UPDATE 1-Britain's Go-Ahead sees improved profit on travel demand recovery

(Adds CEO comment, background and shares)

June 10 (Reuters) - Britain’s Go-Ahead Group said on Thursday its annual outlook “had improved”, as rising vaccination rates drove passenger volumes for its bus and rail services to the highest since the pandemic began, sending its shares up 4%.

Without providing figures for its outlook for the year ending July 3, the company said profit expectations for its London and international bus units have also increased.

Bus and rail operators took a big hit last year as multiple lockdowns in England hampered non-essential travel, with people avoiding public transport due to fears of contracting the virus. But Britain has been opening up as COVID-19 vaccines are rolled out.

Passenger volumes for the regional bus services were currently around 65% to 70% of levels seen before the global health crisis hit, the London-listed transport operator said.

Go-Ahead also said it was working towards paying a dividend at an “appropriate level” in 2021.

The company said it expects to have more than 270 million pounds ($381.11 million) in available cash and unused loans at the end of the year.

“As we emerge from the pandemic, public transport has a huge role to play in economic recovery; and an equally important role in tackling climate change as we encourage more people onto our services and away from private cars,” Chief Executive Officer David Brown said. ($1 = 0.7085 pounds) (Reporting by Pushkala Aripaka in Bengaluru, Editing by Sherry Jacob-Phillips and Devika Syamnath)