Rotala PLC
20 October 2006
Rotala plc
Acquisition of Zak's Bus and Coach Services Limited
Rotala plc ('Rotala' or 'the Company') announces that it has acquired Zak's Bus
& Coach Services Limited ('Zak's'), an established independent bus and coach
operator in the West Midlands. Zak's has a current turnover of some £2.1
million, consisting primarily of contracts with the West Midlands Passenger
Transport Executive ('Centro'), Worcestershire County Council, Staffordshire
County Council, Birmingham City Council and the University of Birmingham. Zak's
has recently been awarded further contracts with Centro with annual revenues of
£532,000, which commence shortly. Zak's also has the benefit of a 3.5 acre
depot in North Birmingham under a long leasehold with 43 years to run.
The consideration for the acquisition is £30,000 payable in cash. Zak's had net
assets of £40,000 as at 28 February 2006 and made a net loss of £4,000 for the
year then ended. Zak's net assets include a number of liabilities which will be
settled in due course, amounting to a maximum of £450,000, which includes a
£150,000 mortgage on Zak's 40 year lease on its long leasehold depot.
Following the acquisition, the vehicles and operations of Zak's will be
transferred to and integrated with the operations at Rotala's existing 4.5 acre
depot in Birmingham. This step will eliminate duplicated administration and
maintenance overheads and realise immediate cost savings. Thus the acquisition
will be earnings enhancing from the outset.
The board further believes that Zak's long leasehold depot offers attractive
possibilities for expansion, or exploitation as an asset in its own right.
The acquisition follows the placing announced on 4 October 2006 and is in line
with the Company's ongoing acquisition strategy. John Gunn, Non-executive
Chairman of Rotala commented:
'The Company is delighted with the acquisition of Zak's as it marks our entry
into the West Midlands bus market. We believe that government policy on
transport will involve the expansion of urban bus services. This was typified
in the West Midlands by the publication last month by the West Midlands
Metropolitan Authorities of a study ('Gridlock or Growth - Choices and
Challenges for the Future'), which predicted a rise in congestion of 22% by 2021
under existing transport policies. The report identified significant investment
in public transport as a requirement to reduce real congestion levels and we
believe that Rotala, through its operations, will play a meaningful part in this
process. The acquisition of these Birmingham bus operations complements those
already conducted from our depot in Weybridge, Surrey. We intend to pursue
growth in the bus division over the coming years and we will update shareholders
when such further acquisitions are made.'
For further information, contact:
Rotala plc - 020 7236 6236
John Gunn, Non-Executive Chairman
Kim Taylor, Chief Executive
Corporate Synergy Plc - 020 7448 4400
David Seal
This information is provided by RNS
The company news service from the London Stock Exchange
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.