Rotala sells Avonmouth depot, offers update on fuel hedging requirements

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Rotala has announced the sale of its freehold depot at Avonmouth, Bristol, to property investment firm Umberdata Avonmouth Ltd for £2.09m.

According to Rotala’s statement approximately £1m of the proceeds generated through the sale will be used to improve the group’s balance sheet through a reduction in its bank borrowings.
The remainder will be kept available for future re-investment or potential acquisitions.

The firm also updated investors on its diesel fuel hedging requirements: “Currently the annual fuel requirement of the Group is approximately 11.5m litres.

“Given the recent volatility of fuel prices, which seems likely to continue, the board has been monitoring diesel price trends closely.

“Taking advantage of the recent weakness of crude oil prices, the board has taken out a number of fuel hedge contracts, using diesel derivatives, for the year ending 30 November 2019. These hedge contracts are expected to cover approximately 52% of the Group’s fuel requirements for that year, at an average price of 101p per litre.

“The board will continue to monitor market conditions closely and take out such further fuel hedges as it deems are appropriate to meet its objective of reducing volatility and creating business certainty.”