Rotala to continue growth strategy as H1 profits increase
BIRMINGHAM-based bus and coach group Rotala has said it will continue with its growth strategy despite a fall in half year revenue.
The group said revenue declined to £26.09m in the six months to May 31, 2014 (2013: £26.66m), although pre-tax profit was up 12% to £1.055m (2013: £0.946m).
Chairman John Gunn said: “Our management efforts are concentrated on expanding our commercial bus activities in all our geographical areas of operation. We are also keen to continue the encouraging inroads which our private bus networks business has made in the last few years. Little can be expected from local authority transport work in the foreseeable future. Pressure on local government budgets will undoubtedly be a continuing theme.
“The group has a solid financial base and can make good use of this in the current market conditions. We have a strong and experienced management team and remain on the lookout for suitable acquisitions. We are confident about our ultimate strategy and the future prospects of the group.”
He said the in the short to medium term, the group would have only a low requirement for replacement vehicles as its fleet was in good condition. Hire purchase instalments on the current fleet will also continue to fall and will be about £3.4m for the financial year as a whole (2013: £4.5m.
“Thus I see free cash flows increasing and, in the absence of acquisitions, my aim will be to continue the steady increase in dividends per share. We will also look to using our existing permissions to buy back ordinary shares for cancellation or treasury should market conditions and cash flows permit,” he added.
Interim dividend increased by 18% to 0.65p per share (2013: 0.55p) and it said it had also fully hedged its fuel costs for the whole of this year and next.
