Transport group Go-Ahead said it would miss its long-standing £100 million bus earnings target by a year, blaming a weaker economy in the North East and roadworks in the South.
The bus and rail firm has pushed back the timetable to hit a £100m operating profit at its bus operations to 2016/17.
Go-Ahead, which runs around 4,600 buses, posted bus operating profits up 6.6 per cent to £89m for the year to June 27, although passenger numbers fell 1.4 per cent over the year due to an "ongoing weakness in the north east economy" and extended roadworks in Oxford and Brighton.
Chief executive David Brown said: "We would expect some of the headwinds which we have experienced over the past year to reverse over time and this, along with reduced fuel costs, gives us continued confidence in the prospects for the bus division."
Overall, the firm, which also runs four rail franchises, said its operating profit jumped 11.1 per cent to £114.7m in the year to June 27 slightly ahead of expectations after it began operating its Govia joint venture Thameslink Southern and Great Northern contract last September.
The route - which is the largest rail franchise in the UK - covers towns and cities such as Cambridge, Peterborough, Bedford, Gatwick and Brighton.
However, the group said the new franchise was hit by timetabling and driver recruitment problems earlier in the year, which resulted in improvement in its rail profits albeit at historically low margins.
Go-Ahead owns 65 per cent of the Govia joint venture, with the rest owned by French transport group Keolis.
On a bottom line basis, annual pre-tax profits fell 12.5 per cent to £78.7m.
Mr Brown added that the strong performance from its Southeastern franchise, between London, Kent and parts of East Sussex, continues to offset problems at its new Thameslink Southern and Great Northern contract. Rail operating profit jumped almost 31 per cent to £25.7m in the period.
It said it was in discussions with the Department for Transport to extend its London Midland franchise from March 2016 to October 2017 and hopes to agree terms shortly.
The group is also the only firm bidding for both the Northern and the TransPennine Express rail franchises, which it expects to be awarded in the first quarter of next year.
Brokers at Liberum said the "results were mixed" cheering the group's profits but adding that the "biggest disappointment" was the postponement of its bus unit's £100m operating profit target.
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