Interim Results
28/07/2022 07:00
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RNS Number : 9773T Rotala PLC 28 July 2022
28 July 2022
Rotala Plc
("Rotala", the "Company" or the "Group")
Interim Results
Rotala plc (AIM:ROL), a provider of transport solutions across the UK,
announces its unaudited interim results for the six months to 31 May 2022.
Highlights
· Passenger numbers recovering slowly but steadily
· Profit after tax of £2.1m (2021: £0.8m)
· Basic earnings per share of 4.17p (2021: 1.61p)
· Interim dividend declared of 0.5p per share (2021: nil)
· Net debt at 31 May 2022 of £44m (2021: £64m)
Simon Dunn, Chief Executive said: "During the COVID-19 pandemic, we decided to
focus on cash conservation and debt reduction with the objective of emerging
from the pandemic with a robust balance sheet, fit for renewed commercial
operation. We believe that we have achieved these objectives.
"As the bus industry recovers from the effects of COVID-19, bus networks are
being reviewed and rationalised and this is causing a good deal of turbulence
in the industry which should bring a continuing flow of acquisition
opportunities to Rotala, much like the acquisitions made in the first half of
FY 2022. We are well placed to take advantage of these opportunities as they
arise. "
For further information please contact:
Rotala Plc 0121 322 2222
John Gunn, Chairman
Simon Dunn, Chief Executive
Kim Taylor, Group Finance Director
Shore Capital 020 7408 4090
Tom Griffiths/James Thomas (Corporate Advisory)
Henry Willcocks (Corporate Broking)
Chairman's Statement
I am pleased to be able to make this report to the shareholders of Rotala Plc
in respect of trading for the six months ended 31 May 2022.
After a period of two years in which bus operation and service levels had been
to a great extent determined by the objectives of the Department for Transport
("DfT") and local authorities, in the first half of the current financial
year, ending 30 November 2022 ("FY 2022"), bus operations returned to more or
less normal, though still underpinned by grants and subsidies provided by the
DfT and local authorities.
Government support
The DfT's Bus Recovery Grant ("BRG") scheme, which was originally due to
expire in early April 2022, covers the period up to October 2022. However, at
the same time, concessionary fares re-imbursement levels, which are controlled
by local authorities, are being gradually adjusted to reflect actual travel
patterns such that by the end of calendar 2022 the re-imbursements received
will represent actual concessionary passenger usage. Thus, broadly, DfT and
local authority support is being tapered as passenger numbers slowly recover
from the impact of COVID-19.
Passenger numbers
At 30 November 2021, the end of the Company's most recent financial year,
passenger numbers overall were ranging between 80% and 85% of pre-COVID-19
levels. In FY 2022, they have continued to grow slowly but steadily towards
the upper end of that range. In some areas, sharper rises in activity levels
have been observed: for example, usage of the "Hoppa" services around Heathrow
Airport has increased considerably since the start of the calendar year in
response to much improved volumes of airline travel. However, recent industry
reports have made it clear that, unlike rail, where the issue is the reduction
in commuter traffic, it is in the concessionary card holder segment of bus
passengers (largely pensioners) where passenger levels have not yet recovered
to pre-pandemic levels. This reluctance to travel seems to have its root in an
aversion to the risk of exposure to current variants of COVID-19. Full
recovery in bus passenger numbers will therefore depend on concessionary card
holders regaining their former confidence in travelling by bus. Reflecting
these underlying trends, the Board expects passenger numbers to continue to
grow slowly but steadily for the remainder of FY 2022, but not to recover
fully to pre-pandemic levels until 2023.
Revenues
£m Six months ended 31 May 2022 Six months ended 30 November 2021 Six months ended 31 May 2021 Year ended 30 November 2021
Commercial 24.7 19.3 12.4 31.7
Contracted 9.0 8.8 7.4 16.2
Charter 0.5 0.2 0.5 0.7
Grants and subsidies 4.8 20.9 27.0 47.9
Total 39.0 49.2 47.3 96.5
The factors set out above are the key drivers of total revenues in the above
table. As grants and subsidies from the various arms of the Government have
tapered as passenger numbers recovered and bus service levels ceased to be
mandated by the Government, so total revenues have fallen back. It can be seen
that the peak of Government support for the bus industry was reached in the
first half of 2021 and that it then fell slowly in the second half of that
year, but has declined substantially in the first half of FY 2022. At the same
time, as the various COVID restrictions were lifted, commercial revenue has
recovered strongly. Contracted revenue, largely derived from tendered bus
contracts operated for local authorities, was much less sensitive to COVID
restrictions, but has shown some recent growth. Charter revenue, which is ad
hoc by nature, is always highly variable.
Profits
£m Six months ended 31 May 2022 Six months ended 31 May 2021 Year ended 30 November 2021
Profit/(loss) before tax before exceptional items 0.0 (0.1) (1.3)
Profit before tax after exceptional items (see note 3) 3.0 1.1 0.3
One of the key requirements of Government support, which was prevalent
throughout most of FY 2021, was that a bus company should, in return for the
package of grants and subsidies, make neither a profit nor a loss at the
normalised pre-tax profit line. This is not a requirement of the current BRG
regime, but, at the moment, the key factor in returning to profitability is
the return of passenger numbers to their pre-COVID levels. As set out above,
the Board does not expect this to happen until FY 2023 and so the results for
the first six months of FY 2022 were in line with budget and the Board's
expectations.
Profit before tax after exceptional items fluctuates principally as a result
of the marking to market of the Group's fuel derivative position (profit of
£2.4m in 2022 and £1.2m in 2021). Note 3 to this statement contains a full
analysis of the make up of exceptional items. In addition, in this reporting
period, a profit of £0.6 million was recorded on the sale of a surplus
leasehold property.
It is worth noting that the way that the fuel derivative is accounted for
anticipates profits (and losses as in FY 2020) but serves to protect pre-tax
profits for the year as a whole from any further increase in fuel prices.
Working capital and debt
Working capital (£m) At 31 May 2022 At 31 May 2021 At 30 November 2021
Inventories 1.2 2.5 1.1
Trade and other receivables 10.1 20.5 21.8
Trade and other payables 7.4 5.7 6.2
Total working capital 3.9 17.3 16.7
The Group's trade and other receivables were inflated during 2021, as they had
been the previous year, by the amounts receivable from the DfT under BRG and
its predecessor programmes. During the first half of FY 2022, the
reconciliation processes governing the release of these grants were completed.
The receipt of the grants in cash facilitated the substantial reduction in
working capital which can be seen in the above table, given that the other
components of working capital remained within their normal ranges.
Net debt (£m) At 31 May 2022 At 31 May 2021 At 30 November 2021
Revolving commercial facility drawn 1.3 14.7 7.6
Mortgage debt 5.6 6.1 5.9
Overdraft (net of cash) 0.0 2.5 3.2
Total net debt 6.9 23.3 16.7
The release of working capital in the first half of FY 2022 occasioned by the
receipt of the grants and subsidies described above enabled the Group to
significantly reduce its drawings on its revolving commercial facility
("RCF"). In March 2022, the Company also announced that it had signed new
banking facilities with its principal bankers, HSBC Bank plc; these facilities
include an RCF of up to £17 million, of which only £1.3 million was drawn as
at 31 May 2022. This leaves ample resources to fund future organic growth and
acquisitions.
The release of working capital should ensure that net debt (including hire
purchase debt, details of which are set out in the table below) is under £40
million by 30 November 2022, in line with the Board's plans and expectations.
This target would need to be modified if any further acquisitions were made by
the Company in the second half of FY 2022, but this is the only circumstance
which would occasion such a modification.
Hire purchase debt and fleet management
£m At 31 May 2022 At 31 May 2021 At 30 November 2021
Hire purchase debt 36.3 39.1 39.9
Average fleet age 7.52 years 7.59 years 7.56 years
As stated at the time of the publication of the FY 2021 results, the Board did
not foresee any requirement, unless for specific new business, for new
vehicles in FY 2022. Capital expenditure in the first half of FY 2022
therefore totalled only £451,000 and was mostly covered by asset disposals,
including that of the surplus leasehold property. No new hire purchase finance
was taken out in the period. Therefore, the Board is confident that its
forecast that hire purchase debt will be approximately £34 million by 30
November 2022 will be met.
The continuing disposal of older vehicles ensured that the average fleet age
remained closely comparable to previous periods.
Dividend
In April 2022, the Company, as it resumed dividend payments post the pandemic,
paid a special interim dividend of 1.0p per share. At the same time, the Board
stated its intention to return to its former policy of maintaining 2.5 times
earnings cover for any future dividend payments. While dividends will
therefore now reflect the Group's current profitability, the Board will adopt
a progressive dividend policy, as before the onset of the COVID-19 crisis,
recognising the importance of dividend flows to shareholders. The Board
therefore has declared an interim dividend of 0.5p per share which will be
paid on 9 September 2022 to shareholders on the register on 19 August 2022 .
It is anticipated that future dividends will be paid in the pattern of
September (interim) and June (final), in the proportion of one third at the
interim dividend stage and two thirds for the final.
Share Buy Back programme
On 23 March 2022 the Company announced that it would commence a Share Buy Back
programme in accordance with the AGM resolution then in force. This resolution
was renewed at the AGM held on 19 May 2022. So far under this programme the
Company has acquired 921,316 ordinary shares at a total cost of £273,000. In
accordance with accounting standards, the cost of shares acquired in this
manner is written off to reserves. A total of 1,721,316 shares is now held in
treasury.
Acquisitions and DfT Policy
In the period under review the Company made two small acquisitions in the West
Midlands. The first was the bus business of Claribel Coaches Limited
("Claribel") which completed on 22 April 2022. Claribel is a bus operator, in
the eastern part of Birmingham. Through its Diamond Bus subsidiary, Rotala
acquired the business and 18 vehicles for a total cash consideration of
£339,000. The Group did not assume any liabilities. On completion, the
acquired business was immediately transferred to, and integrated within, the
Group's existing depot infrastructure in the West Midlands. No goodwill
arose on the transaction.
The second occurred on 29 May 2022, when the Group completed, through its
Diamond Bus subsidiary, its acquisition of the bus business of Johnsons
(Henley) Limited ("Johnsons"), together with 20 vehicles, for a total cash
consideration of £936,000. Johnsons is a well-established operator of
commercial and contracted bus services in Warwickshire and the southern West
Midlands. The Group did not assume any liabilities. Since acquisition, the
acquired business has been suitably rationalised and integrated within, the
Group's existing depot infrastructure in the West Midlands. No goodwill arose
on the transaction.
The DfT recently announced awards under its Bus Service Improvement Plan
("BSIP") scheme, which is part of the Government's National Bus Strategy. A
number of the local authorities in which the Group operates were awarded funds
under this scheme, including Greater Manchester, the West Midlands and
Lancashire. The next stage is that the local authorities concerned must
develop, with the support of bus operators, detailed schemes for further
submission to the DfT. While the effect of these awards on Rotala's businesses
cannot yet be known in detail, the overall position is clearly positive.
Franchising in Greater Manchester
On 26 March 2021, the Company announced that the Mayor of Greater Manchester
(the "Mayor") had made the formal decision to franchise the bus market in the
Greater Manchester region. The Company made an immediate claim to the High
Court of Manchester to judicially review a number of aspects of the
consultation process carried out by the Greater Manchester Combined Authority
("GMCA"') which led to the decision of the Mayor to franchise the bus network.
On 9 March 2022, Mr Justice Julian Knowles rejected these arguments, dismissed
the claim and refused to give leave to appeal. The Company applied to seek
permission to appeal the decision to the Court of Appeal and was granted leave
to appeal. The appeal hearing took place on 12 July 2022. The Court of Appeal
released its judgement on 25 July 2022: it dismissed the Company's appeal. The
Company has considered the Court of Appeal's judgment in its claim against
GMCA and the Mayor and, whilst disappointed with the result, it respects the
decision of the Court and has resolved to take no further steps in this legal
process.
GMCA has already announced mechanisms which cover the acquisition of bus
depots and bus fleets under its franchising proposals. The Board has reviewed
these mechanisms and is confident that, should it decide to place the Bolton
depot and its associated bus fleet assets under these mechanisms, the values
which would be realised from the sale of the Bolton depot and its related bus
fleet should meet or exceed their respective book values. These amounts should
also be more than sufficient to pay off the existing mortgage on the Bolton
depot and the hire purchase debt associated with the bus assets based there.
As a result, the sale of these assets to GMCA, should it take place, would
have no negative effect on the Group's balance sheet and its leverage would
fall to very low levels. The capital which the Group currently has invested in
its Bolton operation would therefore be realised into cash and be available
for re-investment or redeployment elsewhere in the Group.
Fuel hedging
Fuel represents about 12% of total costs and approximately 54% of the Group's
fuel requirement for the remainder of 2022 is covered by hedging contracts, at
an average price of 82p per litre. These prices should be compared to the
current spot price for diesel (excluding VAT) of 140p per litre.
The Board will continue to monitor market conditions closely and take out such
further fuel hedges as it deems are appropriate to meet its objective of
reducing volatility in its costs and creating business certainty.
Financial review
Income statement
The Consolidated Income Statement is set out below. The factors governing the
levels of revenue have been dealt with earlier in this statement in the
section on total revenue. As normal commercial operation has returned, costs
of sales have also fallen in line with total revenues and the gross profit
margin has remained stable at approximately 14%. Administrative expenses rose
during the pandemic because of the extra requirements covering such items as
general legal and professional advice, health & safety, risk assessment,
recording and logging systems for COVID-19 purposes, medical advice and staff
training, but as these demands have receded so administrative expenses have
returned to the levels experienced before the COVID-19 pandemic struck. Profit
from operations (setting aside exceptional items) has remained a similar
proportion of total revenue as in the prior period and year, but finance
expense has fallen as the Group's total net debt has fallen for the reasons
explained above in the section on net debt. Thus, at the normalised profit
before tax line, the Group broke even in line with budget and the Board's
expectations. Profit before tax (including exceptional items) rose
considerably when compared to the prior period for reasons which have already
been stated above in the section on profits. Note 3 to this statement sets out
a full analysis of exceptional items.
The rate of taxation is higher than expected in the period ended 31 May 2022
because, in anticipation of the rise in the basic rate of corporation tax in
April 2023 from 19% to 25%, a charge of £500,000 has been taken to cover
those deferred tax items which are expected to reverse after the date of the
change in the corporation tax rate.
As a result of all the factors set out above, basic earnings per share for the
six months ended 31 May 2022, after all exceptional items, were 4.17p (2021:
1.61p).
Balance sheet
The gross assets of the Group as at 31 May 2022 declined to £91.1 million
(2021: £104.4 million). This resulted to a degree from a fall in the book
values of property, plant and equipment (which are fully analysed in note 6)
as depreciation exceeded new additions. But the principal factor was the
decline in trade and other receivables, the reason for which is set out above
in the section on working capital. These reductions were offset to some extent
by the rise in the value of the Group's fuel derivative at 31 May 2022, driven
as it was by the fuel price at that date.
Current liabilities fell principally because of the reduction in loans and
borrowings, the reasons for which have been set out above in the section on
net debt. The full analysis of loans and borrowings at period ends is set out
in note 7 below. Total obligations under hire purchase contracts fell as
repayments were made but no new contracts were taken out. Note 9 contains a
full analysis of the profile of hire purchase obligations. Non-current
liabilities were little changed from those seen at the end of 2021 and/or the
prior period.
The result of the movements outlined above, combined with the profit after tax
of £2.1 million (2021: £0.8 million) was that the net assets of the Group
grew somewhat to £34.1 million (2021: £31.5 million).
Cash flow statement
Cash flows from operating activities (before changes in working capital and
provisions) fell when compared to 2021 to £7.7 million (2021: £9.6 million).
The principal reason for this was a fall in depreciation, offset by higher
profitability. Cash flows from changes in working capital and provisions
increased markedly as working capital was released for the reasons set out
above in the relevant section on this item. Cash generated from operations
therefore reached £17.2 million for the period (2021: £7.8 million).
Interest paid on lease liabilities fell slightly as no new hire purchase
contracts were entered into. Purchases of property, plant and equipment, at
£0.45 million, were lower than the prior period (£0.96 million) and
consisted in the main in vehicles for new business. The cash outflow for the
acquisition of businesses was in respect of the Claribel and Johnsons
businesses described earlier in this statement.
Within financing activities, the Company paid a special interim dividend in
April 2022 and commenced its share buy back programme as previously announced.
Repayment of bank borrowings includes a net reduction of £6.3 million in the
Group's drawings on its Revolving Commercial Facility. Bank interest fell as
bank borrowings fell.
Thus, given cash flows from operating activities of £16.4 million, £1.8
million of cash used in investing activities, and cash used in financing
activities of £11.4 million, there was an overall increase in cash of £3.2
million in the period (2021: increase of £0.8 million). In summary, the net
cash position of the Group stood at £30,000 at 31 May 2022, compared to
liabilities of £2.5 million at 31 May 2021 and £3.2 million at 30 November
2021.
Outlook
The Group continues to trade in line with budget for FY 22. The Board's base
assumption for the year is that the slow upward trend in passenger numbers
described above will continue and that full recovery will not take place until
FY 2023.
The Group has at present no hedging cover in place for FY2023. However,
recognising that fuel prices may rise further, but also bearing in mind that
fuel represents only some 12% of the total costs of operation, the Board has
been taking active steps to re-align bus service operations so that it remains
sustainable in any future period of still higher fuel prices. This has been
effected through such actions as disposing of vehicles with unacceptable fuel
consumption and planning fare increases where necessary.
During the COVID-19 pandemic, the Board decided to focus on cash conservation
and debt reduction with the objective of emerging from the pandemic with a
robust balance sheet, fit for renewed commercial operation. The Board believes
that these objectives have been successfully achieved. The continued
large-scale investment by the Government under the banner of its National Bus
Strategy is also positive for the industry in the medium term. The
acquisition, actual and prospective, of two of the UK's largest bus groups
(Stagecoach Group plc and The Go Ahead Group plc) by new groups of investors
is also, the Board believes, an important statement about the positive
direction of the bus industry as a whole.
The bus industry is now in a prolonged post-pandemic recovery phase which is
likely to involve the general overhaul of bus networks and rationalisation
amongst bus operators. This will undoubtedly produce continued turbulence in
the bus industry which should bring a healthy flow of opportunities to Rotala,
much like the acquisitions made in the first half of FY 2022, for both organic
growth and acquisitions. For all these reasons, I am therefore very confident
about Rotala's prospects.
John Gunn
Non-Executive Chairman
Date: 27 July 2022
Condensed consolidated income statement Note Unaudited Unaudited 6 months ended 31 May 2022 Unaudited Unaudited Unaudited 6 months ended 31 May 2021 Unaudited
6 months ended 31 May 2022 6 months ended 31 May 2022 6 months ended 31 May 2021 6 months ended 31 May 2021
Results Exceptional Results Results Exceptional Results
before items for the before items for the
exceptional items period exceptional items period
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 2 38,973 - 38,973 47,281 - 47,281
Cost of sales (33,466) - (33,466) (40,410) - (40,410)
Gross profit 5,507 - 5,507 6,871 - 6,871
(4,367) 3,002 (1,365) (5,476) 1,230 (4,246)
Administrative expenses
Profit from operations 1,140 3,002 4,142 1,395 1,230 2,625
(1,136) - (1,136) (1,518) - (1,518)
Finance expense
4 3,002 3,006 (123) 1,230 1,107
Profit/(loss) before taxation 3
Tax (expense)/credit 4 (1) (924) (925) (66) (234) (300)
Profit for the period attributable to the equity holders of the parent 3 2,078 2,081 (189) 996 807
Earnings per share for profit attributable to the equity holders of the parent
for the period:
Basic (pence) 5 0.01 4.17 (0.38) 1.61
Diluted (pence) 5 0.01 4.17 (0.38) 1.61
Condensed consolidated income statement Note Audited Audited Audited
Year ended 30 November Year ended 30 November Year ended 30 November
2021 2021 2021
Results Exceptional Results
before items for the
exceptional items year
£'000 £'000 £'000
Revenue 2 96,543 - 96,543
Cost of sales (82,429) - (82,429)
Gross profit 14,114 - 14,114
(12,334) 1,592 (10,742)
Administrative expenses
1,780 1,592 3,372
Profit from operations 3
Finance income 19 - 19
(3,096) - (3,096)
Finance expense
(Loss)/profit before taxation (1,297) 1,592 295
Tax credit 247 (476) (229)
Loss for the year attributable to the equity holders of the parent (1,050) 1,116 66
Earnings per share for loss attributable to the equity holders of the parent
during the year:
Basic (pence) 5 (2.10) 0.13
Diluted (pence) 5 (2.10) 0.13
Condensed consolidated statement of comprehensive income Note Unaudited Unaudited Audited
6 months ended 31 May 2022 6 months ended 31 May 2021 Year ended 30 November 2021
£'000 £'000 £'000
Profit for the period 2,081 807 66
Other comprehensive income/(expense):
Actuarial gain on defined benefit pension scheme - - 2,821
Deferred tax on actuarial gains on defined benefit pension scheme 4 (250) - (536)
Other comprehensive (expense)/income for the period (net of tax) (250) - 2,285
Total comprehensive income for the period attributable to the equity holders 1,831 807 2,351
of the parent
Condensed consolidated statement of financial position Notes Unaudited Unaudited Audited
As at 31 May 2022 As at 31 May 2021 As at 30
November 2021
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 6 58,038 63,994 61,091
Defined benefit pension asset 4,253 1,441 4,253
Goodwill and other intangible assets 14,907 14,907 14,907
_____ _____ _____
Total non-current assets 77,198 80,342 80,251
Current assets
Inventories 1,184 2,491 1,090
Trade and other receivables 10,067 20,544 21,796
Derivative financial instruments 2,308 644 958
Cash and cash equivalents 365 346 442
_____ _____ _____
Total current assets 13,924 24,025 24,286
_____ _____ _____
Total assets 91,122 104,367 104.537
Liabilities
Current liabilities
Trade and other payables (7,395) (5,731) (6,217)
Loans and borrowings 7 (2,027) (17,884) (11,615)
Lease liabilities 8 (7,187) (7,697) (7,319)
Derivative financial instruments - (103) -
______ ______ _____
Total current liabilities (16,609) (31,415) (25,151)
Non-current liabilities
Loans and borrowings 7 (5,233) (5,651) (5,445)
Lease liabilities 8 (29,899) (33,534) (34,485)
Provision for liabilities (1,202) (374) (3,414)
Deferred income (525) - (640)
Net deferred taxation (3,552) (1,912) (2,377)
______ ______ ______
Total non-current liabilities (40,411) (41,471) (46,361)
______ ______ ______
Total liabilities (57,020) (72,886) (71,512)
_____ _____ _____
Net assets 34,102 31,481 33,025
====== ====== =====
Condensed consolidated statement of financial position Unaudited Unaudited Audited
As at 31 May 2022 As at 31 May 2021 As at 30
November 2021
£'000 £'000 £'000
Equity attributable to equity holders of parent
Called up share capital 12,731 12,731 12,731
Share premium reserve 12,369 12,369 12,369
Merger reserve 2,567 2,567 2,567
Shares in treasury (1,069) (806) (806)
Retained earnings 7,504 4,620 6,164
______ ______ _____
Total equity 34,102 31,481 33,025
===== ===== ====
Condensed consolidated Statement of Changes in Equity Called up share capital Share premium account Merger reserve Shares in treasury Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2020 12,731 12,369 2,567 (806) 3,813 30,674
Profit for the period - - - - 807 807
Other comprehensive income - - - - - -
Total comprehensive income - - - - 807 807
Transactions with owners:
Dividends paid - - - - - -
Transactions with owners - - - - - -
At 31 May 2021 12,731 12,369 2,567 (806) 4,620 31,481
Loss for the period - - - - (741) (741)
Other comprehensive income - - - - 2,285 2,285
Total comprehensive income - - - - 1,544 1,544
Transactions with owners:
Dividends paid - - - - - -
Transactions with owners - - - - - -
At 30 November 2021 12,731 12,369 2,567 (806) 6,164 33,025
Profit for the period - - - - 2,081 2,081
Other comprehensive expense - - - - (250) (250)
Total comprehensive income - - - - 1,831 1,831
Transactions with owners:
Share based payment - - - 10 5 15
Purchase of own shares - - - (273) - (273)
Dividends paid - - - - (496) (496)
Transactions with owners - - - (263) (491) (754)
At 31 May 2022 12,731 12,369 2,567 (1,069) 7,504 34,102
Condensed consolidated cash flow statement Unaudited Unaudited Audited
6 months ended 31 May 2022 6 months ended 31 May 2021 Year ended 30 November 2021
£'000 £'000 £'000
Cash flows from operating activities
Profit for the period before tax 3,006 1,107 295
Finance expense (net) 1,136 1,518 3,077
Depreciation 4,235 6,946 14,906
(Gain)/loss on sale of property, plant and equipment (620) - 3
Acquisition expenses 37 - -
Amortisation of grants received (115) (50)
Share based payment 15 - -
Notional expense of defined benefit pension scheme - - 28
____ ____ ____
Cash flows from operating activities before changes in working capital and 7,694 9,571 18,259
provisions
Decrease/(increase) in trade and other receivables 12,078 1,755 503
(Decrease)/increase in trade and other payables 1,115 (2,678) (2,232)
Decrease/(increase) in inventories (94) 998 2,398
Movement on deferred income and provisions (2,211) (205) 2,834
Movement on derivative financial instruments (1,350) (1,642) (2,060)
____ ____ ____
9,538 (1,772) 1,443
____ ____ ____
Cash generated from operations 17,232 7,799 19,702
Interest paid on lease liabilities (868) (957) (1,920)
____ ____ ____
Net cash flows from operating activities 16,364 6,842 17,782
Condensed consolidated cash flow statement Unaudited Unaudited Audited
6 months ended 31 May 2022 6 months ended 31 May 2021 Year ended 30 November 2021
£'000 £'000 £'000
Cash flows from investing activities
Purchases of property, plant and equipment (451) (958) (1,883)
Grants received thereon - - 690
Sale of property, plant and equipment 47 776 1,268
Acquisition of businesses (1,391) - -
_____ _____ _____
Net cash flows (used in)/derived from investing activities (1,795) (182) 75
Cash flow from financing activities
Dividends paid (496) - -
Purchase of own shares (273) - -
Repayment of bank and other borrowings (6,531) (1,706) (8,987)
Bank interest paid (263) (550) (1,124)
Capital settlement payments on vehicles sold (213) (318) (719)
Capital paid on lease liabilities (3,602) (3,293) (6,943)
_____ _____ ____
Net cash used in financing activities (11,378) (5,867) (17,773)
Net increase /(decrease) in cash and cash equivalents 3,191 793 84
Cash and cash equivalents at start of period (3,161) (3,245) (3,245)
_____ _____ _____
Cash and cash equivalents at end of period 30 (2,452) (3,161)
====== ===== ====
Notes to the Unaudited condensed Consolidated Interim Financial Statements for
the six months ended 31 May 2022
1. Basis of preparation:
The unaudited condensed consolidated interim financial statements for the six
months ended 31 May 2022 have been prepared using the accounting policies set
out in the Group's 2021 statutory financial statements.
The financial statements of the Group for the full year are prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and these interim financial statements
have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The interim financial statements have been prepared on a going concern basis.
2. Turnover:
Revenue represents sales to external customers excluding value added tax. All
of the activities of the Group are conducted in the United Kingdom within the
operating segment of provision of bus services. Management monitors revenue
across the following business streams: contracted services, commercial
services and charter services.
Unaudited Unaudited Unaudited Audited
Six months ended 31 May 2022 Six months ended 30 November 2021 Six months ended 31 May 2021 Year ended 30 November 2021
£'000 £'000 £'000 £'000
Commercial 24,708 19,301 12,383 31,684
Contracted 8,947 8,779 7,400 16,179
Charter 532 259 475 734
Grants and subsidies 4,786 20,923 27,023 47,946
Total 38,973 49,262 47,281 96,543
As set out in the Chairman's Statement, the Group has been the beneficiary of
extensive support from the Department for Transport and local authorities.
3. Profit before taxation:
Profit before taxation includes the following items which the directors
consider to be outside of the normal trading transactions of the Group and are
therefore to be regarded as exceptional in nature:
Unaudited Unaudited Audited
6 months ended 31 May 2022 6 months ended 31 May 2021 Year ended 30 November 2021
£'000 £'000 £'000
Mark to market profit on fuel derivatives 2,442 1,230 1,779
Profit on sale of leasehold property (note 6) 602 - -
Acquisition expenses (37) - -
Loss resulting from Heathrow depot fire - - (187)
Share based payment (5) - -
Profit within profit before taxation 3,002 1,230 1,592
4. Taxation:
The main rate of corporation tax will increase from 19% to 25% from April
2023. The tax charge in the condensed consolidated income statement for the
period ended 31 May 2022 has therefore been increased by £500,000 to reflect
the estimated effect of the reversal of deferred tax items after April 2023.
For the same reason, the deferred tax liability arising on the gross pension
scheme asset has been increased by £250,000 and this charge has been
reflected in the condensed consolidated statement of comprehensive income.
5. Earnings per share:
Basic earnings per share have been calculated on the basis of profit after
taxation and the weighted average number of shares in issue for the period of
49,947,223 (31 May 2021: 50,091,109; 30 November 2021: 50,091,109). Diluted
earnings per share have been calculated on the basis of profit after taxation
and the weighted average number of shares in issue (including such potential
issues as are dilutive) for the period of 49,947,223 (31 May 2021: 50,091,109;
30 November 2021: 50,091,109).
Basic adjusted and diluted adjusted earnings per share before exceptional
items have been calculated using the same weighted average numbers of shares
in issue, but on the basis of profits after tax and before any exceptional
items. This is done in order to aid comparability between the accounting
periods.
6. Property, plant and equipment:
Freehold Right of use assets under IFRS 16 Passenger carrying Total
land and Plant and vehicles
buildings machinery
£'000 £'000 £'000 £'000 £'000
Cost:
At 1 December 2020 10,907 4,814 6,267 71,392 93,380
Additions - - - 11,905 11,905
Disposals - (1,751) (239) (15,115) (17,105)
At 30 November 2021 10,907 3,063 6,028 68,182 88,180
Additions - - 56 395 451
Acquisitions - - 111 1,243 1,354
Disposals - (1,136) (9) (1,041) (2,186)
At 31 May 2022 10,907 1,927 6,186 68,779 87,799
Depreciation:
At 1 December 2020 344 2,859 2,193 22,592 27,988
Charge for the year 512 481 2,210 11,703 14,906
Disposals - (1,722) (103) (13,980) (15,805)
At 30 November 2021 856 1,618 4,300 20,315 27,089
Charge for the period 56 202 424 3,553 4,235
Disposals - (542) (1) (1,020) (1,563)
At 31 May 2021 912 1,278 4,723 22,848 29,761
Net book value:
At 31 May 2022 9,995 649 1,463 45,931 58,038
At 30 November 2021 10,051 1,445 1,728 47,867 61,091
The Group signed an unconditional contract to sell a surplus leasehold
property before the period end, but the transaction was completed just after
the period end. Accordingly, in these unaudited condensed consolidated interim
financial statements, the transaction has been treated as an adjusting event.
7. Loans and borrowings:
Secured bank loans are mortgage-type loans secured by reference to the Group's
freehold property.
Unaudited Unaudited Audited
At 31 May 2022 At 31 May 2021 At 30 November 2021
£'000 £'000 £'000
Current:
Overdrafts (unsecured) 336 2,798 3,603
Bank loans (secured) 415 411 412
Bank loans (unsecured) 1,276 14,675 7,600
2,027 17,884 11,615
Non- current:
Bank loans (secured) 5,233 5,651 5,445
Total loans and borrowings 7,260 23,535 17,060
8. Lease liabilities:
Current: Unaudited Unaudited Audited
At 31 May 2022 At 31 May 2021 At 30 November 2021
£'000 £'000 £'000
Obligations under hire purchase agreements (see note 9) 6,779 7,280 6,897
Other lease liabilities (see note 10) 408 417 422
Total current liabilities 7,187 7,697 7,319
Non - current: Unaudited Unaudited Audited
At 31 May 2022 At 31 May 2021 At 30 November 2021
£'000 £'000 £'000
Obligations under hire purchase agreements (see note 9) 29,540 31,866 33,025
Other lease liabilities (see note 10) 359 1,668 1,460
Total non - current liabilities 29,899 33,534 34,485
9. Hire purchase agreements:
The Group's obligations under hire purchase agreements are secured by the
lessors' rights over the leased assets.
Unaudited Unaudited Audited
At 31 May 2022 At 31 May 2021 At 30 November 2021
£'000 £'000 £'000
Present value:
Not later than one year 6,779 7,280 6,897
More than one but less than two years 8,159 6,185 8,061
More than two but less than five years 14,854 17,726 16,436
Later than five years 6,527 7,955 8,528
36,319 39,146 39,922
10. Other lease liabilities:
Future lease payments for leases treated as finance leases under IFRS 16 but
which take the legal form of rental agreements, without the legal right of
ultimate ownership of the asset leased, are as follows:
Unaudited Unaudited Audited
At 31 May 2022 At 31 May 2021 At 30 November 2021
£'000 £'000 £'000
Present value:
Not later than one year 408 417 422
More than one but less than two years 327 423 432
More than two but less than five years 32 408 201
Later than five years - 837 827
767 2,085 1,882
11. Dividends:
The Company paid a special interim dividend of 1.0p per share in April 2022 in
relation to the six months ended 31 May 2022. All dividends are payable in
cash only.
12. Additional information:
The unaudited Consolidated Interim Report was approved by the Board of
Directors on 27 July 2022. The consolidated interim financial information for
the six months ended 31 May 2022 and for the six months ended 31 May 2021 is
unaudited. The financial information in this interim announcement does not
constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The statutory accounts of Rotala Plc for the year ended 30
November 2021 have been reported on by the Company's auditors and have been
delivered to the Registrar of Companies. The report of the auditors on these
accounts was unqualified, did not contain an emphasis of matter and did not
include a statement under section 498 of the Companies Act 2006. Copies of the
financial statements are available from the registered office of the Company
at Rotala Group Headquarters, Cross Quays Business Park, Hallbridge Way,
Tividale, Oldbury, West Midlands, B69 3HW and the Company's website
www.rotalaplc.com (http://www.rotalaplc.com) .
13. Copies of this statement are available from the registered office of the
Company at Rotala Group Headquarters, Cross Quays Business Park, Hallbridge
Way, Tividale, Oldbury, West Midlands, B69 3HW and the Company's website
www.rotalaplc.com (http://www.rotalaplc.com) .
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