Train and bus operator Arriva has revealed it is interested in bidding for Chiltern Railways.
Arriva chief executive David Martin yesterday said the group would take "a close look" at any opportunities coming to the market.
Mr Martin was speaking as Arriva showed a slight increase in operating profits from £52.9 million to £52.6 million.
The group said overall pre-tax profit dipped slightly to £47.3 million from £48 million as a result of higher net finance costs of £7.6 million, against £5.4 million last time, due to investment in acquisitions and higher interest rates.
Chiltern's owner John Laing, which was bought by fund manager Henderson Infrastructure late last year, has put the London-Birmingham train operator up for sale.
Mr Martin said: "If the formal process for Chiltern starts, clearly we would respond to that."
Arriva said it was "continuing to explore numerous additional opportunities for further development of the business, both in our existing operating areas and in new European territories."
The Sunderland-based company already has the biggest presence in Europe of all the main private UK transport operators.
Mr Martin said the company is looking for further acquisitions or joint ventures in Germany and Italy, given that markets in those two countries remain in the early stages of liberalisation.
Arriva began rail operations in Poland in December and Mr Martin said it would be the forerunner to an expansion of the group's Polish train and bus business.
"We're actively looking at opportunities in probably every country in which we operate," he said.
Arriva said yesterday that it is well positioned for 2008 after further strengthening its European position so far in 2007, making excellent progress on contract wins and improving operational performance in many parts of the group.
Group revenue from continuing operations was up six per cent to £909.2 million from £860.7 million previously, which it said reflected strong growth across the company.
It said there was continued double-digit revenue and operating profit growth in continental Europe, with market positions significantly boosted in Germany and Scandinavia and its first contract secured in Poland.
Operating profit rose marginally to £52.9 million from £52.6 million previously despite higher-than-usual UK franchise bidding costs.
Including its share of associate businesses, operating profit rose five per cent.
Operating profit at Arriva's UK trains division fell to £1.1 million compared with £5.9 million a year ago due to the higher costs, on revenue of £121.6 million against £125.4 million beforehand.
It said the division's prospects had been transformed by its success in winning the new Cross Country franchise.
The group's sole current UK rail franchise, Arriva Trains Wales, achieved record opera-tional performance, with latest official figures showing 90.9 per cent of trains arriving at their destination within five minutes of schedule.
There was a strong performance from UK Bus, with operating profit 16 per cent ahead at £37.8 million.
Arriva attributed that to the positive effects of network development and customer growth as well as expansion from acquisitions and continuing progress in London, and was achieved despite further year on year increases in the cost of fuel of about £4 million.
The company said operational performance in London during the year to date had been affected by unusually high levels of street-works, especially those due to replacement of north London's Victorian water and sewage systems.
"The business has done well to mitigate the operational and financial impact," Arriva said.