23 Nov 2020 07:00
23 November 2020
XPEDIATOR PLC
("Xpediator" or the "Group")
Trading Update
Xpediator (AIM: XPD), a leading provider of freight management services across the UK and Central and Eastern Europe, is pleased to provide a trading update for the current year ending 31 December 2020. Trading since the half year has continued to recover to historic levels and the Group expects to report adjusted profit before tax of at least £6.0 million for the year to 31 December 2020, an 18% increase over the prior year (2019: £5.15 million).
Trading
The Group's primary business is managing the transportation of goods through its freight forwarding division. As an asset light operation, without the fixed costs of owning a large fleet of vehicles, the division is more able to match costs to volumes. This enabled the division to maintain cost flexibility throughout the pandemic, including when volumes dropped sharply at the beginning of the COVID-19 outbreak. Since then, demand for freight forwarding services has strengthened with the Group seeing additional income from new markets. As a result, 2020 revenues for this division are expected to exceed 2019 by approximately £10.0 million (2019: £159.6 million).
The Group's Transport Solutions division, trading principally under the Affinity brand, provides fuel and toll cards to European hauliers. The COVID-19 pandemic led to reduced traffic volumes and significantly lowered fuel prices, which translated into lower income levels in the first half of the year. Since then, monthly revenues have recovered well from 40% down in April (vs 2019) to only 6.5% below in October compared to 2019. Revenues for the year are now expected to be approximately £5.0 million (2019: £6.2 million).
The Group's third division, logistics and warehousing, owns and manages warehousing in the UK and Romania as well running the leading pallet distribution network in Romania under the Pall-Ex brand. Warehousing in Romania and Pall-Ex have performed well throughout the year, recovering from the impact from the pandemic. Income from UK warehousing was reduced due to lower activity amongst retailing clients, however, the second half has been much stronger, especially at Import Services based in the Southampton docks. As a result, the Group expects revenues for the division to be flat year-on-year at approximately £48 million.
Nidd Transport
On 6 October 2020, the Group acquired UK-based international groupage freight forwarder and operator, Nidd Transport Ltd ("Nidd") for £4.6 million. The integration is now underway and the business is performing slightly ahead of management expectations.
Brexit & Outlook
Since 2016, the Group has been preparing itself and its clients for a potential hard Brexit. A new customs brokerage team has been established, set up to handle the likely increase in declarations whatever the Brexit deal outcome. If there is a change in border controls, then the Group believes it will have an increased workload which should translate into higher revenues.
The outlook for 2021 remains strong, even with likely ongoing disruption in specific areas relating to the pandemic. The Group's confidence is based on maintaining current trading patterns, the ongoing benefit of cost reductions made, additional income from Nidd and a healthy balance sheet. The Group anticipates continuing with its progressive dividend policy to reflect the increase in expected profitability.
Commenting on the trading performance, Robert Ross, CEO, said, "For Xpediator, 2020 has demonstrated the strength of being a diversified business. While the COVID-19 pandemic has resulted in less traffic and therefore reduced use of our fuel cards, demand has increased for our freight forwarding and warehouse and logistics services, and we have also delivered on cost saving initiatives. The net result is expected to deliver an 18% increase in annual adjusted profit before tax and annual cost savings of £0.5 million. This, combined with our fuel card business returning to normal, means we are moving forward into 2021 with confidence."
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Xpediator plc | |
Robert Ross, CEO | Tel: +44 (0)330 043 239 |
Cenkos Securities plc (Nominated Adviser & Joint Broker) | Tel: +44 (0)20 7397 8900 |
Max Hartley, Max Gould (Corporate Finance) | |
Nick Searle (Sales)
| |
Novella Communications (Financial Public Relations) | Tel: +44 (0)20 3151 7008 |
Tim Robertson | |
Fergus Young |
About Xpediator:
Xpediator is a well-established international provider of freight management services. Established in 1988, the Group's international network of offices provides road, sea and air freight services, together with logistics and warehousing in the UK and Romania. The business offers integrated freight management within the supply chain logistics and fulfilment sector, through its three main areas: freight forwarding, logistics & warehousing and transport services. With headquarters in Braintree, Essex and country offices in nine CEE countries across 38 sites, the Group currently employs over 1,000 people and was successfully listed on London's AIM market in 2017.
For more information, please visit: www.xpediator.com.
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