Our strategy and business model

Our vision will be delivered by our three strategic objectives

Protect and grow the core

Win new bus and rail contracts

Develop for the future of transport

The three pillars of our strategy help us build these relationships, providing great customer experience, controlling our costs and enabling us to invest for growth in the process. Through this strategy we aim to deliver excellent service to our customers, returns to our shareholders and value to all of Go-Ahead stakeholders.

Creating sustainable value

We create value for all our stakeholders through our
sustainable business model.

Our resources and strengths…

Our success is dependent on effectively using our key resources and strengths.

We work closely with our stakeholders which include customers, communities, strategic partners and suppliers, government and investors. These relationships are built on mutual understanding and trust, and on our commitment to engage with all our stakeholders to provide a high quality service.

We employ around 28,000 people whose work and dedication are key to the success of Go-Ahead. High levels of colleague engagement, job satisfaction and providing a safe, supportive working environment contribute to our performance. By creating a culture of excellence, we ensure we maintain a skilled and motivated workforce.

Our cash generative capabilities and a conservative level of net debt enables us to ensure that our business remains well funded and that we can continue to reinvest cash into operations, deliver returns to our providers of capital and take advantage of growth opportunities that emerge.

We operate over 5,000 buses and run 952 trains through a combination of outright ownership and leasing assets to take our customers to where they need to go in a safe and reliable manner. We continue to invest in our asset base and, in the last year, our capital expenditure amounted to £126.7m.

We have built our experience and reputation over 30 years of operating in transport markets. As a leader in the industry, we have substantial know how which includes our innovative technology and our forward thinking approach to developing solutions for the future of transport to enhance customer experiences.

…enable our business

Our key resources and strengths enable us to generate revenue through our three operating divisions: regional bus, London bus and rail.

Revenue and profit are generated through our three operating divisions in two main ways:

1.

The provision of transport services to fare-paying passengers, whose revenue covers the cost of service and a profit margin. Most bus operations in the UK outside London operate on this commercial basis.

2.

The provision of passenger transport services on behalf of public sector transport authorities. We tender for and operate contracts in two main sub-categories:

  • Gross cost contracts where our entire revenue comprises payments made by the transport authority to us with the authority retaining all fare revenue raised and therefore revenue risk. This includes the UK London bus market and the GTR rail franchise.
  • Net cost contracts where our revenue is a combination of income from fares and payments from transport authorities. Most UK rail franchises are run on this basis.

Good cost controls are vital in areas such as staff utilisation, fuel efficiency and negotiating and managing contractual relationships. Part of the Group’s core skill set is managing all of these areas without compromising safety or quality.

…to create value and outputs for our stakeholders

By running a profitable, sustainable and responsible business, we create value and deliver long term benefits to shareholders, passengers and communities.

91%

regional bus customer satisfaction score (2017: 90%)

We deliver high quality, locally focused services, enabled by our devolved structure, which ensures a better understanding of our customers and ability to respond to their needs. Through this, we have maintained our sector leading position on our regional bus customer satisfaction score.

66%

colleague engagement score (2017: 59%)

We strive to be a best in class employer by providing a rewarding work environment, offering market related compensation and rewarding performance. As a responsible employer, we are focused on colleague wellbeing, retention, training and development.

102.08p

full year dividend payment (2017: 102.8p)

By effectively managing the inputs to our business and executing our strategy, we create profits and cash returns which enable us to pay interest on our debt and to provide an attractive dividend to our shareholders.

£1.9bn

payment to suppliers (2017: £1.9bn)

The transport we provide helps to support economic growth. As a significant purchaser of products and services, our operations provide funds to suppliers. We manage this value chain to minimise risks and contribute to the efficient delivery of our services.

£28.7m

corporation tax payments to governments (2017: £34.1m)

We work closely with central and local government to shape policy and regulatory changes which enhance the future of transport and contribute to fiscal revenue through our tax payments.

0.70kg

carbon emissions per passenger journey (2017: 0.75kg)

We make a significant and positive contribution to the communities in which we operate, enabling communities to remain connected, and do so in a responsible way. We strive to reduce any negative impact our operations may have on the environment.