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Go-Ahead profits slump under poor Southern performance

The company behind Govia Thameslink Railway (GTR), the Go-Ahead Group, has today reported a slowdown in its operating profits partially due to strike action on Southern services.

Operating profits for the company slipped by 12%, from 162.6m in 2016 to 150.6m this year, with overall revenue standing at almost £3.5bn.

In its rail division, Go-Ahead’s operating profit also fell by 16.1%, slipping to £59.9m from £71.4m last year.

Two of the operators owned by Go-Ahead, Southeastern and London Midland, enjoyed increases in passenger revenue growth of 3.2% and 4.9% respectively.

But unsurprisingly, GTR, which oversees the beleaguered Southern services, was Go-Ahead’s poisoned chalice, as passenger revenue growth dropped significantly by 4.1% since 2016.

Similarly, Southeastern profits increased by 0.3% and London Midland profits grew by 2.9% from 2016, but GTR made £86.2m less than it did in 2016 – a 6.1% drop.

The decrease in overall profit is still less than the figure Go-Ahead reported in February earlier this year, when it blamed GTR’s poor performance for a huge 35% dip in profits.

In a statement, CEO of the Go-Ahead Group David Brown apologised to Southern passengers for the months of disruption and explained that services were steadily improving.

“We apologise to our Southern passengers who have been inconvenienced for many months by disruption caused by industrial relations issues,” he said.

“Service levels are beginning to improve but there is still a lot of work to be done to provide the level of service we and our customers expect. Our primary aim is to improve the experience for our passengers and we are resolute in this commitment.”

Brown also explained that with the UK rail network rapidly turning into one of the busiest in the world, significant investment was being made in areas such as the Thameslink Programme to improve services and capacity on routes affected.

“Unfortunately, as with any large-scale improvement programme, some disruption is inevitable before the long-term benefits to improve the daily journeys of hundreds of thousands of people are delivered,” he continued.

“Go-Ahead plays a vital role in building a thriving economy and connecting communities. By providing essential bus and rail services, we help people connect with each other and get where they want to go.”

Today’s news follows London Midland losing the contract to run the new West Midlands franchise to Abellio JV last month.

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Jerry Alderson   08/09/2017 at 13:04

Before people slam the company for making any profits at all, it's worth remembering that it is a bus and train company. Buses are bought out of profits. If they didn't make a profit they couldn't replace or buy buses.

Andrew Gwilt   09/09/2017 at 17:27

I still think that Southern should of been stripped from its dreadful franchise to operate its own franchise if GTR were to lose the Southern franchise (TSGN) to either Abellio, Trenitalia, Stagecoach, First Group, MTR or others that they could take over the Southern franchise (including Gatwick Express). And only allow GTR to manage with Thameslink and Great Northern (TGN) instead. And to order new trains to replace the Class 455's and Class 313's that are ageing. As Thameslink has got Class 700's as Class 319's have moved north and Class 377/5's have been transferred to Southeastern and Class 377/2's back to Southern. Gatwick Express has got Class 387's. Southern has got Class 377's which they will still keep but to replace the Class 455's and Class 313's with new trains. And Great Northern has Class 387's cascaded from Thameslink aswell using Class 700's and are to ordering the Class 717's to operate on the Moorgate service and Hertford North loop route. Which they will replace the Class 365's and Class 313's.

Andrew Gwilt   09/09/2017 at 17:32

Plus Great Northern Class 387's have replaced the Class 317's and Class 321's which they have been transferred to Greater Anglia and some Class 321's have been transferred to Scotrail.

Mark Hare   11/09/2017 at 11:04

Andrew - and if Southern were 'stripped from its dreadful franchise' (sic) and someone else took over then it would still be the same drivers driving the trains with the same issues, do you not understand that? And stop listing random trains and TOCs, it's totally irrelevant to this article and frankly rather tiresome.

Mikeb   11/09/2017 at 16:45

@Mark Hare. Andrew is obviously a keen railway enthusiast with a particular interest in the different classes of trains and which TOCs operate them. His posts have been the same for years and, whatever you say, he will not change.

Andrew Gwilt   27/09/2017 at 07:06

I guess that you got bored of my comments. So I care. Ignore me on what I’m saying.

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