Increased revenue and profits for Rotala
Rotala reported increased half year revenues in the wake of the acquisition of OFJ Connections. For the six months ended 31 May 2016, income increased by 11 per cent to £27.4million compared to the same period last year with operating margins at 18.2 per cent and pre-tax profits, before exceptional items increased by 9 per cent to £1.1million.
The acquisition of OFC Connections, which operates at Heathrow, Gatwick, London City and Southampton airports, contributed to the rise in revenues in the contracted services department, according to Rotala, which also pointed to growth in local authority bus contracts contributing to the rise in revenue.
Rotala remains upbeat about the Bus Services Bill which is currently going through parliament, consistent with its long-held view that some element of re-regulation outside London would be positive.
"In both the Bristol/Bath areas and Greater Manchester it is clearly envisaged that the local authorities will use the legislation to achieve complete control over local bus networks by the franchise process,” says chairman John Gunn. “But in the West Midlands a more collaborative approach using bus alliances is favoured by the local authority.
"From our perspective both lines of approach offer the prospect of considerably increasing the market shares we can achieve to a level to which we could not have aspired under the existing structure of the bus markets in these locations.
"Whilst the bus industry continues to undergo considerable change, the aims of the government's Buses Bill have become much clearer … the effects of the bill look to be very positive."
The AIM-listed company raised around £3.24million after the half year period on 9 June, through the placing of over 3.8 million shares at 62p each which is to be used to improve bus depots in the West Midlands and provide funds for future acquisitions.