23 October 2008
At the Annual General Meeting to be held later today, Sir Patrick Brown, Chairman of Go-Ahead, will make the following Interim Management Statement for the period from 29 June 2008 to 22 October 2008:
The Group's trading in the first quarter has remained in line with the Board's expectations.
On a like-for-like basis and compared to the same quarter last year, our bus division achieved high single digit revenue growth in both our regulated London operations and our deregulated operations. The number of passengers using our deregulated services continued to increase at a similar rate to the 2.9% achieved last year. This was led by additional concessionary passengers and was achieved despite the poor summer weather. We are maintaining tight control over our costs and continue to make good progress with the recovery of increased fuel costs through a combination of fare increases and consumption efficiency. Our fuel costs are fully hedged for the current financial year at an average of 43p per litre. During the period we were awarded the five year Oxford Brookes Bus contract which starts in July 2009.
Overall demand continued to grow in our rail division, which we operate through our 65% owned subsidiary Govia. We achieved double digit increases in like-for-like passenger revenue compared to the same quarter last year in both our Southern and Southeastern franchises. In our new operations, our London Midland franchise continued to deliver strong growth whilst our Gatwick Express services, which became part of our Southern franchise in June 2008, saw some softening in demand as a result of the reduction in aviation traffic at Gatwick airport. We are well underway in the bidding process for the Southern franchise renewal in September 2009. Final bids are due in February 2009 and selection is expected to be announced in May 2009.
This division has performed in line with our expectations in challenging conditions. Our restructuring plans, initiated last year, have largely offset volume reductions in both ground handling and cargo. We have now completed our exit from ground handling at Gatwick. We are working closely with our customers to manage the impact of the flight reductions for the winter schedule, which started in October, and our credit exposure to recent airline failures has been limited to £0.4m. Our Meteor parking operations performed well in the quarter.
We have made a good start to the year and the Group's trading in the first quarter was in line with the Board's expectations. Our balance sheet and cashflows remain strong. Our financing is secure through to 2012 and we will maintain our progressive dividend policy. Whilst the impact of recent economic events on future demand for our services is uncertain at this stage, current demand is robust. We will continue with our focus on service quality, cost savings and financial discipline."
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Keith Ludeman, Group Chief Executive and Nick Swift, Group Finance Director will be hosting a conference call for analysts at 8.00am today. Please contact Weber Shandwick Financial for dial-in details. Please dial into the conference call a few minutes before the start time.
For further information, please contact:
Weber Shandwick Financial
Terry Garrett / Rachel Martin / Clare Perks
020 7067 0446
Notes to Editors
Go-Ahead is one of the UK's leading providers of passenger transport services operating in the bus, rail and aviation services sectors. Employing over 27,500 people across the country, around 920 million passenger journeys are undertaken on our services each year. In addition to the travelling public, customers include the Department for Transport (DfT), Transport for London(TfL), local authorities, British Airports Authority (BAA) and major airlines.
Go-Ahead is one of the UK's largest bus operators. With a fleet of over 3,400 buses, we carry, on average, around 1.6 million passengers every day. Our operations are focused on high density commuter markets. We have a strong presence in London, with around 20% market share, where we provide regulated services for Transport for London(TfL). We operate deregulated services in the north east; Oxford; the south east and southern England.
The rail operation, Govia, is 65% owned by Go-Ahead and 35% by Keolis. It is the busiest rail operation in the UK, responsible for nearly 30% of all UKpassenger rail journeys through its three rail companies: Southern (which includes the Gatwick Express), Southeastern and London Midland. The Southeastern franchise will include the operation of new high speed trains on the domestic Channel Tunnel Rail Link into St Pancras International from 2009, significantly reducing current journey times.
The Group's aviation services division is one of the UK's largest providers of cargo services (primarily Plane Handling), ground handling (primarily Aviance UK) and car parking (Meteor). The division operates from 16 airports and services major airline operators such as British Airways (BA), Virgin and bmi. Market leading services within Meteor include 'Meet & Greet' and 'Pink Elephant' services.