26th Jan 2015 09:18
LONDON (Alliance News) - Rotala PLC on Monday said it expects to report its pretax profit for its recently-ended financial year to be in line with its expectations, but said it has taken out fuel hedges to protect against market volatility through to 2017 and said it expects 2015 to take a hit from the end of its contract with British Airways.
The bus operator said it expects pretax profit for the year to November 30 to be slightly higher year-on-year, despite revenue being slightly lower, and expects the results to be in line with its expectations.
The group said the exceptional items in its results are largely comprised of the mark-to-market provisions for the derivative-based fuel hedges and said it intends to continue taking out the hedges to cover the company until 2017.
The company said it expects the recent fall in the oil price to have little or no impact on its prospects for 2015, with hedges having already been put in place at 108 pence per litre for its entire 9.1 million litre fuel requirement.
For 2016, the company has hedged around 94% of its current fuel requirement for the year at an average price of around 102 pence per litre and has hedged around 80% of its requirement for 2017 at 96 pence per litre.
But the group said it does expect to face a negative impact on its second half results in its current financial year owing to the end of its long-held contract with British Airways, part of International Consolidated Airlines Group PLC, to provide the airline with a private bus network.
Rotala said it is largely confident the impact of the loss of the British Airways contract will be offset by new contract wins, operating efficiencies and service enhancements in its operating centres.
"Change is still the watchword in the bus industry, and we are confident that we can, strongly equipped as we are in both financial and management resources, play an increasing role in this process. We believe that the company has performed well in 2014, and the current financial year has started positively," said Rotala Chairman John Gunn.
Shares in Rotala were down 3.0% to 57.00 pence in early trade.
By Sam Unsted; [email protected]; @SamUAtAlliance
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