Go-Ahead wins place on West Midlands franchise

Go-Ahead Group's 65%-owned Govia joint venture has won a place on the shortlist to bid for the West Midlands rail franchise by the UK Department for Transport.

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Govia, which is 35%-owned by French transport group Keolis, has operated the franchise since 2007.

The contract, which remain on its existing terms until April 2016, will stay under Govia control but under new contract terms until it expires in October 2017.

So far this financial year, the FTSE 250 company has won a number of rail contracts, including a direct award of the London Midland rail franchise from April 2016 to October 2017 and two German rail routes in the newly deregulated country.

Last month, it lost out to Arriva in its bid for London's largest railway concession, with the German-owned transport firm given the contract to run the current 50-50 joint venture on London Overground.

In February, Go-Ahead reported good half-year numbers across most of its operations, with the rail division delivering an adjusted operating profit of £32.9m and returning a £126.6m contribution to the government, up £18.4m on the prior year.

Despite growth in passenger numbers, the contribution from London Midland, the Govia brand that operates the West Midland franchise, fell 37.6% to £20.1m.