Arriva forges ahead on the buses

RAIL and bus operator Arriva delivered forecast-busting annual profits, with its London operation at the heart of a bumper year for its UK buses division.

Chief executive Bob Davies predicted a rise of a little over 4% in turnover this year from the London bus business, which last year accounted for about £220m of the £651.5m income from the division, up from £604m in 2003.

He said: 'We will have 4% more mileage in the capital to around 54 million miles this year. We are paid by the mile by Transport for London. Turnover will be slightly higher as we are operating more buses and more of the expensive buses - the bendy buses carry more passengers.'

Growth overall will also come from European acquisitions. Germany and Italy top the firm's list of priorities for growth in railways and buses.

Underlying group pre-tax profits rose 15% to £116.3m for the year to 31 December against market expectations of £105m. Turnover was £1.75bn against £1.59bn before.

Davies has shaken up his board. David Martin moves up from head of international operations to deputy chief executive in charge of UK and mainland Europe.

Human resources director Mark Saxton is to step down with a pay-off of about £400,000. Steve Clayton, former board director for UK buses, takes over Saxton's job as new corporate affairs director. Finance director Steve Lonsdale broadens his role to a group managing director.