Net income for the six months ended Sept. 30 increased to 56.1 million pounds ($117.5 million), or 12.8 pence a share, from 24.9 million pounds, or 6.3 pence, a year earlier, the Aberdeen, Scotland-based company said today in a statement. Sales rose 3.1 percent to 1.77 billion pounds.

FirstGroup operates six U.K. rail divisions and 9,000 buses in 40 British towns. The company gets more than half of its revenue from the U.S. after acquiring Laidlaw International Inc., the largest operator of the country's yellow school buses. The Laidlaw purchase also gave FirstGroup ownership of Greyhound Lines Inc., the U.S. intercity bus company.

"The first-half results were solid,'' Damian Brewer, an analyst with JPMorgan in London who has an ``overweight'' rating on the shares, said in a note to investors. "Going forward, we think that FirstGroup and its peers will need to carefully balance stimulating demand growth against a growing fuel cost burden.''

FirstGroup shares fell as much as 21.5 pence, or 2.7 percent, to 773.5 pence and were down 2 percent at 8:38 a.m. in London. The stock has gained 36 percent this year, valuing the company at 3.4 billion pounds.

FirstGroup is committed to "at least 10 percent annual dividend growth for at least the next three years,'' the company said in the statement. "Trading in the second half of the year has started well and is in line with our expectations.''

The completion of the Laidlaw acquisition in October ``gives us the scale and opportunities to generate increased value and returns and a robust platform for future growth in the large North American market,'' FirstGroup said.