TRANSPORT company Go Ahead said growing numbers of train passengers would help it meet profit forecasts despite the recession.

But the Newcastle firm, which has cut hundreds of jobs in the last year, said it expected economic conditions would remain tough until 2011.

Go Ahead, which saw first half revenues rise 19% to £1.2bn and flat £65m operating profits, said it was in line to make an operating profit of around £120m for the whole year – better than many analysts were expecting, although down on last year’s £131m.

In its bus division, revenues are continuing to rise at around 6% and full-year operating profit is expected to be around the same as last year’s £66.2m, but the company said this will be hit by a bigger than expected cost of claims from people involved in bus accidents.

It has seen revenue growth at its three rail franchises, Southern, Southeastern and London Midland. But growth would be slower than last year.

Last week, its subsidiary Govia was awarded the five-year and 10-month franchise to run the Southern Central franchise in London and the South coast, after pledging to invest £76m improving Southern’s trains, stations and service frequency.

The company has recovered a £10m increase in fuel costs by increasing fares and cost-cutting measures.