Rotala Management - Questions & Answers

[iamwilljh92]

Simon,

Who do I need to contact about coming to have a look around the Kiddy depot for bus-photoing?

[Simon Dunn]

Will

Please contact dave.russell@rotala.co.uk



Simon

[iamwilljh92]

Currently on the Rotala fleetlist on here it states the following

31507 | R455 CCV | Kidderminster << this should read as "withdrawn"  so needs to be changed

And finally..

T71 JBA is now based in Kiddy as are V266 BNV and T468 HNH all these currently read as being based in Redditch although this is not the case and needs to be changed

[Tony]

Currently on the Rotala fleetlist on here it states the following

31507 | R455 CCV | Kidderminster << this should read as "withdrawn"  so needs to be changed

And finally..

T71 JBA is now based in Kiddy as are V266 BNV and T468 HNH all these currently read as being based in Redditch although this is not the case and needs to be changed

As with all the other large operators (NX/First/Arriva/Stagecoach) the Rotala fleetlist is only updated when I receive new fleetlists from the operator. Simon is kind enough to supply a new one at the beginning of each month, so all those changes will be done at the beginning of January.

NX supply me with a list at the beginning of each month
Stagecoach is every four weeks so is not at the beginning of months.
Arriva is approximately monthly.
First seems to come at some random dates that I have not worked out the pattern yet!

[bwsau cymru]

Thanks for your replies Simon.

Just a quick one: is it true diamond are withdrawing off the 301 evening journeys from the end of January?

Thanks

Dear Sir,

From the 26th January we are removing the journeys from 1925 hrs from Mossley and the 1945 from Walsall.




Simon

Hi simon is it just that journey or is it all journey after this time?

Also will you ever review the service 4 to ever look to re introduce and evening and/or sunday service??

Regards

Danny

[StourportSam]

Hello Simon,

Just out of interest, are you at all able to provide identities for the two Diamond buses (Not the 2 ex First ones) currently in store at Kidderminster depot please?

One is a Black Diamond MPD that looks to be partially stripped for spares.
The other is a Dart in Central Connect livery, again with a few body panels missing. It is also very dirty and looks to have been in store for some time?

I saw them from the bus on my way to work and just wondered as to their identities.

Thank you,
Sam

Sam,

I am guessing you mean

R954YJS
T74JBA

Both these vehicles were badly damaged in none fault accidents, both until recently were awaiting payout.



Simon

Is the intention to scrap these or use them for spares as I imagine they will not be repaired?

They are both at Kidderminster to have the engines removed for use in alternative vehicles.

Once the engines are removed we will either Scrap, or remove parts as they are needed



Simon

Thank you for your reply Simon.

I'm afraid I do have one more question, 30860 is listed as allocated to Kidderminster and I have seen it once or twice in the past few months. However, it does appear to have left Kidderminster again, so my question is is this vehicle still allocated to Kidderminster or has it gone back to Redditch please?

[Simon Dunn]

Thanks for your replies Simon.

Just a quick one: is it true diamond are withdrawing off the 301 evening journeys from the end of January?

Thanks

Dear Sir,

From the 26th January we are removing the journeys from 1925 hrs from Mossley and the 1945 from Walsall.




Simon

Hi simon is it just that journey or is it all journey after this time?

Also will you ever review the service 4 to ever look to re introduce and evening and/or sunday service??

Regards

Danny

Danny,

Its all the journeys.

We are currently changing some of the 4 service from 26th January, but this wont at this point include the introduction of Sundays and Evenings

[PM]

Thanks for all your replies Simon.

Have just noticed the fares for 2014. I am really glad to see that many prices are frozen or even cut but I was just wondering if these were the fares that you are going to promote on the vinyls on many buses that you mentioned a while back-as many of them are extremely competitive and should hopefully get people travelling on Diamond Buses.

Thank you, Merry Christmas and all the best to Diamond in 2014!

Peter

[stephen]

Thanks for all your replies Simon.

Have just noticed the fares for 2014. I am really glad to see that many prices are frozen or even cut but I was just wondering if these were the fares that you are going to promote on the vinyls on many buses that you mentioned a while back-as many of them are extremely competitive and should hopefully get people travelling on Diamond Buses.

Thank you, Merry Christmas and all the best to Diamond in 2014!

Peter

Dear Sir,

Yes, in the new year we will be launching a new marketing project to greatly increase the visibility of our fares and brand in the interior and on the exterior of our vehicles.

This will not be instant, however we hope that through 2014 a noticeable difference will be achieved. Also, there is an exciting development in relation to fares and offers that we may instigate in January (but currently hush hush and undecided at this moment!).

I trust this answers your question; if not please reply and I'll try to clarify.

Stephen

[lynx1103]

Hi i"m wondering whether the

119 Sutton Coldfield Minworth service is to be completely withdrawn from
26 January 2014.

As this route was invented by Petes Travel 1996/1997 and has had
2 attempts by TWM competing against it and failed.

[PM]

Hi i"m wondering whether the

119 Sutton Coldfield Minworth service is to be completely withdrawn from
26 January 2014.

As this route was invented by Petes Travel 1996/1997 and has had
2 attempts by TWM competing against it and failed.

Yes it is? Is your question why or if?

[winston]

Hi Simon,

1. I think I may have touched on part of this before? I've noticed that there are a number of 08/09 plate MAN/Wright Meridians currently for sale on the second-hand market with Drew Wilson & now Ensign have taken two in during Nov ex Premiere, plus Santander have a number of similar aged examples for hire

The 08/09 plate examples at Drew Wilson are priced £65k each, when compared to what Rotala where originally asking for their 5 ex Whitelaw 04 plate B7RLE/Wright Eclipse that Yourbus acquired, them seem very competitively priced, would you agree? Or are they that poor a product?

http://www.drewwilson.co.uk/type/bus/

2. Additionally, is Rotala Group's only real option to fund any future acquisitions via debt financing? In the past additional funds have normally been raised through the issue of additional shares to raise capital for expansion, is there a limit on how many time you can do this due to diluting major shareholders percentage stakes. 

3. If Rotala are successful in selling one or both of Long Acre & Shady Lane depot, do Rotala plan to re-invest the money back in to the West Midland operations or pay down some of the existing debt? Or a bit of both?

Winston,

1.  Ironically I got offered these buses on Friday, and was told me to make an offer.  So I did,  the offer I made was substantially below the £65K you mention.  I don't think they will accept it.
2.  Providing an acquisition is earnings enhancing from a shareholder perspective we will get support for whatever we want to do.  Issuing equity if needed has never been a problem, nor do we expect it to be going forward.
3.  Rotala EBITDA is over £6 million, Dividend is less than 10% of this, so in essence every year we generate millions every year to pay down debt, to reinvest or for acquisitions.  The biggest desire from the Board, the Shareholders and I is for growth.  As I sit here today, we intend to put formulate a structured fleet replacement programme for Preston, there are at present (unless we are awarded new business) no new or replacement vehicle requirements for the South West or London, so the only other fleet requirement is the West Midlands in which we recognise we need to replace a number of short buses with longer buses.  The purpose of considering the sale of Long Acre is to improve efficiency and in doing so financial performance, and increase available cash for investment without the need for Equity

Simon

Simon,

Thanks for all your responses, few more points in response, you'll be pleased to here.....

1. Re: the Drew Wilson MAN/Wright Meridian's, I take it Rotala aren't that fussed either way if you've gone in with a cheeky offer? I was already under the impression that they were priced to sell using the Rotala asking price for the 04 plate B7RLE's £60k as a guide and the fact that they have been for sale for some time. I see from your other comments that your full size single deckers of choice are B7RLE/Wright or Merc Citaro's, but obviously very few of those come on to the second-hand market or are snapped up quickly by others
3. I'm no financial expert, but isn't it catch 22 with the debt financing? I.e. if group debt levels were much lower, interest payments would be lower/the amount of EBITDA required annually to pay down debt would fall substantially, thus pre-tax profits and margins would be much higher? Then Rotala could pay more cash for future growth & acquisitions and reduce the level of additional debt taken on.
4. Do Rotala allocate an annual budget for existing fleet vehicle  replacement new & used?
5. Re: your comments about the state of the ex Mistral Streetlites st Wessex, is it common practice for vehicles not to be inspected before a deal is concluded & monies change hands?
6. I know you've previously that said your not really a fan of the Esteem bodywork and we've asked about the B7RLE/Optare Esteems currently for sale @ Ensign, I was thinking would there be any mileage in acquiring those from Ensign, putting them in to Preston to allow the withdrawal/sale of a further 4 x Scania/Esteems and potentially move the sole Merc Citaro (30103) down to Long Acre to provide back-up on Signature service 82? At least those Esteems would be on a favored chassis and you may be able to pick them up at a sensible price given that most other operators will no doubt share your opinion on the bodywork and interest will be low

Winston,

1.  I am not bothered either way.  The Volvo product is a much better product hence the reason for the price difference.
3.  It would be wrong to assume that without a level of continued investment profitability is sustainable.  You are correct if we had less debt than naturally we could pay more cash for acquisitions.
4.  No. 
5.  We inspect nearly all the vehicles we acquire.  With the "Mistral vehicles" we were assured over their condition by the Sales Director.  So like most relationships there is an element of trust.
6.  I currently have offers on some other B7RLE's, for which we are awaiting a response.

Simon

Simon,

Many thanks for all your open & honest replies, all very interesting stuff especially with the replies to questions that we wouldn't normally get the opportunity to ask.

Obviously there are more B7RLE's around than we think, the only potential option I can see from reports elsewhere are some B7RLE/Wright are being returned off lease from Transdev Lancashire United. I assume you get to hear about vehicles coming on to the market long before they are advertized on the web/in the trade press. If that offer was to be accepted would they be more likely to head to Preston based on your planned fleet renewal programme?

I'll leave it there and leave you in peace for a while,

Cheers,

Winston

Winston,

The B7RLE would be for the West Midlands, and no it is not the ex-Transdev examples.

Simon

Hi Simon,

I notice from Tony's recent Rotala fleetchanges for December that you've acquired further B7RLE/Wright and they are infact the ex Transdev examples, are/have Rotala acquired the entire batch? as I understand that these form part of a larger batch (possibly up to 25) which are in the process of being returned off lease by Transdev.

Also is the B7RLE/Optare Esteem from Ensign a one off acquisition? As I didn't think you were too keen on the Esteem bodywork,

Cheers,

Winston

[Simon Dunn]

Hi Simon,

1. I think I may have touched on part of this before? I've noticed that there are a number of 08/09 plate MAN/Wright Meridians currently for sale on the second-hand market with Drew Wilson & now Ensign have taken two in during Nov ex Premiere, plus Santander have a number of similar aged examples for hire

The 08/09 plate examples at Drew Wilson are priced £65k each, when compared to what Rotala where originally asking for their 5 ex Whitelaw 04 plate B7RLE/Wright Eclipse that Yourbus acquired, them seem very competitively priced, would you agree? Or are they that poor a product?

http://www.drewwilson.co.uk/type/bus/

2. Additionally, is Rotala Group's only real option to fund any future acquisitions via debt financing? In the past additional funds have normally been raised through the issue of additional shares to raise capital for expansion, is there a limit on how many time you can do this due to diluting major shareholders percentage stakes. 

3. If Rotala are successful in selling one or both of Long Acre & Shady Lane depot, do Rotala plan to re-invest the money back in to the West Midland operations or pay down some of the existing debt? Or a bit of both?

Winston,

1.  Ironically I got offered these buses on Friday, and was told me to make an offer.  So I did,  the offer I made was substantially below the £65K you mention.  I don't think they will accept it.
2.  Providing an acquisition is earnings enhancing from a shareholder perspective we will get support for whatever we want to do.  Issuing equity if needed has never been a problem, nor do we expect it to be going forward.
3.  Rotala EBITDA is over £6 million, Dividend is less than 10% of this, so in essence every year we generate millions every year to pay down debt, to reinvest or for acquisitions.  The biggest desire from the Board, the Shareholders and I is for growth.  As I sit here today, we intend to put formulate a structured fleet replacement programme for Preston, there are at present (unless we are awarded new business) no new or replacement vehicle requirements for the South West or London, so the only other fleet requirement is the West Midlands in which we recognise we need to replace a number of short buses with longer buses.  The purpose of considering the sale of Long Acre is to improve efficiency and in doing so financial performance, and increase available cash for investment without the need for Equity

Simon

Simon,

Thanks for all your responses, few more points in response, you'll be pleased to here.....

1. Re: the Drew Wilson MAN/Wright Meridian's, I take it Rotala aren't that fussed either way if you've gone in with a cheeky offer? I was already under the impression that they were priced to sell using the Rotala asking price for the 04 plate B7RLE's £60k as a guide and the fact that they have been for sale for some time. I see from your other comments that your full size single deckers of choice are B7RLE/Wright or Merc Citaro's, but obviously very few of those come on to the second-hand market or are snapped up quickly by others
3. I'm no financial expert, but isn't it catch 22 with the debt financing? I.e. if group debt levels were much lower, interest payments would be lower/the amount of EBITDA required annually to pay down debt would fall substantially, thus pre-tax profits and margins would be much higher? Then Rotala could pay more cash for future growth & acquisitions and reduce the level of additional debt taken on.
4. Do Rotala allocate an annual budget for existing fleet vehicle  replacement new & used?
5. Re: your comments about the state of the ex Mistral Streetlites st Wessex, is it common practice for vehicles not to be inspected before a deal is concluded & monies change hands?
6. I know you've previously that said your not really a fan of the Esteem bodywork and we've asked about the B7RLE/Optare Esteems currently for sale @ Ensign, I was thinking would there be any mileage in acquiring those from Ensign, putting them in to Preston to allow the withdrawal/sale of a further 4 x Scania/Esteems and potentially move the sole Merc Citaro (30103) down to Long Acre to provide back-up on Signature service 82? At least those Esteems would be on a favored chassis and you may be able to pick them up at a sensible price given that most other operators will no doubt share your opinion on the bodywork and interest will be low

Winston,

1.  I am not bothered either way.  The Volvo product is a much better product hence the reason for the price difference.
3.  It would be wrong to assume that without a level of continued investment profitability is sustainable.  You are correct if we had less debt than naturally we could pay more cash for acquisitions.
4.  No. 
5.  We inspect nearly all the vehicles we acquire.  With the "Mistral vehicles" we were assured over their condition by the Sales Director.  So like most relationships there is an element of trust.
6.  I currently have offers on some other B7RLE's, for which we are awaiting a response.

Simon

Simon,

Many thanks for all your open & honest replies, all very interesting stuff especially with the replies to questions that we wouldn't normally get the opportunity to ask.

Obviously there are more B7RLE's around than we think, the only potential option I can see from reports elsewhere are some B7RLE/Wright are being returned off lease from Transdev Lancashire United. I assume you get to hear about vehicles coming on to the market long before they are advertized on the web/in the trade press. If that offer was to be accepted would they be more likely to head to Preston based on your planned fleet renewal programme?

I'll leave it there and leave you in peace for a while,

Cheers,

Winston

Winston,

The B7RLE would be for the West Midlands, and no it is not the ex-Transdev examples.

Simon

Hi Simon,

I notice from Tony's recent Rotala fleetchanges for December that you've acquired further B7RLE/Wright and they are infact the ex Transdev examples, are/have Rotala acquired the entire batch? as I understand that these form part of a larger batch (possibly up to 25) which are in the process of being returned off lease by Transdev.

Also is the B7RLE/Optare Esteem from Ensign a one off acquisition? As I didn't think you were too keen on the Esteem bodywork,

Cheers,

Winston

Winston,

We believe we will need an additional 10 vehicels from 26th January.  We have therefore acquired the vehicles as a result.  You are correct I am not a fan of the Esteem bodywork however, time is against us.



Simon

[bwsau cymru]

Are the ex transdev ones destined for west mid ops if so which garage

Happy new year from danny

[Cedric]

Simon
why was there such a vehicle shortage  in Kidderminster  that caused service not to run for a good part of the day ?