Half-year Report

RNS Number : 9954G

Rotala PLC

12 August 2016

 

12 August 2016

Rotala Plc

("Rotala" or "the company")

Unaudited Interim Results for the six months to 31 May 2016

Highlights

·    Turnover up 11% to £27.4 million (2015: £24.6 million)

·    Profit before taxation (before exceptional items) up 9% to £1.135 million (2015: £1.045 million)

·    Interim dividend increased by 10% to 0.80 pence per share (2015: 0.725 pence)

·    Recent acquisitions of three businesses, expanding operations  in Heathrow and the North West*

·    Group well positioned for opportunities arising from Buses Bill

*Two acquisitions were post period end

For further information please contact:

Rotala Plc	0121 322 2222
John Gunn, Chairman
Simon Dunn, Chief Executive Officer
Kim Taylor, Group Finance Director
Nominated Adviser & Broker: Cenkos Securities plc	020 7397 8900
Stephen Keys/Callum Davidson (Corporate Finance) Michael Johnson/Julian Morse (Corporate Broking)

Chairman's Statement

I am pleased to be able to present this interim report to shareholders in respect of the six months ended 31 May 2016. The company has continued to make good progress in the first half of 2016. We were able to make one significant acquisition in the period and two more small ones after the period end. Whilst the bus industry continues to undergo considerable change, the aims of the Government's Buses Bill have become much clearer since my last report to you. The effects of the Bill look to be very positive for your company, as I explain in more detail below. 

Results

Revenues for the group as a whole for the six months ended 31 May 2016 were £27.4 million. This represents an increase of 11% compared to those of the previous year. Operating margins were maintained at 18.2%. Pre- tax profits before exceptional items rose by 9% to £1.135 million (2015: £1.045 million).      

·    Contracted Services

Revenues in Contracted Services rose overall by 22 %, when compared to the first half of 2015, to £9.8 million (2015: £8.1 million). There were a number of reasons for this increase. The OFJ acquisition in January 2016 (described in more detail below) was of a business positioned largely in the corporate contracts sector of this market. This was therefore the major factor in the increase in this type of revenue and was a welcome boost to our exposure to this part of the transport market. At the same time it should be remembered that the comparative figure for revenue in 2015 contains a three month contribution from the British Airways contract which did not finally finish until the end of the first quarter of that year.

The other major contribution to revenues in Contracted Services comes from Local Authority bus contracts. Overall there was very little change to the year-on-year revenues from this type of business, which comprises about 15% of group turnover. However, following the acquisition of Green Triangle Buses Limited ("GTB") in 2015, the sources of this revenue have a much better geographical spread. We have been successful in increasing the number of contracted bus routes run by GTB in the Manchester area since we acquired that company. This action compensated for reductions in the number of local authority bus contracts we operate in the South West and North West in particular.  Given the continuing pressures on Local Authority budgets (away from the major conurbations, like Greater Manchester, which are benefitting from separate government initiatives), we do not expect revenues from this part of the bus market to show any signs of increase in the foreseeable future; indeed it is probable that we will see more reductions as further cuts to transport budgets are demanded. In the first half of 2016 therefore Contracted Services comprised 36% of group revenues, compared to 33% in the same period of 2015.            

·    Commercial Services

Revenues in Commercial Services, compared to the first half of 2015, rose by 5% to £16.6 million (2015: £15.9 million). Following the acquisition of the OFJ business, Commercial Services revenues comprise about 61% of group turnover, a slightly lower proportion than that seen in recent accounting periods where the share of group revenue attributable to this source was as high as 65%. The principal driver of the increase in Commercial Services revenues was derived from a full contribution from the GTB acquisition made in 2015. The acquisition brought into the group more commercial bus routes which we have continued to develop with further investment in new vehicles and ticket machines. Smaller rises in commercial bus revenues were also evident in both the Preston area and in the West Midlands.  

·    Charter Services

Revenues in Charter Services rose by 41% compared to the previous year to £0.98 million (2015: £0.7 million). This rise in revenues reflects a full contribution from the Wings business, which was acquired at the start of the second half of 2015.  This acquisition more than replaced the revenues from the former British Airways contract in this part of our business.      

Acquisitions

In January 2016, we were able to acquire, from OFJ Connections Limited, that part of its business which is conducted in and around Heathrow airport. This business has a long-established presence in the Heathrow area. Its principal activity is the movement of crew for a large number of airlines from their aircraft to their hotels and other destinations, including Gatwick airport. Other work is carried out for local educational institutions and for a number of private clients. The business is estimated to have revenues of about £5.5 million in a full year.  Most of this revenue falls within our Contracted Services division. All of these activities dovetail well with our existing work at Heathrow and enhance our market presence in important parts of this market like private hire and airside and landside passenger transportation. The acquisition also brought with it a large leasehold depot well-positioned on the Heathrow perimeter road. This adds to our existing smaller depot a few miles away near Hatton Cross Station. Taken together the two depots give us ample room for further expansion in this key market. The consideration for the acquisition was £1.3 million.  As part of the acquisition we acquired a vehicle fleet with a fair value of £0.65 million. The OFJ acquisition will take time to refine and integrate with our pre-existing activities in and around Heathrow airport, but, once the operation becomes fully integrated and streamlined, we are confident that our Heathrow division will make a substantial contribution to group revenues and profits in its new and expanded form.

Shortly after the period end we made two small acquisitions in the North West. The aim of these two acquisitions was to improve our coverage of contracted and private hire services in the Blackpool area (to the west of Preston) and the Wigan area on the western side of Manchester. Up to now we have little or no penetration of these parts of the country and we were keen to enhance the reach of the North West hub of our business which is run from the Preston depot in close alliance with the depot we have at Atherton in northern Manchester. First in early July 2016 we acquired from Elite Minibus and Coach Services Limited ("Elite") its entire business, brand and 6-strong vehicle fleet for a cash consideration of £200,000.  The Elite business has annual revenues of approximately £500,000. Elite is a well-established operator of contracted services for local authorities and schools in the Blackpool area. It also has a successful private hire arm. This business, with its small number of existing staff, has been integrated into the outstation which Rotala already operates in Blackpool.  Then at the beginning of August 2016 we acquired from Rojay Services Limited its entire business, brand and 8-strong vehicle fleet for a cash consideration of £213,000. This business also has annual revenues of about £500,000, but with a slightly different emphasis. It has a considerable private hire arm in the Wigan area as well as holding a number of local authority bus contracts in that town. The business has been transferred to and integrated with our existing business at our Atherton depot. 

The Buses Bill and Franchising

Since I last reported to you four months ago the Government has placed a draft Buses Bill before Parliament and new regional authorities have been created to take advantage of the anticipated powers. The Bill, as expected, covers the re-franchising of bus networks in major cities. We have a presence in three of those conurbations, Greater Manchester, Bristol/Bath and the West Midlands. The approach of the new transport authorities in each of these regions is however different. 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. 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. In Bristol/Bath and Greater Manchester the existing bus markets are dominated by a very small number of bus companies which possess very large market shares. If the London model is employed these dominating market shares will not be allowed to subsist but will be eroded over time by new entrants to the market. With key presences in Bristol/Bath (where we are the clear number two bus operator) and Greater Manchester (where our overall market share is very small), Rotala has therefore good prospects of raising its market share in these places. In the West Midlands, though our overall market share is again relatively small in a market completely dominated by one very large operator, our business is focused on the western and southern sides of Birmingham and in these particular localities we have substantial market shares.  Thus the Bus Alliance proposals offer good prospects of being able to enhance our market share in certain parts of the West Midlands and thereby improve loadings and operational efficiencies.  We cannot see a downside to the Rotala business in either line of approach.   

Dividend

The company will pay an interim dividend of 0.80 pence per share (2015: 0.725 pence) on 8 December 2016 to all shareholders on the register on 28 October 2016.  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.

Placing of New Shares

Shortly after the period end, on 9 June 2016, the company raised approximately £2.24 million (net of expenses) by way of a placing of 3,872,581 ordinary shares with new and existing investors at a price of 62 pence per share. The net proceeds from the placing will be used to improve our key bus depots in the West Midlands and provide funds for future bolt-on acquisitions, as with the two we have made very recently.

We have allocated investment of approximately £800,000 of the net placing proceeds in improvements at the Tividale and Redditch depots and site planning work is underway. The investment in Redditch will enable the expansion of the capacity and the maintenance facilities of the depot. This investment is expected to generate significant cost savings because it will enable us to relinquish a separate leasehold property.  

At Tividale, in December 2015, we took advantage of the opportunity to acquire a 3 acre site adjacent to our existing 4 acre main depot, where we have our largest bus unit. The investment in the Tividale depot will allow us to capitalise on the possibilities offered by its enlarged 7 acre extent. The investment, for which planning permission has already been received, will enable us to more than double the number of buses we can operate from this depot. The Buses Bill, as outlined above, is expected to bring us considerably greater opportunities in the West Midlands area and this investment will enable us to take full advantage of these.

Board changes

Recently we were delighted to welcome a new non-executive director to the board, Graham Spooner. Graham brings with him a wealth of experience, particularly in the transport sector. At the same time Geoffrey Flight decided to step down from the board.  Geoff had been with us almost from the first 10 years ago. We are grateful for his contribution to the development of Rotala over the years and wish him well for the future. 

Fuel hedging

The fuel hedge position is unchanged from that shown in the 2015 annual report. Given the uncertain direction of oil prices at this time, the board has decided not to consider fuel hedging again until 2017 or until the market uncertainty has been satisfactorily resolved. In summary the group has the following fuel hedges in place:

·    For the remainder of 2016 hedges cover about 86% of the fuel requirement at an average price of about 101p a litre;

·    For 2017 about 85% of the fuel requirement is covered at an average price of about 95p a litre;

·    For 2018 about 88% of the fuel requirement is covered at an average price of about 91p a litre.

Financial review

These comments on the Income Statement address the results before any exceptional items. Revenues increased by 11% when compared with the same period in 2015. I have explained the reasons for this increase above. Cost of Sales also rose by 11%; Gross Profits therefore rose in line and the gross profit margin was maintained at 18.2%. Administrative Expenses increased by 13% as a result of having, in effect, two more depots in the group network compared to the previous period. Profit from Operations was therefore up 9% at £1.75 million (2015: £1.61 million). However net finance expense also rose, this time by 9%. This was caused by the increased level of borrowings by the group as set out in note 5 to this statement. Profit before Taxation rose by 9% to £1.135 million (2015: £1.045 million). Note 3 to this statement sets out the analysis of the charges resulting from movements on the mark to market provision for fuel derivatives and the other exceptional items.

The weighted average number of shares in issue has remained roughly stable (though increased after the period end by the placing described above). Basic earnings per share, including all exceptional items, were 1.78 pence per share in the period (2015: 1.86 pence). Exceptional items were up in 2016 as a result of the acquisition made and a somewhat larger movement on the mark to market provision for fuel derivatives than in the comparative period. Adjusted earnings per share, based on profits after tax and before exceptional items, were 2.37 pence per share (2015: 2.19 pence), an increase of 9%.

The gross assets of the group stood at £59.8 million at 31 May 2016, compared to £53.3 million at the same time in the previous year. This change reflects the acquisitions made by the group in the last twelve months, investment in property and the vehicle fleet, and the consequent effect on working capital assets in terms of trade and other receivables. These factors have also had their effect on total liabilities, which have risen to £35.2 million at 31 May 2016 (2015: £27.6 million). Trade and other payables have increased because of the larger size of the group. The loans and borrowings of the group, including its obligations under hire purchase contracts, stood at £26.5 million at 31 May 2016 (31 May 2015: £21.3 million), as a result both of the acquisitions made and the investment in vehicles and property.  An analysis of these borrowings is set out in Notes 5 and 6 to this statement. Net assets were £24.6 million at the period end (31 May 2015: £25.7 million).

The large adverse movement in the mark to market provision on the fuel derivatives in the second half of 2015, combined with the payment of a second interim dividend in the first half of 2016 instead of a final dividend in the second half of the current year, account for this change.  

Cash flows from operating activities were 13% up on the same period in the previous year. Working capital also absorbed funds in the first half of the year, as is the normal pattern of the group's trading, much exacerbated in the current period by the growth in the working capital required by the recently acquired businesses, as they expand and develop. The group's cash flows are always better in the second half of the year, so this position will be mitigated by the end of the year. Hire purchase interest paid fell very slightly. Investing activities include the acquisition of the OFJ business and substantial investment in replacement vehicles in the period. This was offset by the completion of the sale of the Long Acre depot in December 2015 for £2.5 million. Own shares to the value of £368,000 were purchased in the first half of 2016, offset by the issue out of treasury of shares to meet share option exercises amounting to £172,000. The acquisition of OFJ and the share buy-back programme were financed by drawings on the existing banking facilities of the group, but £2.0 million of the proceeds of the sale of the Long Acre depot were used to reduce drawings on these facilities. The opportunity was also taken to refinance a portion of the hire purchase obligations of the group. The capital element of payments on HP agreements fell to £1.67 million in the period (2015: £2.0 million). The closing figure for cash and cash equivalents at the end of the period, a liability of £2.46 million, is distorted by comparison with the same period of 2015, where there was an asset of £216,000. The Wings acquisition straddled the period end in 2015, so that the balance sheet at that date held the £1.5 million purchase price of the business, which was expended on the very next day. Furthermore the effect of the acceleration of what amounted to the final dividend for 2015 of £527,000 into the first half of 2016 must be recognised. Adjusted for these two items the closing balances for the two periods are much more comparable.

Outlook

The group has a strong balance sheet and substantial unused financing facilities. The recent placing will enable the company to maintain its buy and build strategy. To date, Rotala has grown predominantly through acquisition and we continue to be actively engaged in looking for attractive bolt-on opportunities.

In the slightly longer term the draft Buses Bill offers new possibilities for the group. We are well positioned in key conurbations targeted by this Bill. The Bill should, if implemented, enable us to increase our market shares significantly in areas where such ambitions would previously have been impracticable and unattainable. 

These encouraging developments make us confident about the prospects of the group and excited about the possibility of expanding it considerably in the years ahead.

John Gunn

Non-Executive Chairman

11 August 2016

Condensed consolidated income statement	Note	Unaudited 6 months ended 31 May 2016	Unaudited 6 months ended 31 May 2016	Unaudited 6 months ended 31 May 2016	Unaudited 6 months ended 31 May 2015	Unaudited  6 months ended 31 May 2015	Unaudited  6 months ended 31 May 2015
		Results before mark to market provision and other exceptional items	Mark to market provision and other exceptional items	Results for the period	Results before mark to market provision and other exceptional items	Mark to market provision and other exceptional items	Results for the period
		£'000	£'000	£'000	£'000	£'000	£'000
Revenue	2	27,402	-	27,402	24,633	-	24,633
Cost of sales		(22,408)	-	(22,408)	(20,145)	-	(20,145)
Gross profit		4,994	-	4,994	4,488	-	4,488
Administrative expenses		(3,244)	(281)	(3,525)	(2,877)	(151)	(3,028)
Profit from operations		1,750	(281)	1,469	1,611	(151)	1,460
Finance income		10	-	10	11	-	11
Finance expense		(625)	-	(625)	(577)	-	(577)
Profit before taxation	3	1,135	(281)	854	1,045	(151)	894
Tax expense		(227)	55	(172)	(203)	24	(179)
Profit for the period attributable to the equity holders of the parent		908	(226)	682	842	(127)	715
Earnings per share for profit attributable to the equity
holders of the parent during the period:
Basic  (pence)	4	2.37		1.78	2.19		1.86
Diluted (pence)	4	2.34		1.76	2.17		1.85

Condensed consolidated income statement	Note	Audited year ended 30 November 2015	Audited year ended 30 November 2015	Audited year ended 30 November 2015
		Results before mark to market provision and other exceptional items	Mark to market provision and other exceptional items	Results for the year
		£'000	£'000	£'000
Revenue	2	50,889	-	50,889
Cost of sales		(41,358)	-	(41,358)
Gross profit		9,531	-	9,531
Administrative expenses		(5,922)	(1,719)	(7,641)
Profit from operations		3,609	(1,719)	1,890
Finance income		12	-	12
Finance expense		(1,160)	-	(1,160)
Profit before taxation	3	2,461	(1,719)	742
Tax expense		(474)	399	(75)
Profit for the year attributable to the equity holders of the parent		1,987	(1,320)	667
Earnings per share for profit attributable to the equity
holders of the parent during the year:
Basic (pence)	4	5.19		1.74
Diluted (pence)	4	5.16		1.74

Condensed consolidated statement of comprehensive income	Unaudited 6 months ended 31 May 2016	Unaudited 6 months ended 31 May 2015	Audited year ended 30 November 2015
	£'000	£'000	£'000
Profit for the period	682	715	667
Other comprehensive income:
Actuarial loss on defined benefit pension scheme	(175)	(175)	(362)
Deferred tax on actuarial loss on defined benefit pension scheme	35	35	72
Other comprehensive income for the period (net of tax)	(140)	(140)	(290)
Total comprehensive income for the period attributable to the equity holders of the parent	542	575	377

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 2014	9,794	8,603	2,567	(380)	5,022	25,606
Profit for the period	-	-	-	-	715	715
Other comprehensive income	-	-	-	-	(140)	(140)
Total comprehensive income	-	-	-	-	575	575
Transactions with owners:
Share based payment	-	-	-	-	11	11
Purchase of own shares	-	-	-	(237)	-	(237)
Dividends paid	-	-	-	-	(253)	(253)
Transactions with owners	-	-	-	(237)	(242)	(479)
At 31 May 2015	9,794	8,603	2,567	(617)	5,355	25,702
Profit for the period	-	-	-	-	(48)	(48)
Other comprehensive income	-	-	-	-	(150)	(150)
Total comprehensive income	-	-	-	-	(198)	(198)
Transactions with owners:
Share based payment	-	-	-	-	5	5
Dividends paid	-	-	-	-	(460)	(460)
Purchase of own shares	-	-	-	(5)	-	(5)
Transactions with owners	-	-	-	(5)	(455)	(460)
At 30 November 2015	9,794	8,603	2,567	(622)	4,702	25,044
Profit for the period	-	-	-	-	682	682
Other comprehensive income	-	-	-	-	(140)	(140)
Total comprehensive income	-	-	-	-	542	542
Transactions with owners:
Share based payment	-	-	-	-	8	8
Dividends paid	-	-	-	-	(803)	(803)
Purchase of own shares	-	-	-	(194)	-	(194)
Transactions with owners	-	-	-	(194)	(795)	(989)
At 31 May 2016	9,794	8,603	2,567	(816)	4,449	24,597

Condensed consolidated statement of financial position	Notes	Unaudited as at 31 May 2016	Unaudited as at 31 May 2015	Audited as at 30 November 2015
		£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment		33,577	32,015	31,798
Goodwill and other intangible assets		11,402	10,044	10,581
		_____	_____	_____
Total non-current assets		44,979	42,059	42,379
Current assets
Inventories		2,305	2,016	2,355
Trade and other receivables		11,812	8,644	7,905
Held for sale assets		-	-	2,479
Cash and cash equivalents		742	580	1,118
		_____	_____	_____
Total current assets		14,859	11,240	13,857
		_____	_____	_____
Total assets		59,838	53,299	56,236
Liabilities
Current liabilities
Trade and other payables		(6,895)	(5,384)	(5,370)
Loans and borrowings	5	(11,222)	(7,524)	(9,536)
Obligations under hire purchase agreements	6	(2,912)	(3,309)	(3,107)
Derivative financial instruments		(957)	(483)	(502)
		______	______	_____
Total current liabilities		(21,986)	(16,700)	(18,515)
Non-current liabilities
Loans and borrowings	5	(5,250)	(5,950)	(5,600)
Obligations under hire purchase agreements	6	(7,110)	(4,479)	(5,406)
Derivative financial instruments		(343)	-	(1,257)
Defined benefit pension obligation		(278)	(257)	(278)
Deferred taxation		(274)	(211)	(136)
		______	______	______
Total non-current liabilities		(13,255)	(10,897)	(12,677)
		______	______	______
Total liabilities		(35,241)	(27,597)	(31,192)
		_____	_____	_____
Net assets		24,597	25,702	25,044
		======	======	=====

Condensed consolidated statement of financial position	Notes	Unaudited as at 31 May 2016	Unaudited as at 31 May 2015	Audited as at 30 November 2015
		£'000	£'000	£'000
Equity attributable to equity holders of parent
Called up share capital		9,794	9,794	9,794
Share premium reserve		8,603	8,603	8,603
Merger reserve		2,567	2,567	2,567
Shares in treasury		(816)	(617)	(622)
Retained earnings		4,449	5,355	4,702
		______	______	_____
Total equity		24,597	25,702	25,044
		=====	=====	====

Condensed consolidated cash flow statement	Unaudited 6 months ended 31 May 2016	Unaudited  6 months ended 31 May 2015	Audited year ended 30 November 2015
	£'000	£'000	£'000
Cash flows from operating activities
Profit for the period before tax	854	894	742
Finance costs	615	566	1,148
Depreciation	1,792	1,461	3,025
Gain on sale of vehicles	(288)	(245)	(440)
Acquisition expenses	80	41	46
Contribution to defined benefit pension scheme	(175)	(175)	(350)
Notional expense of defined benefit pension scheme	-	2	8
Equity-settled share based payment expense	8	11	16
	____	____	____
Cash flows from operating activities before changes in working capital and provisions	2,886	2,555	4,195
Increase in trade and other receivables	(3,905)	(1,040)	(299)
Increase in trade and other payables	1,298	229	106
Decrease/(increase) in inventories	50	245	(94)
Movement on financial instrument provision	(458)	(83)	1,193
	____	____	____
	(3,015)	(649)	906
	____	____	____
Cash (used in)/generated from operations	(129)	1,906	5,101
Interest paid on hire purchase obligations	(235)	(241)	(476)
	____	____	____
Net cash flows from operating activities	(364)	1,665	4,625

Condensed consolidated cash flow statement	Unaudited 6 months ended 31 May 2016	Unaudited  6 months ended 31 May 2015	Audited year ended 30 November 2015
	£'000	£'000	£'000
Cash flows from investing activities
Acquisitions of businesses	(1,400)	(862)	(2,431)
Purchases of property, plant and equipment	(1,333)	(1,140)	(2,403)
Sale of property, plant and equipment	2,880	421	680
	_____	_____	_____
Net cash flows generated by/(used in) investing activities	147	(1,581)	(4,154)
Cash flow from financing activities
Shares issued	172	1	95
Dividends paid	(803)	(253)	(713)
Own shares purchased	(368)	(672)	(771)
Proceeds of mortgages and other bank loans	2,200	4,310	4,970
Repayment of bank and other borrowings	(2,350)	(653)	(1,163)
Loan stock repaid	-	(160)	-
Loan stock and bank loan interest paid	(334)	(322)	(684)
Hire purchase refinancing receipts	2,160	-	1,152
Hire purchase settlement payments	(634)	-	-
Capital settlement payments on vehicles sold	(28)	-	(301)
Capital element of lease payments	(1,660)	(2,010)	(3,545)
	_____	_____	____
Net cash (used in)/ generated from  financing activities	(1,645)	241	(960)
Net (decrease)/increase  in cash and cash equivalents	(1,862)	325	(489)
Cash and cash equivalents at start of period	(598)	(109)	(109)
	_____	_____	_____
Cash and cash equivalents at end of period	(2,460)	216	(598)
	======	=====	====

Notes to the Unaudited Consolidated Interim Accounts for the six months ended 31 May 2016

1.   Basis of preparation:

The unaudited condensed consolidated interim accounts have been prepared using the accounting policies set out in the group's 2015 statutory accounts.

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 2016	Six months ended 31 May 2015	Year ended 30 November 2015
	£'000	£'000	£'000
Contracted	9,826	8,063	15,816
Commercial	16,593	15,872	33,155
Charter	983	698	1,918
Total	27,402	24,633	50,889

3.   Profit before taxation:

Profit before taxation includes the following:

	Unaudited 6 months ended  31 May 2016	Unaudited 6 months ended  31 May 2015	Audited year ended 30 November 2015
	£'000	£'000	£'000
Acquisition costs	(80)	(41)	(46)
Abortive acquisition costs	-	-	(48)
Share based payment expense	(8)	-	(17)
Mark to market provision on fuel derivatives	(193)	(110)	(1,608)
Loss within profit before taxation	(281)	(151)	(1,719)

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 38,307,355 (May 2015: 38,371,270; November 2015: 38,310,257). 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 38,812,418 (May 2015: 38,728,675; November 2015: 38,639,171).

Basic adjusted and diluted adjusted earnings per share before mark to market provisions and other 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.   Loans and borrowings:

	At 31 May 2016	At 31 May 2015	At 30 November 2015
	£'000	£'000	£'000
Current:
Overdrafts	3,202	364	1,716
Bank loans	8,020	7,160	7,820
	11,222	7,524	9,536
Non- current:
Bank loans	5,250	5,950	5,600
Total loans and borrowings	16,472	13,474	15,136

6.   Obligations under hire purchase agreements:

	At 31 May 2016	At 31 May 2015	At 30 November 2015
	£'000	£'000	£'000
Present value:
Not later than one year	2,912	3,309	3,107
More than one but less than two years	2,521	2,111	2,209
More than two but less than five years	3,835	2,318	2,846
Later than five years	754	50	351
	10,022	7,788	8,513

7.   Acquisition:

On 7 January 2016 the group acquired from OFJ Connections Limited ("OFJ") that part of OFJ's business which is conducted in and around Heathrow airport. The consideration for this acquisition was £1,320,000.  The group acquired, through the acquisition, a vehicle fleet which has a fair value of £615,000, but has not assumed any other assets or liabilities of any materiality.  The book value of the assets acquired is set out below:

	Book value	Fair value adjustments	Fair value on acquisition
	£'000	£'000	£'000
Fixed assets:
Vehicles	615	-	615
Total fixed assets	615	-	615
Current assets:
Trade and other receivables		-
		-
Current liabilities:
Trade and other payables	(114)	-	(114)
	(114)	-	(114)
Total net assets	501	-	501
Acquisition costs (note 3)			80
Goodwill			819
Total cash consideration paid			1,400

Because the acquired business was immediately folded in to the existing operations of the group in the same localities, it is not possible to distinguish revenues and profits for the acquired business in the period to 31 May 2016. Pre-acquisition book values were determined based on applicable IFRS, immediately prior to the acquisition.  The values of assets recognised on acquisition are the preliminary fair values; these fair values will be finalised for the group's financial statements for the year ending 30 November 2016. The acquisition expenses incurred by the group amounted to £80,000, and have been expensed in the Consolidated Income Statement in Administrative Expenses.

8.   Dividends:

On 8 December 2015 the company paid a first interim dividend of 0.725 pence per share in respect of the year ended 30 November 2015 and a second interim dividend in respect of the same accounting year on 30 March 2016 at a rate of 1.375 pence per share. The directors did not propose a final dividend to the Annual General Meeting. All dividends are payable in cash only.  

9.   Additional information:

The unaudited Consolidated Interim Report was approved by the Board of Directors on 11 August 2016. The consolidated interim financial information for the six months ended 31 May 2016 and for the six months ended 31 May 2015 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 2015 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 and does not include a statement under section 496 of the Companies Act 2006.

10.  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.

 

END

 

 

IR BRGDIIUBBGLB