Rotala PLC Trading Statement (1813O)
November 03 2016 - 3:00AM
UK Regulatory
TIDMROL
RNS Number : 1813O
Rotala PLC
03 November 2016
3 November 2016
Rotala plc
("Rotala" or "the Company" or "the Group")
Trading Statement
Rotala today provides an update on trading.
The Group 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, with the Company making three acquisitions during the
year. Two of these, Elite Minibus and Wigan Coachways increased the
scale of our operations in the North West. The more substantial
acquisition of the Heathrow business of OFJ Connections Limited
("OFJ") in January brought a considerable expansion of our business
at Heathrow Airport.
The integration of Elite Minibus and Wigan Coachways has gone
well, considerably broadening the services we can offer in the
North West of the country. We expect these acquisitions to provide
a positive contribution to the Group's profits in FY 2017. The
completion of the integration of OFJ in the Heathrow area was, as
anticipated and as stated at the time of the acquisition, to
require the whole of the remainder of FY 2016. Integration has
proceeded on schedule, although higher than anticipated levels of
temporary staffing during the period have resulted in some
additional non-recurring costs being taken in FY 2016, with a minor
impact on profit before tax expected this year. The desired level
of permanent staffing has now been achieved and the integration
will be completed by the end of FY2016, with a positive
contribution to profits expected in 2017.
In the South West, where we provide many bus services linked to
the universities in Bristol and Bath, passenger numbers remain
consistent. 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, there have been a number of positive developments
which are expected to underpin our 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 Buses 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.
We have also seen a significant pick up in our private bus
networks business where the new contracts which we have won
considerably outweigh the contracts lost through the usual
rotation.
As we look ahead to 2017 and beyond, we remain confident that we
are well placed to take advantage of the opportunities which are
being presented by the continuing state of change in the bus
industry, a state of change which will be further reinforced by the
Buses Bill. Our strategy will continue to focus on maintaining the
Company's strong balance sheet and geographic spread, whilst
striving to improve our position, wherever we can, by organic
growth or by acquisition.
For further information please contact:
Rotala Plc 0121 322 2222
John Gunn, Chairman
Simon Dunn, Chief Executive
Officer
Kim Taylor, Group Finance
Director
Nominated Adviser & Broker:
Cenkos Securities plc 020 7397 8900
Stephen Keys/Callum Davidson
(Corporate Finance)
Michael Johnson/Julian Morse
(Corporate Broking)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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