Xpediator: steps have been taken to conserve cash and to reduce costs during COVID-19

Xpediator Plc, a provider of freight management services across the UK and Central and Eastern Europe, has revealed substantial increase in revenues by 19.0% to £213.2 million in its FY 2019 results however the  Board has introduced temporary pay reductions across the business, reduced overheads  and is minimising capital investment projects to manage the business during the pandemic.

Xpediator Plc announced its FY 2019 results this week. Highlights below:

Strong revenue growth combined with good cash generation

• Substantial increase in revenues by 19.0% to £213.2 million
• Like for like revenues increased by 10.4% reflecting good organic growth
• Delivered ahead of revised expectations with adjusted profit before tax of £5.2 million
• Improved cash generation with a strong focus on working capital
• Maintained financial headroom with positive net cash (excluding liabilities arising from the impact of right-of-use assets debt) of £7.0 million, as at 31 December 2019
• Adjusted earnings per share decreased by 41.7% to 2.80p
• Final proposed scrip dividend, with the intention to return to cash dividends from the 2020 half year results

Operational Highlights

• Freight forwarding revenues increased by 16.6% to £159.6 million with the Baltics and Balkans key areas of strength despite strong prior year comparators
• Pall-Ex franchise in Romania also performed strongly again handling in excess of 730,000 palletised freight (2018: 61,000) a 19.7% increase
• Logistics revenues increased by 32.2% to £47.5 million with increased occupancy in the Romanian Baltics and Balkans key areas of strength despite strong prior year comparators
• Affinity Transport Solutions continued its steady growth performance, delivering £2.5 million of operating profit before central overhead allocation (excluding exceptional items)
• Opening of an office in Shanghai to support the operation of a key contract

Prospects for 2020 & COVID-19 Impact

• Asset light structure and flexible cost base, enabling the Group to manage the business during the early days of the current COVID-19 crisis
• Overall demand for transport services and solutions has continued with high demand in most sectors, whilst some areas have seen a slow down due to impacts of COVID-19
• Trading of the Group in Q1-2020 was broadly in line with management expectations
• To further protect and manage the business responsibly during this extraordinary period the Board has introduced temporary pay reductions across the business, reduced overheads where appropriate and is minimising capital investment projects. In addition, to conserve cash, the final dividend for 2019 will be structured as a scrip dividend
• At the same time, the Board is mindful of the opportunities that may arise from the current crisis and is determined the business will be well placed to capitalise

Stephen Blyth, Chief Executive Officer of Xpediator, said: “2019 saw our revenues increase substantially by 19% to £213.2 million, and helping to end the year with strong cash balances. However, the outbreak of COVID-19 has changed the commercial world, with the duration and ultimate impact of the virus are as yet unknown.

“Our objective is to protect our staff and business, and to ensure we are well placed to resume normal operations and potentially capitalise on opportunities when the virus impact subsides. As an asset light business with low fixed overheads we are better placed than some, with demand for our services holding up and in some areas seeing an increase. However, given the current uncertain environment we have taken measures to protect the business by reducing salaries and costs across all entities. The Group continues to seek acquisitions and the current crisis will, we believe, provide many opportunities to reach our target to grow the business over the next few years. Ultimately the Board believes Xpediator is well placed to operate through this crisis and emerge in a good position.”