ROTALA PLC- Final Results

ROTALA PLC- Final Results

Final results for the year ended 30 November 2022

Rotala plc (AIM:ROL), a provider of transport solutions across the UK, is pleased to announce its audited final results for the year ended 30 November 2022 


·              Passenger numbers at 90% to 95% of pre-COVID levels

·              DfT support continues through Bus Recovery Grant

·              Commercial revenues recovered strongly when COVID restrictions lifted

·              Working capital reduced by receipt of previous years' Government grants

·              Target for level of net debt (less than £40m at year end) successfully met

·              Sale of Bolton depot and the majority of the fleet based there to be accomplished during FY 2023 (subject to shareholder approval)

·              Post-COVID opportunities for both organic growth and growth by acquisition

·              Proposed final dividend of 1.0p per share

About the business

Rotala provides a range of transport solutions, ranging from local bus services under contract to local authorities, through to commercial bus routes. Rotala has operations at Heathrow Airport, in the West Midlands and in the North West. Operating companies are Diamond Bus Ltd, Diamond Bus (North West) Ltd, Diamond Bus (East Midlands) Ltd, Hallmark Connections Ltd and Preston Bus Ltd.


I am pleased to be able to make this report to the shareholders of Rotala Plc for the year ended 30 November 2022 ("FY 2022"). After the disruption of the last two years, caused by the COVID-19 pandemic, patterns of bus operation have begun to stabilise, though are still underpinned by grants and subsidies provided by the Department for Transport ("DfT") and local authorities.    

Government support

In mid-2021 the DfT replaced its initial support scheme for bus services during the pandemic with a new scheme called "Bus Recovery Grant" ("BRG"). This scheme focuses on compensating bus operators for the absence of revenue whilst passenger numbers continue their recovery back to pre-pandemic levels. The period to be covered by BRG has been extended several times and the latest announcement from the DfT has set a new termination date of 30 June 2023.  The other key measure of support comes from local authorities. With the encouragement of the DfT, concessionary fares re-imbursements, which are controlled by local authorities, have been maintained broadly at pre-COVID levels, subject to a variety of adjustments for actual service levels and miles driven, and do not yet reflect actual passenger usage.  It is expected that this form of support will gradually be tapered down to reflect actual travel patterns during the year ending 30 November 2023 ("FY 2023").

Passenger numbers

Passenger volumes have yet to recover to pre-COVID 19 levels. At the start of FY 2022 passenger numbers ranged between 80% and 85% of pre-COVID levels, but continued to grow slowly and steadily throughout the year. Nationally for the bus industry, passenger volumes remain at about 85% of those levels. However, the company's own operations have outperformed the market and have reached 90% to 95% of pre-COVID 19 levels. Whilst some of the absence of passenger volume may be ascribed to the reduction in commuter traffic occasioned by the desire to "work from home", in the case of the bus industry, the principal issue is that concessionary cardholders (largely pensioners) have not returned to their previous travel habits. Recent industry reports make it clear that this is a matter of confidence in travel by bus rather than any other factor. Full recovery in bus passenger numbers will depend on concessionary card holders regaining their former confidence in travelling by bus. The board therefore expects passenger numbers to continue to increase only slowly.

The recovery in passenger numbers and the gradual reduction in Government support are reflected in the breakdown of revenues in the above table. Bus operation in each of the years ended 30 November 2020 and 2021 ("FY 2020" and "FY 2021") was conducted under the burden of various COVID-related restrictions, but in FY 2022 commercial revenues recovered sharply, as these restrictions had fallen away by the start of the year, and passenger numbers responded accordingly. Grants and subsidies in FY 2022 were also much lower than in the two previous financial years as bus service levels were no longer mandated and paid for by Government and normal commercial operation returned. The peak of Government support for the bus industry was reached in the first half of FY 2021, fell slowly in the second half of that year, and declined substantially in FY 2022. 

Contracted revenue, largely derived from tendered bus contracts operated for local authorities, was much less sensitive to COVID restrictions. The company was particularly successful in expanding this area of its business during FY 2022 in both the West Midlands and the North West. These trends have continued so far in FY 2023. Charter revenue is always highly variable, but rebounded substantially in FY 2022 as interest in ad hoc leisure travel recovered. Overall total revenues in FY 2022 were £84.9 million, compared to  £96.5 million  in the previous year.   

Unlike the preceding forms of Government support, BRG does not demand that a bus operator makes neither a profit nor a loss. As passenger numbers have slowly recovered, so the company has benefited from a corresponding increase in operating profits. The board anticipated that FY 2022 would be a year of transition as Government support packages declined in value and the group realigned itself towards the "new normal".  The group traded in line with its budget for FY 2022.  The board believes that the group is now well positioned to return to profitability in FY 2023 at the normalised pre-tax line.

Profit before tax after exceptional items fluctuates principally as a result of the marking to market of the group's fuel derivative position (which produced profits of £2.6m in FY 2022 and £1.8m in FY 2021). In addition in FY 2022 a profit of £0.6 million was recorded on the sale of a surplus leasehold property. Note 3 to this announcement contains a full analysis of the composition of exceptional items.

The group's trade and other receivables of approximately £21.8 million at 30 November 2021 and £22.3 million at 30 November 2020 were inflated by the amounts receivable from the DfT under the various Government bus industry support schemes, which were the subject of lengthy reconciliation exercises. During FY 2022 these exercises were completed and all grants were received in cash. The working capital invested in trade and other receivables therefore fell steeply.  Government support also called for payment terms on trade and other payables to be accelerated. The company has now reverted to its standard payment terms, which explains why trade and other payables have increased in FY 2022. Overall total working capital has fallen for the time being to very low levels. However, as the group increases its exposure to contracted services in the West Midlands and North West (as is set out in more detail later in this statement), more working capital will be absorbed in order to finance this type of revenue.    

In accordance with its stated strategy, during the COVID-19 pandemic, the board focused on cash generation and debt reduction. The board set a target for the company's total net debt to be at or below £40 million at 30 November 2022. This target was successfully met.

The release of working capital occasioned by the receipt of the grants and subsidies described above enabled the group to significantly reduce its drawings on its revolving commercial facility ("RCF"). In March 2022, the company also announced that it had signed new banking facilities with its principal bankers, HSBC Bank plc; these facilities include an RCF of up to £17 million. This leaves ample resources to fund future organic growth and acquisitions. Mortgage debt continued to amortise according to its stated terms.

The COVID-19 pandemic delayed the delivery of the replacement buses ordered as part of the company's acquisition of the Bolton depot from First Group plc in August 2019. The remainder of the vehicles ordered were delivered during FY 2021 and this is primarily why hire purchase debt peaked in that year. The group acquired a number of suitable second hand vehicles in FY 2022, but no new ones and so added no fresh hire purchase debt in the year. In FY 2023 hire purchase debt levels will be much changed by the developments in Greater Manchester, described in detail below. The board does not anticipate the need to acquire any new vehicles in FY 2023, unless for new business.


During FY 2022 the group made three acquisitions. First, in April 2022, it acquired the bus business of Claribel Coaches Limited, operating in the eastern area of Birmingham, and its 18 related vehicles, for a total cash consideration of £339,000. Then in May 2022 the group acquired the bus business of Johnsons (Henley) Limited and a 20-strong vehicle fleet, for a total cash consideration of £1,016,000. This business was a well-established operator of commercial and contracted bus services in Warwickshire and the southern West Midlands.  Rotala did not assume any material liabilities with these acquisitions and there was no associated goodwill.  Both businesses were, following acquisition, immediately subsumed into the group's Diamond Bus business operating throughout the West Midlands and the services were rebranded into Diamond Bus livery. The acquisitions therefore extended the group's network of bus services in Warwickshire and the West Midlands and made more efficient use of the capacity of the group's existing depots in the region.

In August 2022 the company acquired the entire issued share capital of Midland Classic Limited ("Midland"), the principal bus operator in Burton-upon-Trent for a total cash consideration of £2 million. In addition, on completion, Rotala paid approximately £577,000 in cash to one of Midland's shareholders to repay an existing loan of the same sum. Midland operates about 60 vehicles from its freehold depot in Burton-upon-Trent and employs approximately 120 staff. Besides operating in Burton-upon-Trent, Midland provides bus services to other nearby towns such as Uttoxeter, Ashby-de-la-Zouch and Lichfield. The acquisition extended the group's business to a new territory in the East Midlands from which further growth will be targeted. Operationally, Midland (which has now been renamed Diamond Bus (East Midlands) Limited) is part of Rotala's Midlands division and is controlled from the company's headquarters at Tividale, Oldbury. 

Franchising in Greater Manchester

On 23 December 2022, the company released an announcement about developments in the franchising scheme for Greater Manchester.  That announcement should be consulted for greater detail, but the principal points are summarised below.

In March 2021, the Mayor of Greater Manchester made the decision to exercise his power to suspend the deregulated commercial bus market in his area through the introduction of a franchising scheme. The first tranche of the scheme is expected to begin operation in late September 2023. In the tender process for this first tranche of the franchising scheme, which covers the company's bus depot in Bolton, together with its related bus operations, the company was not successful in its bids for either of the large franchise areas covering Bolton and Wigan. However, the company was successful in winning seven out of the nine available small franchises in the same areas which have a combined annual revenue of approximately £18.7 million. These small franchises are for periods of between three and five years.  As a result, the net effect on the group is expected to be a decline in its annual revenues in the Greater Manchester area of approximately £6 million, principally effective from the year ending 30 November 2024.

As a consequence of these developments, the company has agreed to dispose of its Bolton depot and the majority of the bus fleet based there in two separate stages, subject to shareholder approval.  First the company has agreed to sell its Bolton bus depot to the Greater Manchester Combined Authority ("GMCA"), with all its associated fixtures, fittings, plant and machinery.  Second the company has agreed to place the majority  of the bus fleet currently based at the Bolton depot  into a notional asset pool ("Residual Value Mechanism" ("RVM")) created by Transport for Greater Manchester ("TfGM") as part of the franchising arrangements. Under this scheme TfGM allocates buses in the asset pool to the incoming franchise operators. The successful franchise bidder is then obliged to acquire the vehicles allocated to it in the notional asset pool at the value determined by TfGM under the RVM.

The mortgage and hire purchase finance debt associated with these assets will be repaid out of the proceeds of their sale. However, the award of the seven small franchise contracts referred to above will require the company to purchase 60 new diesel buses, as specified by the relevant contracts, at a total cost of approximately £11.9 million, which will be financed by new hire purchase debt. The remaining vehicles in the Bolton fleet will be retained within the group for on-going work.

The overall effect of these transactions on the group is that, subject to signing conditional sale and purchase agreements and obtaining shareholder approval for these transactions, it will receive aggregate cash consideration of approximately £30.5 million for the assets included within the two disposal stages outlined above. The total net book value of these assets at their dates of sale is estimated to be approximately £23.0 million.

As the total consideration receivable for these disposals is material when compared to the company's market capitalisation, pursuant to Rule 15 of the AIM Rules for Companies, the approval of the company's shareholders in a general meeting will need to be obtained prior to the completion of the sale of the Bolton depot and the Bolton bus fleet. At the general meeting, the board intends to recommend to shareholders that they approve the relevant sale transactions, and the directors intend to irrevocably commit their own shareholdings in favour of approving any such transactions. Further announcements regarding these disposals will be made and a circular sent to shareholders in due course.

In the period from completion of the disposal to the GMCA of the company's Bolton bus depot to the commencement of the Bolton franchise by the successful franchise winner, which is expected to be in late September 2023, the group will continue to operate from the Bolton depot and carry out all the bus services which it currently runs from that depot. To facilitate this, the company has agreed to lease back from the GMCA, at a nominal rent, the Bolton depot, and all other assets necessary to support the continued operation of bus services from the bus depot until the formal commencement of the Bolton franchise in late September 2023. At that point the short-term lease will terminate.

These changes in the company's operations in Greater Manchester do not preclude the company from bidding for the franchises which cover the north-east and southern areas of the TfGM region. The company has already successfully completed the pre-qualification stages for participation in these two further franchise rounds and submitted bids in the second round of franchising which is currently underway.       

New contracts won in the West Midlands

Rotala has continued to work in partnership with Transport for the West Midlands ("TfWM") and other bus operators to optimise the existing overlaps on commercial routes to make sure that service frequencies are properly married to current passenger volumes. At the same time, in response to current Government policy and local needs, the size of the tendered services market has continued to grow. The company has participated fully in the recent tender rounds for contracts of this type and has won several new contracts such that it expects annualised revenues in this region to increase by approximately £2.9 million. These new contracts, which commenced on 1 January 2023, have durations of between one and four years. Since vehicles which were formerly used on commercial routes will be redeployed on tendered routes, the vehicle numbers used in the company's operation in the West Midlands will remain roughly the same and the new work will not necessitate the purchase of any new vehicles.

Tender Offer

The disposals outlined above are anticipated to realise capital of which the company has no current need.  Therefore the board decided to return this surplus capital to shareholders and, after due consideration and consultation, concluded that the best and most efficient way to do this was by means of a Tender Offer.  This Tender Offer was announced on 26 January 2023 and fully described in a circular to shareholders of the same date. This circular should be consulted for the full details of the Tender Offer and the background and reasons for its launch. In summary the Tender Offer proposed that the company would buy back up to £10 million of its own shares at a price of 55p per ordinary share. The Tender Offer was fully taken up and a total of 18,181,818 shares were acquired by the company at a cost of £10 million. Of these shares 13,993,134 were cancelled and 4,188,684 were taken to treasury to cover any potential issues of ordinary shares in respect of the outstanding share options. Immediately after the Tender Offer closed on 16 February 2023, a total of 5,910,000 ordinary shares was held in treasury.  

Share buyback

On 23 March 2022 the company announced that it would commence a Share Buy Back programme in accordance with its existing authorities. Those authorities were renewed at the Annual General Meeting ("AGM") held on 19 May 2022. So far under this programme the company has acquired 921,316 ordinary shares at a total cost of £273,000. This programme is separate from the Tender Offer described above and the resolution passed at the 2022 AGM remains valid. It is intended that this resolution will be renewed at the forthcoming AGM. In accordance with accounting standards, the cost of the shares acquired in this manner has been written off to reserves. A total of 1,721,316 shares was held in treasury at 30 November 2022.


In April 2022, the Company, as it resumed dividend payments post the pandemic, paid a special interim dividend of 1.0p per share. At the same time, the board stated its intention to return to its former policy of maintaining 2.5 times earnings cover for any future dividend payments. The board therefore declared an interim dividend of 0.5p per share which was paid on 9 September 2022. A final dividend of 1.0p per share in respect of FY 2022 will be recommended to the forthcoming AGM. This dividend, if approved, will be payable on 30 June 2023 to shareholders on the register on 16 June 2023.

While dividends will therefore now reflect the group's current profitability, the board plans to return to the progressive dividend policy, adopted before the onset of the COVID-19 crisis, recognising the importance of dividend flows to shareholders. It is anticipated that future interim dividends will be paid in September and final dividends in June, in the proportion of one third at the interim dividend stage and two thirds for the final.

During FY 2022, the company's requirements for new vehicles were very limited, being restricted to vehicles for new work or contracts won. Aside from the new vehicles for the small franchise contracts in the GMCA area referred to above, the company does not expect to acquire a material number of new vehicles in FY 2023. The company expects that in FY 2024, it will begin a fresh cycle of fleet replacement. It is intended that these vehicles will be electric and not diesel fuelled.

When acquiring any vehicle new to the fleet, the board is always acutely conscious of its emission standards. At the same time the capability of buses driven by non-diesel propulsion systems has continued to improve and their operating costs to become increasingly attractive when compared to their diesel predecessors. However it should be noted that the new vehicles which will be acquired in FY 2023 as part of the move to a franchised bus network in Greater Manchester will necessarily be diesel fuelled due to the timing of the change and the specification of the buses under the franchise contract terms.

Part of the Government's National Bus Strategy includes the subsidised introduction of 4,000 new zero-emission vehicles. Consequently the board believes that in the medium to long term the group will gradually transition to the acquisition of battery-electric buses or buses propelled by other fuels, and move away from diesel-fuelled buses. Diesel driven vehicles will therefore gradually be phased out of the fleet in accordance with Government targets.  The continuing disposal of older vehicles in the year ensured that the average fleet age remained closely comparable to previous periods. More than half of the bus fleet is now at EURO VI emissions standard or better.

Fuel hedging

The tranche of hedging contracts which covered fuel usage in FY 2022 expired at the end of that year. The group's budget for FY 2023 anticipates fuel usage of approximately 13 million litres, falling to 11 million litres in FY 2024 and FY 2025 as mileage driven aligns itself  with the new contracts in Greater Manchester and the West Midlands set out above. To cover this anticipated fuel usage fresh hedging contracts have recently been taken out such that approximately 50% of the budgeted fuel usage in FY 2023 has been hedged, 92% of that of FY 2024 and 76% of that of FY 2025. All these hedging contracts are at an average price of between 103p and 112p per litre. For reference, the market price of fuel at the date of this statement (excluding VAT) is 106p per litre. 

The board will continue to monitor market conditions closely and take out such further fuel hedging contracts as it deems are appropriate to meet its objective of reducing volatility in its costs and, where possible, creating greater business certainty.

Financial review

Income statement

The Consolidated Income Statement is set out below. The sections set out above on Government Support, Passenger Numbers and Revenues analyse the key factors which determined group revenue in FY 2022, and how and where it differed from the previous year. Cost of sales fell back from the levels seen in FY 2021 in response to these changed operational conditions.   

Administrative expenses before exceptional items also decreased from £12.3 million in FY 2021 to £9.1 million in FY 2022 as the needs of the business for an enhanced level of legal and technical advice in the complex and challenging operating environment under COVID-19 conditions fell away. As stated above, the board expected FY 2022 to be the year of transition back to normal operating conditions and this indeed turned out to be the case. Given this, and the fact that FY 2021 was a year conducted under a variety of COVID restrictions, there is little meaningful to be said about Gross Profits, Profit from Operations and Profit before Tax, or comparisons to be drawn about these captions, in the two financial years under report.  

Finance expense fell to £2.3 million (2021: £3.1 million). This decrease can be ascribed to two factors: first interest on hire purchase debts fell as the total level of that debt fell. Second bank borrowings also fell markedly during FY 2022 and this had a corresponding effect on the interest expense for this item.  

The analysis of the exceptional items is set out in note 3 to this announcement. In 2022 a profit of £3.1 million was recorded in this caption, compared to a profit of £1.6 million in 2021. As in 2021 the principal component of this line was the marking to market of the group's fuel derivative position. The other exceptional profit in 2022 of £0.6 million resulted from the disposal of a surplus leasehold property.

The Chancellor of the Exchequer has increased the rate of corporation tax from 19% to 25% from April 2023. This change requires the company to increase the corresponding rate at which deferred tax is provided in its financial statements. The extra charge included for this reason in the tax expense in FY 2022 amounts to £652,000.   

There were no share issues in the year. As a result of all the factors set out above basic earnings per share in 2022, after all exceptional items, were 2.36p (2021: 0.13p). 

Balance sheet

The gross assets of the group fell from £104.5 million at 30 November 2021 to £84.9 million as at 30 November 2022. The book value of property, plant and equipment declined by £4.2 million as depreciation in the year exceeded additions to the same caption. The additions that were made to fixed assets were almost all second-hand passenger carrying vehicles or were vehicle additions derived from the acquisitions described above. The impact of the interest rate and market turmoil in late 2022 caused the net asset represented by the defined benefit pension scheme to fall back considerably to £1.47 million by the end of the year (2021: £4.25 million). The value of the scheme's investments fell by 34%, but at the same time the present value of the scheme's defined benefit obligation fell by 27%. These changes returned the surplus in the pension scheme almost exactly to the level at which it had stood at 30 November 2020. Goodwill increased as a result of the acquisition of Midland Classic Limited in August 2022, as set out above.

Group stocks of parts, tyres and fuel rose slightly as higher levels of fuel stocks were held. Trade and Other Receivables benefited from the realisation into cash of the DfT grants and subsidies accrued in prior years. The fuel derivative expired at the end of the year and so there was no asset or liability exposure from this source at the balance sheet date.   

In the sections on Working Capital and Total Net Debt above the impact of the reduction of Trade and other receivables on bank borrowings has already been set out, together with the reasons for the increase in Trade and other payables. So, whilst Trade and other payables within Current Liabilities increased from £6.2 million to £9.2 million, loans and borrowings fell from £11.6 million to only £418,000, principally through a reduction in drawings under the group's RCF. Obligations under hire purchase contracts under both Current Liabilities and Non-Current Liabilities fell as no new hire purchase contracts were entered into during the year but repayments of £7.4 million were made. The current portion of hire purchase liabilities is higher than the previous year as a result of balloon payments due in 2023.

In Non-Current Liabilities the grant for the electrification of five vehicles continued to amortise over its agreed term, as did the mortgage liability.  The decrease in Provisions for Liabilities results from the board's review of insurance claims outstanding at the end of the year.  No corporation tax is payable on the profits for the year, but the deferred tax liability has increased in response to the increase in corporation tax rates from April 2023 as set out above. Of this increase in the deferred tax provision £652,000 has gone through the Consolidated Income Statement and £255,000 through the Consolidated Statement of Comprehensive Income (in relation to the defined benefit pension scheme).  The gross liabilities of the group therefore fell to £54.1 million (2021: £71.5 million), a decrease of 24%.

Overall group net assets  were £30.8 million at 30 November 2022, compared to £33.0 million at 30 November 2021.

Cash flow statement

Cash flows from operating activities (before changes in working capital and provisions) fell to £12.5 million in FY 2022 (FY 2021: £18.3 million), principally because the depreciation charge fell by £5.9 million by comparison with the previous year. As in 2021, working capital in 2022 was released rather than absorbed. The key reasons for this lie in the receipt in cash of the various DfT grants accrued in prior years and the return to the company's standard creditor payment terms, as already described above. The consequence of these various factors was that cash generated from operations reached £28.1 million (2021: £19.7 million), a considerable increase on the previous year. Interest paid on lease liabilities fell in line with the fall in total lease liability debt. Cash flows from operating activities therefore increased to £26.4 million (2021: £17.8 million).

The sale of surplus vehicles and the unused leasehold property served to offset to some extent the cash expended on the purchase of property, plant and equipment in FY 2022. As set out above, three acquisitions were made in the year, whereas none had been made in the previous year. The total of £3.9 million expended on acquisitions included the sum of £577,000 related to the repayment of a mortgage associated with one of the acquisitions. Thus, in contrast to the small amount of cash generated in 2021 in this caption, in FY 2022 a total of £4.8 million was expended.

Two interim dividends were paid in the year, after a break in dividend payment under COVID, totalling 1.5p per share. The company also commenced a share buy back scheme in FY 2022 under which a total of 921,316 ordinary shares were purchased. Financing activities also reflect the changes to loans and borrowings already described. In order to finance the acquisitions in the year, £3.9 million was drawn down under the RCF, but over the year as a whole £11.45 million was repaid, together with the usual mortgage instalments, making a total of £11.87 million. By the end of the year there were therefore no drawings on the RCF.  The capital paid on lease liabilities rose somewhat as the Bolton fleet re-equipment of the previous year was reflected in increased hire purchase instalments. Overall £17.2 million was used in financing activities in 2022 compared to £17.8 million in 2021.

 Cash and cash equivalents therefore increased by £4.4 million (2021: £84,000) and, instead of a net liability in cash and cash equivalents of £3.2 million as at 30 November 2021, at 30 November 2022 the company possessed an asset in cash and cash equivalents of £1.2 million. The board regards this outcome for the year as very satisfactory and in line with its plans and expectations.


During the COVID-19 pandemic, the board decided to focus on cash conservation and set a specific debt reduction target, with the objective of emerging from the pandemic with a robust balance sheet, fit for renewed commercial operation. The board believes that these objectives have been successfully achieved.

The board's key assumption for FY 2023 is that, as passenger numbers continue to recover slowly and steadily, Government grants and subsidies will taper off, but that the overall outcome will be a return to normal commercial conditions and sustainable profits at the normalised pre-tax line. In response to inflation in many of the company's key cost inputs, such as salaries, fuel prices and parts, the board has throughout FY 2022 taken active steps to re-align service levels, bus operations and fares onto a footing which will enable the group to trade successfully for the foreseeable future. This internal work has been accompanied externally by close cooperation with all the local authorities in whose areas the group operates, particularly those which have received funding for Bus Service Improvement Plans, to redefine and reshape bus networks in order to take account of the changes, at a detailed route level, in bus usage and travel patterns.

This atmosphere of change enabled the group to make the three acquisitions in FY 2022 described above. At the same time further changes in the bus industry are bound to flow from the acquisition in FY 2022 of two of the UK's largest bus groups (Stagecoach Group plc and The Go Ahead Group plc). The board believes that these investments by new entrants to the bus market are an important statement about the positive direction of the bus industry, especially when considered against the background of the continued large-scale investment by the Government under its banner of the National Bus Strategy.

The board expects that change is likely to be a continuing feature of the bus industry because of the trends set out above and so it expects the industry to experience continued turbulence while it is reshaped in the industry's post-pandemic recovery phase. These business conditions should bring a healthy flow of opportunities to the company, much like the acquisitions made in FY 2022, for both organic growth and acquisitions. The board believes that the group has available to it ample bank facilities to cater for any such growth opportunities. For all these reasons, and despite the increased cost of living, fluctuating fuel prices and general rise of inflation, the board remains confident about the future prospects of the company.

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