Transport group Go-Ahead slumped 15% following fears about the impact of an economic slowdown on the company's rail operations.

The fall came despite today reporting interims in line with City expectations.

The company reported pre-tax profit before exceptionals and amortisation of £58.3 million for the six months to 29 December, 14.5% higher than the same period in 2006. That was after strong demand for its bus and rail services.

But analysts remain cautious about the outlook. Joe Thomas from independent broker Investec, says: 'We are increasingly cautious on the prospects for the transport operators if the London economy slows. While shares trade at the low end of the sector, it is the most exposed operator to London commuter rail.'

Gert Zonneveld from Panmure Gordon, another independent, flags next year's loss of the Southern franchise: 'The rail division accounts for nearly half of Go-Ahead's clean operating profit and the potential negative impact of an economic slowdown, combined with next year's expiry of, in our view, its most profitable rail franchise, means our hold recommendation is unchanged.'

Both analysts, also flagged the potential for rising fuel costs to impact the bus division. In early morning trade the company, which saw underlying pre-tax profits fall following exceptional charges, lost 338p dropping to 1,897 pence.

Pre-tax profits for the period were down 3.6% to £45.2 million, in part reflecting an exceptional charge of £8.2 million against the carrying value of the group's Go West Midlands bus operations, which is under review.

The company's bus operation reported operating profits before amortisation and exceptional items of £33.7 million, up 15% on the same period in 2006. Operating profits in the company's rail division, which includes the Southern, Southeastern and London Midland rail franchises, increased 22.7% to £31.4 million.