Go-Ahead profits hit by Southern strikes

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Southern Rail trainsImage source, AFP

Shares in transport group Go-Ahead have dived 15% after it warned full-year profits would be lower than expected because of strikes at Southern rail.

Go-Ahead, which owns 65% of Southern's operator Govia Thameslink Railway (GTR), said half-year profits from its rail business had fallen 35%.

GTR has been in dispute with unions over driver-only operated trains, leading to a series of strikes.

Go-Ahead said it was talking to unions to try to resolve the issues.

Group chief executive David Brown said: "We have faced lengthy and significant industrial relations issues related to the modernisation of working practices.

"Our customers have suffered months of disrupted travel, impacting work and family lives and we are sorry that such inconvenience and hardship has been caused. Discussions with trade unions are ongoing as we strive to reach a full resolution of these issues," he added.

Go-Ahead said profits at its rail division had fallen to £26.9m in the six months to 31 December, although its Southeastern and London Midland rail franchises had "delivered good results".

Across the group as a whole profits dropped 11.7% to £67m.

The company added that "the long-running industrial relations issues in GTR have introduced additional costs and delays to expected efficiencies which will result in lower than anticipated profits in the full-year".

Go-Ahead also said profits at its bus operations, which saw a "robust financial performance" in the first half of its financial year, would be hit by a slowdown in the number of passengers, particularly in the northeast of England and Oxford.