MARKET REPORT: Recovery puts Go-Ahead back on track to reinstate divi

MARKET REPORT: Recovery puts Go-Ahead back on track to reinstate divi 2
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MARKET REPORT: Recovery puts Go-Ahead back on track to reinstate divi as bus and train operator vows to increase profits

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Bus and train operator Go-Ahead is planning to reinstate dividends in the latest sign of its post-pandemic recovery.

The company is also vowing to increase profits as it bids to overhaul much of its strategy following a group-wide business review.

Shares in the company, down 60 per cent since the pandemic struck, rose 2.3 per cent, or 19p, to 861p.

Bouncing back: Go-Ahead is vowing to increase profits as it bids to overhaul much of its strategy following a group-wide business review

Bouncing back: Go-Ahead is vowing to increase profits as it bids to overhaul much of its strategy following a group-wide business review

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Go-Ahead has committed to returning to its pre-pandemic shareholder dividend policy from 2021-22 by offering at least 50p a share for the year to July 2.

And it aims to increase annual revenues by about 30 per cent to £4billion and operating profits to at least £150million in the medium term.

But topping a series of problems is removing the stain of the Southeastern rail franchise scandal.

It will not be easy to brush off. Southeastern, whose services run between London, Kent and East Sussex, is operated by Govia, a joint venture between transport operators Go-Ahead and Keolis.

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Last October the Government seized the franchise from Govia over disclosure failings regarding more than £25million of taxpayer funding since 2014 that should have been returned.

This was in addition to £64million the Department for Transport is recovering from Govia in relation to the breach of its franchise and other costs.

Go-Ahead’s shares were suspended by the London Stock Exchange following the saga which caused a lengthy delay to its 2020-21 results.

And Govia was fined £23.5million over the scandal.

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Stock Watch – Osirium Technologies

MARKET REPORT: Recovery puts Go-Ahead back on track to reinstate divi 3

Cybersecurity firm Osirium Technologies surged after enjoying record bookings.

The company, which has been AIM-listed since 2016, said its Privileged Security capabilities were in demand while customer wins continued to be strong in the NHS and higher education.

There was a return to pre-pandemic contract values, with five secured in the first three months of the 2022 financial year, each for more than any deal in 2021. 

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It rose 102.4 per cent, or 6.53p, to 12.9p. 

Steve Clayton, a fund manager at Hargreaves Lansdown, said that shareholders will be looking for ‘consistency’ after recent ‘poor execution’.

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The FTSE 100 rose 0.72 per cent, or 54.80 points, to 7613.72 while the FTSE 250 was up 0.13 per cent, or 27.09 points, to 21356.98.

The London Stock Exchange Group rose 2.7 per cent, or 220p, to 8360p after it agreed to buy the identity verification data company Global Data Consortium for an undisclosed fee.

One of the blue-chip index’s biggest risers was the National Grid – up 3.6 per cent, or 42p, to 1211p – while United Utilities rose 3.5 per cent, or 39p, to 1166p.

Also making a strong showing yesterday were the online review platform Trustpilot (up 3.3 per cent, or 4.8p, to 148.3p), cruise company Carnival (up 4.1 per cent, or 55p, to 1396.5p) and Baltic Classifieds (up 5.7 per cent, or 8.4p, to 155p).

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But Cambridge cyber security firm Darktrace plunged 5.9 per cent, or 26.4p, to 424.6p after JP Morgan dished out an ‘underweight’ rating, saying that higher customer acquisition and retention costs are likely to prove challenging. Homeserve was up 1.1 per cent, or 9.5p, to 874.5p after it hailed ‘very good progress’ in the 12 months to the end of March.

Ahead of full-year figures next month, the repairs firm said it retained 84 per cent of its customers last year and results would be ‘in line with expectations’.

Last month Homeserve became the target of a potential takeover after Canadian asset manager Brookfield said it was ‘considering a possible offer’.

Brookfield has until April 21 to state if it will make a formal offer.

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Online card retailer Moonpig cashed in on a successful Mother’s Day and strong demand over the winter, and upgraded its revenue expectations for the year to April 30 to around £300million. Moonpig had previously predicted revenues of about £285million.

It said trading was better than previously forecast on the back of ‘temporary’ changes in customer behaviour in late December and January, amid the rapid spread of Omicron. 

The stock fell by 4.7 per cent, or 11.2p, to 226.8p.

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