By Rhys Jones
LONDON (Reuters UK) - Transport groups Go-Ahead (GOG) and Arriva (ARI) said revenues were growing steadily across their bus and rail operations but were cautious on 2010, predicting the economic climate would remain tough.
Shares in Go-Ahead were up 2.2 percent at 1,402 pence by 10:50 a.m. British time, while Arriva shares were 2.5 percent higher at 448.8 pence.
Go-Ahead, which is the largest bus operator in London, said on Thursday first-quarter revenue growth was slightly ahead of its expectations at its bus business as passenger numbers rose, primarily due to concessionary fares schemes.
Arriva said its bus revenues grew 4.9 percent in the nine months to the end of September and that consistent growth had resumed at its CrossCountry franchise, which runs between Aberdeen in Scotland and Penzance in southwest England.
Astaire analyst Douglas McNeill said Thursday's updates showed that both companies' bus businesses were "relatively steady" and that Arriva's CrossCountry unit had delivered a "rare ray of sunshine."
Go-Ahead, which operates its commuter rail franchises through majority-owned joint venture Govia, said the performance at its Southern and Southeastern rail franchises had been steady.
However, it said the cost of changes to its London Midland trains business would offset the underlying profitability of the franchise in the current financial year.
Arriva, which operates transport groups in 13 different countries around Europe, said train revenues grew 1.3 percent in the 42 weeks to October 24 and sales at its mainland Europe division rose 7.6 percent in the nine months to end-September.
"People have been too pessimistic on rail this year -- the situation is not as bad as people think," said Arbuthnot analyst Gerald Khoo.
Both companies said they had bought the majority of their fuel requirements for next year at fixed prices but were wary of challenging economic conditions in 2010.
Arriva said its ongoing cost reduction measures would help it "meet the challenges posed by economic conditions" in 2010, while Go-Ahead said it had not changed its expectations for the full-year despite the tough outlook.
(Editing by Paul Sandle/Will Waterman)
