FirstGroup executives believe the company is insulated from a rising dollar, with any increase in fuel costs offset by rises in the worth of its recently-enlarged North American ventures.

FirstGroup executives believe the company is insulated from a rising dollar, with any increase in fuel costs offset by rises in the worth of its recently-enlarged North American ventures.

The Aberdeen-based company, whose train franchises include First ScotRail and First Great Western, recently completed the $3.4bn purchase of Laidlaw, operator of Greyhound coaches and yellow school buses in the US.

The company, which is now styling itself "the world's leading transport company" with claims that its 2.5 billion passengers a year outnumber those of any other private operator, yesterday published financial results for the six months to September 30, showing a 3.1% rise in revenue and pre-tax profit of £74.5m, compared with £59.9m a year earlier.

However, its figures will be transformed in the future with the Laidlaw acquisition, meaning the US side of the company will account for half of revenues.

FirstGroup said that in the six weeks since taking over Laidlaw, it had identified more cost savings than it first expected.

Chief executive Moir Lockhead said: "It was the right purchase at the right time for us." But he refused to confirm whether the company would hold onto Greyhound in the long-term until a strategic review had been completed.

Dean Finch, the company's chief operating officer for North America, said: "The integration has gone very smoothly from our perspective and from the customer's perspective. We have found the synergy opportunities are probably better than we thought when we first looked in there."

In particular, he said, the company's US operations, which before the recent acquisition included its school bus business First Student, contract passenger transport business First Transit and vehicle maintenance operation First Services, would benefit from enhanced purchasing power.

Finch said this meant that in a year the company will have made cost savings around the $100m mark, rather than the $70m first identified.

"Downstream there could possibly be more to come," he added.

The company is potentially exposed to rises in oil prices and the value of the dollar, which was at $2.10 against the pound yesterday.

In the UK, all of its oil spending for 2007/08 is hedged at $67, although its US operations are more exposed. Next year around 62% of the UK demand is hedged at around $68 and 40% of US exposure at around the $79 mark.

Acting finance director Nick Chevis said: "In the UK we have some time to plan how we are going to deal with rising fuel prices."

He added: "We have got a natural dollar hedge because we have got profits accruing in the US. Before synergies we have $400m of EBIT (earnings before interest and tax) in the US and $230m of dollar-denominated oil costs in the US. We also have $3.4bn worth of debt in dollars."

Yesterday's financial results showed that FirstGroup's UK operations are also in good health. Its UK bus division, which has a fleet of more than 9000 vehicles, saw revenues rise by 3.5% to £540.1m, while operating profit was up 20.5% to £47.6m. Revenue at its UK rail division rose 5.6% to £863.6m, while operating profit increased 9.8% to £48.2m.

Its interim dividend was increased to 5.5p as the company pledged to raise pay-outs by 10% annually over the next three years.

FirstGroup's shares fell 48p to 747p.