THE operator of the Transpennine Express franchise reported a strong showing by its rail operation yesterday, despite the London terror attacks having a "significant" impact on business.

First Group, which operates nearly a sixth of the UK rail network, saw operating profits rise to £34.3m in the six months to September 30, from £32.7m last time.

It said the rail performance demonstrated the strength of its First TransPennine Express franchise, which includes trains running from Newcastle, Middlesbrough and York to the North-West.

In a statement, the group said: "This is a particularly strong performance, given the effect of the terrorist attacks on London, which had a significant adverse impact on our rail franchises during the second quarter."

FirstGroup said its First Great Western services were starting to see a recovery in passenger numbers following the July incidents.

Across the group, bottom-line profits were £55.3m - down on last year's £64.3m but in line with expectations following changes to accounting standards and the impact of higher fuel costs.

The group described the results as creditable, given that there was an additional £13m of fuel costs.

ScotRail, the UK's largest rail franchise, performed well during the 12 months since FirstGroup won the contract, while there was a six per cent rise in passenger numbers at TransPennine Express.

FirstGroup is also Britain's largest bus operator, running more than one in five of local bus services. A fleet of about 9,300 buses carries 2.8 million passengers a day in more than 40 towns and cities.

During the period, the bus operation partly offset higher fuel expenses through cost reduction measures. Revenues at the division increased by 5.9 per cent, but operating profits fell to £40.7m from £49.4m.