Rotala on the right road to growth

BIRMINGHAM-based transport group Rotala – operator of the Flights airport transfer coach service – has reported a 14% growth in revenue for the year ended November 30, 2009.
 
The company brought in £40.6m last year, compared to £35.7m in 2008. This was despite the challenging bus market in the West Midlands, which declined during recession.

Results before intangible asset expenses, share based payments and debt finance costs rose to a profit of £1.9m from £0.35m, while operations profit taking into account the same factors rose 43% to £3.5m from £2.5m.

Adjusted basic earnings per share rose to 7.06p from 1.67p and net assets at the year-end were up 53% at £17.6m compared with £11.6m in 2008.

John Gunn, chairman, said he was pleased with the results, especially as they had been derived from organic growth as opposed to being acquisition-led. The group made no new acquisitions in 2009.

He said trading in 2010 was likely to be in line with expectations.

In addition to Flights, the group also operates Zaks Bus and Coach Services, Birmingham Motor Traction, Diamond Bus Company, North Birmingham Busways, Ludlows of Halesowen and South Gloucester Bus and Coach. The group’s fleet now stands at 450 vehicles.

In tandem with its annual results, the group has also announced the award of a series of new contracts.

The combined value of the new services is expected to increase annual revenues by almost £2m.

In Birmingham, through its wholly owned subsidiary Central Connect, Rotala has been awarded a number of new contracts by Centro.

These contracts are largely of three and four years’ duration. The principal of these is to operate the s2 and s3 services between Solihull and Coventry.

In the Bristol and Bath area, the company has secured a number of Flights contracts through agreements with Bath & North East Somerset Council, North Somerset Council and South Gloucester Council.

In the Gatwick/Heathrow area, Flights has been awarded two-year contracts to provide staff transportation and hotel bus services.   

Finally in a variety of locations various current customers, including National Grid – Transco, have renewed contracts for up to two years, or extended existing arrangements.

Mr Gunn said: “This success in obtaining new work underlines the company’s commitment to increase group turnover and to become a significant force in transport operations in our chosen locations.

“Our management is to be congratulated on achieving these successes. These awards are a testament to our management strengths and to the consistently high quality and reliability of the services provided to our customers.”

The group said its strategy would continue to focus on its core strengths, in particular the West Midlands bus market – which is the UK’s second largest.

During the year, the company opened a new depot in Droitwich to serve its growing network of services in Worcestershire.

Outside the region, the group has also opened a new depot near Bath to serve its expanding operations in that area.

The group’s turnover is now broadly based and is more or less equally divided between revenues from commercial bus operations, subsidised bus routes and contracted private bus networks.

“We intend to retain this balance in the group’s businesses as we continue to expand,” said Mr Gunn in the results statement.

One of the year’s highlights saw the group earn £1.1m from the transportation contract awarded for the Rotary International conference in Birmingham.

It also secured a grant of £2.9m under the Department of Transport’s £30m Green Bus Fund initiative. The aim of the fund is to help bus operators acquire low carbon buses.

The grant will enable the group to acquire 23 hybrid Alexander Dennis diesel/electric vehicles.