Transport group Go-Ahead powered to the top of the mid-cap leaderboard on Thursday morning when it announced strong growth and announced a target to organically grow bus operating profit to £100m by 2015/2016. The shares jumped 5.7% to £13.62.
The company said it would continue to operate in the UK rail market despite the flaws discovered in the bidding process as a result of the west coast mainline fiasco. Chief executive David Brown said: "We remain committed to operating in the UK rail market."
Revenues from its bus services within London shot up 21% in the first quarter, and 14% excluding the impact of the Olympics. Outisde London, revenues grew by 9%, and 5% excluding acquisitions. Although the Olympics resulted in additional passenger rail revenue, the company said that would have a negligible impact on profits.
Gert Zonneveld at Panmure Gordon wrote:
In the short term we remain cautious, due to the challenging economic environment, potential disappointment in divisional rail earnings and the fact that the rail re-franchising process has been suspended.
He retains a hold rating on the stock.
