RAIL and bus company Go-Ahead last night reported a better than expected performance from its trains in the second half as it forecast satisfactory full-year figures.

Go-Ahead said particularly encouraging revenues and continued good cost control at its Southern and Thameslink franchises had contributed to the upbeat performance by its rail division.

The company, based in Newcastle, said its Thames Trains operation, which it lost to rival rail operator First Group on March 31, broke into profit before the end of the franchise.

Although Thames made a profit in every year of its seven-year tenure apart from last year, Go-Ahead described the returns as modest, saying the operation was forced to use unreliable infrastructure.

A spokesman yesterday declined to reveal the profit figure, but attributed it to improved trading and better than expected results after "winding up the balance sheet" as the contract ended.

The former Thames franchise, which runs trains between London Paddington, Oxford and the Cotswolds, is now run by First under the First Great Western Link banner.

Go-Ahead's rail division now consists of Southern - the operation formerly known as South Central, which runs trains from London Victoria to the South Coast - and Bedford to Brighton operator Thameslink.

As well as trains, Go-Ahead runs buses for Transport for London and deregulated bus services around the UK, including Oxford, Brighton and Newcastle. Last August, it acquired Bournemouth bus operator Wilts and Dorset.

The group said the bus division had continued to trade well, with strong turnover growth and margins maintained.

The division is still implementing initiatives to improve performance, particularly at London Gatwick.