Go-Ahead
Annual Report and Accounts for the year ended 27 June 2009

Operating review

London Midland

  • 2009 revenue: £371.8m
  • Start of franchise: November 2007
  • Franchise renewal: September 2015*
  • Eligible for revenue support: 11 November 2011
  • Approx. 50% of passengers are commuters
  • Regulated (peak-time) fare increases: RPI** +1%
  • *Assumes 17 month extension is granted.
  • **Annual regulated fare increases are made in January based on the Retail Price Index (RPI) as at July of the previous year.

London Midland operates through the heart of England, connecting London, the West Midlands and the North West. Go-Ahead was awarded the London Midland franchise in November 2007. The franchise is formed from parts of the former Silverlink County and Central Trains businesses.

Performance Overview

The second half performance of our London Midland franchise was mixed, with good levels of revenue growth offset by a number of operational issues with the new December 2008 timetable and industrial relations disputes which added around £2m of costs in the period. Despite these issues, we achieved a PPM of 86.7% (2008: 88.6%) and a customer satisfaction rating of 78% (2008: 81%) for the period.

Total revenue in London Midland consisted of passenger revenue of £173.8m (2008: £103.0m), other income of £39.8m (2008: £23.6m) and net subsidy receipts of £158.2m (2008: £113.1m). Comparative figures are from the start of the current franchise on 11 November 2007.

Like for like passenger revenue growth for the period from mid November to end of June was 9.1% and like for like passenger numbers for the same period increased by 3.6%.

The change in the Network Rail access charge regime from 1 April 2009 reduced subsidy payments by approximately £21.2m.

As with Southeastern, we are undertaking a significant amount of restructuring in this franchise and have recently appointed a new managing director to lead these changes. Restructuring costs to date have resulted in a one off exceptional cash charge of £2.8m.

London Midland subsidy profile (£m)

Bar chart showing London Midland subsidy profile

The above chart shows the subsidy London Midland receives from the DfT. Amounts shown are nominal and are before changes to the access charge regime from 1 April 2009. Years commencing 1 April.

London Midland cost base (%)

Pie chart showing London Midland cost base as a percentage
  • Access charges
  • Operating costs staff
  • Operating costs other
  • Rolling stock charges
  • Fuel and electricity

Costs rounded to the nearest 5%.

London Midland revenue split (%)

Pie chart showing London Midland revenue split
  • Passenger
  • Subsidy
  • Other
Bicycle parking spaces

New secure cycle storage

Sustainable integration

We are committed to providing a sustainable and integrated transport network. London Midland offers reduced price parking for low emission vehicles and free parking for electric vehicles. We are looking at extending this across our other franchises. Across the Southern network we have doubled the amount of secure cycle spaces and as part of the new Southern franchise, we will be providing 1,500 extra cycle spaces.