The Financial Week Ahead – Getting back on track.

In the wake of last year’s Paddington rail disaster the value of the Go-Ahead Group – the train operator that runs the Thames train involved in the crash – fell to a level half that of just three months before. But the hit to rail industry confidence was only partly to blame. In the age of soaraway Internet stocks, the dive in value of the company’s market capitalisation to £250m by December was also blamed on investors’ growing disinterest in defensive shares like transport. Today’s announcement of the company’s interim results by group finance director Ian Butcher will set out how the company plans to take its rail and bus operations forward. Investment in safety and, more particularly, investment to improve quality across its services will dominate. With nine subsidiaries in the UK and partnerships in Europe, Go-Ahead is one of the UK’s largest public transport providers. Through subsidiaries including Thames and Thameslink trains, it transports more than 400 million passengers each year. It has come a long way since it was formed from a management buy-out of the state owned Northern bus company, prompted by the deregulation of Britain’s bus services in 1987. Prior to joining the Go-Ahead management team in 1996, Butcher spent 13 years in a range of industries at group FD level, the last eight of which were with plcs. Before that he spent 12 years with KPMG in corporate finance, insolvency and audit at home and abroad. After the results announcement Butcher will resume talks over franchise renewals – first Thameslink and then Thames Trains. Renewal will enable the company to invest more heavily in services, an area that is crucial to the company, as Butcher recognises. ‘The main issue on investment is increased capacity and improved quality,’ he says. For the future the group hopes its acquisition of Metrobus will consolidate its strength in the south east. It also has plans to target aviation services set for growth at Heathrow, Gatwick and Stansted.

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