GWENT business leaders nearly choked on their fine wine when Newport Transport turned up at a plush awards ceremony.

What was the local bus company doing here? They're not a business. Aren't they part of the council?

It's a false image that managing director Trevor Roberts has been fighting since he arrived three years ago.

Newport Transport is very much a business, a profitable one with a surprising portfolio, and one that's dedicated to modernising itself.

Mr Roberts said: "I found a company steeped in tradition with a business culture of the 1960s. That had to change.

"The attitude was, 'we are the bus company, people can come to us'. That has to turn around to saying we want every passenger we can get. We want every 95p.

"It's got a more modern business culture now, but there's still a lot to be done. We're becoming much more proactive - exploring business-to-business links, like a bulk ticket offer to the Office of National Statistics."

One of the most visible changes will be a rebranding of the buses from Newport Transport to Newport Bus. The city crest has been taken off and a new catchline, Serving the City, added.

It's part of a vision to distance the company from the stuffy image of the council and make it more progressive.

Mr Roberts added: While Newport Transport may once have been part of a council department, that's no longer the case."

A quick tour of the HQ in Corporation Road turns up some very surprising finds: Newport Transport also runs its own public MoT testing station and offers repairs on cars.

There's a commercial driver training school with its own learner vehicles and instructors - used primarily for its own staff, but also by the police, the council and other bus companies.

And a whole corner of the site is given over to servicing a maintenance contract for the council that brings in all sorts of weird and wonderful machines - from lawnmowers to woodchippers to road-sweepers to rubbish trucks.

Mr Roberts, 48, said: "People think of us as just a bus company, but there's much more to it. These are small parts of the business but we think they have huge potential. All in all, these satellite businesses account for 19% of total turnover, or £1.5m."

Newport Transport was formed when the industry was deregulated in 1986. Its only shareholder is the council, but they do not influence decision-making or force the company to put on unprofitable services.

The council could sell the company to an organisation like Stagecoach, but Mr Roberts thinks it's unlikely.

A board of directors, which includes councillors and local businessmen, has set a target of 5% profit a year.

In 1999/2000 the company had a turnover of £7.3m and a profit of £21,000. That has grown steadily to £8.1m in 2003/04, and profits have surged to £380,000 - a margin of 4.7%.

Mr Roberts said the 5% target could be hit more easily if the company dropped its community approach, became more 'hardnosed' and axed less profitable rural routes.

The company has bought 12 vehicles in the last year but it can only borrow money from the council and cannot go to the banks, so it uses lease financing to secure new buses.

Mr Roberts is awaiting delivery of six pioneering yellow buses dedicated to school use. It's a carefully balanced project and part of a fresh approach to buses that has also seen successful summer city tours in an open-topped double-decker.

Mr Roberts, also secretary of Newport Chamber of Trade and vice-president of Newport Chamber of Commerce, said: "Newport's regeneration holds significant opportunities for us if the city grasps the nettle and changes.

"I'm praying for the opening of the £55m Southern Distributor Road. Jams have forced us to put on extra buses and drivers to cover those that get delayed. But I'm also wary of the redesign of the bus station in the city centre. I'm worried buses will disappear into a Bermuda Triangle of congestion."

Regeneration company Newport Unlimited is keen to use the riverside site for housing and wants the bus company to relocate at a new depot nearby on the former Pirelli works site. A custom-built facility could cost £3.5m.

Mr Roberts, who started his career in depot management and has served as operations director with giants Stagecoach and First Group, said: "I like the idea of a move but it could be years away.

"The buildings here are very old and have been tacked onto each other. A custom-built office and yard would make us much more efficient.

"My main concern is rocketing fuel prices - up some 15% in the last four months. Insurance costs are also crippling because of the claims culture. It's part of the reason we put CCTV on every bus. Cases are coming up now where it can be proved a claimant wasn't even on the bus they said they were."

And businessmen had also better watch out. Newport Transport has again been shortlisted for the Five Counties Business Awards.

Just don't mention the council.