ROL.L Regulatory News (ROL)

10 Jan 2006 07:00

Rotala PLC10 January 2006 10th January 2006 Rotala plc ("Rotala" or 'the Company') Interim Results for the period from date of incorporation to 30th September 2005 Chairman's Statement During the period under review, the main activity of the Company was theidentification of its first acquisition target, the Flights Group, and theacquisition of these companies on August 30th 2005. Previous announcements by the Company on September 26th and November 25th 2005described the background to potential claims by Central Parking System of UKLimited ("CPS") in respect of the Flights Group of companies acquired by theCompany and the claims that the Company had against Stuart Lawrenson (the vendorof the Flights Group) under the Acquisition Agreement. CPS had commenced legalproceedings against Stuart Lawrenson and others. However, as set out in the announcement made by the Company on December 30th2005, the Company, the Flights Group of companies, Central Parking Corporation("CPC") and its subsidiary, CPS, have agreed a final settlement between them,and with Stuart Lawrenson. The resolution of this issue has been a major focus for management in the lastfour months. In addition, it has become clear that the Company has inherited anumber of unsatisfactory and uneconomic commercial arrangements which areproving problematic. The Board continues to review these arrangements andappropriate provision will be made in the accounts for the year ended 30thNovember 2005 for contracts that are shown to be onerous. Consequently theacquired businesses will incur larger losses in the year ended 30th November2005 than originally anticipated and the adverse effects of the uneconomicarrangements referred to above will continue until they can be ended orre-negotiated. These underlying losses, though declining, will continue into theyear ending November 30th 2006 and will not finally be eradicated until 2007. Tothe extent that these losses are provided for in the group accounts for the yearended 30th November 2005, they will not have an impact on subsequent years. The Board has in the meantime been working hard to reduce costs and eliminateunprofitable activities. These actions are beginning to bear fruit in thereduction of losses from month to month. Although the contract to operate theroute 210 service for National Express Plc will end on January 26th 2006, therevenue represented by this contract (some £2m per annum) has been replaced byequivalent revenue at significantly better margins with other customers largelywithin the airline sector. Taken together with the continuing successful effortsto win other new contracts and build profitable turnover, the Directors considerthat the Company is now moving in the right direction to achieve profitabilityfor the Group. The attached interim statement incorporates the results of the Company as aninvestment company only from January 21st 2005 until August 30th 2005,consolidated with, for September 2005 only, the results of the Flights Group ofcompanies for that month. Potential equity fundraising As a result of the increased turnover of the Company, the continuing losses andthe diversion of effort resultant upon the problems with Stuart Lawrenson andCPC, the Directors consider that it is prudent to augment the working capitalrequirements of the Company. The opportunities for organic and acquisitivegrowth have not diminished and the Company has been successful in negotiatingimproved banking facilities to cover working capital requirements, leasingfinance and the potential acquisition of new contracts. The Directors have determined that new equity funding should be raised toaugment these facilities and are proposing to raise up to £1,500,000, with aminimum target of £600,000. The Directors propose to underwrite the minimumtarget of £600,000. The funding will be under the EIS relief scheme and thepricing will be determined in due course, but is expected to be within thecurrent market price. The objectives set out in the admission document dated March 11th 2005 and there-admission document dated August 9th 2005, can now be pursued. These require astrong financial base, which the above will satisfy, so that the Board will beable to implement these objectives in the coming months and years. The Boardlooks forward to creating an integrated, specialist transport company andbelieves it is well positioned to do so from the attractive platform provided bythe Flights Group. Further details of the proposed fundraising are expected to be announcedshortly. John GunnChairman 10th January, 2006 Contacts: Nick Fox, M: Communications 020 7153 1540/ 07711 727 618 Notes to Editors: The Company was admitted to trading on AIM on March 29th 2005, having beenincorporated on January 21st 2005 to invest in the parking and transportationsectors. In the transport sector, the Board anticipated that opportunities wouldarise in the provision of bus services, chauffeur-drive services, and integratedground transportation. In the Company's admission document dated March 11th 2005the Board stated its intention to complete the Company's first acquisitionwithin six months of Admission and in August 2005 it agreed the acquisition ofthe Flights Group of companies. The Flights Group comprises three companies: Flights Hallmark, Flights CorporateTransfers and FH Transport. Flights Hallmark is a mature coach and bus businessformed through the acquisition and amalgamation of a number of businesses. Itsmain activities include the provision of dedicated transport solutions for arange of corporate customers, the operation of various shuttle bus services anda substantial coach hire business. Flights Corporate Transfers operateschauffeur driven cars, particularly relating to transport to and from UKairports, for a range of airlines and airline-related customers. The thirdcompany, FH Transport, does not currently trade but holds certain contracts withcustomers relating to the business operated by the other members of the FlightsGroup. Profit and loss account Notes Period ended 30 September 2005 £ Turnover - Acquired Business 1 1,361,070Cost of sales - Acquired Business 4 (1,491,854) ------Gross profit (130,784) Administrative expenses - continuing business 1 (159,704) - acquired business (88,079) ------ (247,783) ______ ------Operating Loss - Continuing Business 1 (159,704) - Acquired Business 4 (218,863) Loss on ordinary activities before interest (378,567) Net Interest receivable 57,580 _______Loss on ordinary activities before taxation (320,987)Tax on loss from ordinary activities Nil _______Loss on ordinary activities after taxation (320,987)Retained profit brought forward Nil _______Accumulated loss carried forward (320,987) ========Loss per share - basic and diluted 0.40p Consolidated Balance Sheet Notes At 30 September 2005 £Fixed assets Intangible assets 6,439,827 Tangible assets 543,876 ------ 6,983,703Current assets Debtors 5,344,940 Cash at bank and in hand 1,662,700 ------ 7,007,640Creditors: amounts falling due within one year (5,822,230) ------Net current assets 1,185,410 ------Total assets less current liabilities 8,169,113 Creditors: amounts falling due after more than (1,106,297)one year ------ 7,062,816 ------Capital and reserves Called up share capital 1,719,744 Share Premium Account 3,097,392 Merger reserve 2,566,667 Profit and loss account (deficit) (320,987) ------Shareholders' funds 7,062,816 ======= Cash flow statement Notes Period ended 30 September 2005 £ Net cash outflow from operating activities 5 (916,165) Returns on investments and servicing of finance Interest received 61,376 Interest paid (17,419) ------Net cash inflow from returns on investments and 43,957servicing of finance ------Capital expenditure and financial investment Loans to subsidiaries prior to acquisition (870,000) ------Net cash outflow from capital expenditure (870,000) and financial investment ------Acquisitions Expenses incurred in making the acquisitions (603,835) Bank overdraft acquired with acquisitions (336,884) _______Cash outflow from acquisitions (940,719) ------Cash outflow before use of liquid resources and (2,682,927)financing Financing Issue of ordinary share capital 4,660,000 Issue costs (309,530) Capital element of finance lease payments (4,843) ------Cash inflow from financing 4,345,627 ------Increase in cash for the period 1,662,700 ======= Notes to the unaudited interim statement for the period ended 30th September2005 1 Basis of Preparation: The financial information for the period hasnot been audited or reviewed. These consolidated accounts represent theaccounts of Rotala plc only from 21 January 2005 (the date of incorporation)until 30 September 2005 (the "Continuing Business") and the results of theFlights Group of companies from 30 August 2005 (the date of acquisition) to 30September 2005 (the "Acquired Business"). 2 Accounting policies: the accounting policies used in this statementare the same as those which were used for the preparation of the accountinginformation contained within the document sent to shareholders dated 9 August2005 and those which are intended to be used in the accounts for the periodended 30 November 2005. 3 Loss per share: loss per share has been calculated in a manner basedupon the weighted average number of shares in issue in the period of 81,011,893.The share options outstanding at the period end were not dilutive. 4 Intangible assets: goodwill arising has been calculated upon thebasis of the effects of the transactions carried out to assemble the FlightsGroup of companies and their subsequent acquisition by Rotala. As explained inthe Chairman's statement a review of onerous contracts is being conducted whichmay result in the recognition of further amounts of goodwill. In drawing up thestatutory accounts for the period ended 30 November 2005, it will be appropriateto consider the carrying value of goodwill in the group balance sheet and makeany necessary provision. Cost of Sales and the Operating Loss for the acquiredbusiness include in the period a charge for amortisation of goodwill of £26,945. 5 Reconciliation of Operating Loss to Net Cash Outflow:Reconciliation of Operating Loss to NetCash Outflow from Operating Activities Operating Loss (378,567)Amortisation of goodwill 26,945Depreciation 10,610Increase in debtors (1,071,909)Increase in creditors 496,756 _________Net Cash Outflow from Operating (916,165)Activities _________ 6 Summarised Balance Sheet of the Acquisitions at 30 August 2005:Summarised Balance Sheet of theAcquisitions Intangible assets 524,831Tangible assets 554,486Debtors 4,259,410Bank Overdraft (336,884)Loan from Rotala plc (870,000)Creditors (5,636,614) _________Net liabilities (1,504,771) _________ 7 Post Balance Sheet Events: as referred to in the Chairman'sStatement, on 30 December 2005 the Company made an announcement which set outin detail the settlement of the disputes which surrounded the acquisition of theFlights Group of companies. 8 Additional Information: this Interim Report does not constitutestatutory accounts within the meaning of s.240 of the Companies Act 1985.Because the Company was only formed on 21 January 2005 accounts have yet to beprepared for the Company's first accounting period, which ended on 30 November2005. Consequently no accounts have been subject to audit and none has beenfiled with the Registrar of Companies. 9 Other: copies of this Interim Report can be obtained by request fromthe company's registered office at 46, Cannon Street, London, EC4N 6JJ. This information is provided by RNS The company news service from the London Stock Exchange