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

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LONDON, Oct 2 (Reuters) - FirstGroup said it was preparing to take over the running of Britain's West Coast rail line Later this year, despite a legal appeal over the contract award by incumbent Virgin Trains.

Bus and rail operator FirstGroup on Tuesday said that its focus was on ensuring a smooth transition for staff and passengers as it made plans to start running the franchise on Dec. 9, having been awarded the deal by the UK government in August.

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

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

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

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

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

(Reporting by Sarah Young; editing by Rhys Jones)

((sarah.young@thomsonreuters.com)(+44 20 7542 1109)(Reuters Messaging: sarah.young.thomsonreuters@reuters.net))