Newcastle-based transport group Go-Ahead hailed an "exceptional" year on the buses as its services took another step on the road to profits of £100 million.
The company said record passenger levels helped bus profits improve 11% to £78.2 million in the year to June 29.
While revenues have risen, the rail arm has been affected by assumptions set out in franchise bids that no longer reflect economic conditions.
This has meant payments to the Government increased by £85.9 million, while its rail profits fell by £15.7 million to £24.3 million.
Chief executive David Brown said the bus division had traded"exceptionally well" as it looks to meet a target set last year to grow bus profits to £100 million by 2015.