Rotala Final Results

[winston]

Final Results to 30th Nov 2012 + a few extracts from statements that may be of interest

Turnover GBP54.8 million (2011: GBP56.1 million)
Profit before taxation up 10.5% to GBP2.08 million (2011: GBP1.88 million) - 3.8% profit margin

- We have also not been drawn in to submitting unrealistic bids for local authority tenders and have thus deliberately relinquished some business in this area.

- In addition the group lost a number of marginally profitable subsidised contracts in the Centro operating area, in circumstances where we refused to match unrealistic tender bids made by certain competitors

Strategy and acquisitions

At the end of January 2013 we were able to announce the acquisition from First of certain of their bus operations in Worcestershire. This deal was completed at the beginning of March 2013. We acquired, for a cash consideration of GBP1.5 million, two freehold depots, one in Kidderminster and the other in Redditch, 36 vehicles, and various items of plant and equipment. These depot acquisitions added about 108 staff to our workforce. On the basis of the information available at present the acquisition is expected to generate a small amount of negative goodwill.

The Kidderminster depot comprises a site of some two acres and was purpose built in 2001. It can accommodate up to 60 vehicles. The Redditch depot, built about 35 years ago, has a slightly smaller useable area and can accommodate about 50 vehicles. In the year ended 31 March 2012, these depots reported combined revenues of approximately GBP5.2 million and an operating loss of about GBP0.27 million.

In essence the two depots bring bus routes which are complementary to our existing route network in Worcestershire. There was very little overlap between our operations and those of First: indeed we competed on only one route. The acquisition therefore enables us to expand and consolidate our position in those areas of Worcestershire which are contiguous to our main areas of operation in and around the Birmingham conurbation. By integrating these acquired depots into our current depot network, the Company will in time be able to take advantage of the operating efficiencies that will be generated. The acquisition is not expected to have a material impact on earnings in 2013. It will take time to integrate fully the two route networks and workforces. Inevitably a certain amount of investment is required. The 36 vehicles we did acquire from First did not comprise the whole of their fleet at these two depots. We immediately brought in more than 20 vehicles from our existing fleet in order to bring the fleet numbers up to those required for efficient operations. Furthermore, many of the vehicles do not comply with the requirements of the Disability Discrimination Act which begin to come into force in 2014. We will thus need to replace most of these vehicles in due course, and in certain cases have done this already. Once the integration of operations and overheads has been fully implemented, the acquisition is expected to have a beneficial effect on earnings in the following years.

[Ash]

So from this I gather Rotala are improving and will improve even further once the Redditch and Kidderminster operations settle down. Also can't blame them for not bidding or losing out on so many tenders if they feel money is not to be made with such low bids due to I'm guessing Arriva bidding low amounts for tenders. Hopefully more investment will follow into more vehicles to go with the recent purchase of the b7rle's.

[winston]

So from this I gather Rotala are improving and will improve even further once the Redditch and Kidderminster operations settle down. Also can't blame them for not bidding or losing out on so many tenders if they feel money is not to be made with such low bids due to I'm guessing Arriva bidding low amounts for tenders. Hopefully more investment will follow into more vehicles to go with the recent purchase of the b7rle's.

The results are slowly improving, they made an additional £200k profit on £1.3million less turnover, however, even once RH & KR are fully integrated in to Diamond, I doubt they'll improve group performance drastically as the two operations under First only turned over £5.2million, even at 10% profit margins that would only equate to an extra £520k profit. Although Diamond currently have very little competition in Redditch, that is possibly set to change with Greenbus thought to be re-routing its 50A to serve parts of the 57/58 route and also they have recently taken on a former First Redditch depot manager.

RH & KR look set to get some new/second-hand buses, I thought all single deck buses had to be DDA compliant by 2016 & double deckers by 2017 rather than 2014 as Rotala are quoting? There are still quite a few early Darts @ Tividale that will also need replacing

The above unrealistic Centro bids are obviously referring to the bulk batch Arriva won, Arriva are in the position where they can easily absorb any losses to get a foothold in the West Midlands and we don't yet know what longer term plans Arriva have 

[Ash]

At Tividale there are not that many darts that are not DDA compliant so hopefully the new b7rle's and the ones from midland classic and Wessex will see off quite a few of the early darts that are left in service and currently being used on the 4.

[winston]

At Tividale there are not that many darts that are not DDA compliant so hopefully the new b7rle's and the ones from midland classic and Wessex will see off quite a few of the early darts that are left in service and currently being used on the 4.

I'm sure what year buses were DDA compliant from, NXWM Plaxton Presidents weren't DDA complaint from new but were upgraded to become compliant during refurb, they are 1999/2000 models V/W-reg

So working on that basis will the DDA rule effect the majority of S/T/V/W reg buses at Diamond?

[Ash]

I think the plaxton pointers 2 which diamond have got S/T/V/W have ramps built into them. NXWM mercs both T and V reg have the ramps built in so it does get confusing to what has and what hasn't as the crusaders of diamond's definitely don't have ramps or even a backboard for a wheel chair headrest.

[PM]

Great to see rotala's results improving-more profit on slightly less turnover seems to be a real achievement and fair play to them for not being silly and submitting ridiculous tender prices to match/beat other ridiculous tendered prices

[sconehead85]

Single deckers have to be compliant by 31st December 2014, double deckers that date in 2016 and coaches by that date in 2019.

sconehead85

[Tony]

At Tividale there are not that many darts that are not DDA compliant so hopefully the new b7rle's and the ones from midland classic and Wessex will see off quite a few of the early darts that are left in service and currently being used on the 4.

I'm sure what year buses were DDA compliant from, NXWM Plaxton Presidents weren't DDA complaint from new but were upgraded to become compliant during refurb, they are 1999/2000 models V/W-reg

So working on that basis will the DDA rule effect the majority of S/T/V/W reg buses at Diamond?

It is darts numbered 31xxx that are non-DDA compliant, the 30xxx ones are