(Reuters) -Britain’s Go-Ahead said it plans to expand its transport operations and reinstate its pre-COVID-19 dividend policy after a months-long strategic review, lifting its shares on Tuesday.
Go-Ahead, which runs more than 6,000 buses in England and Britain’s largest passenger rail contract, said it plans to turn around underperforming businesses and grow in existing markets, which include Norway, Germany, Singapore and Ireland.
Its shares were up 6.8% to 900 pence at 1010 GMT after it said it plans to explore acquisitions and is looking at new urban mass transit services such as metro and light rail.
“Transport is at a tipping point as we recover from the pandemic,” Chief Executive Christian Schreyer, who was appointed in November, said in a statement.
Go-Ahead plans to pay at least 50 pence per share in dividend for the year ending July 2, and said it would start distributing between 50% and 75% of its underlying earnings per share as payouts to shareholders from the current fiscal year.
The group suspended dividends in March 2020 after its operations were hit by the coronavirus pandemic.
Go-Ahead’s new strategy comes after it was fined 23.5 million pounds ($31 million) last month by Britain’s transport department for overcharging by the operator’s London and Southeastern railway franchise.
Schreyer said he was confident about the group’s future.
“Go-Ahead’s core strength is in commuter transport and we see opportunities to grow by encouraging people to leave their cars at home, by winning new contracts and through carefully selected acquisitions,” he said.
Go-Ahead is also targeting annual operating profit of at least 150 million pounds and an increase in revenue to around four billion pounds in the medium-term, up by around 30% from 2021 after excluding recently discontinued operations.
Peel Hunt analysts said Go-Ahead could achieve the targets without new international contracts.
($1 = 0.7617 pounds)
(Reporting by Muhammed Husain in Bengaluru; Editing by Uttaresh.V and Alexander Smith)