The firm says more people are turning to the railways

Pre-tax profits rose to £84.6m ($177.7m) in the six months to 31 October, with revenues up 9% to £821m.

Stagecoach said increasing car congestion, inward migration and a growing focus on environmental issues would help to attract more passengers.

The company said it planned to spend £71m on 584 new buses.

'Marketing skill'

Revenue from its UK bus operations - which cover about 100 cities and towns - rose 8.1%.

But sales from bus services in North America were broadly flat.

We were especially encouraged by the fact that most of this growth came from passengers paying full fares Credit Suisse See Stagecoach shares

Analysts said they were impressed by the almost 4% growth in UK passenger numbers over the period.

"We were especially encouraged by the fact that most of this growth rate - 2.4% - came from passengers paying full fares, rather than from concessionary fares schemes," Credit Suisse said in a research note.

"We remain convinced that this is evidence of the group's superior skill in marketing and other volume stimulating initiatives."

Revenue from the company's UK rail operations rose 15%.

It operates 1,600 daily train services from London to the South East under its recently reawarded 10-year South West franchise.

Stagecoach also holds a 49% stake in Virgin Rail Group and recently won the East Midlands franchise, operating trains in and out of London St Pancras.