Profits up 20pc for Diamond Bus owner

Adjusted pre-tax profit was up by 20 per cent to £3.22 million on turnover which grew five per cent to £57.9m for the year to the end of November.

The business bought three companies during the year to expand operations in the West Midlands, the North West and at Heathrow airport. They included Hansons (Wordsley) for £608,000.

Chairman John Gunn said the company made good progress in the year

"The two smaller acquisitions were aimed at enlarging our bus business, firstly in the West Midlands and secondly in Greater Manchester. The last and largest acquisition just before the year end, for our Heathrow depot, further increased our presence in this key market.

"Shortly after the year end we acquired another small bus business in the West Midlands area in order to extend our route network there. The seven acquisitions we have made since 2016 have very much enlarged the scale of the group's operations and considerably raised the group's prospects in a market which continues to undergo much change. "

Mr Gunn said Rotala expected to see further growth this year from contracts for local authority services which delivered 16 per cent of revenue in 2016-2017.

Revenue from commercial services grew three per cent to £33.7m

Mr Gunn said the introduction of bus alliances in the West Midlands offered the prospect of being able to increase market share.

"The speed with which changes are likely to happen is however difficult to gauge with any certainty. In the West Midlands we anticipate a gradual introduction of bus alliances covering a number of routes over the next few years," he added.

Rotala has sought to increase its reach in the western and northern parts of the West Midlands conurbation by making infill acquisitions of two smaller bus businesses.

The Hansons depot in Stourbridge was sold at the end of January for £320,000. Its 50 staff and 30 vehicles have moved to Rotala's other depots.

In November last year it bought the Hotel Hoppa bus business from National Express together with the fleet of 32 buses for £2m. This business, with revenues of about £6 million per annum and about 90 employees, comprises a passenger transport service between all the terminals of Heathrow Airport and hotels within a five mile radius of Heathrow Central Bus Station, delivered under contracts with those hotels and other airline customers.

Central Buses was bought in February from CEN Group for £1.95m and included a 30-strong vehicle fleet. Central operates commercial and contracted bus services in the northern part of the West Midlands.

The acquisition has extended the group's network of bus services in the northern part of Birmingham, particularly in the Perry Barr area.

Rotala has also invested £900,000 in new ticket machines equipped with the latest ticketing technology across the whole of the West Midlands and Worcestershire network operated by Diamond Bus