30 Jul 2019 07:00
30 July 2019
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
("Xpediator" or the "Group")
Trading Update
Xpediator, (AIM: XPD), a leading provider of freight management services across the UK and Europe, announces the following trading update for the year ending 31 December 2019.
Due to a number of factors summarised below, while the business is on course to meet market expectations for revenues in the current year of over £200 million, profit before tax is anticipated to be materially below market expectations.
As a result of a large customer recently giving notice in respect of its contract with Xpediator's UK logistics division to utilise the warehousing facilities at Braintree, the Board has decided to take the opportunity to invest in the warehouse so that it is suitable for higher value fulfilment business rather than lower margin storage activities. This re-configuring of the Braintree warehouse will entail a loss of business while the proposed investment is carried out over the next few months. In addition, Import Services Limited, part of the UK logistics division, has suffered an increase in labour rates which it has been unable to pass onto customers.
Currently in its third year of development, EshopWeDrop, the Group's e-commerce business has generated lower volumes in the current year whilst continuing to invest in developing its franchise model in further geographies. Michael Grange, currently the Group's chief information officer, will now focus solely on the development of the Group's e-commerce business and his current position will be filled internally.
Turnover in Regional Express is currently tracking below that achieved in 2018 which has impacted upon profitability this year. However, this is largely as a result of management focussing attention on securing two valuable and strategic contracts which is expected to generate a material and sustainable profit growth in 2020 and beyond.
As previously announced, the Group has been investing heavily in infrastructure and central resources required to support the enlarged business as well as position the Group for further growth. The rate of this extensive investment has been accelerated and will create the capability required to facilitate the Group's organic growth and buy-and-build strategy. Some additional costs have also been required to prepare for the consequences of a "no-deal Brexit" as we continue to work with our customers to ensure a continuous service.
The Board is pleased that the turnaround of Benfleet continues, Anglia is performing strongly and the Romanian Pallex business and Affinity are also trading well. The generation of operating cash flow also remains satisfactory.
Chief Executive, Stephen Blyth commented, "We are disappointed to be below our profit targets for this year, however, critically customer demand for our services remains strong reflected in our continued sales growth which, together with the investments we have made across the business, particularly into information technology makes us confident in the Group's future growth prospects for 2020 and beyond."
Enquiries
Xpediator plc | Tel: +44 (0)330 043 2395 |
Stephen Blyth, Chief Executive Officer | Email: info@xpediator.com |
Stuart Howard, Chief Financial Officer |
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SP Angel Corporate Finance LLP (Nominated Advisor & Joint Broker) | Tel: +44 (0)20 3470 0470 |
Jeff Keating |
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Caroline Rowe |
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Cantor Fitzgerald Europe (Joint Broker) | Tel: +44 (0)20 7894 7000 |
David Foreman, Michael Boot (Corporate Finance) |
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Caspar Shand Kydd (Sales) |
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Novella Communications (Financial Public Relations) | Tel: +44 (0)20 3151 7008 |
Tim Robertson |
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Fergus Young |
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About Xpediator:
Xpediator is a well-established international provider of freight management services. Established in 1988 by Stephen Blyth, 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 938 people and was successfully listed on London's AIM market in August 2017.
For more information, please visit: www.xpediator.com.
Alternatively, do follow us on Twitter at @Xpediator or find us on LinkedIn at Xpediator Plc.