Rotala profits slow as revenue drops

News stories are free to read. Click here for full access to all the features, articles and archive from only £2.99.

Rotala has released unaudited interim financial results for the six months to May 31, 2015.

Revenue stood at £24.633m (2014: £26.086m), a drop partially attributed to the end of a contract with British Airways which the company had held for 10 years. Revenue in contacted services had thus dropped by 19%, while revenue in commercial services was up 8%.

Gross profit saw a marginal increase to £4.488m (2014: £4.470), though profit from operations fell to £1.460m (2014: £1.654m) and profit before taxation fell by just under £100,000 to £894,000. Rotala claimed profit before taxation was in fact up 6% at £1.045m before mark to market provision and other exceptional items.

Rotala highlighted an interim dividend increase of 11.5% to 0.725p per share, acquisitions of Green Triangle Buses (GTB) and Wings and said the group is ‘well positioned for franchising opportunities under the new Bus Bill.’

Rotala Chairman John Gunn said the business was concentrating on profitable turnover rather than turnover regardless of margin, and had seen operating margins rise from 17.1% to 18.2%.

On the Bus Bill, he added: “The one conurbation in which the greatest progress has so far been seen is that of Greater Manchester, in which we recently made a strategic investment by our acquisition of GTB. We believe that this entry point into the Manchester market leaves us well placed to participate in any bids for franchised contracts that may result from the Government’s new proposals.

“Similar plans are being made for both Birmingham and Bristol. In both of these areas we are the clear number two bus operator and so will be very well positioned to participate in the operation of any franchising arrangements which may be put in place there.”