TRANSPORT group Go-Ahead said yesterday its bus and train operations were all on course to achieve revenue growth this year.

But it warned that while the performance of its bus business was expected to remain strong in the coming year, economic conditions were likely to hit profits at its rail arm.

Go-Ahead, which runs the Southern, Southeastern and London Midland franchises through its 65% owned Govia subsidiary, is also facing �6million of bid costs during a busy period for the re-letting of franchises.

The company said it had performed well in the financial year due to end on June 30, with passenger revenues from its deregulated bus operations up by 4%.

Go-Ahead has established a substantial foothold in East Anglia this year through the acquisition of Colchester-based Hedingham Ominibuses in March, Anglian Buses, based in Beccles, in April and Chambers, based at Bures, earlier this month.

In its rail division, which benefited from average regulated fare rises of 6% at the start of this year, Southern and Southeastern’s revenues were up 8.5% and 10% respectively after passenger growth of 1.5% in both cases.

London Midland’s record remained strong, with full-year expectations for a 13.5% rise in revenues and 8% in usage, Go-Ahead added, meaning it will not require revenue support from the Government despite it becoming eligible in November.

However, the company warned that the economic climate was weaker than expected when it bid for the Southern franchise in 2009, which was likely to hit profits next year.