TRANSPORT group Go-Ahead yesterday reaffirmed its commitment to reject any takeover bid, after posting results showing a two per cent drop in profits.

The Newcastle-based operator of Thames Trains, one of the services involved in last year's Paddington rail crash, posted a defence document to shareholders arguing against the bid by industrialists Caisse de Depots-Developpement and private equity company Rhone Capital.

Go-Ahead confirmed it had met the two groups early in July to discuss the offer but Chairman Sir Frederick Holliday says the £326m, 650p-a-share bid by the French consortium, C3D undervalued the group.

"Shareholders should not let C3D deprive them of the value of their company. They should reject this inadequate and wholly opportunistic offer," he said.

The shareholders have until September 16 to decide on the offer from C3D.

Sir Frederick added trading for the first two months of the current financial year at the group was running ahead of expectations.

Turnover for the year to July 1 rose to £485.2m, against £444.9m, but a £4.5m one-off cost associated with the ending of joint ventures with French firm VIA-GTI in Sweden impacted on pre-tax profits, which came in at £40.6m, against £41.2m the year before.

Excluding one-off items, operating profit for the group rose by eight per cent to £47.7m, from £43.4m last time.

Passenger numbers on ThamesLink increased by 10.6 per cent while Thames Trains saw a 7.1 per cent growth.

During the year the railways division increased its turnover to £253m, from £241m, but operating profits fell to £14.4m from £14.5m the time before.

In the bus division the increasing cost of fuel impacted on profits to the tune of £3.5m, but passenger numbers were up.

Operating profits there rose to £28.5m, from £28.3m the time before.

Shareholders will pick up a final dividend of 9.2p