TIDMGOG
RNS Number : 2282H
Go-Ahead Group PLC
05 April 2022
5 April 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
Conclusions of Business Review
The Go-Ahead Group today announces the conclusions of a Business
Review headed by Group Chief Executive, Christian Schreyer.
The company will reinstate its pre-COVID dividend policy of
paying a dividend to shareholders equivalent to between 50% and 75%
of underlying earnings per share from FY22. The Board intends to
recommend a dividend of not less than 50p in respect of the year
ending 2 July 2022 (FY22) in line with this policy.
A presentation to analysts and investors will be given by
Christian Schreyer at 9.00am today (details below).
Highlights
New strategy: "The Next Billion Journeys":
Three strategic priorities have been identified, aimed at
delivering profitable and sustainable growth in existing and new
markets:
-- Performance improvement
o Enhance the basics by focusing on operational excellence,
particularly in performance management, standardisation of
processes and digitalisation
o Turnaround underperforming operating companies
o Reduce the zero-emission breakeven point to accelerate fleet
decarbonisation
-- Grow organically and externally
o Accelerate passenger recovery and increase modal shift
o Grow in existing geographies, notably the UK regional bus
market, maintain London market share and promote an attractive
model for Passenger Service Contracts in the UK rail market
o Replicate the successful London & International Bus
business model in selected international markets, exploring
partnership and acquisition opportunities where appropriate
-- Progress new opportunities by leveraging existing capabilities and resources
o Explore new urban mass transit modes such as metro, light rail
and bus rapid transit
o Accelerate in B2B, such as airport transport and rail
replacement services
o Explore new services within the mobility value chain with
existing capabilities and resources, such as zero emission
services, Mobility as a Service (Maas) operation and property
utilisation
Financial targets:
-- An increase in annual Group revenue to around GBP4 billion,
up by around 30%*, in the medium-term
-- An increase in annual Group operating profit to at least GBP150 million in the medium-term
-- Dividend payout between 50% and 75% of earnings per share beginning FY22
-- Adjusted net debt to EBITDA [1] maintained within the
existing target range of between 1.5 and 2.5 times
Following the business review, the Group has reaffirmed its
commitment to reduce carbon emissions by 75% by 2035.
*excluding recently discontinued operations
Christian Schreyer, Group Chief Executive, said:
"This is an exciting moment for Go-Ahead. My review of the
business has found fundamental strengths, and has identified areas
where we can deliver improvements and sustainable growth. We plan
to strengthen, digitalise and decarbonise our operations,
delivering greater profitability and stronger returns to investors
alongside improvements for our customers and communities.
"Transport is at a tipping point as we recover from the COVID-19
pandemic. The importance of mass transport is growing, reflecting
trends in climate change, digitalisation, urbanisation and
demographics around the world; and there are increasing
opportunities for private operators to bring their expertise to
public transport markets. Go-Ahead's core strength is in commuter
transport and we see opportunities to grow by encouraging people to
leave their cars at home, by winning new contracts and through
carefully selected acquisitions.
"Today, we've set ambitious, but deliverable, targets. It has
been a challenging two years for public transport but there is an
exciting future ahead for Go-Ahead."
The person responsible for arranging the release of this
announcement on behalf of the Group is Carolyn Ferguson, Company
Secretary.
END
Presentation and webcast:
A presentation for analysts and investors will be held at 9.00am
today at the offices of Investec, 30 Gresham Street, London EC2V
7QP. Presentation materials can be found at www.go-ahead.com.
A live webcast will also be available. To register, please use
the following link:
https://edge.media-server.com/mmc/p/c7v6zmeg
For further information, please contact:
Andrew Clark 07977 343846 communications@go-ahead.com
Go-Ahead
Go-Ahead is a leading public transport operator, connecting
communities through bus and rail services. Our purpose is to be the
local partner taking care of journeys that enhance the lives and
wellbeing of our communities across the world.
We employ more than 27,000 people across our bus and rail
businesses in the UK, Singapore, Ireland, Sweden, Norway and
Germany. In addition to the travelling public, our customers
include governments and local authorities. We are committed to
tackling climate change, poor air quality and social isolation.
Bus
Go-Ahead is one of the UK's largest bus operators. We run a
fleet of more than 6,000 buses across England and run a quarter of
London's buses for Transport for London. Outside London, we serve
high-density commuter markets in the North East, Greater
Manchester, East Yorkshire, Oxfordshire, East Anglia, the South
East and the South West of England. Internationally, we operate
buses in Singapore, Sweden and Ireland.
Rail
We operate rail franchises in the UK, Germany and Norway. In the
UK, we run the country's largest passenger contract, Govia
Thameslink Railway, comprising Southern, Gatwick Express, Great
Northern and Thameslink. This is managed through our 65 per cent
owned subsidiary Govia, which is 35 per cent owned by Keolis. In
Germany and Norway, our contracts are run exclusively by
Go-Ahead.
[1] On a pre-IFRS basis, in line with bank covenants
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END
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