Transport company ‘cautious’ (From The Northern Echo)

Transport company ‘cautious’

9:52am Friday 3rd September 2010 in

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A TRANSPORT company that employs 2,000 people in the North-East said it remains cautious about its prospects for the year ahead, despite better-than-expected annual profits.

The Go-Ahead Group that operates the deregulated Go North-East bus service admitted the looming Government spending review ensured the outlook was “difficult to predict”, after it unveiled operating profits down on tighter margins.

Overall pre-tax profits fell 24 per cent to £88.7m with bus revenue down by almost eight per cent.

The group’s bus business runs a fleet of more than 650 vehicles across the North- East. Go-Ahead spent £37.2m on new acquisitions, including Arriva’s Hexham depot.

Cheaper fuel costs are expected to help the firm make savings of £7m a year and it is also involved in ongoing wage negotiations to drive down labour costs.

Alongside a fragile economy, Go-Ahead fears possible deficit-beating measures could include reduced Government support for the bus industry.

Commenting on the results that saw the company’s end of year performance £5m ahead of its own forecasts, chairman, Sir Patrick Brown, said: “We are pleased with the progress we have made this year in challenging economic conditions. All our bus and rail operations have increased passenger revenue, highlighting the quality and value for money of our services.

“We have acquisitively grown our bus operations in the UK, leading to more than one billion annual passenger journeys on our bus and rail operations for the first time in our history.

“We are in good financial shape and continue to believe in the fundamental strengths of public transport.

"However, we are cautious on the near-term prospects for the UK economy, and the outlook for the next financial year is difficult to predict.”

The group has jettisoned its unprofitable airport cargo and ground handling business, reducing its workforce from 27,177 to 22,570.