UPDATE 1-Firstgroup prepares to run West Coast line this year

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LONDON, Oct 2 (Reuters) - FirstGroup said it waspreparing to take over the running of Britain's West Coast railline Later this year, despite a legal appeal over the contractaward by incumbent Virgin Trains.

Bus and rail operator FirstGroup on Tuesday said that itsfocus was on ensuring a smooth transition for staff andpassengers as it made plans to start running the franchise onDec. 9, having been awarded the deal by the UK government inAugust.

Virgin Trains has said a legal challenge it started againstthe British government could prevent the contract withFirstGroup being signed, legal action which FirstGroupacknowledged but indicated was not affecting its plans.

"We continue to prepare for a successful mobilisation on 9December 2012," the company said in a statement.

Virgin Trains, a joint venture between high-profilebillionaire Richard Branson's Virgin Group and Stagecoach, has run the service between London, north west Englandand Scotland, for 15 years but lost out in the contractextension bid.

The tycoon argues that said Britain's Department forTransport's decision needs to be reviewed because FirstGroup'snumbers do not stack up.

FirstGroup said that trading in the first six months of theyear across the rest of its business, which includes schoolbuses and Greyhound coaches in the U.S. and buses in the UK, wasin line with expectations and it was committed to dividendgrowth of 7 percent for its current financial year.

(Reporting by Sarah Young; editing by Rhys Jones)

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Keywords: FIRSTGROUP/BRIEF