Coach and Bus Week

[PM]

Was skim reading CBW in whsmiths today and found an article about how rotala has secured £11 million of finance from their bank-rbs I think. Can we read anything into this in terms of rotala buying up another bus operation as £11 million would probably be enough to buy some of the companies first are selling. Or, do we think this is being used for debt repayments, fleet replacement etc. It just sounded like a lot of money.....

[PM]

http://www.stockmarketwire.com/article/4505002/Rotala-revises-banking-facilities-totalling-11m.html Heres the article. Nearly £2million has been used already in Bristol.

[winston]

Personally I think Rotala should concentrate on improving the profit margins at their existing businesses before worrying about expanding in to new areas, they should definitely steer clear of any loss making operations First are looking to sell, as they don't have a particularly good track record of improving financial performance of businesses they acquire.  As Rotala have grown through numerous acquisitions over the years the turnover has grown substantially but the group profit margins are still pretty poor:

Full year to 30th Nov 2011:

Turnover = £56.1 Million
Pre tax profit = £1.88 Million
Profit margin = 3.35% (which is way below industry average)

Unaudited Interim Results for the six months to 31 May 2012

Highlights

-- Growth in Turnover of 7 per cent. to GBP28.5 million (2011: GBP26.6 million)
-- Interest expense down 18% to GBP0.65 million (2011: GBP0.8 million)
-- Profit before tax up 4% to GBP0.96 million (2011: GBP0.92 million)
-- Net Debt down 20% to GBP16.1 million (2011: GBP20.1 million)
-- Net Debt to EBITDA ratio: 2.2, down 18% period on period
-- Interim dividend up by 25% to 0.50 pence per share (2011: 0.40 pence)

Profit margin = 3.37% (little improvement in profit margin (0.02%) based on a 7% increase in turnover)

Also of note, Rotala Plc currently carries more debt (£16.1 Million) than the entire group is worth based on the current stock market capitalisations of £15.7 Million (@ 44.5p / share). I think they should focus on reducing the debt they owe not take on more, unless they are looking to fatten up the group to sell out in the not too distant future?

With poor profits margins, I suspect this is why Rotala Plc has to either issue a boat load of new shares through a placing or raise funds though a new banking facility for expansion & sometimes for fleet renewal in the past.

The WM business is set to shrink further still with the reported loss of 13 coaches worth of NX work to De Courcey, who also took the NEC car park shuttle contract off them, not to mention the numerous commercial services they have withdrawn from against NX over the years

[PM]

Although I agree, I think it would be good to see rotala expand yet at the same time not overlook their existing businesses. Though to be honest, I dont know what is for sale at the moment or what first are selling as it all seems to have gone very quiet. TBH they would have done well to buy wigan with a 10% margin!!

[winston]

Although I agree, I think it would be good to see rotala expand yet at the same time not overlook their existing businesses. Though to be honest, I dont know what is for sale at the moment or what first are selling as it all seems to have gone very quiet. TBH they would have done well to buy wigan with a 10% margin!!

It would certainly improve the group margins if they could acquire a profitable operation with 10% margins the size of Wigan, I think they would have struggled to buy Wigan, not only with the asking price of £12 Million, they would then need to be able to fund fleet replacement, as Wigan's fleet comprised of mainly R-T reg buses that would have caused the biggest headache. Even on Wigan's turnover of £13.2 Million and a operating profit of £1.5 Million (11.3% margin), if Rotala had pulled off the deal & re-invested all the profits back in that £1.5 Million would only buy them approx 10 new B7RLE's per year

Not sure on the First UK bus disposals, I thought that would have been under more pressure to raise funds after the WCML contract was terminated. I doesn't sound as though Redditch & Kidderminster are now being sold off

[PM]

I agree. It seems they have a problem having the cash to actually purchase new buses although it must be said they have wasted money on god awful secondhand solos and the MCVs. No, it all seems to have gone quiet tho a while ago someone said that there'd be a surprise come the new year with regard to kidderminster and redditch-if i remember rightly involving the dutch?? Cant see rotala buying either as it seems from my observations that there doing fine in redditch and are on all the profitable routes

[winston]

I agree. It seems they have a problem having the cash to actually purchase new buses although it must be said they have wasted money on god awful secondhand solos and the MCVs. No, it all seems to have gone quiet tho a while ago someone said that there'd be a surprise come the new year with regard to kidderminster and redditch-if i remember rightly involving the dutch?? Cant see rotala buying either as it seems from my observations that there doing fine in redditch and are on all the profitable routes

It doesn't seem as though anyone is interested in the all Cadets & 04 plate B7RLE's that Rotala currently have for sale, I notice they've now started to drop the asking price of the B7RLE's at least. All majority of the new fleet investment seems to go to Wessex & Preston, yet the WM operation is the biggest part of the group

Just can't see Abellio being interested in two garages with around 50 buses worth of work, if it ever did get sold it would be an bolt on operation to a neighbouring operator. I doubt Rotala would be able to buy Redditch without the MMC intervening

[PM]

Not surprised about the cadets as theyre awful but surprised about the volvos as they are a good solid bus. Maybe theyd be better selling direct to ensign. Has anyone heard any more about the new darts from yourbus and when theyre entering service/what livery or anymore about 30831 and what fleet its joining. Also, have all the darts that have been sold left yet or are any still in service.

[winston]

Not surprised about the cadets as theyre awful but surprised about the volvos as they are a good solid bus. Maybe theyd be better selling direct to ensign. Has anyone heard any more about the new darts from yourbus and when theyre entering service/what livery or anymore about 30831 and what fleet its joining. Also, have all the darts that have been sold left yet or are any still in service.

What's wrong with the Cadets? They're pretty much Wright bodies Darts. Tony has all the ex Yourbus Darts as going to Tividale (Black Diamond).

What's 30831? Is it the one new B7RLE?

[PM]

Cadets are awful. Underpowered, slow buses and no they can't be classed as pretty much wright bodied darts. Yes, the bodyworks fine its just the naf bus chassis. 30831 is the new MAN/plaxton centro ex jpt middleton

[winston]

Cadets are awful. Underpowered, slow buses and no they can't be classed as pretty much wright bodied darts. Yes, the bodyworks fine its just the naf bus chassis. 30831 is the new MAN/plaxton centro ex jpt middleton

But, Cadets have exactly the same Cummins engine/driveline as a Dart

[Ash]

The cadets at diamond are used nearly everyday of the week either on the 4 or the 301 and seem to see little time when not in service, so seem to be getting really worn especially some of the interiors which need a refurb. The 02 reg ones seem alot more powerful compared to the 51 reg ones.

[tank90]

I agree. It seems they have a problem having the cash to actually purchase new buses although it must be said they have wasted money on god awful secondhand solos and the MCVs. No, it all seems to have gone quiet tho a while ago someone said that there'd be a surprise come the new year with regard to kidderminster and redditch-if i remember rightly involving the dutch?? Cant see rotala buying either as it seems from my observations that there doing fine in redditch and are on all the profitable routes

It doesn't seem as though anyone is interested in the all Cadets & 04 plate B7RLE's that Rotala currently have for sale, I notice they've now started to drop the asking price of the B7RLE's at least. All majority of the new fleet investment seems to go to Wessex & Preston, yet the WM operation is the biggest part of the group

Just can't see Abellio being interested in two garages with around 50 buses worth of work, if it ever did get sold it would be an bolt on operation to a neighbouring operator. I doubt Rotala would be able to buy Redditch without the MMC intervening

NX showed huge interest in Redditch and proberly Kidder, but both Depots have come off the the for sale list for a while.

[winston]

I agree. It seems they have a problem having the cash to actually purchase new buses although it must be said they have wasted money on god awful secondhand solos and the MCVs. No, it all seems to have gone quiet tho a while ago someone said that there'd be a surprise come the new year with regard to kidderminster and redditch-if i remember rightly involving the dutch?? Cant see rotala buying either as it seems from my observations that there doing fine in redditch and are on all the profitable routes

It doesn't seem as though anyone is interested in the all Cadets & 04 plate B7RLE's that Rotala currently have for sale, I notice they've now started to drop the asking price of the B7RLE's at least. All majority of the new fleet investment seems to go to Wessex & Preston, yet the WM operation is the biggest part of the group

Just can't see Abellio being interested in two garages with around 50 buses worth of work, if it ever did get sold it would be an bolt on operation to a neighbouring operator. I doubt Rotala would be able to buy Redditch without the MMC intervening

NX showed huge interest in Redditch and proberly Kidder, but both Depots have come off the the for sale list for a while.

Do you know why they were taken off the for sale list? So it appears that First Group was the party that backed out of doing a deal with NX then,

Surely if NX were so keen they would have paid a fair price for possibly both garages, now it seems with talk of KR closing with some of KR's more profitable routes moving in to RH & WR depots, the operation will surely fetch less further down the line as it wouldn't include KR garage as an asset and would include include a limited number of routes operating in to KR, not doubt First would just leave the town routes to Whittles. It's not as though First are going to invest in the fleet & try grow the business during the next 6-12 months, these will still be small operations / low priority compared with the bigger former PTE operations First owns. They will actually be contracting further but will save on the overheads of running KR and reduced staff numbers.....

[tank90]

Not sure why but all i know is they have been taken off for a while, doesnt mean to say that they are staying with First just not being sold this side of 2013. Maybe first think they can make three work better than four.