Birmingham bus operator Rotala has posted a flat year for sales and profits as the company prepares to take legal action city rival National Express.
Writing in its annual results posted to the stock exchange today, chairman John Gunn said revenues in its contracted services division fell by 8.5 per cent to £20.6 million (2012: £22.5 million).
"The cause of almost all of this reduction was the loss in April 2013 of the two route diagrams we operated up to that time for National Express," he said.
"In our view National Express breached their contract with us by their actions. Therefore, we have commenced legal proceedings against National Express to recover our losses.
"This case is expected to come to trial in the last quarter of 2014. In these accounts, we have written off as an exceptional item £364,000 of our losses, which form part of our claim.
"Looking beyond this exceptional event, we experienced continuing strong growth in our private bus networks business.
"Revenues from these contracts have increased by some 50 per cent over the last two years and we remain positive about this part of our activities."
A National Express spokesman said: "We will continue to defend our position but as this is an ongoing legal issue we cannot comment further."
In its results for the year to 30 November 2013, Rotala posted sales of £53.3 million (2012: £54.8 million) and pre-tax profit of £2.05 million (2012: £2.07 million).
Mr Gunn said the company continued to hold a market leading position in Preston and had become the number two bus operator in Bristol and Bath.
He added: "In the West Midlands, the second largest bus market in the country after London, where we are also the number two bus operator, the addition of depots in Kidderminster and Redditch acquired from First Group in the year undoubtedly strengthened our position in the region.
"We are furthermore one of the leading providers of private bus networks in the country, especially to the aviation industry around Heathrow."
He added that local authority transport budgets had continued to be under pressure and revenue from the local authorities in the West Midlands and South West had declined when compared to 2012.
