TIDMROL
RNS Number : 9566Y
Rotala PLC
15 September 2020
15 September 2020
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
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 2020.
Highlights
-- Operating profit before exceptional items for first half 2020
of GBP0.37m (H1 2019: GBP2.3m), despite impact of COVID-19
-- Passenger volumes gradually increasing as Government restrictions eased
-- Operating well within extended overdraft facility put in
place by the Company's bankers HSBC
-- Bus services continue to be well supported by Government
-- No necessity for Company to utilise any of the Government loan schemes
-- Post-crisis opportunities for both organic growth and growth by acquisition
For further information please contact:
Rotala Plc 0121 322 2222
John Gunn, Chairman
Simon Dunn, Chief Executive
Kim Taylor, Group Finance Director
Nominated Adviser & Joint Broker:
Cenkos Securities plc 020 7397 8900
Stephen Keys/Callum Davidson (Corporate
Finance)
Michael Johnson/Julian Morse (Corporate
Broking)
Chairman's Statement
I am pleased to present this interim report to shareholders in
respect of the six months ended 31 May 2020. Up until the COVID-19
pandemic triggered the "lockdown" phase of the Government's
response in late March 2020, the Group was trading in line with
budget and was well on course to achieve its best ever first half
results. All that progress was halted however when the Government
introduced severe restrictions on travel for all but essential
workers on 23(rd) March 2020.
In line with the announcement dated 9 April 2020, the Company
has continued over the intervening period to align bus services
with local requirements, reduce commensurately the costs of
operation and conserve cash. Cash flow, both at EBITDA level and
net of all debt, interest and other payments, was quickly
stabilised and since the beginning of May 2020 has been positive.
As highlighted in the same 9 April 2020 announcement, the bankers
to the Company, HSBC Bank Plc, responded to the COVID-19 crisis by
increasing the Company's overdraft facility to GBP6.6 million. The
Company has operated well within that facility in the intervening
period and, whilst it has benefited from the grants Government is
providing to the bus sector, it has not taken up any of the options
offered under the various Government-supported loan schemes, and at
the current time sees no requirement to do so. Besides the response
of HSBC Bank Plc outlined above, the Company benefited from a
moratorium of between three and six months declared by the majority
of hire purchase finance providers.
In the announcement of 9 April 2020 we set out the Group's
response to the restrictions placed upon it by Government action.
In brief we consulted closely with the Local Authorities in whose
areas we operate (as we were directed to do by Government),
reconfigured timetables to meet the likely new passenger levels and
reduced driver rosters to match the new levels of service
provision. All other employees not rostered to work were placed
into the Coronavirus Job Retention Scheme. At the beginning of the
crisis passenger loadings fell to under 15% of expected levels on a
like for like basis but since then passenger volumes have slowly
recovered as the crisis has eased and the Government has lifted
many of the initial restrictions.
At the time of writing passenger volumes are rising steadily as
schools have returned and the holiday season has ended. On a like
for like basis passenger volumes now stand at about 54% of the same
period in the previous year. We expect this upward trend to
continue. To match these increases bus service frequencies have
been gradually returned to pre-crisis levels. We are now running at
roughly the level we were at before the Coronavirus crisis hit. We
are also playing our full part in the Home to School transport
initiative being funded by the Department of Education. Staff have
accordingly gradually been brought back from furlough. At one time
just under 50% of staff were on furlough but this proportion has
fallen steadily and, bearing in mind that between 5% and 10% of
staff are always on holiday, almost all of our staff are now back
at work.
Throughout this period the support of Government at local and
national level has been key to sustaining our operations. As we
highlighted in the announcement of 9 April 2020, as soon as the
"lockdown" phase of the Coronavirus pandemic began, the UK
Government designated bus operation to be an essential service.
Government also took steps, through specific direction provided by
the Cabinet Office to all arms of the State at both national and
local level and through the Department for Transport, to ensure
that bus companies had sufficient cash flow to support the
operations that they were being asked to run. These measures
encompassed a specific COVID-19 Bus Service Support Grant (now
renamed "CBSSG Restart") and the maintenance of Bus Services
Operator's Grant, concessionary fares re-imbursements and payments
for contracted bus services broadly at their pre-crisis levels.
These support measures continue to be in place at the current time.
We remain grateful to Government for recognising early that bus
operation was indeed an essential public service and for putting in
place the support measures that were necessary to keep services
running in very adverse circumstances.
Government has confirmed that CBSSG Restart and all other
support measures will continue in place for the time being.
Government has stated that, if it decides to terminate CBSSG
Restart, it will give eight weeks' notice of termination. This
should give ample time for us to make any service changes which
might be necessary following the withdrawal of the grant.
Results and review of trading
For the six months ended 31 May 2020 group revenues were GBP35.5
million (2019: GBP30.5 million). However, as should be apparent
from my words above, there is no comparability between the two
accounting periods and therefore little meaningful to be said,
except to point out that the 2020 figures include the results of
the Bolton acquisition made in August 2019, but that the results
for the period ended 31 May 2019 obviously do not include any such
contribution. In the period to 31 May 2020 the grant and subsidy
regime described above contributed GBP7.1 million to total revenues
(which are broken down in detail in note 3 to this statement).
Despite the adverse operating conditions, before exceptional
items, the Group recorded an Operating Profit of GBP373,000 for the
six months to 31 May 2020 overall (2019: GBP2,330,000). For the
same period the Group incurred a charge of GBP4.1 million for
exceptional items, largely brought about by the COVID-19 crisis.
The charge is analysed in detail in Note 4 to this statement and is
the main cause of the loss before tax of GBP4.9 million (2019:
profit before tax GBP1.1 million). The principal components of that
charge are as follows:
-- As the COVID-19 crisis took hold it rapidly became clear to
the Board that the oldest vehicles in the bus fleet (retained
mainly to increase the flexibility of service operation) were very
unlikely ever to see service again. Accordingly the Board concluded
that it would be more beneficial to group cash flow to sell these
seventy one vehicles for scrap and take a one-off charge to the
profit and loss account of GBP913,000. The group's cash flow will
be improved by about GBP300,000 by the combined effect of the sale
of the buses and the release back into the tyre pool of the tyres
used by these vehicles;
-- In order to hedge its requirement for diesel fuel, the Group
enters, as a matter of course, into diesel commodity forward
contracts. These agreements do not meet the definition of hedging
transactions under IAS 39 "Financial Instruments: Recognition and
Measurement". Accordingly they are accounted for as a derivative
and are recorded at fair value through profit and loss in any
accounting period. This means that the group's entire fuel
derivative exposure is marked to the market price at the end of any
reporting period. Therefore the profit and loss account for the six
months ended 31 May 2020 recognises the charge of GBP2,877,000
required to reflect the full potential loss to the Company of all
its remaining fuel derivative contracts at the price prevailing at
that date. Since 31 May 2020 the market prices and exchange rate
underlying this provision have changed considerably and as at 31
August 2020 the provision required was GBP1,626,000, GBP1,258,000
as a current liability and GBP368,000 as a non-current liability.
The cash flow impact of the mark to market provision on the fuel
derivative exposure, if realized wholly into cash, would arise
evenly over the eighteen months to 30 November 2021.
Financial review
The Board believes that the Company will be able to sustain its
activities for the foreseeable future under current operating
conditions. Therefore it is considered to be appropriate to draw up
these financial statements on the going concern basis.
Income statement
Trading conditions for the six months ended 31 May 2020 were
abnormal and not directly comparable with preceding accounting
periods. The restrictions on trading prompted by the COVID-19
pandemic caused gross profits to fall by 14% compared to the same
period in 2019 and the gross profit percentage to fall to 14.2%
(2019: 19%). Administrative expenses rose to GBP4.7m (2019: GBP3.5
million) reflecting the addition of the large depot at Bolton in
the second half of 2019. Consequently Profit from Operations before
exceptional items fell to GBP373,000 (2019: GBP2,330,000) and,
after interest and tax, a loss before exceptional items of
GBP644,000 was recorded (2019: profit GBP1,269,000). T he loss per
share was 1.29 pence (2019: profit per share of 2.64 pence).
The composition of the charge for exceptional items of GBP4.1
million has already been analysed above. The Loss from Operations
after exceptional items was GBP3.8 million (2019: Profit of GBP1.9
million) and, on the same basis, the Loss before Tax was GBP4.9
million (2019: Profit before Tax of GBP1.1 million). The loss per
share for the period was therefore 7.61 pence (2019: profit per
share of 1.75 pence).
Balance sheet
The balance sheet as at 31 May 2020 was relatively static when
compared to that pertaining at 30 November 2019. Note 6 should be
consulted for a detailed analysis of property, plant and equipment.
In accordance with IFRS 16 - Leases (see note 2) right of use
assets were recognised in the opening balance sheet using the
modified retrospective approach. Some additions were made to the
vehicle fleet in the period but, given that deliveries of new buses
for the Bolton re-equipment were delayed by the pandemic, they were
outweighed by depreciation, disposals and the decision, as above,
to scrap 71 older vehicles. The liabilities side of the balance
sheet encompasses for the first time the lease obligations
calculated under IFRS 16, as both current and non-current
liabilities. Otherwise the only item of note is that, making use of
the increased overdraft facility provided by HSBC Bank Plc as part
of their response to the COVID-19 crisis, net bank debt increased
from GBP24.6 million at 30 November 2019 to GBP26.5 million as at
31 May 2020. No new bank borrowings were taken out in the period
under review and indeed a small repayment of mortgage borrowings
was made in the period.
Cash flow statement
Despite the loss before tax of GBP4.9 million for the period,
major components of that loss were formed from non-cash items. Thus
the Group was able to record a positive cash flow generated from
operations of GBP1,235,000 (2019: GBP1,456,000) and positive net
cash flow from operating activities of GBP668,000 (2019:
GBP1,070,000).
The sale proceeds of the disposal of the Atherton depot in May
2020 outweighed purchases of property, plant and equipment and the
interim dividend was paid in December 2019, well before the
COVID-19 crisis was upon us, but no final dividend was declared and
paid.
The mortgage repayment of GBP1 million of the previous year was
directly connected to the sale of a property and so was not
repeated this year. The capital payments under HP agreements
benefited somewhat from the moratorium already mentioned but
otherwise the pattern of payments and receipts under financing
activities was very similar to the comparative period. Cash used in
financing activities therefore totalled GBP3.1 million (2019:
GBP3.2 million) and the net decrease in cash and cash equivalents
at this stage of the year was actually lower than in the
comparative period at GBP2.1 million (2019: GBP2.6 million).
New vehicles
The delayed delivery of the new buses for the Bolton depot, to
replace the buses presently leased from First Group plc in
accordance with the terms of the acquisition in August 2019, means
that a large batch of these vehicles will arrive in close order in
the second half of the year and cause the book value of passenger
service vehicles and the hire purchase debt financing them to
increase by about GBP17 million by 30 November 2020. The remainder
of the vehicles on order, with a value of some GBP11 million,
almost all destined for Bolton, will arrive throughout 2021. In
cash flow terms these acquisitions will be cash neutral as the
current leasing costs are equivalent to the capital repayments on
the new vehicles. In addition the replacement vehicles are far more
fuel efficient and have much lower maintenance costs. Furthermore,
given the change in circumstances since these orders were placed
last year, we do not foresee any requirement, unless for completely
new business, to acquire any vehicles for the following two years.
In a normal year we would expect to invest about GBP4m in the
natural cycle of fleet replacement, so, after the initial large
increase in the size of the outstanding HP debt, that increase will
be temporary and reduce rapidly so that, when the next re-equipment
cycle begins HP debt levels will be comparable to where they were
as at 31 May 2020.
Dividends
Because of the onset of the lockdown under the COVID-19 crisis
the directors were unable to recommend to the Annual General
Meeting in May 2020 a final dividend in respect of the year ended
30 November 2019. One of the terms of the CBSSG Restart scheme is
that no dividends can be paid to shareholders. However, once the
CBSSG Restart grant period has ended, the Board will consider
whether it is possible to reinstate dividend payments.
Fuel hedging update
The normal annual fuel requirement of the Group is approximately
14.0 million litres . In drawing up its budget for 2020 and beyond
the Board originally targeted an average fuel price of about 100p a
litre . The board continued to hedge this fuel requirement until
early in 2020. By that stage about 77% of the group's fuel
requirement for 2020 was covered by hedging contracts and about 87%
of the fuel requirement for 2021. Actual fuel usage during the
COVID-19 crisis has of course been well below expected levels and
full provision has been made in these financial statements against
the fuel derivative exposure as at 31 May 2020 at the then market
prices.
Outlook
For the foreseeable future the Group will continue to work
closely with the Department for Transport and relevant Local
Authorities and be in receipt of the various elements of Government
support in the form of the grants and subsidies already described.
In these abnormal circumstances it is not possible, while the CBSSG
Restart regime remains in place, to give any guidance to the market
as to expected financial performance.
The Board does expect the steadily increasing trend in passenger
volumes to continue until normal trading conditions can be
re-established, although it is of course impossible to forecast
exactly when that will be. The Board however does believe that the
Company will be well placed after the pandemic has passed to take
advantage of opportunities in the bus market. Even before the onset
of the COVID-19 crisis it was evident that the likelihood of major
opportunities in our markets was increasing. Since then a number of
small and medium sized competitors in our areas of operation have
either collapsed or withdrawn from the market and the factors
causing stress to several of our larger competitors have not
diminished. Therefore the Board expects there to be increased
opportunities in the future both for organic growth and for
sizeable acquisitions.
In addition the Board believes that the Group, its management
and its employees have met the stress test posed by extraordinary
and unprecedented circumstances and come through them with flying
colours. We have seen service delivery and reliability improve
throughout the crisis, management learn to be quicker on its feet,
and the increased investment in systems infrastructure continue to
produce discernible benefits. We are therefore very confident that,
operationally, the Group is in good shape, fitter and leaner to
meet the challenges that lie beyond the end of the COVID-19
crisis.
John Gunn
Non-Executive Chairman
15 September 2020
Condensed consolidated Note Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
income statement 6 months 6 months 6 months 6 months 6 months 6 months
ended 31 ended ended 31 ended 31 ended ended 31
May 2020 31 May May 2020 May 2019 31 May May 2019
2020 2019
Results Exceptional Results Results Exceptional Results
before items for the before items for the
exceptional period exceptional period
items items
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 3 35,495 - 35,495 30,523 - 30,523
Cost of sales (30,460) - (30,460) (24,698) - (24,698)
Gross profit 5,035 - 5,035 5,825 - 5,825
Administrative
expenses (4,662) (4,129) (8,791) (3,495) (386) (3,881)
Profit/(loss)
from operations 373 (4,129) (3,756) 2,330 (386) 1,944
Finance expense (1,168) - (1,168) (801) - (801)
------------- ------------ ---------- ------------- ------------ ----------
(Loss)/profit
before taxation 4 (795) (4,129) (4,924) 1,529 (386) 1,143
Tax credit/(expense) 151 963 1,114 (260) (41) (301)
(Loss)/profit
for the period
attributable
to the equity
holders of the
parent (644) (3,166)) (3,810) 1,269 (427) 842
Earnings per
share for (loss)/profit
attributable
to the equity
holders of the
parent for the
period:
Basic (pence) 5 (1.29) (7.61) 2.64 1.75
Diluted (pence) 5 (1.29) (7.61) 2.64 1.75
Condensed consolidated Note Audited Audited year Audited year
income statement year ended ended 30 ended 30
30 November November November
2019 2019 2019
Results Exceptional Results
before items for the
exceptional year
items
GBP'000 GBP'000 GBP'000
Revenue 3 67,533 - 67,533
Cost of sales (53,917) - (53,917)
Gross profit 13,616 - 13,616
Administrative expenses (7,563) (1,806) (9,369)
------------- ------------- ---------------
Profit from operations 6,053 (1,806) 4,247
Finance income 53 - 53
Finance expense (1,688) - (1,688)
Profit before taxation 4,418 (1,806) 2,612
Tax expense (840) 175 (665)
------------- ------------- ---------------
Profit for the year attributable
to the equity holders of
the parent 3,578 (1,631) 1,947
Earnings per share for profit
attributable to the equity
holders of the parent during
the year:
Basic (pence) 5 7.35 4.00
------------- ------------- ---------------
Diluted (pence) 5 7.35 4.00
------------- ------------- ---------------
Condensed consolidated statement Unaudited 6 Unaudited Audited year
of comprehensive income months ended 6 months ended 30
31 May 2020 ended 31 November
May 2019 2019
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (3,810) 842 1,947
-------------- ---------- -------------
Other comprehensive income:
Actuarial gain on defined
benefit pension scheme - - 527
Deferred tax on actuarial
gain on defined benefit pension
scheme - - (100)
--------------
Other comprehensive income
for the period (net of tax) - - 427
Total comprehensive (expense)/income
for the period attributable
to the equity holders of
the parent (3,810) 842 2,374
============== ========== =============
Condensed consolidated Notes Unaudited Unaudited Audited as at
statement of financial as at 31 as at 31 30 November 2019
position May 2020 May 2019
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and
equipment 6 51,427 41,518 51,698
Defined benefit pension
asset 2,319 1,737 2,319
Goodwill and other intangible
assets 15,060 14,620 15,246
_____ _____ _____
Total non-current assets 68,806 57,875 69,263
Current assets
Inventories 4,324 3,916 4,310
Trade and other receivables 19,403 19,396 18,275
Derivative financial
instruments - 152 36
Cash and cash equivalents 1,371 482 746
_____ _____ _____
Total current assets 25,098 23,946 23,367
_____ _____ _____
Total assets 93,904 81,821 92,630
Liabilities
Current liabilities
Trade and other payables (7,086) (8,167) (7,648)
Loans and borrowings 7 (22,009) (16,152) (19,267)
Obligations under hire
purchase agreements 8 (4,188) (3,951) (4,295)
Other lease obligations 9 (731) - -
Derivative financial
instruments (1,710) (20) (3)
______ ______ _____
Total current liabilities (35,724) (28,290) (31,213)
Non-current liabilities
Loans and borrowings 7 (5,946) (3,982) (6,124)
Obligations under hire
purchase agreements 8 (16,262) (11,861) (15,934)
Other lease obligations 9 (1,889) - -
Provision for liabilities (109) (334) (234)
Derivative financial (655) - -
instruments
Net deferred taxation (1,401) (2,058) (2,515)
______ ______ ______
Total non-current liabilities (26,262) (18,235) (24,807)
______ ______ ______
Total liabilities (61,986) (46,525) (56,020)
_____ _____ _____
Net assets 31,918 35,296 36,610
====== ====== =====
Condensed consolidated Unaudited Unaudited Audited as at
statement of financial as at 31 as at 31 30 November 2019
position May 2020 May 2019
GBP'000 GBP'000 GBP'000
Equity attributable
to equity holders
of parent
Called up share capital 12,731 12,220 12,731
Share premium reserve 12,369 11,779 12,369
Merger reserve 2,567 2,567 2,567
Shares in treasury (806) (817) (806)
Retained earnings 5,057 9,547 9,749
______ ______ _____
Total equity 31,918 35,296 36,610
===== ===== ====
Condensed consolidated Called Share Merger Shares Retained Total
Statement of Changes up share premium reserve in treasury earnings
in Equity capital account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 December 2018 12,220 11,779 2,567 (817) 9,146 34,895
---------- --------- --------- ------------- ---------- ------------
Profit for the period - - - - 842 842
Other comprehensive - - - - - -
income
Total comprehensive
income - - - - 842 842
Transactions with
owners:
Dividends paid - - - - (441) (441)
Transactions with
owners - - - - (441) (441)
At 31 May 2019 12,220 11,779 2,567 (817) 9,547 35,296
---------- --------- --------- ------------- ---------- ------------
Profit for the period - - - - 1,105 1,105
Other comprehensive
income - - - - 427 427
Total comprehensive
income - - - - 1,532 1,532
Transactions with
owners:
Share based payment - - - - 2 2
Shares issued 511 590 - 11 - 1,112
Dividends paid and
accrued - - - - (1,332) (1,332)
Transactions with
owners 511 590 - 11 (1,330) (218)
At 30 November 2019 12,731 12,369 2,567 (806) 9,749 36,610
---------- --------- --------- ------------- ---------- ------------
Change in accounting
policy - IFRS 16
"Leases" - - - - (882) (882)
Loss for the period - - - - (3,810) (3,810)
Other comprehensive - - - - - -
income
Total comprehensive
expense - - - - (4,692) (4,692)
Transactions with
owners:
Dividends paid - - - - - -
Transactions with - - - - - -
owners
At 31 May 2020 12,731 12,369 2,567 (806) 5,057 31,918
Condensed consolidated cash Unaudited Unaudited Audited year
flow statement 6 months ended 6 months ended ended 30 November
31 May 2020 31 May 2019 2019
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
(Loss)/profit for the period
before tax (4,924) 1,143 2,612
Finance expense (net) 1,168 801 1,635
Depreciation 4,138 2,090 4,361
Gain on sale of property,
plant and equipment (331) (31) (4)
Acquisition expenses - - 578
Contribution to defined benefit
pension scheme - (129) (190)
Amortisation of intangibles 187 257 501
Notional expense of defined
benefit pension scheme - - 5
____ ____ ____
Cash flows from operating
activities before changes
in working capital and provisions 238 4,131 9,498
Increase in trade and other
receivables (1,129) (3,501) (2,377)
(Decrease)/increase in trade
and other payables (132) 1,792 (79)
Increase in inventories (15) (391) (590)
Movement on provisions (125) (406) (506)
Movement on derivative financial
instruments 2,398 (169) (71)
____ ____ ____
997 (2,675) (3,623)
____ ____ ____
Cash generated from operations 1,235 1,456 5,875
Interest paid on hire purchase
agreements and other lease
obligations (567) (386) (664)
____ ____ ____
Net cash flows from operating
activities 668 1,070 5,211
Condensed consolidated cash Unaudited Unaudited Audited year
flow statement 6 months ended 6 months ended ended 30 November
31 May 2020 31 May 2019 2019
GBP'000 GBP'000 GBP'000
Cash flows from investing
activities
Acquisitions of businesses - - (5,992)
Purchases of property, plant
and equipment (464) (589) (1,325)
Sale of property, plant and
equipment 729 113 96
_____ _____ _____
Net cash flows derived from/(used
in) investing activities 265 (476) (7,221)
Cash flow from financing activities
Shares issued - - 1,112
Dividends paid (476) (441) (1,297)
Proceeds of mortgage and other
bank loans - 750 6,750
Repayment of bank and other
borrowings (176) (1,139) (1,283)
Bank interest paid (517) (507) (1,037)
Hire purchase refinancing
receipts 185 354 353
Capital settlement payments
on vehicles sold - (115) (117)
Capital element of obligations
under hire purchase agreements (1,607) (2,086) (4,199)
Other lease obligations under (459) - -
IFRS 16
_____ _____ ____
Net cash (used in)/generated
from financing activities (3,050) (3,184) 282
Net decrease in cash and cash
equivalents (2,117) (2,590) (1,728)
Cash and cash equivalents
at start of period (1,959) (231) (231)
_____ _____ _____
Cash and cash equivalents
at end of period (4,076) (2,821) (1,959)
====== ===== ====
Notes to the Unaudited Consolidated Interim Financial Statements
for the six months ended 31 May 2020
1. Basis of preparation:
The unaudited condensed consolidated interim financial
statements have been prepared using the accounting policies set out
in the group's 2019 statutory financial statements. However for the
year ending 30 November 2020 the group is required to adopt IFRS 16
- Leases (see note 2).
The financial statements of the group for the full year are
prepared in accordance with IFRS's as adopted by the European Union
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. IFRS 16 - Leases:
Under this standard the group, as a lessee, is required to
recognize on-balance sheet its right to use all leased assets,
except short term leases and leases of low value items, and the
corresponding lease liability, being the obligation to make lease
payments. In applying IFRS 16 the group has adopted the modified
retrospective approach. This approach requires that the cumulative
profit and loss account effect of the adoption of the accounting
standard is recognised as an adjustment to opening reserves.
Furthermore the value of the right of use assets should be
recognised at the commencement date together with the corresponding
lease liabilities. Comparative figures are, under this approach,
not required to be adjusted and have not been so adjusted.
Therefore as at 1 December 2019 (the commencement date) the
group recognised :
-- as an asset the carrying value of right of use assets at a
gross value of GBP4,161,000 (see note 6);
-- accumulated depreciation on those assets of GBP2,293,000 (see note 6);
-- as a liability the present value of the minimum lease
payments on right of use assets of GBP2,750,000;
-- an adjustment to opening reserves of GBP882,000 (see the
Condensed Consolidated Statement of Equity).
The group had already recognized as an asset a leasehold
interest at its fair value at the date of acquisition in 2006,
which has now been reclassified as a right of use asset. Accounting
standards at that time did not require the recognition of a
corresponding right of use liability, which is therefore now
included within the above calculation for the present value of the
minimum lease payments.
The adoption of this standard has had and will have no material
impact on the profit and loss account of the group in the current
accounting period.
3. 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 Six months Year ended
ended 31 ended 31 30 November
May 2020 May 2019 2019
GBP'000 GBP'000 GBP'000
Commercial 19,385 19,175 45,842
Contracted 8,789 10,566 20,223
Charter 209 782 1,468
Grants and subsidies 7,112 - -
Total 35,495 30,523 67,533
=========== =========== =============
As set out in the Chairman's Statement the group has been the
beneficiary of extensive support in the current accounting period
from the Department of Transport and Local Authorities. The
principal component parts of the income from grants and subsidies
in the period were:
-- Concessionary fares income received but not matched by the
carriage of a passenger - GBP2,660,000;
-- Bus Services Operator's Grant not matched by actual kilometres driven - GBP597,000;
-- COVID-19 Bus Services Support Grant - GBP3,623,000.
4. 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 year
6 months 6 months ended 30
ended 31 ended 31 November
May 2020 May 2019 2019
GBP'000 GBP'000 GBP'000
Depreciation charge for (913) - -
vehicles scrapped
Mark to market provision
on fuel derivatives (2,877) 325 58
Amortisation of intangible
assets (187) (257) (501)
Professional fees and (29) - -
re-organisation expense
related to COVID-19
Other transaction costs (123) (57) (67)
Acquisition costs - (397) (578)
Costs of reorganisation
and integration of acquisitions - - (717)
Share based payment expense - - (1)
(Loss)/profit within
profit before taxation (4,129) (386) (1,806)
========== ========== =============
The principal elements of the charge for exceptional items in
the period consist of the following items described in detail in
the Chairman's Statement:
-- Depreciation charge for vehicles scrapped: the oldest
vehicles in the bus fleet (retained mainly to increase the
flexibility of service operation) are unlikely ever to see service
again. Accordingly the board concluded that it would be more
beneficial to group cash flow to sell these seventy one vehicles
for scrap and take a charge to the profit and loss account of
GBP913,000;
-- Mark to market provision on fuel derivatives: the profit and
loss account for the six months ended 31 May 2020 recognises the
charge required to reflect the full potential loss to the Company
on all its remaining fuel derivative contracts at the price
prevailing at that date.
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 50,091,109 (May 2019: 48,026,580; November
2019: 48,673,701). 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 2019: 48,026,580;
November 2019: 48,673,701).
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 Public
and leasehold of use Plant service
land and assets and vehicles Total
buildings under machinery
IFRS 16
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost:
At 1 December 2018 7,103 - 5,238 50,954 63,295
Acquisition 4,692 - 500 - 5,192
Additions 186 - 895 10,435 11,516
Disposals (11) - (323) (2,721) (3,055)
At 30 November 2019 11,970 - 6,310 58,668 76,948
Right of use assets
recognised under IFRS
16 - 4,161 - - 4,161
Reclassifications (913) 913 - - -
Additions 3 322 194 1,877 2,396
Disposals (168) - (159) (4,194) (4,521)
At 31 May 2020 10,892 5,396 6,345 56,351 78,984
Depreciation:
At 1 December 2018 503 - 1,604 21,744 23,851
Charge for the year 75 - 486 3,800 4,361
Disposals (11) - (321) (2,630) (2,962)
At 30 November 2019 567 - 1,769 22,914 25,250
Depreciation on right
of use assets recognised
under IFRS 16 - 2,293 - - 2,293
Reclassifications (255) 255 - - -
Charge for the period 24 452 270 3,391 4,137
Disposals (17) - (8) (4,098) (4,123)
At 31 May 2020 319 3,000 2,031 22,207 27,557
Net book value:
At 31 May 2020 10,573 2,396 4,314 34,144 51,427
At 30 November 2019 11,403 - 4,541 35,754 51,698
7. Loans and borrowings:
Secured bank loans are mortgage-type loans secured by reference
to the group's freehold property.
At 31 May At 31 May At 30 November
2020 2019 2019
GBP'000 GBP'000 GBP'000
Current:
Overdrafts 5,447 3,303 2,705
Bank loans (secured) 387 224 387
Bank loans (unsecured) 16,175 12,625 16,175
22,009 16,152 19,267
Non- current:
Bank loans (secured) 5,946 3,982 6,124
Total loans and
borrowings 27,955 20,134 25,391
8. Obligations under hire purchase agreements:
All finance leases are secured by the lessors' rights over the
respective leased assets which consist principally of passenger
service vehicles.
Obligations under hire At 31 May At 31 May At 30 November
purchase agreements 2020 2019 2019
GBP'000 GBP'000 GBP'000
Present value:
Not later than one
year 4,188 3,951 4,295
More than one but less
than two years 3,863 3,182 3,840
More than two but less
than five years 7,978 6,609 8,051
Later than five years 4,421 2,070 4,043
---------- ---------- ---------------
20,450 15,812 20,229
Other lease obligations:
Other lease obligations consist of those obligations created by
the adoption in the current accounting period, for the first time,
of the provisions of IFRS 16 - Leases (see note 2).
10. Dividends:
On 13 December 2019 the company paid an interim dividend of 0.95
pence per share in respect of the year ended 30 November 2019; the
directors were unable to recommend the payment of a final dividend
in respect of that year because of the advent of the COVID-19
pandemic. All dividends are payable in cash only.
11. Additional information:
The unaudited Consolidated Interim Report was approved by the
Board of Directors on 14 September 2020. The consolidated interim
financial information for the six months ended 31 May 2020 and for
the six months ended 31 May 2019 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 2019 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.
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 or the Company's website www.rotalaplc.com .
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END
IR BLGDCBUBDGGS
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