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Rotala PLC (ROL)

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Thursday 09 June, 2016

Rotala PLC


RNS Number : 7855A
Rotala PLC
09 June 2016





9 June 2016



Rotala plc


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


Placing to raise £2.4 million


Rotala plc (AIM: ROL), a provider of transport solutions across the UK, announces that it has raised approximately £2.40 million (before expenses) by way of a placing of 3,872,581 new Ordinary Shares ("New Shares") at a price of 62 pence per share (the "Placing Price") from both new and existing shareholders.





·      Placing to raise proceeds of £2.4 million for the Company, gross of expenses


·      Of the proceeds £800,000 to be invested in the enhancement of facilities at the Tividale and Redditch depots


·      Investment expected to generate significant operational efficiencies and capacity for further top line growth


·      Remainder of the proceeds intended for further bolt-on acquisitions around existing depots



John Gunn, Non-Executive Chairman, commented:


"We are pleased to have received this level of support from both new and existing shareholders in this placing; the proceeds will enable the Company to enhance its key depots in the West Midlands in preparation for the advantages that will flow to the Company from the recently announced Buses Bill. The proceeds will also enable us to add to the footprint of our existing depot network by making judicious acquisitions which can be fitted easily into our existing operations. We welcome particularly the addition of new institutional investors to our shareholder base. Furthermore, we would like to thank Geoff Flight, who is stepping down from the Board, for his contribution to the development of Rotala over the past 10 years. We wish him well for the future."




Introduction and summary


The Company announces that it has raised approximately £2.24 million (net of expenses) by way of a placing of the New Shares with new and existing investors at the Placing Price. Furthermore, due to surplus demand, the Selling Shareholders have agreed to sell 1,850,000 existing Ordinary Shares ("Sale Shares") at the Placing Price. The Placing Price represents a discount of 2.4 per cent. to the Company's mid-market closing price as at 8 June 2016 of 63.5p, being the latest practicable date prior to this announcement. The net proceeds from the Placing receivable by the Company will be used to improve operational efficiencies at its key bus depots in the West Midlands and provide funds for future bolt-on acquisitions. The Placing is conditional on Admission.


Background to and reasons for the Placing


Since the Company's admission to AIM in 2005, it has acquired and integrated 11 businesses in line with its strategy to be a consolidator in the regional bus market within the UK. Rotala now has a well invested network of depots throughout the North West, Midlands, South West and at Heathrow Airport. All acquisitions undertaken have contributed to the increasing profitability of the Group and have provided a network of regional depots from which to expand further.  


The Company constantly monitors the facilities and suitability of its depot locations with a view, whenever possible, to improving utilisation and increasing their capacity. On 16 December 2015, the Group announced the disposal of its Long Acre Birmingham site for £2.5 million, having concluded that this asset was surplus to requirements, and thereby freed up cash for redeployment.  At the same time, the Company took advantage of the opportunity to acquire a 3 acre site adjacent to its existing main depot in Tividale, West Midlands, where Rotala has its largest bus fleet.


The Company intends to invest, in aggregate, approximately £800,000 of the net placing proceeds in site improvements at the Tividale and Redditch depots.


The investment in Redditch will enable the Company to expand the maintenance facilities of the depot and the usable area of the site. This investment, which will enable the Company also to relinquish a separate leasehold property, is expected to generate significant cost savings. The Directors expect a return on this investment within two years and intend to take full advantage of the increased capacity of the depot.


The larger investment in Tividale will allow the Company to capitalise on the possibilities offered by its 7 acre main depot at Tividale, West Midlands. The investment, for which planning permission has already been received, will enable the Company to more than double the number of buses operated from this depot. The recently announced Buses Bill will, in the opinion of the Directors, bring considerably greater opportunities to the Company in the West Midlands area and this investment will enable the Company to maximise these. Rotala's existing network of depots has considerable scope for additional bus capacity. The Directors believe that the Company's existing depot infrastructure, including the investment outlined above, has the capability to support up to £85 million of revenue.


The remainder of the net proceeds receivable by the Company, being approximately £1.44 million, are intended to enable Rotala to continue its buy and build strategy. To date, Rotala has grown predominantly through acquisition and the Company continues to be actively engaged in monitoring and securing attractive bolt-on opportunities. The Placing therefore provides the Company with increased flexibility to execute such acquisitions.   


Current Trading 


The Company released its final results for the year ended 30 November 2015 on 27 April 2016. In January 2016 the Company acquired, from OFJ Connections Limited, that part of its business which is conducted in and around Heathrow airport. The activities of this business fit well with the existing work of the Company at Heathrow; the acquisition enhanced its market presence in important parts of this market, including private hire and airside and landside passenger transportation. The process of integrating the OFJ acquisition with the pre-existing activities of the Company in and around Heathrow Airport, has begun well and all parts of this business are now concentrated on one site, as planned as part of the rationale of the acquisition. The Company continues to trade in line with management expectations.



The Placing Agreement


Pursuant to the terms of the Placing Agreement, Cenkos, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the New Shares at the Placing Price and as agent for the Selling Shareholders to procure purchasers for the Sale Shares.


The Placing Agreement is conditional upon, inter alia, Admission becoming effective on or before 8.00 am on 15 June 2016 (or such later time and/or date as the Company and Cenkos may agree, but in any event by no later than 8.00am on 30 June 2016).

Settlement and dealings

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM.  It is expected that Admission will occur on 15 June 2016.

The New Shares will, when issued, rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares following Admission and otherwise pari-passu in all respects with existing Ordinary Shares.

Following Admission, the Company will have 42,193,246 Ordinary Shares in issue with voting rights and an additional 854,338 Ordinary Shares held in Treasury. This figure (42,193,246), is the number which may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interests in, the Company under the FCA's Disclosure and Transparency Rules.

Directors' Dealings, Selling Shareholders and Concert Party

As part of the Placing, Graham Spooner, Non-Executive Director of the Company, has agreed to subscribe for 50,000 Placing Shares at the Placing Price through his self-invested personal pension ("SIPP"). Following Admission, Graham's total beneficial interest in the Company will be 50,000 Ordinary Shares, representing approximately 0.12 per cent of its enlarged issued Ordinary Share Capital with voting rights.

Furthermore, the Selling Shareholders have agreed to sell Sale Shares at the Placing Price as follows:


Total Existing interest in Ordinary Shares

Number of Sale Shares to be sold

Interest in Ordinary Shares following sale of the Sale Shares

Percentage of enlarged share capital with voting rights

John Gunn, Non-Executive Chairman (including concert party interests)*





Geoffrey Flight, Non-Executive Director





*John Gunn currently has a beneficial interest in 6,114,487 Ordinary Shares, and a total direct and indirect interest in the Company of 9,169,348 Ordinary Shares. Following the transaction he will have a beneficial interest in   5,364,487 and a total direct and indirect interest in the Company of 8,419,348 Ordinary Shares. This figure, 8,419,348, represents the aggregate interest of John Gunn and those considered to be acting in Concert with him (the "Concert Party), which is further detailed in the Company's RNS on 21 October 2009. Following Admission, the Concert Party will therefore hold 19.95 per cent. of the Company's voting rights.

Directorate Change


Geoffrey Flight will step down from the board on Admission. The Company is seeking to appoint an additional Non-Executive Director and will update the market in due course with respect to such appointment. The Company wishes to thank Geoff to for his contribution to the development of Rotala over the past 10 years and wishes him well for the future.  




Placing Statistics

Placing Price

62 p

Number of New Shares


Number of Sale Shares to be sold by the Selling Shareholders


Number of Placing Shares


Gross proceeds receivable by the Company

£2.40 million

Proceeds receivable by the Company, net of expenses

£2.24 million

Gross Proceeds receivable by the Selling Shareholders

£1.15 million

Number of existing Ordinary Shares in issue with voting rights


Number of Ordinary Shares in issue following Admission (with voting rights)


New Shares as a percentage of the existing voting Ordinary Shares

10.1 per cent


Expected timetable of principal events

Announcement of the Placing

 9 June 2016


15 June 2016

Where applicable, expected date for CREST accounts to be credited in respect of Placing Shares in uncertificated form

 15 June 2016





the admission of the New Shares issued pursuant to the Placing, expected to be admitted to trading on AIM on 15 June 2016


the market of that name operated by the London Stock Exchange

"AIM Rules"

the AIM Rules for Companies published by the London Stock Exchange, as amended from time to time

"Board" or "Directors"

the directors of the Company


Cenkos Securities plc, the Company's nominated adviser and broker

"Company" or "Rotala"

Rotala plc, a company incorporated and registered in England and Wales with registered number 05338907, whose registered office is at Rotala Group Headquarters Cross Quays Business Park, Hallbridge Way, Tividale, Oldbury, West Midlands B69 3HW


means the relevant system (as defined in the CREST Regulations)


the Company and its subsidiary undertaking undertakings from time to time

"New Shares"

Means 3,872,581 new Ordinary Shares proposed to be issued by the Company and subscribed for pursuant to the Placing

"Ordinary Shares"

ordinary shares of 25p each in the capital of the Company


The placing of the Placing Shares pursuant to the Placing Agreement

"Placing Agreement"

the conditional agreement dated 9 June 2016 and made between Cenkos, the Company, John Gunn and Geoffrey Flight in relation to the Placing

"Placing Shares"

the New Shares and the Sale Shares

"Placing Price"

62 pence per Placing Share

"Sale Shares"

the 1,850,000 existing Ordinary Shares proposed to be sold by the Selling Shareholders pursuant to the Placing Agreement

"Selling Shareholders"

John Gunn and Geoffrey Flight  


holders of Ordinary Shares




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)





About the business


Rotala provides a range of transport solutions, from local bus services under contract to local authorities, to commercial bus routes. Rotala has operations at Heathrow Airport, in the West Midlands, the North West and the South West of England.








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