Pre-close trading statement

RNS Number : 8141N

Rotala PLC

23 January 2019

 

RNS

23 January 2019

Rotala Plc

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

Pre-close trading statement

Rotala is pleased to announce the following update on trading for the year ended 30 November 2018 ("FY 18") and the prospects for the current year ending 30 November 2019 ("FY 19").

FY 18 trading

The Company announces that trading during FY 18 was in line with market expectations. Net debt, which stood at £32.8 million at the half year, had fallen to £31.5 million by the end of the year.  During the financial year, the Group achieved further growth through the acquisition, from CEN Group Limited, of its entire bus business, trading as "Central Buses". This acquisition was made in accordance with the Group's declared strategy of acquisitive growth and has considerably strengthened the Group's network of bus services in the northern part of Birmingham, particularly in the Perry Barr area.

Fuel Hedging

Currently, the annual fuel requirement of the Group is approximately 11.5 million litres.  Taking advantage of a weakness in crude oil prices, in late November 2018, the Board took out a number of fuel hedge contracts, using diesel derivatives, in order to cover approximately 50% of its fuel requirement for FY 2019. The coverage of these hedging contracts has recently been extended. All of the Group's fuel requirement for 2019 has now been covered by hedging contracts, at an average price of 100p per litre, which is the price that the Group has used in preparing its budget for 2019.

The Board will continue to monitor market conditions closely and take out such further fuel hedges as it deems are appropriate to meet its objective of reducing volatility in its costs and creating business certainty.

Dividend

The Company expects to maintain its progressive dividend policy and will be announcing details of a final dividend payment in due course.

FY 19 outlook

The Company is pleased to report that trading for the current year has begun in line with budget. In the view of the Board, the uncertainty and disruption caused by the Bus Services Act 2017 continues to drive change in the bus industry. Accordingly, the Board remains focused on identifying suitable acquisitions which will enhance and expand the services of the Group. At the same time the Group possesses ample financial facilities to undertake further acquisitions.

The Group performed well in 2018 and, with a strong management team and a comprehensive network of operating facilities, is well placed to take advantage of these continuing developments in the bus industry. Such uncertainty brings opportunity to groups like Rotala and the Group is well placed to take advantage of any acquisition opportunities that may arise.

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)

 

END

 

 

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