Go-Ahead shares plummet

Shares in Go-Ahead plummeted 395p to 1840 on Friday after the bus and train firm warned that annual profits will be lower than last year’s.

The Newcastle-based operator, whose Southern rail franchise is due to run out in September 2009, will also have to pay an increased profit share to the Department for Transport.

The company said diesel prices have been hovering around the 36p to 37p a litre mark since the start of the year, net of the discount that bus operators receive. At this price it is not economic for transport groups to buy ahead as a hedge against further increases.

However, a good performance from the bus division helped to lift underlying pre-tax profits for the year to end of December by over 14% to £58.3 million, after revenues increased 12.3% to £1.03 billion.

In the rail division, profits for the 6 months in rail increased £5.8 million to £31.4 million, with passenger revenues up by 12.9% on Southern and 13.4% on Southeastern.

Bus revenues rose 9.5% to £277 million. Over half the growth came from acquisitions, with profits up 15.4% to £33.7 million.

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