Rail profits are expected to slide as growth in passenger numbers across its three franchises will not be sufficient to offset the reductions in net franchise subsidies from the government. Go-Ahead expects that first half operating profit will be broadly half of the first six months of last year's 34.9m.

First half operating profit from its buses will be slightly ahead of the first half of last year's £31.4m. In the regulated London bus operations, first half revenue growth is anticipated to be 6-7% and mileage to be up around 5%. Unregulated revenue will be up by 7%.

Aviation Services, most of which has recently been sold, will break even in the half, but there will be first half exceptional charges of around £41m (H1 2008/9: £58.4m), consisting of the impairment charge for aviation services of around £35m and around £6m of restructuring costs to date.

'At this stage of the year, we have not changed our expectations for the full year results. We continue to believe that the economic climate will remain difficult and we will take management action accordingly,’ Go-Ahead said.

'We expect our bus operations to remain strong in the second half of this year and to benefit from a full year of acquisition contributions, and a fully hedged reduction in fuel costs of around £6m, in the next financial year. In rail, we expect revenue growth before initiatives to be modest in the second half given the low fare increases in January 2010,'it added.

See also:

Go-Ahead Trades In Line; Rail Profit To Fall By Half

Wall Street Journal: DECEMBER 15, 2009
By Kaveri Niththyananthan

LONDON (Dow Jones)--Go-Ahead Group PLC (GOG.LN) Tuesday said it was trading in line with expectations but added profit from its rail division for the first six months of its fiscal year would be half of the GBP34.9 million posted a year ago because of reduced government subsidies.

The bus and rail operator said it continues to believe the economic climate will remain difficult and it will act accordingly, without giving details. It said it has not changed its expectations for the full year.

The company said its bus unit continues to perform well and now forecasts an operating profit for the 27 weeks to Jan. 2 ahead of the GBP31.4 million posted a year ago. London bus operations will grow between 6% and 7%. Go-Ahead added it expects first-half revenue at its deregulated bus operations to increase by 7% with passenger numbers increasing by about 5%.

It expects bus operations to "remain strong in the second half of this year and to benefit from a full year of acquisition contributions, and a fully hedged reduction in fuel costs of around GBP6 million, in the next financial year."

Fuel costs will increase by GBP2 million over the six-month period to Jan. 2, part of which will be recovered by increasing fares, it said.

First-half passenger revenue growth at its Southern and London Midland rail franchises will be 10% as passenger volumes increase between 3% and 4%. It expects Southeastern to grow 4% despite a 2% fall in passenger numbers. Revenue growth in the second half will be modest due to low fare increases planned for January 2010.

Go-Ahead's shares have fallen 14% over the past three months and closed Monday at 1271 pence.

See also:

Go - Ahead Sees H1 Rail Profit Down

New York Times: December 15, 2009

LONDON (Reuters) - Transport group Go-Ahead said first-half profit at its rail unit would be 50 percent down on last year due to reductions in government subsidies but that its bus business was performing well.

"We continue to believe that the economic climate will remain difficult and we will take management action accordingly," Go-Ahead's chief executive Keith Ludeman said.

"We expect our bus operations to remain strong in the second half ... in rail, we expect revenue growth before initiatives to be modest in the second half given the low fare increases in January 2010."

The company, which operates its commuter rail franchises through majority-owned joint venture Govia, expects operating profit at its rail unit to be broadly half the 34.9 million pounds it reported last year due to reductions in franchise subsidies from the government.

It added that passenger numbers were growing steadily across the rail business, however.

The firm, which operates bus companies and runs three London rail franchises, said first-half bus revenues would be 7 percent higher than last year but that its fuel costs for the year were hedged at 47 pence per litre compared to 43 pence last year.

Go-Ahead, which earlier this month sold its aviation services unit, said it would likely spend around 70 million pounds on acquisitions and investments in the full-year.

Go-Ahead is expected to report an average pretax profit of 81.16 million pounds for the year to the end of June 2010, according to a Thomson Reuters I/B/E/S poll of 13 analysts.

Shares in Go-Ahead, which have risen 20 percent in 2009, closed at 1271 pence on Monday, valuing the group at around 545 million pounds.