Go-Ahead vows to increase profits and summarize dividends in strategy overhaul



Transport group Go-Ahead has pledged to resume payouts to shareholders and increase earnings as part of a business overhaul, as it recovers from the pandemic and a recent scandal over the Southeastern rail franchise.

The firm said it will return to its pre-pandemic shareholder dividend policy from 2021-22, turn around under-performing businesses, and expand into growth areas, following a group-wide business review.

It wants to look at possible acquisitions in international bus markets as well as explore new urban so-called mass transit modes, such as metro, light rail and bus rapid transit.

The plan, led by chief executive Christian Schreyer, aims to increase annual revenues by about 30% to £4 billion and operating profits to at least £150 million.

It comes just weeks after its joint venture Govia, a tie-up between Go-Ahead and French firm Keolis, was fined £23.5 million over the Southeastern franchise scandal.

The Government stripped Govia of the franchise last October for a serious breach of contract after it deliberately concealed more than £25 million of historic taxpayer funding relating to High Speed ​​1, which should have been returned.

The penalty came on top of £64 million the Department for Transport is recovering from Govia in relation to the breach of its franchise and other costs.

The saga led to the firm’s shares being suspended from the London Stock Exchange as accountants needed more time to work out what impact the problems would have on the company, causing a lengthy delay to its 2020-21 results.

In Tuesday’s business strategy announcement, Go-Ahead sought to appease investors with aims to restart paying out between 50% and 75% of underlying earnings per share from this financial year, with plans for a payout of at least 50p for the year to July 2 .

See also  Ukraine-Russia: Zelensky: Attacks on civilians demonstrate 'evil that has no limits'

As well as new expansion plans, it wants to grow in current markets, in particular the UK regional bus market.

Shares jumped 8% in early trading on Tuesday.



Go-Ahead’s core strength is in commuter transport and we see opportunities to grow by encouraging people to leave their cars at home, by winning new contracts and through carefully selected acquisitions

Go-Ahead chief executive Christian Schreyer

Mr Schreyer said: “Transport is at a tipping point as we recover from the Covid-19 pandemic.

“The importance of mass transport is growing, reflecting trends in climate change, digitalisation, urbanization and demographics around the world; and there are increasing opportunities for private operators to bring their expertise to public transport markets.

“Go-Ahead’s core strength is in commuter transport and we see opportunities to grow by encouraging people to leave their cars at home, by winning new contracts and through carefully selected acquisitions.”

Transport expert Alex Paterson, at Peel Hunt, said the new financial targets are “significantly above our forecasts”, with Go-Ahead’s business strategy set to deliver “improved growth, margins and shareholder returns”.


www.independent.co.uk

Related Posts

George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

Leave a Reply

Your email address will not be published.