Rotala's progress down to acquisition strategy, says chairman

Rotala's shares inched upwards on Tuesday after revenue and profits climbed, largely courtesy of a newly acquired fleet and a newly integrated airport shuttle bus business.

The transport operator recorded a profit before tax of £3.7m for 2018, an increase of 31% compared to the year before, as revenue climbed by 19% to £62.4m after it acquired the entire bus business, bus brand and 31-strong vehicle fleet of CEN Group, which trades as Central Buses, for a cash consideration of £1.95m.

The AIM traded company also benefitted from a full-year contribution from its acquisition of Hotel Hoppa, which serves routes between the Heathrow airport terminals and local hotels, right at the end of 2017.

John Gunn, non-executive chairman of Rotala, said: "I am pleased to be able to make this report to the shareholders of Rotala Plc for the year ended 30 November 2018. The company continues to make good progress and its results clearly show the benefit of the acquisition strategy which the board has pursued over the last three years. In that time we have made seven acquisitions."

Cash and cash equivalents stood at £0.4m at the end of the year, down from £0.6m at the same point the year before, while its total proposed dividend was 2.70p per share, up from 2.50p per share.

Rotala also noted that it changed its principal bankers to HSBC at the beginning of the year, entering into new and enlarged facilities, which it said are "generally on more favourable terms than the ones they replaced"

The new facilities comprise a term loan of £5.5m, a revolving facility of £15.5m and an overdraft facility of £3.5m, with a maturity date for all these facilities of 5 December 2021, giving the group approximately £10m of headroom with which it can finance further potential acquisitions.

"The group possesses a strong and very experienced management team which has demonstrated over the last decade that it has the right strategy and the skills to implement it. We continue to be actively engaged in hunting out potential acquisitions and, with the backing of our new bankers, possess considerable firepower with which we can attain our objectives. In our assessment there will continue to be much divestment and acquisition activity in the bus market in the next few years," said Gunn.

Rotala's shares were up 2.91% at 53.00p at 1011 BST.