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Transport company Go-Ahead cautious despite price rises; RAIL PASSENGER NUMBERS UP BY 4%TO BOOS TREVENUES.

Byline: SION BARRY

TRANSPORT group Go-Ahead yesterday said it will make better-than-expected half-year profits as more passengers use its train services.

But the company remains cautious for the next six months despite pushing through inflation-busting price hikes in January.

The firm said revenues at Southeastern and Southern were up by 6% and at London Midland by 7% in the second half of 2010.

It now expects first-half operating profits to be in line with the same period last year, when it made pounds 19.9m, whereas it had previously forecast a drop in profits in the period.

Go-Ahead said the improvement reflected the performance of its rail division, largely due to procurement savings.

Rail providers across the UK are putting prices up by an average of 6.2% in January as part of the Government's plans to invest in the network. Some fares at Southeastern are going up by as much as 12.8%.

The firm, which runs its rail services in a joint-venture with French company Keolis, said passenger numbers were up 4% at Southern and London Midland.

Revenues increased at Southeastern as a result of high-speed services connecting parts of Kent with London, which started a year ago.

The Government allowed train operating companies to raise regulated fares, which include season tickets, in 2011 by 5.8% - one percentage point above retail price inflation of 4.8%.

Southeastern was allowed to raise its prices by 7.8%, or three percentage points above the inflation rate.

Its bus division, which operates services including Metrobus in Sussex, Plymouth Citybus and Oxford Bus Company, also put in a solid performance and should make better operating profits than last year.

The company's deregulated bus operations saw revenues and passenger numbers increase by between 3% and 4% in the period.

Its regulated London bus operation performed in line with expectations, with revenues 7% below last year due to changes in incentive-based contracts.

Despite the strong performance in the second half of 2010, Go-Ahead remained cautious in its outlook.

It said: "Our operations are proving resilient with continued passenger growth across our bus and rail operations.

"However, we continue to anticipate challenging economic conditions in the near-term and therefore believe it is prudent to maintain our full-year expectations as previously reported." Its rail business remains difficult to forecast, but it said all three divisions will be in profit in the first half of 2011.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Dec 15, 2010
Words:400
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