TRANSPORT group Arriva, at the centre of controversy over plans to cut rail services due to driver shortages, has seen pre-tax profits in the first six months of the year rise to £42.4m.

The Sunderland group, which runs Transpennine rail services in Yorkshire and the North-East, as well as buses, has started to recruit more train drivers, but claims they will not be in place for at least another year.

Bob Davies, chief executive, said about another 100 drivers were needed.

He said: "We think it is much more sensible to make sure we announce a timetable we can deliver consistently and that customers can plan around.

"We have inherited a lot of the problems with staff shortages.

"We also tend to lose a proportion of our drivers to services like GNER and Virgin, which, as national providers, can offer better pay."

The company has secured an agreement with the Strategic Rail Authority for a two year extension to a franchise for Northern and Merseyrail Electrics, now called Arriva Trains Merseyside. The revised terms enabled Arriva Trains to achieve a first-time operating profit of £5.5m, based on turnover of £204m.

Higher fuel and labour costs left operating profits before one-off items in the bus division at £31m, against £30.7m last time.

Passenger services in mainland Europe achieved an operating profit of £5.4m, unchanged on last year, while motor retailing increased its operating figure by 20 per cent to £6m.

Arriva was forced to write off £1.3m over the Independent Insurance crisis.

Shareholders will receive an interim dividend of 4.2p.