SHARES in Go-Ahead Group, the UK transport company that has secured contracts to operate bus services in Dublin and to counties including Laois, Offaly, Kildare and Meath, soared as much as 18pc yesterday on the London stock exchange after full-year results were ahead of expectations.
The surge in its share price was despite the group’s pre-exceptional operating profit tumbling almost 10pc to £135.9m (€151.2m) in its last financial year.
It reported that it made an exceptional gain of £25m (€27.8m) after recognising a non-cash reduction in its pension liability of £35m, but taking a £10m impairment on its regional bus services.
Go-Ahead’s operations in Dublin are due to commence this weekend with one route.
All 24 bus routes for which it has a contract around the city will be operated by Go-Ahead by January 20.
Its services between Dublin and commuter towns in surrounding counties are also due to begin next year.
Revenue at the company was flat at £3.46bn (€3.85bn) in its financial year that ended in June.
The company said pre-exceptional operating profit at its bus operations edged slightly higher to £91.4m (€101.7m) in its last financial year.
A challenging regional bus market in the UK was offset by a stronger performance at the group’s operations in London.
It said that the number of bus journeys undertaken on its services in regional England fell by more than 2pc, as a result of local authority cuts, congestion and changes in consumer behaviour. In London, Go-Ahead is the largest bus operator with just under a quarter of the market in the English capital.
But even there, passenger demand is decreasing, with more people working from home and increased online shopping impacting passenger numbers, according to the company.
Bus services accounted for roughly two-thirds of Go-Ahead’s profits in its last financial year, with rail contributing the remainder.
Profits at the rail division fell almost 26pc as its London Midland franchise expired at the end of last year.
Go-Ahead said that its international expansion is a significant part of its strategy.
It has bus contracts in Singapore, and offers rail services in Germany.
“We remain on track to meet our target of generating 15pc of 20pc of group operating profit from international operations by 2022,” said chief executive David Brown.
The company added that mobilisation of its first contract in Ireland to operate bus services in the outer Dublin area is progressing well.
“Similar to the structure of bus contracts in London and Singapore, this contract will run for five years with a possible extension of two years,” according to the company, which has provided bonds totalling €8m in favour of the National Transport Authority of Ireland to support its bus operations here.
The company, which has a new bus depot in Dublin, is investing about €8.5m in its Irish arm, and will have created 425 jobs here by the end of the year.