THE firm behind East Coast rail travel aims to strengthen its train division after hailing its regional venture an instant success.

Stagecoach Group says its decision to bid for East Coast work has bolstered financial results.

The company returned East Coast back to the private sector earlier this year, working alongside Virgin under the Inter City Railways banner to take on the route from the publicly-run Directly Operated Railways.

The venture wooed the Government with a £3.3bn eight-year deal and promises of creating direct links to London from Middlesbrough and Thornaby, near Stockton, and a new London to Sunderland service.

Now, just weeks into the agreement, Stagecoach said UK rail revenues have increased significantly in the 12 weeks to July 25.

The firm added the rail endeavour, which will use trains made at the soon-to-open Hitachi Rail Europe factory in Newton Aycliffe, County Durham, has helped overall year-on-year revenues lift considerably, and revealed it is targeting new contracts to maintain such success.

It said: “We are pleased with the financial performance of our UK rail division.

“In addition to the like-for-like revenue growth of 5.5 per cent, overall reported revenue increased substantially year-on-year in the 12 weeks due to the inclusion of the new Virgin Trains East Coast franchise.

“The group has also submitted a bid for a new Transpennine Express franchise and a joint venture with Abellio is shortlisted to bid for a new East Anglia franchise.

“The successful franchise bidder for Transpennine Express will start in April next year, with the winner of the East Anglia franchise expected to start in October next year.”

Stagecoach also runs bus services across Teesside, Hartlepool, Sunderland and Newcastle, and revealed its UK business saw a one per cent rise in like-for-like revenues in the 12-week period to July 25.

Bosses said the result came amid a slower summer period due to earlier school holidays and councils reining back spending.

It added: “The division’s like-for-like revenue growth continues to come principally from the revenue received directly from passengers travelling on services.

“Growth in both commercial revenue and revenue from tendered and school services was affected by the timing of school holidays compared to last year, though we expect stronger growth over August and September as this reverses.

“Concessionary revenue growth remains modest, and revenue from tendered and school services provided under contract has continued to decline, reflecting the timing of school holidays and the result of local authorities reducing spending on supported services due to budget constraints.”