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Go-Ahead Group welcomes additional help for regional buses as profits stall

The government this week extended its regional bus support scheme beyond June

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Go-Ahead Group PLC (LON:GOG) has said it will make a small operating profit in the second half of this trading year while its liquidity has improved.

Operating profits for the year to June will be between £63-75mln the FTSE 250-listed group said in a statement on Friday, compared with £60mln in the first half.

The bus and train operator noted that it has been protected by guaranteed contracts with customers even though few passengers have been travelling during the coronavirus (COVID-19) lockdown.

In London, for example, Go-Ahead said it is running 75% of bus services but revenue remains at pre-COVID-19 levels.

Regional bus services have seen passenger numbers drop by 90%, it said, but it is running between 40-50% of normal scheduled mileage, which has created "a misalignment between revenue and our cost base".

The government this week extended its regional bus support scheme beyond June, a move welcomed by Go-Ahead, though details have not been released.

UK rail franchises have remained resilient, said Go-Ahead, though the German operation has been weaker than expected.

Go-Ahead added that it remains cash generative and expects to have around £200mln available in unutilised loan facilities and cash at the year-end.

David Brown, Go-Ahead’s chief executive, said: “The last nine weeks have been unlike any other, and I am extremely proud of how my colleagues across the business have responded, keeping vital services running for other key workers and increasing service levels to provide safe travel as people return to work.

"We are pleased that governments have recognised the importance of essential public transport networks. By providing financial support they are enabling the delivery of vital transport links for key workers and supporting the recovery of our communities.”

Quick facts: Go Ahead Group

Price: 1135 GBX

LSE:GOG
Market: LSE
Market Cap: £490.06 m
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