Fuel agreement boosts Rotala as year-end performance improves
BIRMINGHAM-based bus and coach group Rotala has said it expects 2013 pre-tax profits to be to be modestly ahead of the previous year and in line with management expectations.
In a trading update for the year to November 2013, the company said operating cash flow was strong, and while net debt increased slightly to £19.9m, this was after spending £3.8m on acquisitions.
The ratio of net debt to EBITDA, which stood at just under three times at the end of the year, is expected to decrease to about 2.5 times for 2014.
The transport company, which operates the Flights coaches business and several bus fleets around the UK, including the West Midlands, added that trading for the current year had begun in line with budget.
More recently, it said it had taken advantage of stable oil prices and the strength of Sterling to extend hedging agreements on the price of fuel to approximately 95% of the company’s anticipated requirements out to April 2015 and 70% of its requirements in the remainder of 2015.
The price achieved is a little below that used for current budgets and forecasts and the firm said this gave management considerable certainty over one of the company’s major costs for the next two years.
John Gunn, Rotala chairman said: “The bus industry continues to be volatile and in a state of some change. In this light, we believe that the company produced an acceptable performance in 2013. The current financial year has started reasonably and we look forward to releasing our final results for FY 2013 in March 2014.”
