Go-Ahead shares in the red on bus issues

The price of shares in FTSE 250 passenger travel firm Go-Ahead Group (LON:GOG) has dropped by 2.55% to 2,220p (as 14:40 GMT) after the company warned that regional bus performance has been below expectations during the six months ending 28th December. London buses and rail performance were in line with guidance, with strong UK rail offsetting a rocky start to the company’s new German contracts.

CEO David Brown commented: “In regional bus, we continue to see growth in passenger journeys and our yield enhancement plans are beginning to deliver improvements. The integration of our new bus company in Manchester, combined with cost pressures in some areas of the business, has slightly lowered our expectations for this division’s financial performance for the full year.

“In our London & International bus division, all of our businesses are performing well and in line with expectations.

“I firmly believe in the fundamental strength of our bus business. Buses have a significant role to play in transforming the way people travel and in slowing the rate of climate change, improving air quality and easing congestion in our towns and cities. We continue to invest in the customer experience and were pleased to introduce the UK’s first tap on, tap off capped payment scheme outside London, on our buses in Brighton. Since launching in September, the number of journeys paid for using this method has grown to 25 per cent of all on-bus transactions.

“In rail, I’m pleased to see the continuation of strong performance across our UK operations, delivering some of the highest levels of punctuality and customer satisfaction ever seen on these networks. In October, GTR completed the introduction of its new fleet of 717 trains delivering greater capacity and reliability to our passengers with 1,500 new carriages brought into service since 2014.

“Internationally, mobilisation is well underway for new contracts that will begin in Norway, Germany and Dublin next month and we continue to consider bidding opportunities across our target markets“.