Rotala chugs its way through 2015

The AIM-traded omnibus company said pre-tax profit, off a slightly reduced level of turnover and before exceptional items, was broadly in line with management expectations.

Exceptional items were largely comprised of the mark to market provisions for the derivative-based fuel hedges, Rotala's board said, which the company took out to cover its future fuel requirements.

During the year, Rotala made two acquisitions - Green Triangle Buses and Wings Luxury Travel. Post period end Rotala also acquired OFJ Connections for consideration of £1.3m, with the board saying the purchases had considerably strengthened its business offering in the North West and Heathrow areas.

The company's operating cash flows remained strong, though net debt rose to £22.7m from £18.4m during the year.

Rotala said the two acquisitions were behind the debt, as well as investment in freehold property and the programme of share buybacks for holding in treasury. Shortly after year end, the group disposed of a depot surplus to requirements, leading to net debt reducing by £2.1m.

"We have made considerable strides in the last 12 months to reshape our depot footprint to conform to anticipated requirements, at the same time as making a number of key acquisitions", said Rotala chairman John Gunn.

"Our asset cover remains strong and we have a good geographical spread of businesses and activities which offer protection against any renewed local authority control of bus services through the prospective Buses Bill", he added.

Rotala's board said it would pay a second interim dividend for the 2015 year on 30 March 2016, at a rate of 1.375p per share, though it would not recommend a final dividend. The total dividend for the year was 2.1p per share.

Looking ahead, Rotala said its trading for the current year began in line with budget, and that - with the recent three acquisitions considered - turnover should show a return to growth without affecting margins.