Rotala's first half revenue rises 11%

For the six months ended 31 May, revenue increased by 11% to £27.4m compared to the same period last year. Operating margins remained flat at 18.2% and pre-tax profits, before exceptional items, increased by 9% to £1.135m.

The acquisition of OFC Connections, a supplier of ground transportation services at Heathrow, Gatwick, London City and Southampton airports, in January contributed to the rise in revenues in the company’s contracted services department. Revenue rose by 22% to £9.8m.

Local authority bus contracts also contributed to the rise in revenue in the department as it comprises about 15% of the company's turnover. The 2015 acquisition of Green Triangle Buses provided the company with a much better geographical spread from where revenue came from.

Revenue in the commercial services department rose 5% to £16.6m, also in part due to the acquisition of OFC Connections, and comprises about 61% for the company’s turnover.

Revenue in the chartered services department rose by 41% to £980,000 due to the acquisition of Uxbridge-based luxury coach company Wings in June 2015.

The Buses Bill draft has been placed before parliament, which covers the re-franchising of bus networks in major cities. Rotala has a presence in Greater Manchester, the West Midlands, and Bristol/Bath, which could be affected by the bill.

Chairman John Gunn, said: "In both the Bristol/Bath areas and Greater Manchester it is clearly envisaged that the local authorities will use the legislation to achieve complete control over local bus networks by the franchise process. But in the West Midlands a more collaborative approach using bus alliances is favoured by the local authority.

"From our perspective both lines of approach offer the prospect of considerably increasing the market shares we can achieve to a level to which we could not have aspired under the existing structure of the bus markets in these locations."

Gunn added: "Whilst the bus industry continues to undergo considerable change, the aims of the government's Buses Bill have become much clearer … The effects of the bill look to be very positive."

The interim dividend is 0.80p per share, up from 0.725p in 2015. Basic earnings per share, including all exceptional items, was 1.78p per share in the period, down from 1.86p in 2015.

The AIM-listed company also raised about £3.24m, after the half year period on 9 June, through the placing of over 3.8m shares at 62p each which would be used to improve bus depots in the West Midlands and provide funds for future bolt-on acquisitions.

Shares in Rotala were up 5.60% to 66p at 0856 BST.