Bus and train operator Arriva has warned annual profits for its rail division will reflect "substantial expenditure" on three UK franchise bids.
But, in a pre-close trading statement, the transport group stressed it had made "solid progress" in developing its business since publishing interim results in September, while anticipating full-year results in line with expectations.
The company, which successfully bid for the nine-year CrossCountry inter-city rail franchise earlier this year, said it had achieved a "smooth start" to the operating contract.
Arriva revealed 86.3 per cent of CrossCountry services ran on time during the first four weeks of the franchise coming into operation on November 11th, marking a "substantially better" performance than that achieved for similar services last year.
The group said Arriva Trains Wales was also continuing to experience strong demand and had been confirmed as the UK's most-improved rail operator over the second quarter of the year, when 92.3 per cent of its services arrived on time up from 85.7 per cent for the same period of 2006.
Arriva said its bus division had also continued to grow, with higher passenger numbers having more than offset year-on-year increases in fuel costs.
In addition, London's biggest bus operator said it had mitigated the disruptive impact of extensive street works within the capital.
Meanwhile the transport firm said it was maintaining the development of its business in mainland Europe, where it is continuing to explore contract and acquisition opportunities with a view to doubling the division's revenue by 2011.
Looking ahead, Arriva said: "We look forward to continued delivery from our established, robust businesses, and to full-year contributions from our new ventures in Europe and from the CrossCountry franchise.
"With measures in place to limit any potential impact of fuel price increases in 2008, Arriva is well positioned for another year of profitable growth and strategic opportunity," added the company, which will report preliminary results for the year to December 31st in March.