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Go-Ahead Group lowers full-year profit outlook due to Southern rail strike
February 28, 2017 / 8:30 AM / 10 months ago

Go-Ahead Group lowers full-year profit outlook due to Southern rail strike

Feb 28 (Reuters) - British transport group Go-Ahead Group Plc said full year profits would be lower than it previously expected due in part to repeated strike action on Southern railways.

Go-Ahead, which owns 65 percent of Govia Thameslink Railway (GTR) that runs the Southern rail contract, reported an 11.7 percent fall in half yearly pre-tax profit on Tuesday.

The weaker profit outlook sent its shares down around 15 percent in early trade.

“Overall Group performance has been significantly impacted by a reduction in rail profitability due to losses from our GTR franchise, as a result of ongoing industrial action on Southern,” Go-Ahead said in a statement.

GTR’s passenger revenues fell 6.4 percent in the six months through December from a year earlier while the number of passenger journeys dropped 3.4 percent, Go-Ahead said.

“This is primarily due to the impact of industrial action on GTR’s Southern services. This disruption has significantly impacted customer satisfaction in the period, with Southern’s score particularly affected,” it said.

Go-Ahead’s full-year profit would also be hurt by a slowdown in bus passenger volumes in the northeast of England and Oxford, it said.

Its London bus business also faced challenges.

“Performance in our London bus business is in line with expectations for the full year although securing profitable growth in this market, as always, remains challenging,” it said.

Go-Ahead said its profit before tax fell to 67 million pounds ($83 million) for the six months through December 2016, from 75.9 million pounds, a year earlier. ($1 = 0.8050 pounds) (Reporting by Arathy S Nair in Bengaluru; Editing by Susan Fenton)

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