ROL.L Regulatory News (ROL)

30 Aug 2007 07:00

Rotala PLC30 August 2007 Press Release 30 August 2007 Rotala plc ("Rotala" or 'the Company') Unaudited Interim Results for the six months to 31 May 2007 Chairman's Statement I am pleased to be able to present this interim report to shareholders inrespect of the six month period ended 31 May 2007. In the period under review the results of the efforts made over the previouseighteen months to increase revenues and reform the cost base began to makethemselves felt. Turnover increased by 19%, to £9,557,000, compared to the sameperiod in previous year, whilst cost of sales rose by only 11%. Consequentlygross profit almost doubled to £1,470,000. The majority of the increase inadministrative expenses was accounted for by the uplift in depreciation. Thisresulted from the acquisition of 34 new vehicles in the reporting period, usinghire purchase instead of operating leases in accordance with the change ofpolicy I highlighted in the last Annual Report. The operating loss sustained bythe Company therefore fell from £1,075,000 in the first six months of 2006 to£608,000 in the same period of 2007. Within this figure is a loss of some£103,000 in respect of the Company's small depot at Weybridge, Surrey. At theend of the period an opportunity arose to relinquish this depot to anothersimilar business on the same site at no cost. These losses will not thereforerecur in the future. Interest payable has risen, reflecting the investment in new vehicles and thecost of the mortgage on the group's freehold main depot at Long Acre,Birmingham, acquired in April 2006. The loss on ordinary activities before taxthus fell to £856,000 compared to a loss of £1,119,000 in the same period of2006. The principal impact on the balance sheet has again come from theacquisition of the many new vehicles: this has boosted not only fixed assets butalso creditors, both those due within one year and those due after more than oneyear, with the resultant hire purchase obligations. The main influences on the increase in business came from the acquisition ofZak's Bus & Coach Services Limited late in the previous accounting year and theeffect of new contracts obtained in 2006. The acquisition of the bus business ofBirmingham Motor Traction Limited ("BMT") just before Christmas 2006 did nothave a material impact because of the small size of that operation. The newcontracts amounting to £2.5m announced in February 2007 had little impact on theperiod because in the main these services had hardly commenced in the six monthsto 31 May 2007. Besides the addition of BMT to the group and the new contracts referred toabove, the main focus of the period under review was on the enlargement of thegroup. In June and July 2007 the Company announced its intention to acquirethree companies, or their businesses. Although the completion of these dealslies after the end of the accounting period, clearly the Board was extremelyactive in these six months in identifying its targets and negotiating agreementsto bring these deals to a conclusion. The completion of the acquisition of NorthBirmingham Busways Limited was announced on the 30 July 2007, together with theacquisition of the first tranche of the bus business of South GloucestershireBus & Coach Limited ("SGBCC"). The remainder of the business of SGBCC will beacquired over the next seven months. The due diligence on the proposedacquisition of Ludlows of Halesowen Limited continues at the date of thisreport. Completion is expected to occur in the near future and an announcementabout this will be made in due course. The funds to make these acquisitions were raised via a placing of £2.5m in newequity capital which was the subject of a circular to shareholders sent out on22 June 2007. The resolutions to confirm this placing were passed by theExtraordinary General Meeting held on 17 July 2007. Just prior to this activity,the Company had also conducted a small placing of £0.5m in new equity capital inApril 2007 to provide the necessary working capital to service the needs of thenew contracts announced in the previous February as outlined above. Thiscapital, in particular, enabled the Company to establish an initial presence inthe Bristol area, which the Board regards as a key new hub in its strategy forexpansion. Finally, in dealing with changes in the Company's share capital, itshould be noted that £275,000 in convertible loan stock, which fell due on 30June 2007, was duly converted into ordinary shares on that date, furtherstrengthening the Company's capital base. I am also pleased to be able to report continuing success in our objective toincrease the revenues of the group with new contracts. On 30 July 2007 we wereable to announce that we had been awarded a further batch of contracts bringingwith them revenues of some £1,705,000. The success in obtaining new contractsunderlines our commitment to increase the group's turnover and to become asignificant force in transport operations in our chosen locations. The Boardremains convinced that the transport sector offers opportunities for growth,both organically and by acquisition, as shown by the activity described in thisstatement. I continue to believe that one of the keys to success in the sectoris a strong financial as well as operational base. I intend that we will takefurther decisive strides towards these twin objectives as 2007 passes into 2008and build on the successes we have achieved so far. I am pleased that the trend in reduction of losses has continued in 2007 inaccordance with our budgets. In the second half of the year I expect that thegroup's financial performance, compared to the same period of 2006, will show amuch increased rate of change. Furthermore, I am confident that the group willbegin to attain positive results month by month, both in cash flows and profits,as 2008 approaches. Over the next six months our key objectives will be thedigestion and integration of the acquisitions I have mentioned above. At thesame time our quest for suitable new work will continue, as will our pursuit offurther acquisition targets in our chosen areas of operation. The Boardbelieves that its strategy will deliver a sizeable and profitable, integratedtransport group. I look forward to being able to report further successes to youin my report for the year as a whole. John GunnChairman 30 August, 2007 Contacts: John Gunn Chairman 020 7236 6236Kim Taylor CEO 07918 883796Rhod Cruwys, Blue Oar Securities Plc 020 7448 4400 Consolidated profit and loss account Notes Six months Six months Year ended ended 31 May ended 31 May 30 November 2007 2006 2006 (unaudited) (unaudited) (audited) £ £ £ Turnover 9,556,639 8,026,749 16,094,920Cost of sales (8,087,409) (7,280,630) (15,009,429) ------------ ------------ ------------Grossprofit/(loss) 1,469,230 746,119 1,085,491 Administrativeexpenses (2,076,784) (1,821,308) (3,578,924)(Including goodwillamortisation of £204,000,£259,285 and £400,000respectively) ------------ ------------ ------------Operating Loss (607,554) (1,075,189) (2,493,433) Interestreceivable 6,902 1,284 19,301 Interestpayable (255,500) (45,208) (251,534) ------------ ------------ ------------Loss onordinaryactivitiesbefore andafter taxation (856,152) (1,119,113) (2,725,666) ============ ============ ============Loss per share- basic anddiluted 3 (0.23p) (0.54p) (1.05p) ------------ ------------ ------------ Consolidated Balance Sheet Notes At 31 May 2007 At 31 May 2006 At 30 November (unaudited) (unaudited) 2006 (audited) £ £ £Fixed assetsIntangibleassets 7,605,858 8,313,431 7,737,800Tangible assets 9,811,672 3,727,190 5,675,158 ------------ ------------ ------------ 17,417,530 12,040,621 13,412,958Current assetsStocks 157,474 118,274 164,511Debtors 3,483,539 2,464,942 3,539,430Cash at bankand in hand - 42,634 - ------------ ------------ ------------ 3,641,013 2,625,850 3,703,941Creditors:amountsfalling duewithin oneyear (6,812,730) (3,308,995) (5,940,235) ------------ ------------ ------------Net current(liabilities) (3,171,717) (683,145) (2,236,294) ------------ ------------ ------------Total assetsless currentliabilities 14,245,813 11,357,476 11,176,664 Creditors:amountsfalling dueafter morethan one year (7,373,253) (3,505,946) (3,597,582)Provisions (570,967) (1,224,124) (893,431) ------------ ------------ ------------ 6,301,593 6,627,406 6,685,651 ============ ============ ============Capital and reservesCalled upshare capital 4,010,243 2,803,077 3,676,910Share PremiumAccount 4,454,984 3,525,258 4,316,223Merger reserve 2,566,667 2,566,667 2,566,667Profit andloss account(deficit) (4,730,301) (2,267,596) (3,874,149) ------------ ------------ ------------Shareholders'funds 6,301,593 6,627,406 6,685,651 ============ ============ ============ Consolidated cash flow statement Notes Six months Six months Year ended ended 31 May ended 31 May 30 November 2006 2006 2006 (unaudited) (unaudited) (audited) £ £ £Net cashoutflow fromoperatingactivities 4 (43,226) (1,113,100) (2,977,867)Returns on investments andservicing of financeInterestreceived 6,902 1,284 19,301Interest paid (220,590) (35,715) (200,003) ------------ ------------ ------------Net cash(outflow)/inflow fromreturns oninvestmentsand servicingof finance (213,688) (34,431) (180,702) ------------ ------------ ------------Capital expenditure andfinancial investmentPayment toacquireintangiblefixed assets - (250,000) (250,000)Payments toacquiretangible fixedassets (549,868) (2,072,271) (2,173,208)Sale oftangible fixedassets 685,042 11,190 90,447 ------------ ------------ ------------Net cashinflow/(outflow) fromcapitalexpenditureand financialinvestment 135,174 (2,311,081) (2,332,761) ------------ ------------ ------------AcquisitionsAcquisition (34,000) - (30,000)Expensesincurred inmaking theacquisitions (38,059) - (132,308)Bank overdraftacquired withacquisitions - - (40,150) ------------ ------------ ------------Cash outflowfromacquisitions (72,059) - (202,458) ------------ ------------ ------------Cash outflowbefore use ofliquidresources andfinancing (193,799) (3,458,612) (5,693,788)Management of liquid resourcesDecrease indeposits withbanks - 1,000,000 1,000,000 FinancingIssue of ordinary share capital 500,000 1,625,000 3,331,002Issue costs (27,904) (113,801) (130,006)Issue of convertible loan notes 400,000 - 250,000Redemption of loan note (100,000) - -Bank loan - 1,500,000 1,500,000Bank loan repaid (7,590) - (3,902)Capital element of finance lease payments (799,140) - (647,801) ------------ ------------ ------------Cash (outflow)/inflow from financing (34,634) 3,011,199 4,299,293 ------------ ------------ ------------(Decrease)/Increase in cash for the period (228,433) 552,587 (394,495) ============ ============ ============ Notes to the unaudited interim statement for the period ended 31 May 2007 1 Basis of Preparation: the financial information for the period has not been audited or reviewed. 2 Accounting policies: the accounting policies used in this statement are the same as those which were used for the preparation of the audited accounts for the year ended 30 November 2006. 3 Loss per share: loss per share has been calculated based upon the weighted average number of shares in issue in the period of 369,380,525 (May 2006: 208,283,884; November 2006: 259,006,815). The share options outstanding at the period ends were not dilutive. 4 Reconciliation of Operating Loss to Net Cash Outflow: Reconciliation of Operating Loss to Six months Six months Year ended 30 Net Cash Outflow from Operating ended 31 May ended 31 May November Activities 2007 2006 2006 £ £ £ Operating Loss (607,554) (1,075,189) (2,493,433) Amortisation of goodwill and intangibles 204,000 259,286 418,000 Depreciation of tangible fixed assets 217,501 74,854 263,144 Decrease in debtors 55,891 1,287,138 456,322 Increase/(decrease) in creditors 397,198 (1,362,515) (984,641) Decrease in stock 7,037 23,416 13,440 Loss on disposal of fixed assets 5,165 2,786 2,870 Movement on provisions (322,464) (322,876) (653,569) ------------ ------------ ------------ Net Cash Outflow from Operating Activities (43,226) (1,113,100) (2,977,867) ============ ============ ============ 5 Additional Information: this Interim Report does not constitute statutory accounts within the meaning of s.240 of the Companies Act 1985. The comparatives for the full year ended 30 November 2006 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 237(2) - (3) of the Companies Act 1985. 6 Other: copies of this Interim Report can be obtained by request from the company's registered office at 46, Cannon Street, London, EC4N 6JJ. This information is provided by RNS The company news service from the London Stock Exchange