Transport giant FirstGroup has insisted it is making headway in its battle to put Britain's biggest bus operator on the road to recovery.
It said there were early positive signs in some of its markets, although like-for-like passenger revenues growth of 2.1% for the quarter to the December 31 was slower than the 2.6% reported for the previous half.
In November, FirstGroup revealed half-year bus profits slid to £39.6 million from £59.4 million a year earlier as higher fuel costs, lower demand and reduced subsidies took their toll. FirstGroup has around 8,000 buses operating in 40 towns and cities across the UK, carrying 2.5 million passengers every day.
It has offloaded a number of operations as part of the overhaul, most recently its Birkenhead and Chester operations for £4.5 million and announced the sale of services in Kidderminster and Redditch for £1.5 million.
Other efforts by the Aberdeen-based company have included local fare promotions, the revamp of its bus depots and the provision of £160 million on 1,000 new buses and the modernisation of a further 750 vehicles.
It is also investing another £27 million in new ticketing technology, including a "touch-in, touch out" contactless payment system using bank cards. In a trading update, FirstGroup said it was making headway in its drive to improve performance: "While there remains considerable work to be done across our UK bus division, we are encouraged by early positive signs in some of our markets."
The company also operates a quarter of Britain's rail lines through franchises such as FirstGreatWestern and FirstScotRail, while it operates 70,000 school and transit buses in North America.
The rail arm's like-for-like revenues increased by 8.1% in the October to December quarter, in line with the half year. The company said it welcomed the outcome of a Whitehall-commissioned independent inquiry which called for an early return to refranchising in the wake of the recent West Coast fiasco.
FirstGroup, whose appointment to take over the line from Virgin Rail was cancelled due to a flawed bidding process, recently held its interim dividend at last year's level but has pledged to review the full-year payment in May.
It added that the impact of Hurricane Sandy on its First Student business will knock operating profits by 15 million US dollars (£9.5 million) in this year's results.