13 January 2011 Last updated at 06:33 ET

Severe weather costs Scots-based First Group £7m

The transport group said the weather hit bus and rail services

A Scottish-based transport firm has said the recent severe weather has cost it £7m.

However, First Group Plc said it remained on course to achieve its earnings targets for the year ending 31 March.

The Aberdeen-based company said its bus and rail operations had been hit hardest by the freezing weather.

The cost was revealed in the firm's trading update for the third quarter, from 1 October to 31 December 2010.

The company, which also owns Greyhound in North America, said that the trading environment had remained "challenging" since early November, but that its overall trading was in line with management expectations.

It said that its UK bus operation continued to deliver a steady performance, with like-for-like passenger revenues up by 2.1% during the third quarter.

In its UK rail operation, like-for-like passenger revenues also grew by 5.2%.

It said: "The prolonged and widespread disruption, particularly in the UK, caused by severe weather during the period impacted UK bus and rail profits by around £7m.

"However, the group remains on course to achieve its earnings and cash targets for the year."