GO-AHEAD Group — which includes train companies London Midland, Southern and Southeastern in its Govia joint venture — has surprised the financial markets with a better-than-expected result for the past year.

The company said on 3 September that adjusted pre-tax profit fell 14.5 percent to £112 million pounds for the year ended 27 June 27, but revenue increased 6.7 per cent to £2.35 billion — primarily due to a full year of income from the London Midland franchise and from Gatwick Express, which became incorporated in Southern operations during the year.

Analysts were expecting pre-tax profit of £110 million, according to the Reuters agency.

Go-Ahead’s chairman, Sir Patrick Brown, said: “We have not changed our overall view on the outlook since our trading update in June 2009. We believe we are well placed for the year ahead, although we continue to assume economic conditions in the UK will remain difficult over the next twelve months.”

He added: “Our rail operations should deliver a good level of profitability in the year ahead, albeit below the level achieved to June 2009.
“Our aim is to supplement the expected modest growth in underlying passenger revenue with additional revenue from our new high speed rail services in Southeastern, initiatives in our new Southern franchise and comprehensive cost control across all three franchises.”

He said Go-Ahead’s strategy remains to provide high quality public transport services in the UK, “targeting organic growth through the economic cycle and from value-adding capital investment and acquisitions.”

· Go-Ahead has announced a £5 million deal to buy rival Arriva's bus operation based in Horsham, West Sussex. The newly-acquired assets will operate under Go-Ahead’s Metrobus brand which provides services in Sussex, Surrey and Kent.