Plymouth Citybus' parent firm Go-ahead makes £37million half-year profit
THE transport giant which bought Plymouth Citybus made a £37.1million profit on its bus operations in just six months and carried more passengers including in Plymouth.
The figure was up 5.4 per cent and Go-Ahead Group, which paid £19million for Citybus in December 2009, said that growth was despite significant fuel costs.
The company has announced its interim results for the six months ended December 29, 2012, and reported "strong trading" in its bus division.
Go-ahead said overall results were in line with management expectations and it is on track to meet its bus operating profit target of £100million by 2015/16.
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Total bus revenue increased by 13.6 per cent, or £45.6million, to £381.3million during the second half of 2012, the group said.
But the total bus operating profit margin decreased by 0.8ppts to 9.7 per cent, as the bus business was faced with higher fuel costs and reduced bus service operators' grant (BSOG) receipts.
However, Go-ahead's deregulated operations, which includes Plymouth, saw an increase in passenger journeys.
These increased on a like-for-like basis by 2.7 per cent, resulting in like-for-like revenue growth of 4.7 per cent.
But this growth in fare-paying passengers was partly offset by a weaker concessionary performance.
About 90 per cent of the firm's deregulated revenue is generated from commercial services, limiting exposure to changes in local authority policies and budgets.
The group is also focusing more on "vibrant urban areas", although mainly in the South East, to protect it from "the challenges of the wider economic environment".
The group's regulated London buses saw passenger growth too and an "excellent performance" in delivering key Olympic Games transport services.
Go-ahead spent £28.3million in capital expenditure, including £18.7million on 100 new buses.
This was less than spent last year as fewer London contracts required new buses.
Go-ahead's rail division also reported "overall solid" revenue growth.
David Brown, Group Chief Executive, said: "I am pleased to report a good set of results for the first half of the financial year.
"Our focus on running high-quality, convenient services and our industry leading marketing strategy have continued to attract more passengers on to our value-for-money services.
"At the core of the group is our bus division and this performed very well in the period, despite significant fuel cost headwinds.
"The deregulated operations continue to benefit from our effective localised management structure and we have made good progress with our marketing plans, with over 120,000 passenger journeys a day now being made with our smartcard "the key".
"We continue to invest in our fleet and 100 new buses were bought in the period, almost half of which are carbon efficient hybrid vehicles.
"We have also introduced free wi-fi on many of our services.
"These good results underpin my confidence in our ability to achieve our target of £100m bus operating profit by 2015/16.
"Looking ahead to the full year, overall expectations remain unchanged. I
"We now expect a greater proportion of operating profit to come from the bus division."