Shares in Go-Ahead Group were up on the FTSE 250 in morning trading after the transport company reported a fall in full year profits, but a rise in revenue.
In the full year to 3 July revenue at Go-Ahead was reported as rising 0.7 per cent to £2.2 billion, while operating profit fell 20.8 per cent to £102 million and pre-tax profit dropped 24.4 per cent to £88.7 million.
Net debt was reported as falling three per cent to £88.3 million, while the group said it would be holding its dividend at 81.00 pence per share.
During the year Go-Ahead said that it had reached over a billion passengers for the first time in its history, helping to deliver revenue growth in its bus and rail companies.
Sir Patrick Brown, Chairman of Go-Ahead Group, said, "We are pleased with the progress we have made this year in challenging economic conditions. All of our bus and rail operations have increased passenger revenue, highlighting the quality and value for money of our services.
"We have sold most of our aviation services division and started our yellow school bus joint venture in North America. We have also acquisitively grown our bus operations in the UK, leading to more than one billion annual passenger journeys on our bus and rail operations for the first time in our history. We are working closely with the new Government and welcome its review of future rail franchising announced in July 2010. In summary, we are in good financial shape and continue to believe in the fundamental strengths of public transport.
"However, we continue to be cautious on the near term prospects for the UK economy and the outlook for the next financial year remains difficult to predict, including any impact from the Government's Comprehensive Spending Review expected to be announced in October 2010.
"At this stage, we have not changed our outlook for the next financial year since our trading update in June 2010, and are assuming that the broad operating trends experienced in the second half of the financial year ended 3 July 2010 continue throughout the next financial year. In bus, we therefore expect lower fuel costs and a small additional contribution from acquisitions to be partly offset by the full year effect of lower operating profit* margins in London. In rail, we expect a small reduction in operating profit margin next year compared to the financial year just ended. We will continue to take management action accordingly, focusing on service quality, cost control and financial discipline.
"Our cashflow, balance sheet and financing are strong and the maintenance of the dividend per share will remain a priority. We have started the new financial year well and trading has been in line with the Board's expectations."
By 11:20 shares in Go-Ahead were up 5.42 per cent on the FTSE 250 to 1,147.00 pence per share.