Diamond Bus owner says passenger numbers are still recovering after pandemic

For the year to the end of November revenue was down from £96.5 million to £84.8m for Rotala, which has its headquarters at Tividale.

Pre-tax profit improved from £295,000 to £1.97m.

Chairman John Gunn said; "Passenger volumes have yet to recover to pre-Covid 19 levels. At the start of 2021-2022 passenger numbers ranged between 80 and 85 per cent 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 per cent of those levels.

"However, the company's own operations have outperformed the market and have reached 90 to 95 per cent 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."

In mid-2021 the Department for Transport replaced its initial support scheme for bus services during the pandemic with a new scheme called Bus Recovery Grant. This scheme focuses on compensating bus operators for the absence of revenue whilst passenger numbers continue their recovery back to pre-pandemic levels. The latest announcement from the DfT has set a new termination date of June 30.

Rotala traded in line with its budget for 2021-2022.

Mr Gunn said the board believes that the group is now well positioned to return to profitability in 2022-2023 at the normalised pre-tax line.

During 2021-2022 the group made three acquisitions – Claribel Coaches, operating in the eastern area of Birmingham, and its 18 related vehicles, for £339,000; the bus business of Johnsons (Henley) and a 20-strong vehicle fleet, for £1.01m and Midland Classic in Burton upon Trent for £2m.

Claribel and Johnsons have been subsumed into Diamond Bus. Midland has been renamed Diamond Bus (East Midlands).

Rotala has continued to work with Transport for the West Midland 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 and expects annual revenue to increase by approximately £2.9m.

The board expects passenger numbers to continue to recover slowly and steadily, but Government grants and subsidies will taper off.

"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," added Mr Gunn.