Rotala profits improve as bus market recovers post-Covid

9th May 2023 14:11

(Sharecast News) - Bus-focussed passenger transport operator Rotala reported total revenue of £84.9m in its final results for 2022 on Tuesday, down from £96.5m in the prior year, but up from £78.1m in 2020.

The AIM-traded firm said operating profit totalled £4.2m, up from £3.4m year-on-year.

Its loss before tax and exceptional items was £1.1m, narrowing from £1.3m, while its profit before tax after exceptional items rose to £2m from £0.3m.

It said it achieved its target for levels of net debt, which was less than £40m at the end of the year.

Rotala also received support from the Department for Transport (DfT) through the Bus Recovery Grant.

The company said its commercial revenues recovered strongly after the lifting of Covid-19 restrictions, while its working capital was reduced by the receipt of previous years' government grants.

Rotala reported that passenger numbers were now at between 90% and 95% of pre-pandemic levels.

The company said it was targeting both organic growth and growth by acquisition in the post-Covid market, adding that the sale of the Bolton depot and the majority of the fleet based there would be accomplished during the 2023 financial year, subject to shareholder approval.

Its directors proposed a final dividend of 1p per share.

"The board expects that change is likely to be a continuing feature of the bus industry ... and so it expects the industry to experience continued turbulence while it is reshaped in the industry's post-pandemic recovery phase," said non-executive chairman John Gunn.

"These business conditions should bring a healthy flow of opportunities to the company, much like the acquisitions made in 2022, for both organic growth and acquisitions."

Gunn added that the board believed Rotala had "ample" bank facilities available to cater for any such growth opportunities.

"For all these reasons, and despite the increased cost of living, fluctuating fuel prices and general rise of inflation, the board remains confident about the future prospects of the company."

At 0941 BST, shares in Rotala were up 0.24% at 41p.

Reporting by Josh White for Sharecast.com.