Changes in lifestyle and working patterns are suppressing travel


David Brown: ‘There is a whole range of issues’


Go Ahead-Group has highlighted the impact of changing travel patterns across the UK on transport companies’ finances in its half-year results.

Despite patronage falls at the group’s regional bus division and Southeastern rail franchise, half-year operating profit rose 19% to £86.9m on revenue up 6.6% to £1.8bn. However, the increase was largely due to asset sales from the London Midland rail franchise to incoming operator Abellio and early settlement of a contractual payment from the Department for Transport to Govia Thameslink Railway.

At the regional bus division, operating profit fell 3.2% from £25.3m to £24.5m as like for like passenger numbers fell 1.2%. At the Southeastern rail franchise operating profit fell by £6.4m as patronage fell 0.9%.

In both cases, Go-Ahead chief executive David Brown said the businesses had been affected by changes in lifestyle and working patterns.

There are socio-economic changes taking place across the whole of passenger transport in the UK

“There are socio-economic changes taking place across the whole of passenger transport in the UK,” he said. “Some of that is people working from home, some of that is people Skyping, some of that is the nature of the work people do that is going to be more part time… There is a whole range of issues and on buses, across every operator, some discretionary journeys will not now take place.”

Actions to protect the profitability of the group’s core business during the six months included reducing regional bus mileage by 2.8%.

Group investigates Mobility as a Service

Go-Ahead Group is investigating new business areas that reflect people’s future travel expectations. Presenting the group’s half-year financial results this week, chief executive David Brown revealed that his colleagues had started “investigating a variety of true Mobility as a Service offers in the cities we operate in” which would “provide sustainable answers to mobility”. It has also bought a 12% stake in Frankfurt electric car sharing partnership Mobileeee as “a low cost entry into understanding journeys between different modes”.

Meanwhile, finance director Patrick Butcher outlined further details of the group’s international expansion plans following its breakthrough into the German rail and Singapore bus markets. He told City analysts that Go-Ahead is currently bidding for the first of six rail franchises that the Norwegian government plans to let, intends to bid for four German rail contracts per year, and that the Singapore government plans to let a further two bus contracts per year over the next seven years. In addition, Go-Ahead is assessing contract opportunities in Sydney.

Butcher said the target is to win one in four contract bids in order to achieve the previously-announced ambition of making 15-20% of operating profit from overseas businesses within five years (PT168).


This article appears in the latest issue of Passenger Transport.

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