FirstGroup yesterday highlighted surging revenues in its UK bus and rail business in the first quarter of its new financial year

FirstGroup yesterday highlighted surging revenues in its UK bus and rail business in the first quarter of its new financial year and "excellent progress" in its North American business following its £1.9bn acquisition of Greyhound owner Laidlaw.

At its annual meeting in Aberdeen, FirstGroup hailed 2007-08 as a "fantastic" year and said it had made a "good start" to the new financial year, with trading in line with management expectations.

FirstGroup shares jumped 3.6%, or 19.5p, to 560.5p yesterday after it said that like-for-like passenger revenues in its UK bus division in the first quarter of its new financial year to March 31, 2009, were up 6.4% on the same period of 2007-08.

Passenger revenues in its UK rail business, which includes ScotRail and First Great Western, were up 10.7% on a like-for-like basis.

The jump in its shares came during a session in which the wider FTSE-100 index of leading shares tumbled. However, the shares are well adrift of their 52-week high above 800p.

FirstGroup highlighted its hopes of a greater shift in journeys from cars to public transport as people were faced with the rising cost of motoring and became more concerned about the environment. It also said that it supported the "industry view" that people were switching some journeys from car to rail because of the rising cost of fuel.

It highlighted its reversal of the declining revenue trend which it had inherited when it acquired Greyhound in October 2007. It added that it had enjoyed like-for-like revenue growth of 4.2% at Greyhound in the first quarter of its new financial year and said this trend had "accelerated" into June.

FirstGroup said the acquisition of Laidlaw provided a unique opportunity to create value by leveraging scale and to increase earnings through improved operating efficiencies and the delivery of substantial synergies. It said: "During 2007-08, trading was strong across all of our businesses and we continue to see the positive results of our focus on customer service, quality and operational performance.

"In North America we have made excellent progress in delivering our integration plans. We have achieved our early priorities in consolidating the businesses."

FirstGroup added: "In UK Bus we continued to develop strong partnerships and invested to build an improved network of services, greater reliability and passenger growth.

"In UK Rail we delivered strong growth across all of our rail companies as demand for our services continues to increase.

"We have created an international portfolio of transport operations with leadership positions in our core markets in the UK and North America.

"The record performance, reported at our preliminary results in May 2008, demonstrates the strength of the group and the committed focus on our strategy to achieve profitable growth in our core markets."

FirstGroup said that it "continued to pursue our twin objectives of integration and growth" in North America.

It added: "We have made excellent progress in consolidating the operations and remain on course to achieve $150m per annum of synergies from April 2009."

FirstGroup said the school bus division had achieved strong contract retention together with new business wins.

It added: "Looking ahead, we are well placed to benefit from the many opportunities for the group. Our balanced portfolio of businesses continues to generate strong operating cashflows with excellent opportunities for future growth in all of our markets. The board is confident about the prospects for the business and for the remainder of the year."