Foreign Owners Reap Dividends as Go-Ahead Group Resumes Payouts

Go-Ahead Group, the UK’s largest rail operator, has resumed its dividend payments for the first time since the pandemic, distributing over £80 million to foreign shareholders.

Recent corporate filings reveal that Go-Ahead has paid £58 million to shareholders based in Spain and Australia, alongside an additional £26 million to its joint venture partner Keolis, a subsidiary of the French state-owned SNCF.

This company, which also ranks as one of Britain’s leading bus operators, was purchased by Kinetic, an Australian firm, and Globalvia, a Spanish infrastructure investor, for £650 million in late 2022.

During the pandemic, dividend payouts for rail operators were suspended as the UK government provided £15 billion in public funding to maintain service operations. Southern, Thameslink, and Great Northern received about £2.1 billion, most of which was allocated before Go-Ahead was taken private.

Bus operators were similarly supported with several bailouts throughout the pandemic, and they continue to benefit from government assistance, including a price cap on single fares at £2 outside of London, a program that started in early 2023 and is set to continue until December. This initiative is projected to cost taxpayers hundreds of millions of pounds.

For the 18-month period ending December 2023, Go-Ahead reported a pre-tax profit of £6 million against revenues of £3.8 billion.

Recent financial statements indicate that Go-Ahead has restructured its debt, increasing its “core facilities” from £560 million while publicly listed to over £1 billion post-acquisition. However, net debt currently stands at £780 million.

The rail lines operated by Southern, Thameslink, Great Northern, and Gatwick Express—all part of Govia Thameslink—are scheduled for potential nationalization under the leadership of Sir Keir Starmer, whose government has stated its intent to bring train services into public ownership. The current Govia Thameslink contract is set to expire in April 2025.

Miguel Parras, CEO of Go-Ahead, remarked, “In 2023, we significantly expanded our operations, executing several strategic acquisitions and securing new contracts. Additionally, over £200 million was invested in replacing our older diesel buses with greener alternatives, marking our leadership in the electric vehicle transition. We have a further £290 million committed for our fleet enhancement over the next two years.”

In a related development, the government faces criticism for initiating a £1.2 billion private sector train deal shortly after coming into power, promising nationalization.

The Department for Transport has invited proposals from private “rolling stock companies” to finance the purchase of new trains for the TransPennine Express, which serves the route between Hull and Liverpool.

Labour had previously indicated that it would exclude the rolling stock sector from its nationalization strategy. However, Helen Whately, the shadow transport secretary from the Conservative party, commented, “Labour has spent years denouncing private investment in our railways, yet now they are in government and issuing new tenders.”

She added, “Their main strategy for resolving our rail issues seems to be putting politicians in charge. They must realize that private investments enhance service quality for passengers and lessen the financial burden on taxpayers.”

A spokesperson for the Department for Transport stated, “Our plans for public ownership prioritize passenger interests. We expect rolling stock companies to keep leasing vehicles, collaborating with Great British Railways to enhance train sharing throughout the network.”

They further clarified that the competition for new rolling stock for the TransPennine upgrade began prior to the current transport secretary’s tenure.