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Go-Ahead FY10 Pre-tax Profit Drops; Provides Cautious Outlook - Update

(RTTNews) - UK-based public transport company Go-Ahead Group Plc (GOG.L) Thursday reported a decline in pre-tax profit for fiscal 2010 hurt by higher operating costs, despite a slight rise in revenues. Looking forward, the group said it continues to be cautious on the near term prospects for the UK economy and the outlook for the next financial year remains difficult to predict.

Go-Ahead's profit before taxation for the year fell to GBP 50.4 million from GBP 90.9 million a year ago. Excluding special items, pre-tax profit profit slipped to GBP 88.7 million from GBP 117.3 million.

Profit for the year attributable to equity holders increased to GBP 17.2 million from GBP 6.3 million a year ago, on lower loss from discontinued operations and reduced income tax expense.

On a per share basis, earnings increased to 40.1 pence from 14.7 pence. Excluding exceptional items, earnings per share were lower at 135.1 pence compared with 152.3 pence last fiscal.

On a continuing operations basis, profit for the year was lower at GBP 35.5 million or 68.0 pence per share compared with GBP 58.5 million or 108.3 pence per share last fiscal. Excluding special items, earnings dropped to 128.3 pence per share from 161.6 pence per share.

Chairman Patrick Brown said, "We are pleased with the progress we have made this year in challenging economic conditions. All of our bus and rail operations have increased passenger revenue, highlighting the quality and value for money of our services."

Operating profit for the year slipped to GBP 63.7 million from GBP 102.4 million in the year ago period. Operating profit before amortisation and exceptional items dropped 20.8% to GBP 102.0 million for the current year.

Go-Ahead's revenues marginally rose to GBP 2.201 billion from GBP 2.187 billion last year. The increase, the company noted, was due to a reduction of GBP 194.3 million on a change in access charge regime subsidy and an underlying increase of GBP 208.7 million.

Segment wise, revenues from Rail division, which forms a major part of the Group's revenues, edged down to GBP 1.53 billion from GBP 1.55 billion last year. Margin for this segment declined to 2.4% from 4.0%.

Revenues from Bus division were higher at GBP 629.5 million versus GBP 584.7 million a year ago. However, margin for this segment was lower at 10.1% compared with 11.4%. At Aviation Services, revenues fell to GBP 34.3 million from GBP 50.5 million.

The company noted that the number of employees during the year fell to 22,570 from 27,177 last fiscal, on the disposal of the majority of its aviation services division.

The Board is proposing a final dividend of 30.0 pence per share to maintain the total dividend for the year at 81.0 pence. The final dividend is payable on November 19, to registered shareholders at the close of business on November 5.

GOG.L is currently trading at 1,104.0 pence, up 16.00p or 1.47%, on the LSE.