26th Mar 2015 10:57
LONDON (Alliance News) - Transport company Rotala PLC on Thursday said its pretax profit fell in 2014 due to one-off losses related to fuel-hedging contracts, but it said it remains confident on its outlook despite the imminent loss of its long-term contract with British Airways.
Rotala said its pretax profit for the year to the end of November fell to GBP1.5 million from GBP2 million a year earlier, due to a GBP745,000 mark-to-market provision booked on fuel hedging derivatives. Stripping out exceptional items, pretax profit rose to GBP2.3 million from GBP2.1 million.
The pretax profit, excluding exceptional items, rose despite a fall in revenue in the year to GBP51.7 million from GBP53.3 million last year. That was offset by the group cost of sales falling faster than the revenue drop.
Revenue was pushed lower by the company's decision to start pursuing only profitable revenue, with a focus on margins rather than volume growth.
Revenue also fell as a result of the ongoing strategic shift for the company away from contracted revenue towards commercial revenue. Contracted revenue fell in the year, due to the cancellation of two contracts held with National Express Group PLC and in part from the conversion of its contract with the University of West England from a contracted service into a commercial service.
The revenue mix shifted in the year to reflect the change in focus, with commercial revenue now accounting for 59% of revenue, up from 56% previously, and contracted revenue's contribution falling to 35% from 39%.
The remainder of the revenue is derived from charter services, which grew 14% on the back of a recovery in private coach hire work.
Rotala said it will pay a final dividend of 1.2 pence per share, bringing it total payout for the year to 1.85 pence. Last year, Rotala paid a final dividend of 1.05 pence per share, making a total dividend of 1.6 pence.
The company said trading in 2015 so far has been good, though it reiterated that its contract with British Airways will come to an end after ten years, which will have a negative impact on revenue. The company, however, remains confident the impact will be largely mitigated by new contracts and operational efficiencies.
Rotala shares were up 0.4% to 58.00 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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