TRANSPORT group Stagecoach said it was on track to hit full-year forecasts as it reported signs of an upturn in passenger numbers on its South West Trains franchise.

Passenger volumes on the franchise were down by 2.4 per cent in the 48 weeks to March 31 as the impact of speed restrictions on the network was compounded by strike action called by the RMT union earlier this year.

Stagecoach said the industrial action had dented profits by about £9m in the second half of its financial year.

The group's Virgin rail venture had returned to profitability, with passenger numbers up 9.9 per cent and revenues ahead 11.7 per cent in the 48 weeks.

But Stagecoach said the franchise was still being affected by ongoing engineering works.

Analysts are forecasting Stagecoach will deliver profits of £108m for the full-year to April 30.