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Bus and train operator Stagecoach expects to report annual profits ahead of expectations due to stronger than anticipated revenue growth.

In a trading update the company said strong results reported across its businesses reflected a growing demand for public transport and Stagecoach's continued focus on "product innovation" and good operational performance.

The statement, issued ahead of the group's first-half results being published, revealed that Stagecoach's UK rail operations saw like-for-like revenues grow by 15.7 per cent in the 24 weeks to October 24th.

Stagecoach said the growth could be partially attributed to the introduction of revenue-enhancing initiatives by its South West Trains franchise.

"Some of these initiatives have been introduced earlier than had been assumed in the original franchise bid and the exceptionally good revenue growth in the UK rail division in the period partly reflects the benefits of this," Stagecoach stressed.

The group revealed that like-for-like revenues for its Virgin Rail joint venture, which operates the West Coast and CrossCountry train franchises, also increased by 11.6 per cent over the same period.

Like-for-like revenues for Stagecoach's UK bus operations also climbed by 7.9 per cent, while in North America the transport group's revenues were up 4.2 per cent in the five months to September 30th.

"Notwithstanding continuing cost pressures such as increased fuel prices, the outlook for the group remains positive," Stagecoach stressed.

Stagecoach will announce its interim results for the six months to October 31st on December 5th.