ROL.L Regulatory News (ROL)

Embargo for 07.00 on 16 March 2017:

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Rotala plc

("Rotala" or "the Company" or "the Group")

Contract wins - further expansion in West Midlands

Rotala is pleased to announce a series of new contract wins with Transport for the West Midlands ("TfWM").

These contracts were won following TfWM's latest tender round for its supported bus contracts, which are due to commence operations on 23 April 2017. These contracts will attract a subsidy from TfWM of approximately £866,000 a year. The passenger revenue associated with these contracts (based on usage statistics provided by TfWM at the time of the tender) is estimated to be a further £740,000 per annum. Therefore in a full year the total revenue derived from these contracts will be approximately £1,606,000.

The contracts are for periods of between one and five years, with the vast majority of them concentrated in the three to five year range. The contracts will require the equivalent of a further 12 buses to be put on the road which are stipulated by the contracts to be at the Euro 5 emission standard at a minimum. However the mix of vehicles in the Group's current fleet is sufficient to meet these new requirements and no new vehicles will be acquired to service this additional business. The services will also be operated from the existing Tividale and Redditch depots of the Company. Therefore, by using existing depots and vehicles, increased operational efficiency will be attained.

In anticipation of this expansion the Company has secured from the West Midlands Traffic Commissioner authorisation to increase its operating fleet in the West Midlands area from 228 to 275 vehicles. This increase places the Company in a position where it can take immediate advantage of any further growth opportunities arising from the Buses Bill which is expected to receive the Royal Assent this summer.

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