The group which operates the Arriva Trains Northern franchise as well as bus services across the country, said it would continue to focus on organic growth, targeted acquisitions and share buy-backs.

Reporting figures for the six months to June 30, Arriva said this year had seen the completion of a fundamental restructuring - including the disposal of its motor retailing and finance businesses.

The Sunderland company sold its three remaining motor dealership sites in the West Country in early July. The disposal raised about £70m - broadly in line with its book value.

Group pre-tax profits, excluding one-off charges, increased by 18 per cent to £51.1m from £43.4m last year. Turnover for continuing businesses grew by 20 per cent to £783.9m.

Within its rail division, Arriva was chosen by the Strategic Rail Authority as preferred bidder for the 15-year Wales and Borders franchise. It is also planning an assault on three further franchises - ScotRail, Northern and Greater Anglia.

Each bid is for business worth in the region of £400m.

Bob Davies, chief executive, described the results as a solid performance. He said there was "an awful lot going on" in the future.

Arriva's international operation saw full half-year contributions from major acquisitions in Portugal and Italy made in June and July last year.

Mr Davies said teething problems in Denmark had been ironed out.

The company suffered a backlash from angry commuters when it took charge of track operations previously run by Danish Rail and a shortage of drivers caused timetable chaos.