Half-year Report

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		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.

 

END

 

 

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