RNS Number : 7399F
Rotala PLC
20 July 2021
20 July 2021
Rotala Plc
("Rotala" or "the Company" or "the Group")
Unaudited 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 2021.
Highlights
· Trading for H1 2021 underpinned by DfT subsidies
· Passenger loadings now about 65% of pre-COVID levels
· Small profit after tax for H1 2021 of £807,000 (H1 2020: loss of £3.8 million)
· H1 2021 net cash flow positive of £793,000 (H1 2020: cash flow negative of £2.1 million)
· Government pushing ahead with National Bus Strategy
Simon Dunn, Chief Executive said: "The Government's new National Bus Strategy promises large scale fresh investment in bus transport. The Government is providing £3 billion in new funding in the next few years. This must be beneficial for the bus industry. During the COVID-19 pandemic, Rotala has deliberately concentrated on improving its business efficiency, software systems and use of working capital. As a result, I believe that Rotala is very well placed to play its full part in a revitalised bus industry."
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 / Michael McGloin (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 2021. During this entire accounting period, bus operation has been conducted under a variety of restrictions imposed by the UK Government to combat the COVID-19 pandemic. These restrictions have severely affected the normal commercial operation of bus services, but the financial effects of these steps have been counterbalanced throughout the period by the package of grants and subsidies provided by the Department for Transport ("DfT") and local authorities. The pandemic began in March 2020, just over halfway through the corresponding accounting period in that year. These are the key facts to be borne in mind when considering trading performance so far this year, any comparison with previous years, and the overall position of the Group as at the date of this statement.
Review of Operations
From the beginning of the COVID-19 pandemic, the support of Government at local and national level has been key to sustaining the Group's operations. This support is largely encompassed by a specific grant ("CBSSG Restart") which is funded and administered by the DfT. Local authorities continue to pay Bus Services Operator's Grant ("BSOG"), concessionary fares re-imbursements and payments for contracted bus services in effect at their pre-crisis levels. These measures are designed to put a bus company in a no profit/no loss position in return for the running of the level of bus service desired by the relevant local authority working in concert with the DfT.
At the beginning of the pandemic in March 2020, passenger numbers fell to under 15% of those seen at the same time in the previous year, but then recovered slowly as the crisis eased into the summer of 2020 and the Government lifted many of the initial restrictions. When the new school year began in September 2020, passenger numbers rose steadily to about 60% of those of the previous year. In the late 2020 lockdown period, passenger volumes fell back once more to about 45% of the levels of the previous year, but service frequencies were maintained. In the early 2021 lockdown period, passenger numbers declined once more to about 25% of normal levels and service frequencies, working in co-ordination with those local authorities in whose areas the Group operates and the DfT, were adjusted to 80% to 85% of pre-crisis levels. As restrictions were eased, passenger numbers then recovered steadily and now stand at about 65% of the levels seen before the onset of the COVID-19 pandemic in March 2020. As lockdown restrictions are eased further, the Board believes that passenger confidence is likely to return more strongly leading to higher passenger volumes. Only time will tell whether and in particular, when passenger volumes will return to pre-COVID-19 levels. Service frequencies have already been restored to those which were being operated before the advent of COVID-19.
The CBSSG Restart scheme contains a ratchet mechanism which ensures that, as passenger numbers decline or increase, grant support increases or declines, maintaining the no profit/no loss position for a bus operator. In line with the anticipated ending of the various COVID-19 restrictions, particularly those covering social distancing, the DfT gave notice on 6 July 2021 that the CBSSG regime will come to an end on 31 August 2021. The DfT also announced that CBSSG would be replaced by a fixed pool of £226.5 million in bus recovery funding. This funding is available for the period up to 5 April 2022, when the Enhanced Partnerships formed under the National Bus Strategy, further details of which are set out below, are planned to commence. The bus recovery funding is a subsidy to bus operators based on key metrics, rather than claimable costs as under CBSSG. This will allow operators greater flexibility to adapt services to meet the new demands of the post-pandemic bus market.
Results
For the period ended 31 May 2021 Group revenues were £47.3 million (2020: £35.5 million), to which the grant and subsidy regime described above contributed £27 million (2020: £7.1 million). The breakdown of total revenues is set out in note 2 to these financial statements. It should also be pointed out that revenues for the first half of 2021 were flattered by the running of specific school services funded by the Department for Education. These revenues totalled £1.5 million in the period (2020: £nil). Furthermore, a prudent view was taken in the year ended 30 November 2020 about the eligibility of some expenditure for CBSSG purposes; the resolution of these uncertainties has caused the recognition in the accounting period under report of about £1m in prior period revenues.
The Company has succeeded in winning a Government transportation contract with annualised revenues of about £1.4 million. There was no revenue impact on the six months to 31 May 2021 but revenue from this new contract will be more significant henceforward, with a beneficial and worthwhile contribution expected towards gross profits. This contract, being new business, required the acquisition of eight additional vehicles. The Group purchased these second-hand vehicles outright, at a total value of £617,000, as they were available at very advantageous prices and the Board believes that they will hold their value well.
The unusual operating conditions under COVID-19 and the varying levels of bus service provision requested by the DfT and local authorities during the period under report, combined with the package of grants and subsidies from the DfT, referred to above, make it almost impossible to draw any useful analysis from the financial results and very hard to point to any meaningful conclusions when comparing the results for the first half of 2021 with those of the comparative period of 2020 or the financial year ended 30 November 2020 as a whole. Despite the adverse operating conditions, before exceptional items, the Group recorded an overall Operating Profit of £1.4 million for the period to 31 May 2021 (2020: £0.4 million).
Immediately following the onset of the COVID-19 crisis in March 2020, fuel prices fell steeply. As the Group's entire fuel derivative exposure is marked to the market price at the end of any reporting period, the profit and loss account for the period ended 31 May 2020 recognised an exceptional charge of £2.9 million in this regard. Since then, fuel prices have recovered significantly. The consequence of this is that, for the period ended 31 May 2021, the mark to market calculation produces an exceptional profit of £1.2 million.
Working capital and debt
Although the support of the Government throughout the COVID-19 crisis has been very welcome, it can be readily seen that the timing of the payment of the package of grants and subsidies has had a deleterious effect on working capital over the accounting periods covered by the pandemic. We expect this effect to unwind gradually. This unwinding, combined with the release of working capital from parts and engineering stocks (described in more detail below) and the continuing positive cash flow of the Group at the EBITDA level, is expected to have a materially beneficial effect on the Group's drawings on its Revolving Commercial Facility over the next two years. This factor, taken together with the forecast fall in hire purchase debt set out below, should ensure that the overall leverage of the Group declines steadily. On the assumption that EBITDA post-COVID-19 recovers to normal levels, the Group's leverage is expected to be in line with the Board's target of 2.5 times EBITDA by 30 November 2022.
Investment in systems
Whilst bus provision during the pandemic has required management to resolve numerous operational problems, the crisis has also given management the opportunity to complete two software projects commenced before the advent of the COVID-19 pandemic. These projects cover the full implementation of new systems to control parts stocks and to digitalise engineering and maintenance spend. These new systems, the implementation of which had begun before the COVID-19 pandemic began, now form one integrated whole. In time the benefits of these changes will be evidenced in further reduced parts stocks and lower engineering spend.
Fleet management
The COVID-19 pandemic delayed the delivery of the replacement buses for the Bolton depot ordered as part of the plan drawn up at the time of the acquisition of the depot from First Group plc in August 2019. The bulk of these vehicles, 104 in total, had been delivered by 31 May 2021. The remaining 28 of the vehicles on order, with a value of some £5.5 million, will arrive during the third quarter of this financial year. Furthermore, given the advent of the COVID-19 pandemic since these orders were first placed, we do not foresee any requirement, unless for specific new business as above, to acquire any further vehicles until 2023. In a normal year, we would expect to invest about £5.0 million in the natural cycle of fleet replacement, so, after the initial large increase in the size of the outstanding hire purchase debt, that increase will be temporary and reduce rapidly so that, by 30 November 2022, hire purchase debt levels are forecast to be around £32 million.
Aside from the Bolton re-equipment plan, the Group has continued to be active in reshaping its bus fleet to match changing needs. The Group has recently taken advantage of the availability of a Government grant in order to convert five existing diesel buses to all electric operation. We are looking forward to the operational experience which we expect to gain when these vehicles are fully in service.
When acquiring any vehicle new to the fleet, the Board is acutely conscious of its emission standards and relative fuel consumption. The Board believes that having a modern and efficient bus fleet is a key aspect of customer service. Management monitors each vehicle in the fleet for relative fuel consumption, reliability and maintenance cost. Older vehicles also produce a higher level of emissions. The Group is keen to minimise this aspect of bus operation and has continued to dispose of vehicles that fall outside of acceptable parameters.
Fuel hedging
When opportunities arose before the pandemic to hedge the fuel requirements of the Group, the Board, as usual, took out fuel hedges, using diesel derivatives. As a result, about 83% of the Group's fuel requirement for 2021 is covered by hedging contracts, at an average price of 100p per litre, though the forecast fuel requirement of the Group for 2021 is at the reduced level of about 12.1 million litres. The Group's forecasts anticipate fuel usage of about 14 million litres in 2022. About 54% of this fuel usage is covered by hedging contracts, at an average price of 87p per litre. These prices should be compared to the current spot price for diesel (excluding VAT) of 102p 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.
Group Strategy
Before the COVID-19 crisis took hold in early 2020, the Government had announced an ambitious package of new funding to overhaul bus provision in every English region outside London. In March 2021, it published a detailed National Bus Strategy paper, "Bus Back Better", which lays out a comprehensive plan of reform and promises £3 billion of new Government investment. New Enhanced Partnerships, combined with subsidies for 4,000 zero emission vehicles, are designed to re-invigorate the bus market all over the country and increase bus usage. We welcome this policy change and look forward to working closely with local and national Government in making a success of these new initiatives.
The Group already has extensive experience of operating routes in specific partnerships in the West Midlands. The National Bus Strategy paper also sets out targets for next stop information, on bus CCTV, and cross-operator fare capping. A significant number of the Group's buses are equipped with next stop systems and all of our bus fleet has on-board CCTV which can be remotely accessed from the depot. The Group already has fare-capping architecture installed which can be used to deliver "Tap on/ Tap off" cross-operator capping, which is a desired feature of the National Bus Strategy. Therefore the Board believes that the Group already has extensive experience of implementing and using these advanced systems which underlie the targets the Government has set and which are designed to smooth the travel experience of customers and enhance their perception of safety and security.
In Greater Manchester, the Mayor, following a further period of consultation, made in late March 2021 the decision to proceed with franchising. In our view, this decision stands at the end of a flawed process and we, with another bus operator, are challenging it in the courts. A judicial review hearing was held at the end of May 2021. The judge's decision in this case has yet to be announced. A further announcement will be made in due course.
Dividend
The Company last paid a dividend in December 2019 in relation to the six-month period ended 31 May 2019. One of the terms of the DfT grants is that bus companies may not pay dividends as long as the grant regime is in place. Accordingly, it will be necessary for the DfT grant regime to have ceased and normal bus operation to have re-commenced successfully before the Board may consider the resumption of dividend payments.
Financial review
Income statement
The Consolidated Income Statement is set out below. Due to the COVID-19 crisis and the designation of bus operation as an essential service, the Government has provided a grant and subsidy support package to the bus industry. In return, the Group has provided the service levels requested by the DfT and the local authorities in whose areas the Group operates. These service levels also varied during the period, as the country moved into and out of lockdown. As remarked above, there is therefore little useful to be said about the levels of Revenue, Cost of Sales, Gross Profit, Gross Profit Margin, Profit or Loss from Operations and Profit or Loss before Taxation when set against the comparable period last year.
Administrative expenses (setting aside exceptional items) did increase considerably compared to the previous year. In these very demanding and unusual times, the Group required not only enhanced levels of general legal and professional advice but also specific advice covering such areas as health & safety, risk assessment, recording and logging systems for COVID-19 purposes, and medical advice to deal with employees categorised as clinically extremely vulnerable. Furthermore, staff required extra training tailored to the requirements of working in COVID-19 conditions. These demands necessitated the creation of new posts with the skill sets to provide the support required. All these factors, taken together, caused overhead expenses to rise considerably when compared to those of the same period in the previous year.
The interest expense related to hire purchase agreements rose in the period commensurately with the increased use of this type of vehicle finance. See note 8 to these financial statements for the full analysis. The exceptional item represented by the mark to market provision on fuel derivatives (and in prior periods other exceptional costs) is analysed in detail in note 3 to these financial statements. The principal components of the exceptional items caption are described fully in the "Results" section above.
As a result of the factors set out above, basic earnings per share for the six months ended 31 May 2021, after all exceptional items, were 1.61p (2020: loss per share of 7.61p).
Balance sheet
The gross assets of the Group as at 31 May 2021 declined slightly to £104.4 million when compared to the position as at 30 November 2020 when they stood at £108.7 million. Part of this decline was caused by a small reduction in the book value of property, plant and equipment. See note 5 below for the full analysis of this caption. The other cause of the decline was a further reduction in Group stocks of parts, tyres and fuel as a result of the full implementation of the new systems referred to above. Furthermore, the working capital absorbed by the CBSSG regime during 2020 has begun slowly to unwind as the complex series of submissions and reconciliations result in the gradual receipt of the grant and subsidy income in cash. This overall reduction in current assets was to a degree offset by the recognition of the fuel price derivative asset, referred to above, which has arisen as a result of the recovery of fuel prices when compared to those at the end of 2020.
Commensurate with the fall in current assets, current liabilities also shrank when compared to the position as at 30 November 2020. The continuing cash flow positive nature of the Group has enabled it to reduce utilisation both of its overdraft facility and its Revolving Commercial Facility. As mentioned above, this trend is expected to continue. The full analysis of loans and borrowings at period ends is set out in note 6 below. It should be noted that at no stage has the Group needed to take on any loans from one of the Government-backed loan schemes set up to counteract the effects of the Coronavirus crisis.
Obligations under hire purchase contracts rose as a result of the new vehicle deliveries for the Bolton fleet, but the sharp recovery in fuel prices during the period removed most of the short-term liability for derivative fuel contracts. Nevertheless, net current liabilities overall fell from £9.8 million at 30 November 2020 to £7.4 million at 31 May 2021.
Non-current liabilities were little changed from those seen at the end of 2020. Lease liabilities will rise somewhat by 30 November 2021 as the remainder of the Bolton fleet replacements are received, but this increase will be largely offset by the normal level of hire purchase capital payments. Overall, therefore the gross liabilities of the Group declined by 7% at 31 May 2021 to £72.9 million (2020: £78.1 million).
The result of the movements outlined above was that the net assets of the Group were stable, closely comparable to those as at 31 May 2020 and slightly increased when compared to those as at 30 November 2020 as a result of the small profit after tax recorded for the period under report.
Cash flow statement
Cash flows from operating activities (before changes in working capital and provisions) rose sharply when compared to 2020 to £9.6 million (2020 : £238,000). Most of the reason for this was that a small profit before tax of £1.1 million was recorded for the period ended 31 May 2021 in contrast to the loss of £4.9 million seen in the six months ended 31 May 2020. The depreciation charged in 2021 was also considerably higher than that of the same period in 2020. Although changes in working capital and provisions did absorb cash flow in the period ended 31 May 2021, rather than release it as in the same period in 2020, cash generated from operations still reached £7.8 million compared to only £1.2 million in the same period last year. The decrease in trade and other payables was more or less matched by decreases in trade and other receivables and inventories. Interest paid on lease liabilities increased so as to reflect the rise in hire purchase debt, but overall net cash flows from operating activities for the six months to 31 May 2021 were £6.8 million (2020: £668,000).
Purchases of property, plant and equipment (including the £617,000 of vehicles purchased outright mentioned earlier in this statement) were largely covered by sales of the same item.
Within financing activities, the repayment of bank borrowings includes the reduction of £1.5 million in the Group's drawings on its Revolving Commercial Facility. The cash outflows on the other captions in this section of the cash flow statement are closely comparable to previous periods except that capital paid on hire purchase instalments rose to encompass the increased level of hire purchase borrowings arising from the Bolton re-equipment programme. There were no dividend payments (2020: £476,000).
Thus, given cash flows from operating activities of £6.8 million, cash used in financing activities of £5.9 million and only £0.2 million of cash used in investing activities, there was an overall increase in cash of £793,000 in the period compared to an outflow of cash of £2.1 million for the same period in 2020 and an outflow of cash for the year ended 30 November 2020 as a whole of £1.3 million. In summary, the net overdraft position of the Group stood at £2.5 million at 31 May 2021, compared to a liability of £4.1 million at 31 May 2020 and £3.2 million at 30 November 2020.
Outlook
As mentioned above, the provisions of CBSSG Restart and the associated Government support measures were designed to ensure that the Group makes neither a profit nor a loss at the normalised level up to the time that the CBSSG regime ends on 31 August 2021. The regulations covering the £226.5 million pool in bus recovery funding are likely to contain broadly the same stipulations as CBSSG.
However, the Government's new National Bus Strategy does promise large scale fresh investment in bus transport. The shape and scale of this investment will also become clearer as the year passes, as will the likely effect of the Bus Service Improvement Plans that go with this investment. The Government is promising to provide £3 billion in new funding in the next few years. This must be beneficial for the bus industry as a whole and Rotala in particular. At the same time, I believe that, as the bus industry emerges from the protection afforded by the CBSSG regime and commercial reality returns, opportunities for organic growth and acquisitions are likely to arise once more. Rotala has deliberately concentrated during the COVID-19 pandemic on improving its business efficiency, software systems and use of working capital and on reducing its unsecured debt. If acquisition opportunities do arise, we will therefore have access to the unused facilities necessary to finance them sensibly. Accordingly, I continue to believe that the Company is very well placed, with excellent prospects in a revitalised bus industry.
John Gunn
Non-Executive Chairman
Date: 20 July 2021
Condensed consolidated income statement
Note
Unaudited 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2020
Unaudited 6 months ended 31 May 2020
Unaudited 6 months ended 31 May 2020
Results before exceptional items
Exceptional items
Results for the period
Results before exceptional items
Exceptional items
Results for the period
£'000
£'000
£'000
£'000
£'000
£'000
Revenue
2
47,281
-
47,281
35,495
-
35,495
Cost of sales
(40,410)
-
(40,410)
(30,460)
-
(30,460)
Gross profit
6,871
-
6,871
5,035
-
5,035
Administrative expenses
(5,476)
1,230
(4,246)
(4,662)
(4,129)
(8,791)
Profit/(loss) from operations
1,395
1,230
2,625
373
(4,129)
(3,756)
Finance expense
(1,518)
-
(1,518)
(1,168)
-
(1,168)
(Loss)/profit before taxation
3
(123)
1,230
1,107
(795)
(4,129)
(4,924)
Tax (expense)/credit
(66)
(234)
(300)
151
963
1,114
(Loss)/profit for the period attributable to the equity holders of the parent
(189)
996
807
(644)
(3,166)
(3,810)
Earnings per share for (loss)/profit attributable to the equity holders of the parent for the period:
Basic (pence)
4
(0.38)
1.61
(1.29)
(7.61)
Diluted (pence)
4
(0.38)
1.61
(1.29)
(7.61)
Condensed consolidated income statement
Note
Audited year ended 30 November 2020
Audited year ended 30 November 2020
Audited year ended 30 November 2020
Results before exceptional items
Exceptional items
Results for the year
£'000
£'000
£'000
Revenue
2
78,115
-
78,115
Cost of sales
(66,010)
-
(66,010)
Gross profit
12,105
-
12,105
Administrative expenses
(10,683)
(3,999)
(14,682)
Profit/(loss) from operations
3
1,422
(3,999)
(2,577)
Finance income
43
-
43
Finance expense
(2,247)
-
(2,247)
Loss before taxation
(782)
(3,999)
(4,781)
Tax credit
149
585
734
Loss for the year attributable to the equity holders of the parent
(633)
(3,414)
(4,047)
Earnings per share for loss attributable to the equity holders of the parent during the year:
Basic (pence)
4
(1.26)
(8.08)
Diluted (pence)
4
(1.26)
(8.08)
Condensed consolidated statement of comprehensive income
Unaudited 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2020
Audited year ended 30 November 2020
£'000
£'000
£'000
Profit/(loss) for the period
807
(3,810)
(4,047)
Other comprehensive expense:
Actuarial loss on defined benefit pension scheme
-
-
(890)
Deferred tax on actuarial loss on defined benefit pension scheme
-
-
169
Other comprehensive expense for the period (net of tax)
-
-
(721)
Total comprehensive income/(expense) for the period attributable to the equity holders of the parent
807
(3,810)
(4,768)
Condensed consolidated statement of financial position
Notes
Unaudited as at 31 May 2021
Unaudited as at 31 May 2020
Audited as at 30 November 2020
£'000
£'000
£'000
Assets
Non-current assets
Property, plant and equipment
5
63,994
51,427
65,392
Defined benefit pension asset
1,441
2,319
1,441
Goodwill and other intangible assets
14,907
15,060
14,907
_____
_____
_____
Total non-current assets
80,342
68,806
81,740
Current assets
Inventories
2,491
4,324
3,489
Trade and other receivables
20,544
19,403
22,299
Derivative financial instruments
644
-
165
Cash and cash equivalents
346
1,371
1,035
_____
_____
_____
Total current assets
24,025
25,098
26,988
_____
_____
_____
Total assets
104,367
93,904
108,728
Liabilities
Current liabilities
Trade and other payables
(5,731)
(7,086)
(8,338)
Loans and borrowings
6
(17,884)
(22,009)
(20,842)
Lease liabilities
7
(7,697)
(4,919)
(6,340)
Derivative financial instruments
(103)
(1,710)
(1,267)
______
______
_____
Total current liabilities
(31,415)
(35,724)
(36,787)
Non-current liabilities
Loans and borrowings
6
(5,651)
(5,946)
(5,881)
Lease liabilities
7
(33,534)
(18,151)
(33,195)
Provision for liabilities
(374)
(109)
(579)
Derivative financial instruments
-
(655)
-
Net deferred taxation
(1,912)
(1,687)
(1,612)
______
______
______
Total non-current liabilities
(41,471)
(26,548)
(41,267)
______
______
______
Total liabilities
(72,886)
(62,272)
(78,054)
_____
_____
_____
Net assets
31,481
31,632
30,674
======
======
=====
Condensed consolidated statement of financial position
Unaudited as at 31 May 2021
Unaudited as at 31 May 2020
Audited as at 30 November 2020
£'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
(806)
(806)
(806)
Retained earnings
4,620
4,771
3,813
______
______
_____
Total equity
31,481
31,632
30,674
=====
=====
====
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 2019
12,731
12,369
2,567
(806)
9,749
36,610
Change in accounting policy - IFRS 16 "Leases"
-
-
-
-
(1,168)
(1,168)
Loss for the period
-
-
-
-
(3,810)
(3,810)
Other comprehensive income
-
-
-
-
-
-
Total comprehensive expense
-
-
-
-
(4,978)
(4,978)
Transactions with owners:
Dividends paid
-
-
-
-
-
-
Transactions with owners
-
-
-
-
-
-
At 31 May 2020
12,731
12,369
2,567
(806)
4,771
31,632
Loss for the period
-
-
-
-
(237)
(237)
Other comprehensive expense
-
-
-
-
(721)
(721)
Total comprehensive expense
-
-
-
-
(958)
(958)
Transactions with owners:
Dividends paid
-
-
-
-
-
-
Transactions with owners
-
-
-
-
-
-
At 30 November 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
Condensed consolidated cash flow statement
Unaudited 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2020
Audited year ended 30 November 2020
£'000
£'000
£'000
Cash flows from operating activities
Profit/(loss) for the period before tax
1,107
(4,924)
(4,781)
Finance expense (net)
1,518
1,168
2,204
Depreciation
6,946
4,138
7,765
(Gain)/loss on sale of property, plant and equipment
-
(331)
793
Amortisation of intangibles
-
187
339
Notional expense of defined benefit pension scheme
-
-
31
____
____
____
Cash flows from operating activities before changes in working capital and provisions
9,571
238
6,351
Decrease/(increase) in trade and other receivables
1,755
(1,129)
(4,024)
(Decrease)/increase in trade and other payables
(2,678)
(132)
962
Decrease/(increase) in inventories
998
(15)
821
Movement on provisions
(205)
(125)
345
Movement on derivative financial instruments
(1,642)
2,398
1,135
____
____
____
(1,772)
997
(761)
____
____
____
Cash generated from operations
7,799
1,235
5,590
Interest paid on lease liabilities
(957)
(567)
(1,000)
____
____
____
Net cash flows from operating activities
6,842
668
4,590
Condensed consolidated cash flow statement
Unaudited 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2020
Audited year ended 30 November 2020
£'000
£'000
£'000
Cash flows from investing activities
Purchases of property, plant and equipment
(958)
(464)
(878)
Sale of property, plant and equipment
776
729
586
_____
_____
_____
Net cash flows (used in)/derived from investing activities
(182)
265
(292)
Cash flow from financing activities
Dividends paid
-
(476)
(476)
Repayment of bank and other borrowings
(1,706)
(176)
(243)
Bank interest paid
(550)
(517)
(1,069)
Hire purchase refinancing receipts
-
185
185
Capital settlement payments on vehicles sold
(318)
-
(228)
Capital paid on lease liabilities
(3,293)
(2,066)
(3,753)
_____
_____
____
Net cash used in financing activities
(5,867)
(3,050)
(5,584)
Net increase /(decrease) in cash and cash equivalents
793
(2,117)
(1,286)
Cash and cash equivalents at start of period
(3,245)
(1,959)
(1,959)
_____
_____
_____
Cash and cash equivalents at end of period
(2,452)
(4,076)
(3,245)
======
=====
====
Notes to the Unaudited Consolidated Interim Financial Statements for the six months ended 31 May 2021
1. Basis of preparation:
The unaudited condensed consolidated interim financial statements have been prepared using the accounting policies set out in the Group's 2020 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.
Six months ended 31 May 2021
Six months ended 31 May 2020
Year ended 30 November 2020
£'000
£'000
£'000
Commercial
12,383
19,385
31,596
Contracted
7,400
8,789
16,501
Charter
475
209
665
Grants and subsidies
27,023
7,112
29,353
Total
47,281
35,495
78,115
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 6 months ended 31 May 2021
Unaudited 6 months ended 31 May 2020
Audited year ended 30 November 2020
£'000
£'000
£'000
Depreciation charge for vehicles scrapped
-
(913)
(913)
Mark to market profit/(provision) on fuel derivatives
1,230
(2,877)
(2,511)
Amortisation of intangible assets
-
(187)
(339)
Redundancy and reorganisation costs
-
(152)
(236)
Profit/(loss) within profit before taxation
1,230
(4,129)
(3,999)
The profit within exceptional items in the period arose from the marking to market of the Company's fuel derivative position as at 31 May 2021, as described in the Chairman's Statement. The losses shown in the above table for the periods ended 31 May 2020 and 30 November 2020 arose from similar mark to market calculations at the respective valuation dates.
4. 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 50,091,109 (May 2020: 50,091,109; November 2020: 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 50,091,109 (May 2020: 50,091,109; November 2020: 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.
5. Property, plant and equipment
Freehold land and buildings
Right of use assets under IFRS 16
Plant and machinery
Public service vehicles
Total
£'000
£'000
£'000
£'000
£'000
Cost:
At 1 December 2019
11,066
5,063
6,310
58,668
81,107
Reclassifications
-
-
17
(17)
-
Additions
10
259
281
20,454
21,004
Disposals
(169)
(508)
(341)
(7,713)
(8,731)
At 30 November 2020
10,907
4,814
6,267
71,392
93,380
Additions
-
-
-
6,356
6,356
Disposals
-
(1,983)
(407)
(3,337)
(5,727)
At 31 May 2021
10,907
2,831
5,860
74,411
94,009
Depreciation:
At 1 December 2019
313
2,547
1,769
22,914
27,543
Reclassifications
-
-
9
(9)
-
Charge for the year
47
790
598
6,330
7,765
Disposals
(16)
(478)
(183)
(6,643)
(7,320)
At 30 November 2020
344
2,859
2,193
22,592
27,988
Charge for the period
415
276
1,139
5,117
6,947
Disposals
-
(1,954)
(270)
(2,696)
(4,920)
At 31 May 2021
759
1,181
3,062
25,013
30,015
Net book value:
At 31 May 2021
10,148
1,650
2,798
49,398
63,994
At 30 November 2020
10,563
1,955
4,074
48,800
65,392
6. Loans and borrowings:
Secured bank loans are mortgage-type loans secured by reference to the Group's freehold property.
At 31 May 2021
At 31 May 2020
At 30 November 2020
£'000
£'000
£'000
Current:
Overdrafts (unsecured)
2,798
5,447
4,280
Bank loans (secured)
411
387
387
Bank loans (unsecured)
14,675
16,175
16,175
17,884
22,009
20,842
Non- current:
Bank loans (secured)
5,651
5,946
5,881
Total loans and borrowings
23,535
27,955
26,723
7. Lease liabilities:
Current:
At 31 May 2021
At 31 May 2020
At 30 November 2020
£'000
£'000
£'000
Obligations under hire purchase agreements (see note 8)
7,280
4,188
5,788
Other lease liabilities (see note 9)
417
731
552
Total current liabilities
7,697
4,919
6,340
Non - current:
At 31 May 2021
At 31 May 2020
At 30 November 2020
£'000
£'000
£'000
Obligations under hire purchase agreements (see note 8)
31,866
16,262
31,309
Other lease liabilities (see note 9)
1,668
1,889
1,886
Total non - current liabilities
33,534
18,151
33,195
8. Hire purchase agreements:
The Group's obligations under hire purchase agreements are secured by the lessors' rights over the leased assets.
At 31 May 2021
At 31 May 2020
At 30 November 2020
£'000
£'000
£'000
Present value:
Not later than one year
7,280
4,188
5,788
More than one but less than two years
6,185
3,863
5,856
More than two but less than five years
17,726
7,978
16,993
Later than five years
7,955
4,421
8,460
39,146
20,450
37,097
9. 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 ownership of the asset leased, are as follows:
At 31 May 2021
At 31 May 2020
At 30 November 2020
£'000
£'000
£'000
Present value:
Not later than one year
417
731
552
More than one but less than two years
423
400
426
More than two but less than five years
408
630
615
Later than five years
837
859
845
2,085
2,620
2,438
10. Dividends:
The Company last paid a dividend in December 2019 in relation to the six months ended 31 May 2019. One of the terms of the DfT grants is that bus companies may not pay dividends as long as the grant regime is in place. Accordingly, it will be necessary for the DfT grant regime to have ceased and normal bus operation to have re-commenced successfully before the Board may consider the resumption of dividend payments.
11. Additional information:
The unaudited Consolidated Interim Report was approved by the Board of Directors on 19 July 2021. The consolidated interim financial information for the six months ended 31 May 2021 and for the six months ended 31 May 2020 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 2020 have been reported on by the Company's auditors and will be delivered to the Registrar of Companies by 31 August 2021. 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.
12. 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.
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