BUS and train operator Go-Ahead Group, which has made two acquisitions in East Anglia is recent weeks, said today that both sides of its business were continuing to grow.

But the company, which this week announced a deal to buy Beccles-based Anglian Bus, following its acquisition of Colchester-based Hedingham Omnibuses last month, said that its net debt at the year-end would be higher than previously expected.

In a trading update for the period from January 1 to April 25 – its third quarter – Go-Ahead said its London bus business, which was also bolstered during the period by the acquisition of a depot in Tottenham from First London East, had performed strongly.

Excluding acquisitions the effect of acquisitions, revenue and mileage for the year to date were now ahead by more than 4% and 2% respectively, with the depot acquisition and new contract set to result in strong mileage growth continuing into the next financial year.

Outside of London, where Go-Ahead runs bus services in areas including southern England and the north-east, year-to-day revenue since last year was also 4% up, with passenger numbers around 3% ahead, said the group.

“Following the Government’s decision to reduce funding through the Bus Service Operators’ Grant and as a result of increasing fuel prices, our bus companies will be reviewing fares and targeting cost efficiencies in our fourth quarter,” it added.

In Go-Ahead’s rail division, which runs three franchises through its 65%-owned subsidiary Govia, year-to-date passenger growth was now up by around 9% within the Southern operation (which includes the Gatwick Expres), more than 10% at Southeastern and more than 13% at London Midland, the group said.

The third quarter also saw Govia shortlisted for the new Thameslink franchise, which is due to start in September next year and into which Southern services will eventually be integrated.

Go-Ahead said the rail division was expected in incur bid costs of around �6million in the next financial year, with the winner of the Thamslink deal due to be announced in May next year.

“The group remains in a good financial position with strong cash generation and a robust balance sheet, underpinning our dividend policy and allowing flexibility to pursue further value-adding opportunities,” said Go-Ahead.

However, it added: “Due to recent acquisitions in our bus division, year end net debt is expected to be higher than previously anticipated at around �95m.”

David Brown, group chief executive, said: “I am pleased to report continued growth in both our bus and rail divisions.

“In bus, our focus of operating in urban areas, predominantly in the South East, combined with our strategy of local management and marketing has continued to deliver growth. Our sector leading London bus business performed strongly in the quarter and we were pleased to announce the acquisition of the Northumberland Park depot in North London, demonstrating our long term confidence in this market.

“Our rail businesses continue to perform well and we were delighted to have been shortlisted for the Thameslink franchise.

“Whilst we continue to be cautious about the wider economic outlook, we remain confident that we will deliver a full year result in line with our expectations.”