Go-Ahead pulls off coup with Thameslink deal, says Investec

23rd May 2014 11:21

Train and bus group Go-Ahead has pulled off a major coup by winning the Thameslink rail super-franchise, according to Investec.The seven-year management contract will give the group certainty about its rail earnings for a number of years and is a major shareholder value-enhancing contract, Investec said.It also brings forward the day when investors might expect a dividend per share increase, the broker added."We lift our target price to 2630p from 2300p to reflect the value of the award to the group," Investec's John Lawson said in a note.Go-Ahead beat off competition from FirstGroup and Stagecoach for the enlarged Thameslink Southern Great Northern (TSGN) franchise.TSGN starts in September and will include the First Capital Connect routes from King's Cross and Moorgate to Cambridge and Peterborough, together with the Southern and Gatwick Express operations and parts of Southeastern, which runs trains between London and Kent.Shares in Go-Ahead rose 173p or 8.9% to 2112p at 12:20 in London.PW