Lothian Buses said in its annual report that its revenue rose £4 million to £146 million in 2016, with profit up from £6.4 million to £11.9 million.

The improved performance allowed the firm to increase the dividend paid to its public sector owners to £6.6 million, up from £5.5 million the previous year.

Lothian Buses is 91% owned by the City of Edinburgh Council.

Councillor Lesley MacInnes, the council’s transport and environment convener, said: “The council is committed to increasing the use of cleaner, more efficient public transport by residents and visitors, and, as majority shareholder, we are particularly encouraged by Lothian’s ongoing success, which will allow further investment in and development of sustainable transport in the capital.”

Richard Hall, Managing Director of Lothian, added: “Our focus for the year ahead will be to continue to develop our business, improving the essential connections that we provide for residents, workers and visitors in the Edinburgh city region.

“This will build on the new services introduced last year and our investment in cleaner, quieter vehicles aligning with Scottish Government aspirations.

“As a major contributor to both the local and wider Scottish economy we will continue to work closely with all our partners, particularly The City of Edinburgh Council, to ensure that our buses are able to move efficiently around the city and surrounding areas which allows us to deliver an excellent service for all our customers.

“Over 120 million customer journeys were undertaken on our services during 2016 representing a year on year uplift of 0.3%, contrasting sharply with significant declines seen elsewhere throughout the UK and Scotland.”

Over the last 10 years, the company said it has generated revenues of more than £1.2 billion and returned a dividend of £38.5 million to its local authority shareholders.

During this period it has carried 1.1 billion passengers.