Bus and train group National Express expects first half pre-tax profits to show good progress after trading was in line with forecasts through the second quarter.

Revenue trends have been resilient, whilst progress on cost saving programmes and delivery of a stronger operational focus across the business has accelerated, it added.

Overall UK profitability continues to benefit from an improved margin in Rail, following the removal of the loss-making franchise last year. The group said it welcomes the government's review of franchising policy. "The cancellation of the reletting process for our current franchises enables us to explore opportunities to continue to deliver our industry-leading rail performance beyond early 2011," it added.

In UK Bus, reduced operating mileage is driving improved network efficiency though underlying revenue is marginally lower year-on-year. The bus margin improvement plan is now underway. National Express expects these measures to start to benefit margin in the second half of this year.

Underlying revenue in Coach has grown 3% year-on-year, benefiting from strong Easter and May holiday travel. First half margin will be affected by an increase in investment in marketing and new operations and services.

Spain continues to see an improving revenue trend in its long term concessions, with underlying passenger revenue in the first half expected to be broadly flat on 2009.

In North America, the outlook for underlying revenue growth remains strong with over 1,600 new routes now secured for the new school year beginning in August/September 2010, giving a net addition of almost 750 routes after contract losses.

"With fundamentally strong businesses across the group, National Express now has a greater operational focus. The initiatives we have put in place will progressively improve our performance from the second half year onwards, driving earnings and cash generation," said chief executive Dean Finch.

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