22nd Apr 2020 11:22
(Alliance News) - Bus operator Rotala PLC posted a full-year revenue rise on Wednesday, but reported that profit fell due to more exceptional costs.
In the year ended November 30, revenue was 8.2% higher at GBP67.5 million from GBP62.4 million.
Rotala's pretax profit was 28% lower at GBP2.6 million from GBP3.7 million. Stripping out exceptional items, pretax profit rose by 4.4% to GBP4.4 million from GBP4.2 million.
Exceptional items soared to GBP1.8 million from GBP580,000. The vast majority of exceptional costs were related to redundancies and integration of acquisitions. These were 82% higher at GBP717,000. Acquisition costs alone soared to GBP578,000 from GBP64,000.
Non-Executive Chair John Gunn said: "I am pleased to be able to make this report to the shareholders of Rotala for the year ended November 30. In the year, the company made a key acquisition in Greater Manchester which will in a full year considerably enlarge the revenues of the group."
Back in June of last year, Rotala said it agreed to buy the "majority of businesses" of First Manchester Ltd, which had been part of public transport operator FirstGroup PLC, for GBP5.3 million.
"After London, Manchester represents one of the largest bus markets in the country, on a par with the West Midlands where Rotala already has a significant presence. The acquisition enabled Rotala to move from being a small player in the Greater Manchester bus market to the Number 2 bus operator in that region," Rotala said on Wednesday.
Focus now shifts to the Covid-19 pandemic. Earnings from the recently ended financial year were spared from the virus, though its final dividend was not.
Rotala will now propose a final payout, having initially planned a 1.95 pence per share dividend.
This would have taken its annual payout to 2.9p, a 7.4% rise from 2.7p. Instead, its dividend has been cut by 65%, having only made a 0.95p interim payout.
"The board will consider at an appropriate time in the future whether it may be possible to pay a special interim dividend to replace the abandoned final dividend for 2019," Rotala said.
"The board has also taken action on many fronts to align the bus services being operated with local requirements, reduce commensurately the costs of operation and conserve cash. If it is permitted to look beyond the coronavirus crisis, having regard to the fact that it is of unknown duration and effect, the recent announcement by the government of large scale investment in bus transport heralds a new era in the bus industry after a difficult ten-year period."
Bus companies in England will receive almost GBP170 million in new government funding to ensure services continue to operate during the coronavirus pandemic, UK Transport Secretary Grant Shapps had said earlier in April.
Rotala shares were 4.1% lower at 35.00p each in London on Wednesday morning.
By Eric Cunha; [email protected]
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