According to its latest trading update, Rotala has made good progress during the year and the longer term trading outlook remains in line with market expectations.
Growth has been achieved this year predominantly through acquisition. Rotala said the integration of Elite Minibus and Wigan Coachways has gone well.
However, higher than anticipated levels of temporary staffing during the period have resulted in some additional costs being incurred with the integration of Heathrow-based OFJ Connections.
The desired level of permanent staffing has now been achieved and the integration, which is proceeding on schedule, will be completed by the end of the 2016 financial year, with a positive contribution to profits expected in 2017.
In the South West, where Rotala operating company Wessex Connect provides bus services linked to the universities in Bristol and Bath, passenger numbers remain consistent. The firm stated: “We have however, seen a shift in the buying habits of the passenger in the region, such that purchases of weekly or daily ticket products are increasingly more favoured over the longer dated pass products. This change in preference of ticket product is expected to defer a small amount of revenue anticipated to crystallise in 2016 into 2017 instead.”
Looking ahead, Rotala said there have been a number of positive developments which are expected to underpin its trading prospects for 2017: “In the West Midlands, it is encouraging that we have been noticeably more successful at winning local bus contracts offered by Transport for West Midlands (TfWM), the successor body to Centro, in its last contract round.
“TfWM is also making progress on its plan to take the Bus Alliance route, rather than waiting for the Bus Services Bill to deliver the ability to adopt full bus franchising. We are in active negotiation with TfWM to introduce a bus alliance on a key West Midlands bus corridor and we expect this to commence in early 2017. Such bus alliances will bring significant benefits to the passenger, as well as to bus operators.”
Rotala said its strategy will continue to focus on maintaining the company’s “strong balance sheet and geographic spread,” whilst striving to improve its position, wherever possible, by organic growth or by acquisition.
