Would a cold call from a telesales person persuade you to take the bus? Stagecoach is claiming that it is having remarkable success in convincing people on its routes to try out the bus. Congestion is the big factor forcing people out of cars, but more attractive vehicles and more reliable journey times are also helping. Finally, there is even some anecdotal evidence, admittedly in more liberal, metropolitan areas, that people are genuinely leaving their cars behind for environmental reasons. So Stagecoach's calls are falling on receptive ears and now the company is taking the logical next step and pumping even more money into its bus fleet.

But Stagecoach is not quite the committed bus evangelist it would have you believe. In areas where it can't make enough money from bus travel it has already quit the market. Last year it sold its London bus business to Macquarie, complaining that Ken Livingstone wouldn't allow it to make enough money, and in the first half of the year it sold its Darlington bus business to Aviva.That is helping to keep its bus margins higher than the industry average, up from 10 per cent to 14.3 per cent.

This is significant because a new transport Bill laid before Parliament will give local authorities greater powers to impose so-called quality control contracts. These are regulation of buses by another name and the local authority in Sheffield, for one, is keen to use them. If that happens, Stagecoach will be riding straight out of town. Indeed, it may even sue for damages.

On the rail front, Stagecoach has seen its best ever operational performance at South Western but profits are falling there because of the fierce competition for the franchise. Stagecoach needs to collect revenues aggressively to stand still here and has already brought in 100 extra ticket collectors. There is also a risk, if a recession hits employment in the City, that South West, the UK's biggest commuter franchise, could be hit very hard.

Still, Stagecoach's confidence is high and it is expecting to deliver better than expected profits in the full year, despite the burden of record oil prices. The Scottish transport group may be spreading a very green-friendly message but there's nothing woolly about its business plan.

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