UPDATE 1-Go-Ahead buoyed by growing bus profits
LONDON, Sept 5 (Reuters) - British transport group Go-Ahead reported forecast-beating profits on Thursday as new payment systems helped to boost income at its bus business, making up for a slump at its rail division where franchise payments increased.
The bus and rail operator said full-year pretax profit was 86.2 million pounds ($134.72 million) during the year, down 8 percent but ahead of the average 83.2 million pounds forecast in a Thomson Reuters poll of 14 analysts.
Go-Ahead said operating profit at its bus division, which runs some of London's famous red buses as well as services across Britain's regions, rose 11.4 percent to a record 78.2 million pounds, helped by the introduction of new smartcard payment systems and mobile ticketing.
This puts the division in a strong position to hit an operating profit target of 100 million pounds by 2015/16.
"Go-Ahead's bus unit successfully absorbed around 20 million pounds of fuel-related cost pressures and achieved growth after steering for flat profit earlier in the year ... it looks well placed to progress towards its operating profit target by 2016," said Jefferies analyst Joe Spooner.
Go-Ahead shares were up 4 percent at 1551 pence by 0840 GMT, valuing the group at around 660 million pounds.
The firm, which also operates the Southern, Southeastern and London Midland rail services, said profit at its rail unit fell 39 percent to 24.3 million pounds during the year as franchise payments to the UK government rose by 85.9 million pounds.
Go-Ahead, which was forced to withdraw from a competition to run London's Docklands Light Railway services after its French joint venture partner Colas Rail pulled out, is bullish about its chances to win the upcoming Thameslink and Crossrail franchises, for which it is short-listed.
"Rail performance has become more challenging as the assumptions set out in the franchise bid no longer reflect the current economic conditions," said Chief Executive David Brown.
"However, the bus business saw a strong uptake of the smartcard payment system outside London, which has generated about 1 million pounds of revenue in less than a year, and advances in mobile-ticketing."
The company maintained full year dividend at 81 pence and said its new financial year had started well.
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