ROL.L Regulatory News (ROL)

2 Sep 2008 07:00

Rotala plc

("Rotala" or 'the Company')

Voluntary Quality Partnerships, New Contracts and Other Service Enhancements

The Board is pleased to announce that the group has entered into two Voluntary Quality Partnerships and in addition has been awarded a number of new contracts.

Voluntary Quality Partnerships

The group, through its recently acquired Diamond Bus subsidiary, has entered into two new Voluntary Quality Partnerships:

The first is a partnership with the West Midlands Passenger Transport Executive ("Centro") and Sandwell Borough Council covering routes which serve West Bromwich, Walsall, Blackheath, Merry Hill, Cradley and Bilston. The partnership covers the introduction of 33 new buses under the "Black Diamond" brand, the bulk of which are being introduced in October 2008. These low floor, easy access buses are equipped to the highest possible specification and will have leather seats as well as interior and exterior CCTV. The buses also possess the most environmentally- friendly engines to the European EEV standard. In parallel with the group's investment in vehicles Centro has agreed to engage in a marketing campaign for these bus routes, install real-time information systems for passengers at bus stops and to make improvements to the roads used in order to improve their friendliness to buses. Partnerships which Centro has formed with other bus companies in the Midlands region have been successful in attracting significant growth in new passengers. The same is expected of the routes chosen for this partnership. 

Stephen Rhodes, Bus and Highways Director of Centro said: "With rising fuel and living costs, people want bus services that are not just clean, safe and reliable but affordable too. Black Diamond goes a step further than this by providing passengers with top of the range buses with reasonably priced tickets. Working in partnership with the Diamond Bus Company and Sandwell Council on this initiative is an important step towards our goal of providing the West Midlands with a world class, integrated and sustainable public transport system and attractive alternatives to the car."

John Gunn, Chairman of Rotala, commented: "We look forward to working closely with Centro and Sandwell Borough Council so that together we can make a real difference to travelling by bus. We expect to invest further in such initiatives in the future."

The second partnership is with Worcestershire County Council ("WCC") and Redditch Borough Council covering routes in and around Redditch itself. Here 6 new buses under the "Red Diamond" brand will commence services on new routes in western Redditch at the beginning of September 2008. These buses join 6 others of the same high specification which have been serving existing routes in eastern Redditch since July 2008.  These buses are also all low floor, easy access vehicles equipped to high specification with interior and exterior CCTV. The buses are also to EEV engine standard, as for the Black Diamond buses described above. In parallel with the group's investment in vehicles WCC has agreed to engage in a marketing campaign for these bus routes, install real-time information systems for passengers at bus stops and to make improvements to the roads used in order to improve their friendliness to buses.

New Contracts

The group is also pleased to announce the award of a number of new contracts in many areas of its operations. On an annualised basis, these new contracts will generate, in aggregate, additional revenues of £2.2 million per annum.

At the Heathrow depot the group has won a new contract from a large media business covering the provision of a private bus network to transport staff from public transport terminuses to their offices in Brentford. This contract is for 3 years and it is expected to generate annual revenue of some £1 million. 

Also out of this depot the group has won a new contract from a small airline to transport its aircrew and the revenue from this contract will be £146,000 per annum. 

In Redditch, again in the Diamond Bus operation, the group has been successful in obtaining subsidised contracts in a tender auction held by Worcestershire County Council. These contracts have an annualised revenue of £792,000 and the average length of the contracts is some three years. The contracts require the provision of 8 new vehicles on a variety of routes. 

In Bristol the group has been awarded by Bristol City Council an enhancement to an existing contracted route which will bring additional revenues of some £203,000 a year.

Finally the group has signed a five year contract with Adbus Titan Limited covering the advertising displays on all of the group's bus fleet. This contract will be worth a minimum of £100,000 per annum. Should the vehicle fleet expand in number in the future this advertising revenue will rise.

 John Gunn, Chairman of Rotala, commented "Our executive team is to be congratulated on the successful negotiation of these Voluntary Quality Partnerships and in achieving further contract successes. The agreement with Titan is particularly pleasing as it exploits the full value of an existing asset." 

Enquiries: 

Contacts:

John Gunn, Chairman  020 7621 5770

Kim Taylor, CEO 07825 808529

Romil Patel, Blue Oar Securities Plc 020 7448 4400