  • Rail operating profit down 2.9% to £10.2m, with margins reducing to 0.9%. Contribution to the Government increased to £108.2m
  • Challenging start to GTR franchise. Investment already underway to improve performance for passengers
  • Working with Network Rail to minimise disruption to rail passengers during major infrastructure projects, in particular the £6.5 billion Thameslink Programme
  • Proposed interim dividend increased by 4.3% to 26.6p (H1’14: 25.5p), in line with 2013/14 full year dividend increase
  • Shortlisted for Northern and TransPennine Express franchises. Exploring overseas bus and rail opportunities
  • Strong cashflow and reduction in adjusted net debt

Financial summary:

H1’15
£m

Restated*
H1’14
£m

Increase/
(decrease) 
£m

Increase/
(decrease) 
%

Revenue

1,558.7

1,370.0

188.7

13.8

Operating profit

55.3

52.1

3.2

6.1

Operating profit margin (%)

3.5%

3.8%

n/a

(0.3ppts)

Net finance costs

(8.4)

(8.6)

0.2

2.3

Profit before tax and amortisation

46.9

43.5

3.4

7.8

Profit before tax

44.7

40.3

4.4

10.9

Adjusted earnings per share (p) (see note 7)

75.6p

83.3p

(7.7p)

(9.2)

Proposed dividend per share (p)

26.6p

25.5p

1.1p

4.3

 

H1’15
£m

Restated*
H1’14
£m

Increase/
(decrease) 
£m

 

Cashflow generated from operations

250.4

120.3

130.1

 

Free cashflow

244.7

52.8

191.9

 

Net cash / (debt)

169.2

(70.5)

 

Adjusted net debt

(254.1)

(295.6)

 

Adjusted net debt/EBITDA (twelve month rolling basis)

1.47x

1.90x

 

Notes:

Unless otherwise stated, references made to operating profit throughout this statement exclude amortisation and exceptional items

* Restated for the reclassification of defined benefit pension scheme net interest expense from operating costs to finance costs

David Brown, Group Chief Executive, commented:

“I am pleased with the Group’s financial performance in the first half of the year, with overall operating profit of £55.3m.

“Through our regional bus operations, Go-Ahead has kept people in towns and cities across the UK moving over the last three decades and we have heavily invested in our operations over this time. In the last five years alone, we have invested over £170 million in our regional bus services. Our passengers have given us a record 92% satisfaction score, reflecting the importance we place on listening to our customers, delivering value and responding innovatively to their evolving requirements. We firmly believe that public transport is best delivered through working in partnership, with strong alliances between operators and local authorities.

“We believe that increased rail infrastructure investment is essential to improve services and we welcomed the Government’s £38bn programme of infrastructure investment last year. While an investment programme of this scale will deliver enormous benefit in the long term, it will inevitably result in disruption while infrastructure improvements are made. We acknowledge the significant effect this has on passengers and are working closely with Network Rail to minimise the impact of this disruption.

“Overall, the Board’s expectations for the full year results remain unchanged, with second half profits expected to be similar to those in the first half of the year for both our bus and rail divisions. The Group remains in a good financial position, with strong cash generation and a robust balance sheet supporting our progressive dividend policy and allowing flexibility to pursue value-adding opportunities.”

Ends

For further information, please contact:

The Go-Ahead Group
Sarah Boundy, Group Corporate Communications Director
sarah.boundy@go-ahead.com
www.go-ahead.com
07808 568 667

Go-Ahead

Go-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. Employing around 26,000 people acorss 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, or customers include the Department for Transport, Transport for London (TfL) and local authorities.