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Rotala says FY pretax profit in line with its views

By BFN News | 07:41 AM | Monday 26 January, 2015

Rotala said, in a trading update for the year to Nov. 30, 2014, said its FY pretax profit, on slightly reduced revenues before exceptionals, was broadly in line with management expectations. Exceptional items were largely comprised of the mark to market provisions for the derivative-based fuel hedges which the Company has taken out to cover its future fuel requirements. Market to market provisions must be taken to profit or loss every year, but the fuel hedges are in reality in place to benefit the business in the future. The board's stated policy is to create certainty over the Group's fuel costs by hedging the total fuel requirement, whenever it seems prudent to do so. The board's view is that hedging the fuel requirement is a prudent and conservative approach which reduces the volatility of underlying earnings and cash flows whilst also giving certainty to business planning and financial forecasts. The board therefore has continued to take out fuel hedges against the fuel requirements of the Group, at the present time up to November 2017. The current position on fuel hedges is set out in more detail below. Operating cash flow was again very good and enabled the Group to improve the balance between current assets and current liabilities by £2.5m in the year compared to the position at the end of 2013. Net debt, which at 30 November 2013 stood at £20.0m, had fallen to £18.4m by 30 November 2014. Story provided by

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