* Says trading remains challenging, especially in rail
* Profitability since end-April in line with expectations
* UK rail revenue up 0.9 percent
* North American revenue down 5.8 percent
* Shares up 1.9 percent
(Adds background, shares)
By John Bowker
LONDON, Aug 28 (Reuters) - British transport operator Stagecoach said it was seeing slower revenue growth as conditions remained tough across the group, although profitability since April was in line with expectations.
Revenue growth at its British rail business, which includes London commuter franchise South West Trains, was 0.9 percent for the 12 weeks to July 26, down from a 6.2 percent like-for-like rise in the year to end-April, the rail and bus operator said in a statement on Friday .
Its North American coaches operation saw a 5.8 percent revenue decline in the three months to end-July.
Stagecoach shares were up 1.9 percent at 139.4 pence by 0800 GMT, valuing the business at just over 1 billion pounds ($1.63 billion).
The company is weighing up options regarding a potential takeover of rival National Express which said on Thursday it had received a proposed all cash takeover offer of 450 pence a share, or 600 million pounds, from a consortium of CVC Capital Partners and Spanish shareholder the Cosmen family..
National Express shares were down slightly at 408 pence a share as newspapers including The Financial Times reported investors were minded to ignore the approach and instead see the indebted company through a rights issue.
Stagecoach said last month it was in exclusive talks with the CVC-Cosmen axis with the aim of buying certain National Express businesses should the takeover go through. (Reporting by John Bowker, Editing by Paul Hoskins) ($1 = 0.6140 pound)