Plymouth bus fares under review as operator reports 'solid' trading figures
THE introduction of smartcard technology is being credited for "solid" trading at the transport giant which bought Plymouth Citybus – but it warned it will be reviewing fares.
The Go-Ahead Group Plc, which paid £19million for Citybus in December 2009, said its third quarter, from January to this week, has done nothing to dent predictions for its year end on June 30.
But it said it would have to look at pricing and cost efficiencies during the next quarter.
In February, the firm's half-year operating profit stood at £51.7million, with its deregulated bus sector, which includes Citybus, seeing year-on-year six-month operating profit fall of £500,000 to £18million.
Business Cards From Only £10.95 Delivered www.myprint-247.co.ukView details
Our heavyweight cards have FREE UV silk coating, FREE next day delivery & VAT included. Choose from 1000's of pre-designed templates or upload your own artwork. Orders dispatched within 24hrs.
Terms: Visit our site for more products: Business Cards, Compliment Slips, Letterheads, Leaflets, Postcards, Posters & much more. All items are free next day delivery. www.myprint-247.co.uk
Contact: 01858 468192
Valid until: Friday, May 31 2013
In an interim management statement, Go-ahead said passengers continue to take advantage of "value for money" period passes and smartcards.
Last October, The Herald reported that since acquiring Citybus, Go-Ahead had invested more than £50,000 in new technology including upgrading websites to ensure easier access to information, and the introduction of on-line purchase of key cards, offering discounted weekly, monthly and annual travel.
The interim statement said bringing in smartcards had, "as expected", reduced the average yield per customer.
But the firm stressed the move had provided the opportunity for long-term growth.
However, Go-ahead also said that following the Government's decision to reduce funding through the Bus Service Operators' Grant, and as a result of increasing fuel prices, its bus companies will be reviewing fares and targeting cost efficiencies in the next three months.
The firm, which has acquired two bus companies and a depot since February, said the revenue of its bus operation, excluding London, increased by about four per cent and passenger numbers were up about three per cent, with stronger growth in fare-paying passengers being partly offset by recent a weaker concessionary performance.
But, due to the acquisitions in the bus division, year end net debt is expected to be higher than previously anticipated, at around £95million.
David Brown, group chief executive, said: "I am pleased to report continued growth in both our bus and rail divisions.
"In bus, our focus of operating in urban areas, predominantly in the South East, combined with our strategy of local management and marketing has continued to deliver growth.
"Our sector leading London bus business performed strongly in the quarter and we were pleased to announce the acquisition of the Northumberland Park depot in North London, demonstrating our long term confidence in this market."
The firm's rail division has also performed well, and it has been shortlisted for the Thameslink franchise.
The group said it remains in a good financial position with strong cash generation and a robust balance sheet.
Mr Brown said: "Whilst we continue to be cautious about the wider economic outlook, we remain confident that we will deliver a full year result in line with our expectations."