Stagecoach runs about a quarter of the UK's rail network

Like-for-like revenues were up 7.6% in the three months to 21 July, despite floods disrupting some operations.

"We are encouraged with the current trading performance of the group and the outlook remains positive," it said.

Stagecoach runs South West Trains and Megabus, and recently won the contract for the East Midlands rail franchise.

The firm is major provider of transport services - including school bus and sightseeing operations as well as commuter services - employing 4,400 people and operating a fleet of 2,800 coaches.

Trains boost

Revenues at its UK Rail business drove the strong performance, climbing 15% on a like-for-like basis, while revenues at Virgin Rail - in which Stagecoach has a 49% stake - rose 13.4%.

Elsewhere, revenues at its bus arm were 7.6% higher than a year earlier while its US revenues rose 6.1%.

The trading update was welcomed by investors disappointed by Stagecoach's recent failure to win the East Coast and Cross Country rail franchises.