Rotala targets £300m annual turnover within five years

Likely further big group divestments will be the opportunity that drives growth, group says in its annual report

Rotala has targeted annual revenues of in excess of £300m within five years, the company says.

That aspiration is part of what Chairman John Gunn describes as “a targeted growth strategy.” Writing in Rotala’s half-yearly report for the six months to 31 May, he adds that increased turnover will not come at the expense of margins.

In that period, Rotala’s revenues were £30.52m, a slight decrease on the same period in 2018. “That resulted from our adherence to group policy… of not chasing turnover regardless of profitability,” he says.

Although it did not occur during the period referred to in the report, Rotala’s recent acquisition of First Manchester’s Bolton depot “demonstrates the company’s ability to capitalise on such opportunities arising out of changes in the UK bus market.”

Mr Gunn adds that such an attribute will be important in the delivery of a turnover in excess of £300m. Further likely divestment activity by the large bus groups represents an opportunity and Rotala “undoubtedly has the management skills and the resources to capitalise on it.”

Rotala purchased First’s Bolton operation for £5.3m. It is leasing 125 vehicles that will be returned progressively until 30 June 2021. Rotala expects to invest around £26m in the Bolton business, but that will satisfy all its replacement vehicle requirement for “at least the next decade.”

The report says that in First’s hands, Bolton made a profit before tax of £300,000 on a turnover of approximately £25m in the twelve months to 31 March. Rotala believes that the return will increase when the operation is integrated with the group’s Atherton and Eccles depots.