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RNS
Rotala PLC  -  ROL   

Half-year Report

Released 07:00 09-Aug-2018

RNS Number : 2609X
Rotala PLC
09 August 2018
 

 

9 August 2018

 

 

Rotala Plc

 

("Rotala" or "the Company" or "the Group")

 

Unaudited Interim Results

 

Rotala plc (AIM:ROL), a provider of transport solutions across the UK, announces its unaudited interim results for the six months to 31 May 2018.

 

Highlights

 

·      Revenue up 14% vs. H1 2017 to £32.7 million

 

·      Profit from operations up 18% to £2.3 million*

 

·      Profit before taxation up 17% to £1.57 million*

 

·      Basic adjusted earnings per share up 3.5% to 2.67p*

 

·      Interim dividend increased by 8% to 0.92p per share (2017: 0.85p)

 

·      Rotala continues to pursue attractive acquisition targets

 

·      Current trading in line with market expectations

 

*before exceptional items

 

For further information please contact:

 

 

Rotala Plc

0121 322 2222

John Gunn, Chairman

 

Simon Dunn, Chief Executive

 

Kim Taylor, Group Finance Director

 

 

 

Nominated Adviser & Joint Broker:

Cenkos Securities plc

 

020 7397 8900

Stephen Keys/Callum Davidson (Corporate Finance)

Michael Johnson/Julian Morse (Corporate Broking)

 

 

Joint Broker: Dowgate Capital Stockbrokers Ltd

0203 903 7715

David Poutney/James Serjeant (Corporate Broking)  

 

 

 

 

 

Chairman's Statement

 

I am pleased to present this interim report to shareholders in respect of the six months ended 31 May 2018. The Company has continued to make good progress in the first half of 2018, building on the benefits derived from the three acquisitions made in 2017 and the Central Buses acquisition made in the current accounting period.  

 

Results

 

Revenues for the Group as a whole during the period were £32.7 million. This represents an increase of 14% compared to the same period in the previous year. Operating margins fell slightly to 17.9% (2017: 18.9%) but this is attributable to seasonality effects to which I will return below. Pre- tax profits before exceptional items rose by 17% to £1.57 million (2017: £1.34 million).     

 

Contracted Services

 

Revenues in the Contracted Services division rose overall by 13.5%, when compared to the first half of 2017, to £11.8 million (2017: £10.4 million). Revenues in this division have increased by almost 50% over the last four years. This level of growth reflects the investment we have made in this division over this period, not only in the form of acquisition but also in a determination to become a key player in the contracted markets in which we are now represented.

 

Thus we entered the Manchester market through an acquisition in 2015 and in the intervening period we have successfully expanded the contracted base of the business by winning an increasing number of contracts from Transport for Greater Manchester. This progress was bolstered in 2017 by the acquisition of the Goodwins business. Similarly in the West Midlands, the Hansons acquisition in 2017, followed by that of Central Buses in 2018, has significantly improved our market share in the Transport for the West Midlands contracted market. We have also benefited from smaller, but locally important, gains in local authority contracts in Lancashire and Surrey, compared to the corresponding period in 2017.

 

In contrast to earlier years, therefore, income from local authority bus contracts has become the larger component of the Contracted Services division and now forms about 19% of group revenues. Revenues from corporate contracts, leaving aside a dwindling share of this market in the South West, were steady period on period.

 

Commercial Services

 

Revenues in the Commercial Services division, compared to the first half of 2017, rose by 19% to £20.1 million (2017: £16.9 million). Revenue gains were enjoyed in all geographical areas except for the South West where we have been deliberately reducing the number of our commercial services. In the West Midlands the acquisition of Hansons in 2017 and Central Buses in 2018 has undoubtedly improved our market share considerably. The Goodwins acquisition in Manchester, allied to the registration of some new routes, has also made a very positive contribution to revenue in this area of the business.  The bulk of the increase in revenues in this division has been provided by the Hotel Hoppa acquisition which was made late in 2017. This business is however seasonal, since it is reliant on the tourist traffic coming into and out of Heathrow airport, which significantly increases in the Summer months. This explains the dip in margins of the first half of this year to which I referred at the beginning of my statement. The busiest months of the Hotel Hoppa business lie in the second half of our accounting year and will have a beneficial impact on margins in that accounting period. In the remaining part of this division revenues in Preston were consistent with the previous year.

Overall therefore this division has increased in size by about 20% since 2015, reflecting in particular the acquisitions made for this division of the Group in 2017.    

 

Charter Services

 

Revenues in the Charter Services division fell by 41% compared to the previous year to £748,000 (2017: £1.28 million). This fall can be ascribed to two factors: first the amount of rail replacement work which we were able to obtain was much down on the previous year. Secondly the generally poor winter weather, being both unusually cold and wet for extended periods, had a markedly detrimental effect on activity in the private hire coach market in the first half of the year. It is noticeable that in the recent good weather the private hire market has shown renewed vigour.

 

Dividend

 

The Company will pay an interim dividend of 0.92 pence per share (2017: 0.85 pence) on 7 December 2018 to all shareholders on the register on 16 November 2018.  The board is conscious of the importance of dividend flows to shareholders; the board has set a target for dividend cover of 2.5 times earnings in the longer term.

 

Acquisition and Investment

At the end of February 2018 the Group acquired from CEN Group Limited, trading as Central Buses ("Central"), its entire bus business, bus brand and 30-strong vehicle fleet for a cash consideration of £1,950,000.  The Central business had annual revenues of approximately £2.8 million and its vehicle fleet had a fair value at acquisition of approximately £1.5 million. No other assets or liabilities of any materiality were assumed on acquisition. The acquisition is expected to be earnings enhancing from acquisition.

Central Buses was a well-established operator of commercial and contracted bus services in the northern part of the West Midlands area. This business, with its staff, was immediately integrated into the existing depot infrastructure which Rotala already possesses in the West Midlands and so no additional overhead was required as part of the acquisition. The acquisition extends the Group's network of bus services in the northern part of Birmingham, particularly in the Perry Barr area.

In order to integrate the acquisition with the rest of the Group we re-equipped the business with the standard Ticketer ticket machines which we use in the West Midlands region. In the first half of 2018 we also moved the whole Manchester business onto these machines and began to process of converting the Preston business as well. This investment in new ticket machines forms the bulk of the addition to plant and machinery of £530,000 in the period.

Also in the first half of the year in Manchester we purchased for £220,000 the freehold site next door to the one which we acquired with the Goodwins acquisition in 2017. We have cleared this new site of its unwanted buildings and thereby doubled the size of the freehold depot we possess in the Eccles area of Manchester.  The depot is now comparable in size to our Atherton depot and gives us ample room for expansion in accordance with our plans for the area.

 

Debt

 

At the beginning of this accounting period the Group changed its principal bankers to HSBC Bank Plc. Besides the attraction of enlarged facilities to support the Group's greater scale of operation, another key aspect of the HSBC offering is that it is tailored to the business characteristics of a bus company. In order to operate we must invest heavily in property and vehicles.  HSBC regard all secured lending, in the form of property mortgages and hire-purchase finance attached to vehicles, as forming no part of the leverage covenant that they wish to monitor. Their focus therefore is only on unsecured lending, which at 31 May 2018 stood at £11.4 million. At the same point, against a net book value in the vehicle fleet of £27.4 million, borrowings on hire purchase finance totalled £13.5 million and mortgage borrowing was £5.5 million compared to the net book value of freehold property of £7.5 million at that date.

 

 

Financial review

 

The following comments on the Condensed Income Statement address the results before any exceptional items. Revenues increased by 14% when compared with the same period in 2017, as explained above. Cost of Sales rose by 16%; consequently Gross Profits increased by 8% to £5.85 million (2017: £5.4 million). Administrative Expenses however increased by only 3%. Profit from Operations was therefore up by 18% and reached £2.32 million for the period (2017: £1.96 million). Net finance expense rose to reflect the increased size of the business, the larger vehicle fleet and the bank finance drawn down for acquisitions. Profit before Taxation increased by 17% to £1.57 million (2017: £1.34 million). Note 3 to this statement analyses the exceptional item column in the income statement.

 

The new shares issued in 2017 have increased the weighted average number of shares in issue, but the second half seasonality of the largest acquisition made with the funds raised (the Hotel Hoppa business) means that adjusted basic earnings per share, based on profits after tax and before exceptional items, were only some 3.5% up at 2.67 pence per share (2017: 2.58 pence). Basic earnings per share, including all exceptional items, were 2.62 pence per share in the period (2017: 1.79 pence), reflecting principally the large swing in the mark to market provision for the fuel derivative.

 

The gross assets of the Group were £75.1 million at 31 May 2018, compared to £65.3 million at the same time in the previous year. This change reflects the acquisitions made over the past twelve months, and investment in ticket machines and the vehicle fleet.  An analysis of the Group's holdings of property, plant and equipment is set out in Note 5 to this statement. The working capital assets of the group have also increased for the same reasons.

 

These factors have had their effect on total liabilities, which have risen to £41.2 million at 31 May 2018 (2017: £37.0 million). The net loans and borrowings of the Group, including its obligations under hire purchase contracts, stood at £32.7 million at 31 May 2018 (31 May 2017: £25.7 million), as a result both of the acquisitions made and the investment in ticket machines and vehicles. An analysis of these borrowings is set out in Notes 6 and 7 to this statement. Net assets were £33.2 million at the period end (31 May 2017: £28.2 million).  The large positive movement in the mark to market provision on the fuel derivative, combined with the 2017 share issue and retained profits, account for this change. 

 

Cash flows from operating activities were 40% up on the same period in the previous year but these flows were entirely absorbed by the demands made on working capital by the increased size of the Group. Hire purchase interest increased to reflect the larger borrowings via this type of financing arrangement.  Plant and equipment purchases were, as in 2017, largely offset by vehicles sold.

 

Cash flows from financing activities in the period principally reflect the large flows associated with the change in the Group's bankers at the start of the accounting year in December 2017, combined with some hire purchase refinancing activity. The capital element of payments on HP agreements fell slightly period on period. There was the usual decrease in cash and cash equivalents in the first half of the year, though a little lower at £0.7m than the £0.8 million of the previous year. The profitability, and resultant cash flows, of the Group are customarily weighted towards the second half of the year and this pattern can be expected to be repeated in the second half of 2018.  

 

Outlook

 

The progress achieved by the Group during the first half of the year has been very encouraging. Bearing in mind that the Group's profitability has an increased bias to the second half of the year as a consequence of the Hotel Hoppa acquisition, the results we have achieved in the first half of the year make the Board confident that we remain well on course to meet market expectations for the financial year as a whole.

 

Rotala has a proven track record of steady organic growth supplemented by sensibly priced acquisitions. The recent acquisition of Central Buses conforms to this strategy. We continue to be actively engaged in hunting out potential acquisitions and, with the backing of our new bankers, possess considerable firepower which can be used to attain these targets.

 

In our assessment there will continue to be much divestment and acquisition activity in the bus market in the next few years. We undoubtedly have the management skills and the resources to capitalise on these opportunities.  This makes us confident about the prospects of the Group in 2018 and beyond.

 

  

 

John Gunn

Non-Executive Chairman

 

9 August 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed consolidated income statement

Note

Unaudited 6 months ended 31 May 2018

Unaudited 6 months ended 31 May 2018

Unaudited 6 months ended 31 May 2018

Unaudited 6 months ended 31 May 2017

Unaudited 6 months ended 31 May 2017

Unaudited 6 months ended 31 May 2017

 

 

 

 

 

 

 

 

 

 

Results

before

 exceptional items

Exceptional

items

 

Results

for the

period

Results

before

 exceptional items

Exceptional

items

 

 

 

Results

for the

period

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Revenue

2

32,713

-

32,713

28,627

-

28,627

 

 

 

 

 

 

 

 

Cost of sales

 

(26,864)

-

(26,864)

(23,227)

-

(23,227)

 

 

 

 

 

 

 

 

Gross profit

 

5,849

-

5,849

5,400

-

5,400

 

 

 

 

 

 

 

 

Administrative expenses

 


(3,534)


36


(3,498)


(3,439)


(408)


(3,847)

 

 

 

 

 

 

 

 

Profit from operations

 

2,315

36

2,351

1,961

(408)

1,553

 

Finance expense

 

 


(748)


-


(748)


(621)


-


(621)

 

 

 

 

 

 

 

 

 

Profit before taxation

 

3


1,567


36


1,603


1,340


(408)


932

 

 

 

 

 

 

 

 

Tax expense

 

(283)

(61)

(344)

(253)

78

(175)

 

 

 

 

 

 

 

 

Profit for the period attributable to the equity holders of the parent

 



1,284



(25)



1,259



1,087



(330)



757

 

 

 

 

 

 

 

 

Earnings per share for profit attributable to the equity

 

 

 

 

 

 

 

holders of the parent during the period:

 

 

 

 

 

 

 

Basic  (pence)

4

2.67

 

2.62

2.58

 

1.79

Diluted (pence)

4

2.67

 

2.62

2.57

 

1.79

                              

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed consolidated income statement

Note

Audited year ended 30 November

2017

Audited year ended 30 November

2017

 

 

 

 

 

 

 

 

Results

before

 exceptional items

Exceptional

items

 

Results

for the

year

 

 

£'000

£'000

£'000

 

 

 

 

 

Revenue

2

57,906

-

57,906

 

 

 

 

 

Cost of sales

 

(46,828)

-

(46,828)

 

 

 

 

 

Gross profit

 

11,078

-

11,078

 

 

 

 

 

Administrative expenses

 


(6,599)


(796)


(7,395)

 

 

 

 

 

 

Profit from operations

 


4,479


(796)


3,683

 

Finance expense

 

 


(1,264)


-


(1,264)

 

 

 

 

 

 

Profit before taxation

 

3


3,215


(796)


2,419

 

 

 

 

 

Tax expense

 

(595)

257

(338)

 

 

 

 

 

Profit for the year attributable to the equity holders of the parent

 



2,620



(539)



2,081

 

 

 

 

 

Earnings per share for profit attributable to the equity

 

 

 

 

holders of the parent during the year:

 

 

 

 

Basic (pence)

4

5.95

 

4.73

Diluted (pence)

4

5.94

 

4.72

                                                                                                             

 

 

 

 

                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed consolidated statement of comprehensive income

Unaudited 6 months ended 31 May 2018

Unaudited 6 months ended 31 May 2017

Audited year ended 30 November 2017

 

 

£'000

£'000

£'000

 

 

 

 

Profit for the period

1,259

757

2,081

 

Other comprehensive income:

 

 

 

Actuarial profit on defined benefit pension scheme

-

-

58

 

 

 

 

Deferred tax on actuarial profit on defined benefit pension scheme

-

-

(11)

 

 

 

 

Other comprehensive income for the period (net of tax)

-

-

47

 

 

 

 

Total comprehensive income for the period attributable to the equity holders of the parent

1,259

757

2,128

 

Condensed consolidated Statement of Changes in Equity

Called up share capital

Share premium account

Merger reserve

Shares in treasury

Retained earnings

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

At 1 December 2016

10,762

9,875

2,567

(817)

5,424

27,811

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

757

757

Other comprehensive income

-

-

-

-

-

-

Total comprehensive income

-

-

-

-

757

757

Transactions with owners:

 

 

 

 

 

 

Share based payment

-

-

-

-

10

10

Dividends paid

-

-

-

-

(338)

(338)

Transactions with owners

-

-

-

-

(328)

(328)

 

 

 

 

 

 

 

At 31 May 2017

10,762

9,875

2,567

(817)

5,853

28,240

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

1,324

1,324

Other comprehensive income

-

-

-

-

47

47

Total comprehensive income

-

-

-

-

1,371

1,371

Transactions with owners:

 

 

 

 

 

 

Shares issued

1,458

1,904

-

-

-

3,362

Share based payment

-

-

-

-

10

10

Dividends paid 

-

-

-

-

(632)

(632)

Transactions with owners

1,458

1,904

-

-

(622)

2,740

 

 

 

 

 

 

 

At 30 November 2017

12,220

11,779

2,567

(817)

6,602

32,351

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

1,259

1,259

Other comprehensive income

-

-

-

-

-

-

Total comprehensive income

-

-

-

-

1,259

1,259

Transactions with owners:

 

 

 

 

 

 

Share based payment

-

-

-

-

2

2

Dividends paid

-

-

-

-

(408)

(408)

Transactions with owners

-

-

-

-

(406)

(406)

 

 

 

 

 

 

 

At 31 May 2018

12,220

11,779

2,567

(817)

7,455

33,204

 

 

 

 

 

 

 

 

Condensed consolidated statement of financial position

Notes

Unaudited as at 31 May 2018

Unaudited as at 31 May 2017

Audited as at 30 November 2017

 

 

£'000

£'000

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

5

39,353

35,491

36,925

Goodwill and other intangible assets

 

15,110

12,033

14,759

 

 

_____

_____

_____

Total non-current assets

 

54,463

47,524

51,684

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

2,743

3,086

2,526

Trade and other receivables

 

16,628

13,635

13,646

Derivative financial instruments

 

752

63

450

Cash and cash equivalents

 

514

947

627

 

 

_____

_____

_____

Total current assets

 

20,637

17,731

17,249

 

 

_____

_____

_____

Total assets

 

75,100

65,255

68,933

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

(6,723)

(7,407)

(6,477)

Loans and borrowings

6

(14,571)

(15,272)

(16,278)

Obligations under hire purchase agreements

7

(3,682)

(2,871)

(3,158)

Derivative financial instruments

 

-

(211)

-

 

 

______

______

_____

Total current liabilities

 

(24,976)

(25,761)

(25,913)

 

 

 

 

 

Non-current liabilities

 

 

 

 

Loans and borrowings

6

(5,204)

-

-

Obligations under hire purchase agreements

7

(9,840)

(8,503)

(8,357)

Provision for liabilities

 

(586)

(1,477)

(1,203)

Defined benefit pension obligation

 

(265)

(644)

(427)

Deferred taxation

 

(1,025)

(630)

(682)

 

 

______

______

______

Total non-current liabilities

 

(16,920)

(11,254)

(10,669)

 

 

______

______

______

Total liabilities

 

(41,896)

(37,015)

(36,582)

 

 

_____

_____

_____

Net assets

 

33,204

28,240

32,351

 

 

======

======

=====

 

Condensed consolidated statement of financial position

 

Unaudited as at 31 May 2018

Unaudited as at 31 May 2017

Audited as at 30 November 2017

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

Equity attributable to equity holders of parent

 

 

 

 

Called up share capital

 

12,220

10,762

12,220

Share premium reserve

 

11,779

9,875

11,779

Merger reserve

 

2,567

2,567

2,567

Shares in treasury

 

(817)

(817)

(817)

Retained earnings

 

7,455

5,853

6,602

 

 

______

______

_____

Total equity

 

33,204

28,240

32,351

 

 

=====

=====

====

 

 

 

 

Condensed consolidated cash flow statement

Unaudited 6 months ended 31 May 2018

Unaudited  6 months ended 31 May 2017

Audited year ended 30 November 2017

 

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

Profit for the period before tax

1,603

932

2,419

Finance expense (net)

748

621

1,264

Depreciation 

1,725

1,597

3,274

Gain on sale of property, plant and equipment

(241)

(242)

(446)

Acquisition expenses

49

-

47

Contribution to defined benefit pension scheme

(162)

(156)

(337)

Amortisation of intangibles

153

-

19

Notional expense of defined benefit pension scheme

-

-

22

Equity-settled share based payment expense

2

10

20

 

____

____

____

Cash flows from operating activities before changes in working capital and provisions

3,877

2,762

6,282

 

 

 

 

Increase in trade and other receivables

(2,980)

(2,497)

(2,056)

Increase in trade and other payables

281

2,302

396

(Increase)/decrease in inventories

(217)

(231)

80

Movement on provisions

(617)

(176)

(450)

Movement on derivative financial instruments

(302)

191

(408)

 

____

____

____

 

(3,835)

(411)

(2,438)

 

____

____

____

Cash generated from operations

42

2,351

3,844

 

 

 

 

Interest paid on hire purchase obligations

(299)

(244)

(501)

 

____

____

____

Net cash flows from operating activities

(257)

2,107

3,343

 

 

Condensed consolidated cash flow statement

Unaudited 6 months ended 31 May 2018

Unaudited  6 months ended 31 May 2017

Audited year ended 30 November 2017

 

£'000

£'000

£'000

Cash flows from investing activities

 

 

 

Acquisitions of businesses

(2,007)

-

(3,329)

Purchases of property, plant and equipment

(752)

(616)

(1,799)

Sale of property, plant and equipment

512

445

1,002

 

_____

_____

_____

Net cash flows used in investing activities

(2,247)

(171)

(4,126)

 

 

 

 

Cash flow from financing activities

 

 

 

Shares issued

-

-

3,362

Dividends paid

(408)

(338)

(970)

Proceeds of mortgage and other bank loans

17,879

-

1,105

Repayment of bank loans

(14,970)

(350)

(722)

Bank loan interest paid

(460)

(373)

(740)

Hire purchase refinancing receipts

1,681

140

717

Capital settlement payments on vehicles sold

(137)

-

(240)

Capital element of lease payments

(1,784)

(1,853)

(3,086)

 

_____

_____

____

Net cash generated from/(used in)  financing activities

1,801

(2,774)

(574)

 

 

 

 

Net decrease  in cash and cash equivalents

(703)

(838)

(1,357)

 

 

 

 

Cash and cash equivalents at start of period

(1,699)

(342)

(342)

 

_____

_____

_____

Cash and cash equivalents at end of period

(2,402)

(1,180)

(1,699)

 

======

=====

====

 

 

 

 

 

 

 

Notes to the Unaudited Consolidated Interim Financial Statements for the six months ended 31 May 2018

 

1.     Basis of preparation:

 

The unaudited condensed consolidated interim financial statements have been prepared using the accounting policies set out in the group's 2017 statutory financial statements.

The financial statements of the group for the full year are prepared in accordance with IFRS's as adopted by the European Union and these interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting".  

 

2.     Turnover:

Revenue represents sales to external customers excluding value added tax. All of the activities of the group are conducted in the United Kingdom within the operating segment of provision of bus services. Management monitors revenue across the following business streams: contracted services, commercial services and charter services.

 

 

 

 

 

Six months ended 31 May 2018

Six months ended 31 May 2017

Year ended 30 November 2017

 

 

 

 

 

£'000

£'000

£'000

Contracted

11,825

10,420

21,415

Commercial

20,140

16,932

33,702

Charter

748

1,275

2,789

Total

32,713

28,627

57,906

 

 

3.     Profit before taxation:

 

Profit before taxation includes the following:

 

 

 

Unaudited 6 months ended 31 May

2018

Unaudited 6 months ended  31 May

2017

Audited year ended

30 November 2017

 

£'000

£'000

£'000

 

 

 

 

Amortisation of intangible assets

(153)

-

(19)

Abortive transaction costs

(94)

-

-

Costs of change of principal bankers

(31)

-

(58)

Revenue debtor written off

-

-

(477)

Costs of acquisition and integration

(271)

(94)

(384)

Share based payment expense

(2)

(10)

(20)

Mark to market provision on fuel derivatives

587

(304)

162

 

 

 

 

Profit/(loss) within profit before taxation

36

(408)

(796)

 

 

4.     Earnings per share:

 

Basic earnings per share have been calculated on the basis of profit after taxation and the weighted average number of shares in issue for the period of 48,026,580 (May 2017: 42,193,246; November 2017: 44,001,465). Diluted earnings per share have been calculated on the basis of profit after taxation and the weighted average number of shares in issue (including such potential issues as are dilutive) for the period of 48,095,501 (May 2017: 42,253,839; November 2017: 44,112,629).

Basic adjusted and diluted adjusted earnings per share before exceptional items have been calculated using the same weighted average numbers of shares in issue, but on the basis of profits after tax and before any exceptional items. This is done in order to aid comparability between the accounting periods.

  

 

5.     Property, plant and equipment

 

 

Freehold

land and

buildings

Long and short

leasehold

property

 

Plant and

machinery

Public

service

vehicles



Total

 

£'000

£'000

£'000

£'000

£'000

Cost:

 

 

 

 

 

At 1 December 2016

7,351

1,084

3,672

42,837

54,944

Acquisitions

585

-

45

1,192

1,822

Additions

14

4

1,266

3,302

4,586

Disposals

(270)

-

(95)

(1,678)

(2,043)

 

 

 

 

 

 

 

 

 

 

 

 

At 30 November 2017

7,680

1,088

4,888

45,653

59,309

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition

-

-

20

1,462

1,482

Additions

280

-

530

2,132

2,942

Transfers

(5)

-

5

-

-

Disposals

-

-

(286)

(779)

(1,065)

 

 

 

 

 

 

 

 

 

 

 

 

At 31 May 2018

7,955

1,088

5,157

48,468

62,668

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation:

 

 

 

 

 

At 1 December 2016

364

201

1,360

18,143

20,068

Charge for the year

62

29

303

2,880

3,274

Acquisitions

35

-

45

450

530

Disposals

(35)

-

(95)

(1,358)

(1,488)

 

 

 

 

 

 

 

 

 

 

 

 

At 30 November 2017

426

230

1,613

20,115

22,384

 

 

 

 

 

 

 

 

 

 

 

 

Charge for the period

30

14

182

1,499

1,725

Disposals

-

-

(225)

(569)

(794)

 

 

 

 

 

 

 

 

 

 

 

 

At 31 May 2018

456

244

1,570

21,045

23,315

 

 

 

 

 

 

Net book value:

 

 

 

 

 

At 31 May 2018

7,499

844

3,587

27,423

39,353

 

 

 

 

 

 

 

 

 

 

 

 

At 30 November 2017

7,254

858

3,275

25,538

36,925

 

 

 

 

 

 

  

 

6.     Loans and borrowings:

 

 

At 31 May 2018

At 31 May 2017

At 30 November 2017

 

£'000

£'000

£'000

Current:

 

 

 

Overdrafts

2,916

2,127

2,326

Bank loans (secured)

278

5,250

4,952

Bank loans (unsecured)

11,377

7,895

9,000

 

 

 

 

 

14,571

15,272

16,278

 

 

 

 

 

 

 

 

Non- current:

 

 

 

Bank loans (secured)

5,204

-

-

 

 

 

 

Total loans and borrowings

19,775

15,272

16,278

 

 

 

 

 

 

 

 

 

Secured bank loans are mortgage-type loans secured by reference to the group's freehold property.

 

  

 

7.     Obligations under hire purchase agreements:

 

All finance leases are secured by the lessors' rights over the respective leased assets which consist principally of passenger service vehicles.

 

 

At 31 May 2018

At 31 May 2017

At 30 November 2017

 

£'000

£'000

£'000

Present value:

 

 

 

Not later than one year

3,682

2,871

3,158

More than one but less than two years

3,211

2,741

2,962

More than two but less than five years

5,672

4,828

4,792

Later than five years

957

934

603

 

13,522

11,374

11,515

 

 

 

 

 

 

 

 

 

 

 

 

8.     Acquisition of Central Buses:

 

As set out in the Chairman's Statement, in February 2018 the Group acquired the bus business of CEN Group Limited, trading under the name of Central Buses.  The Chairman's Statement describes the details of and the reasons for the acquisition and should be consulted for a detailed description of all the relevant factors. The consideration for this acquisition was £1.95 million in cash.  The book values of the assets acquired are set out below.

 

 

Book value

Fair value adjustments

Fair value on acquisition

 

£'000

£'000

£'000

Fixed assets

 

 

 

Plant and machinery

20

-

20

Vehicles

1,462

-

1,462

Customer contracts

-

432

432

Total fixed assets

1,482

432

1,914

 

 

 

 

Current liabilities

 

 

 

Other payables and accruals

-

-

(27)

 

-

-

(27)

 

 

 

 

Net assets

 

 

1,887

Goodwill

 

 

71

Acquisition costs

 

 

49

 

 

 

2,007

Total cash consideration paid

 

 

 

 

 

 

 

 

Pre-acquisition book values were determined based on applicable IFRS, immediately prior to the acquisition.  The values of assets recognised on acquisition are their estimated fair values. The directors engaged Crowe Clark Whitehill LLP ("CCW") to make an assessment of the values of the intangible assets acquired with the business.  Principally this involved an assessment of the value of the intangible asset attributable to the contracts inherited with the business. The value estimated by CCW is reflected in the above table.

The directors do not consider that the brand name has any separable value. No licenses were acquired with the business. The sales and purchase agreement included standard non-compete clauses; however, the seller had no intention of re-entering the respective market at the acquisition date and so there could be no value attributable to these clauses.  The goodwill generated by the acquisition arose from the benefit of synergies with the existing businesses of the group in their respective locations. As stated above the business acquired included a  vehicle fleet and these vehicles were immediately subsumed into existing operations following acquisition.

 

 

9.     Dividends:

 

On 8 December 2017 the company paid an interim dividend of 0.85 pence per share in respect of the year ended 30 November 2017; a final dividend in respect of the year was paid on 29 June 2018 at a rate of 1.65 pence per share. All dividends are payable in cash only.  

 

10.  Additional information:

 

The unaudited Consolidated Interim Report was approved by the Board of Directors on 8 August 2018. The consolidated interim financial information for the six months ended 31 May 2018 and for the six months ended 31 May 2017 is unaudited. The financial information in this interim announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts of Rotala Plc for the year ended 30 November 2017 have been reported on by the company's auditors and have been delivered to the Registrar of Companies. The report of the auditors on these accounts was unqualified, did not contain an emphasis of matter and did not include a statement under section 498 of the Companies Act 2006.

 

 

 

11.  Copies of this statement are available from the registered office of the company at Rotala Group Headquarters, Cross Quays Business Park, Hallbridge Way, Tividale, Oldbury, West Midlands, B69 3HW or the Company's website www.rotalaplc.com.

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Half-year Report - RNS