Shares in First Group were up on the FTSE 250 after the transport group said that its trading for the six months ended 30 September was "in line" with expectations and that it was "on track to deliver moderate earnings growth for the full year".

The group said that its UK Bus business had continued performing "steadily" with like for like passenger revenues up 1.3 per cent in the half year period. However First Group added that in many towns and cities the trading environment remained "challenging".

Like for like passenger revenues at First Group's UK Rail business rose 4.4 per cent in the period, despite lower fares, the group said, thanks in part to improving sales of First Class tickets.

In its North American First Student business First Group said that revenues were "broadly in line" with last year, its First Transit business saw revenues rise 4.5 per cent and its Greyhound business saw like for like passenger revenue increase 1.6 per cent.

In an outlook statement, First Group said, "The Group has successfully built a leading position in all of its core markets providing both resilience and opportunity through the challenging economic environment. The Board is confident of the Group's prospects to continue to deliver safe, high quality services for customers and long term value for shareholders. The trading performance in the first half of the year is in line with management's expectations; our drive to improve cash generation is yielding good results and, as previously reported, we expect moderate earnings growth in the current financial year which supports the Board's commitment to dividend growth of at least 7% per annum."

By 11:50 shares in First Group were up 4.95 per cent on the FTSE 250 to 366.90 pence per share.