New business in Go-Ahead’s bus division held back operating profits in the first half, as the group struggled to source vehicles and drivers for a programme in Dorset that combined school bus, commercial bus and special-needs vehicle operations in one package.

Rail also recorded a drop. But growth in passenger numbers in both divisions and steady progress on net debt reduction paint a sunny picture for the group’s dividend, which generates nearly a 7 per cent return on Thursday’s share price.

Given that potential future rail franchise wins are not priced into the shares, a price of nine times 2012 earnings seems good value.

Go-Ahead half-year results to December 31
SalesPre-tax profitEarnings per shareDividend
£1.2bn£39.2m61¼p 25½p
↑5.9%↓13%↓12%-

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