Rotala has released its unaudited interim results for the six months to May 31, 2016, with significant increases in revenue and profit.
Turnover was up 11% to £27.4m (2015: £24.6m) while profit before taxation (before exceptional items) was up 9% at £1.135m (2015: £1.045m).
Interim dividend also saw an increase of 10% to 0.80p per share (2015: 0.725p).
John Gunn, Non-Executive Chairman of Rotala, said the company was highly optimistic about the impact the Bus Service Bill would have on the company.
“The effects of the Bus Services Bill look to be very positive for Rotala,” he said.
“The Bill is expected to bring us considerably greater opportunities in the West Midlands area and our recent investment will enable us to take full advantage of these.
“The Bill, as expected, covers the re-franchising of bus networks in major cities. We have a presence in three of those conurbations, Greater Manchester, Bristol/Bath and the West Midlands.
“The approach of the new transport authorities in each of these regions is however different. In both the Bristol/Bath areas and Greater Manchester it is clearly envisaged that the local authorities will use the legislation to achieve complete control over local bus networks by the franchise process. But in the West Midlands a more collaborative approach using bus alliances is favoured by the local authority.
“From our perspective both lines of approach offer the prospect of considerably increasing the market shares we can achieve to a level to which we could not have aspired under the existing structure of the bus markets in these locations.
“In the West Midlands, though our overall market share is again relatively small in a market completely dominated by one very large operator, our business is focused on the western and southern sides of Birmingham and in these particular localities we have substantial market shares.”
The company said its fuel hedge position is unchanged, and given the uncertain direction of oil prices, the board has decided not to consider fuel hedging again until 2017 or until the market uncertainty has been satisfactorily resolved.
The group has the following fuel hedges in place:
? For the remainder of 2016, hedges cover about 86% of the fuel requirement at an average price of 101p per litre;
? For 2017 about 85% of the fuel requirement is covered at an average price of 95p a litre; and
? For 2018 about 88% of the fuel requirement is covered at an average price of 91p a litre.
John Gunn added: The group has a strong balance sheet and substantial unused financing facilities.
“The recent placing will enable the company to maintain its buy and build strategy. To date, Rotala has grown predominantly through acquisition and we continue to be actively engaged in looking for attractive bolt-on opportunities.
“In the slightly longer term the draft Bus Services Bill offers new possibilities for the group. The Bill should, if implemented, enable us to increase our market shares significantly in areas where such ambitions would previously have been impracticable and unattainable.”
