Shares digital

Go-Ahead (GOG) – Interims PTP: £45.2m (£46.9m) Divi: 25.5p (23p)

Taxable profits slipped 3.6% to £45.2 million, dragging shares in the transport company down 15% to around £19. Despite strong demand for its bus and rail services, the fall in profits came on the back of an exceptional charge of £8.2 million against the carrying value of its Go West Midlands bus operations, now under review. The group’s bus division is likely to be hampered by increased fuel costs, while the company also cautioned that in its rail division, reduced subsidies and increased profit share are expected to result in a full-year operating profit below last year. Some analysts also refer to the expiry of Go-Ahead’s Southern rail franchise next year as posing another risk. However, finance director Nick Swift remains upbeat, pointing out that underlying trends are good and believing higher fuel costs may prompt some car owners to turn to public transport.

Shares says: With a cautious outlook, the stock remains a hold.

by: Rachel Robson