BUS and rail operator Stagecoach Group says its profit before tax for the year to April 30 2003 should be at the top end of market expectations.

The company says that in the UK, the bus and rail divisions are making good progress, the strategy to restructure the Coach USA division is on schedule and the overseas bus division continues to perform satisfactorily.

The UK Bus division is benefiting from revenue and passenger growth with revenues for the 48 weeks to March 30 2003 5.1 per cent above the previous year.

Operating profit from UK Bus for the year ending April 30 2003 is expected to be marginally higher than the previous year's operating profit of £62.7m, taking account of increases in labour costs, including pensions.

Turning to the rail division, its financial performance benefited from operational improvements at South West Trains.

Revenues for the 48 weeks to March 30 2003 are up 3.7 per cent on the previous year with passenger numbers up 2.8 per cent.

Rail operating profit for the year ending April 30 2003 is expected to exceed the previous year's £31m.

At Virgin Rail Group, the business has benefited from the significant investment in new trains and focus on service delivery.

Passenger revenues for the 48 weeks ended March 30 2003 are 9.8 per cent above the previous year, with passenger numbers up 4.5 per cent.

The company expects to announce its results for the year to April 30 2003 on June 25 2003.