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Progress and challenges

Update | Industrial Support Services | 08 Sep 2011

Rotala's interims showed that strategic progress across the group is continuing apace with the successful integration of Preston Bus Limited, further routes opening and new contract wins. Operationally, the most significant impact remains the cost of fuel and this has led us to ease our FY11 and FY12 forecasts. With the strategic acquisition of PBL being integrated and a focus on expanding the commercial opportunities for the group, we feel Rotala remains well placed to deal with the opportunities that are arising from the shake-up in the local bus market and the operational pressures on larger operators.


Commercial opportunity

Update | Industrial Support Services | 27 Apr 2011

Rotala’s results were broadly in line with our expectations and demonstrated that the group had managed to progress despite challenges around fuel and competitor behaviour. With further progress anticipated in 2011, supported by the recent acquisition of Preston Bus Ltd (PBL), we feel Rotala’s agility and increasing focus on commercial routes will provide further opportunities for expansion over the coming years. In addition, the initial Competition Commission report is anticipated in the next few months and we believe this will be supportive of businesses such as Rotala.


Acquisition and new hub

Update | Industrial Support Services | 26 Jan 2011

Rotala’s acquisition of Preston Bus Ltd (PBL) from Stagecoach highlights precisely the strategy, rationale and benefits of its business model. With Stagecoach agreeing with the Competition Commission to sell its Preston operations, we feel we may have witnessed real evidence of the long-term potential of the strategy. The £3.2m acquisition is anticipated to be earnings enhancing in the current year and provides not only increased revenue, but also a new hub from which the group can expand.


Routes for growth

Outlook | Industrial Support Services | 08 Dec 2010

Through the consolidation of smaller operators and growth of the business through new business wins, Rotala has created a local bus group that is now delivering profitable growth. With larger operators under pressure, both economically and from the Competition Commission, we believe Rotala is well placed to continue its growth trajectory. Following a period of restructuring the operating model, the cash generative nature of the business is becoming increasingly apparent. With the shares trading at a substantial discount to peers, we feel there is further upside potential.


Driving growth

QuickView | Industrial Support Services | 08 Apr 2010

Conceived as a consolidator in the small bus operator market, Rotala’s progress is clear to see. With 2009 results demonstrating that the group is in a strong position in its chosen markets and trading increasingly profitability, we feel that the benefits of this strategy are being proven. New contract wins show Rotala is gaining market share, more than offsetting the recessionary impact. There appears to be further expansion potential, with a Competition Commission investigation into the local bus market due in 18-24 months. The shares are also trading at a significant discount to its larger peers, which may narrow as such progress is demonstrated.