UK rail and bus operator Stagecoach has seen profits slip in the wake of the 11 September attacks and the placing of Railtrack into administration.

The company said that the six months to October produced a pretax profit of �75.1m before one-off charges, down from �91.8m in the same period the year before.

It was the weakness in the US market following 11 September which did the most damage to the company's finances, it said.

The Coach USA long-distance bus operation saw operating profits drop $18m in September and October, with sales down $25m.

Stagecoach said it will cut staff by 10% or 550 jobs - including Coach USA's chief executive, Randy West - mothball 330 coaches and close down a number of businesses.

That should reduce costs by $25m, it said.

The cost-cutting measures encouraged investors, who lifted Stagecoach stock by 8.3% to 71.5p at 1140m GMT in London.

Off the rails

The disruption of the UK rail network as a result of the Hatfield rail crash and Railtrack's problems also harmed performance, the company said.

While sales crept up �6m to �206m, operating profits on the railways were down nearly a sixth to �20.8m from �24.3m.

Stagecoach owns 49% of Virgin Rail, which runs the West Coast main line and Cross Country franchises. It is also negotiating for a new 20-year franchise on its existing South West Trains operation.

"Each of our divisions is operating against the background of a challenging economic environment," said chief executive Keith Cochrane.

Just when Coach USA might fully recover was impossible to determine, he said, while the uncertainties shrouding the UK rail network would not be settled for some time.

Taking charge

Even so, Stagecoach is pushing for the chance to run its own railway track and maintenance operation as the government tries to clean up after the forced collapse of Railtrack.

"We believe this is a railwayman's solution to the problems of our railways" which would address decades of under-funding and weak management of the track", said chairman Brian Souter.