Rotala posts lower profit and eyes law change opportunity

10th Aug 2015 13:16

(ShareCast News) - Shares in transport company Rotala were down slightly after the company posted a drop in first half profits.At 1325 BST shares in the AIM listed stock were down by 0.36% at 86.50p.Rotala posted pre-tax profit of £894,000, down by almost 10% from £990,000 which it posted in the first half of last year.The company said in a statement it was confident a new bus bill which would give elected mayors the power to franchise services would only be to Rotala's benefit.The bus company's revenues fell by about 6 % to £26.09m from £24.62m, but chairman John Gunn said in a statement Rotala was focused on profitable turnover rather than turnover regardless of margins."Thus, whilst overall revenues for the first half of the current year fell by 6% when compared to the same period in 2014, operating margins rose from 17.1% to 18.2% and pre-tax profits before exceptional items increased by 6%," Gunn said in a statement.Basic earnings per share were lower at 1.86p per share in the period, compared with 2.27p in 2014.The board increased the company's interim dividend by 11.5% to 0.725p per share to 0.65p.Rotala eyed opportunities in Manchester, Bristol and Birmingham as a result of the government bus bill which would enable refranchising of bus services.The company said there were areas where it is the number two franchisor so an opportunity to participate in new franchising arrangements would be beneficial.It had purchased Green Triangle Buses for £815,000 in cash and a further £303,000 to settle that company's overdraft.Rotala said while Green Triangle Buses and earlier acquisition Wings would not make a significant contribution to earnigns this year, they would be "healthy contributors" in later years.