Rotala looking to acquisitions
Rotala is eying further acquisitions despite posting a decline in revenues in its latest financial report. The Birmingham based business achieved revenue of £24.6m in the six months to 31 May 2015 (H1 2014: £26.0m). Revenues from its contracted services fell overall by 19% compared to the first half of 2014 to £8.1m (2014: £10.01m). One of the reasons behind this fall was the conversion of the contracted services operated on behalf of the University of the West of England (UWE) to commercial bus services. Secondly, during the first half of 2015, the contract with British Airways, which the group had held for more than ten years, came to an end. The falls in revenues from these two events were to some degree mitigated by increases in contractual income elsewhere in the group. In the first half of 2015 Contracted Services comprised 33% of revenues, compared to 38% in the same period of 2014.
Revenues in its commercial services, compared to the first half of 2014, rose by 8% to £15.9m (2014: £14.7m). The principal driver of this increase was the change in UWE services. The company says the improvements to the coverage and accessibility of the Swift card have had a positive impact. Revenues from these Centro network cards have shown renewed growth following these changes, after a period of some stagnation.
During the first half of the year, Rotala acquired the Wings business (June) and GTB (February). The company’s main aim is to use its assets to continue to make acquisitions similar to these two made so far this year. The objective is to increase the size of the group considerably over the next few years. GTB and Wings are not expected to make a significant contribution to earnings in 2015, but, once bedded in, will be healthy contributors to group profits in future years. Its financial statement said, ‘There are many more available targets like these’.