Friday April 25, 11:48 AM
Sector movers: Bus and train groups buoyed by Go Ahead
LONDON (ShareCast) - Bus and rail operator Go-Ahead Group said it anticipates delivering full year performance in line with expectations and "significantly ahead" of the record results last year. The group said its bus division achieved
double digit revenue growth in the third quarter and anticipates a significant improvement in operating profit and margin for the full year. "While recent fuel price increases have been significant, fuel still represents a relatively small part of the cost base of our bus operations, at around 10%," said the group. It (Frankfurt: A0MLX5 - news) said it can recover the extra fuel costs through a combination of improved consumption efficiency and fare increases. In the rail division, underlying growth in passenger revenue in the quarter continued at a similar rate to the 13.2% achieved in the first half of the year. The trading update gave a lift to sector peers First Group and Stagecoach. Advertising firm WPP (LSE: WPP.L - news) said in the first quarter both operating margins and profitability were ahead of budget and last year. It said the group remains on course to achieve its margin objective of 15.5% for 2008. "We are in the process of compiling our quarter one full year revised forecasts, but early indications continue to show like-for-like revenues growing faster than 2007," it added. The group said first quarter growth reflected the continued steady overall economic environment, despite the uncertainty stimulated by the credit and liquidity crisis and slowdown in the United States. In the first quarter of 2008, reported revenues rose by 14.1% to £1.55bn. Revenues in constant currency were up 9%, reflecting the strength of the Euro overcoming the weakness of the US dollar against the pound sterling. On a like-for-like basis revenue growth was almost 5%. Whilst January and February were strong across the board March was slower "somewhat surprisingly" in Western Continental Europe, it said. Asia Pacific, Latin America, Africa and the Middle East, continues to be the fastest growing region with revenues up over 15%. North America, despite the talk of recession, remains strong with revenues up almost 10%, with like-for-like sales up 5%, said the group. On constant currency basis, Continental Europe was up over 5% and the United Kingdom remained the slowest growing region, with revenues up almost 5%.
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