Cash rich, asset light
Xpediator has issued a COVID-19 related trading update. The key messages are reassuring: the business has a strong balance sheet and is asset light, trading is in line with internal budgets and the group has begun to see activity returning from its Chinese customers following an understandably difficult January and February.We are encouraged by the comprehensive review of costs, the resilient trading to date, a healthy cash buffer, and the underlying confidence shown in still proposing a final dividend for 2019.
Trading YTD is broadly in-line with internal expectations, albeit with some areas performing better than others. Freight Forwarding across Europe and Pall-Ex Romania look to have exceeded expectations. Other units such as EMT, which specialises in textiles and fashion, are struggling and revenues from Chinese customers fell sharply in the first ten weeks of the year.
The Group benefits from being asset light, in effect acting as a broker with limited overheads and few vehicles owned. And the level of net cash outstanding at the 2019-year end has been reconfirmed at a healthy £6.9m. Not only does the cash provide a degree of comfort, but management has confirmed its intention to pay a final dividend for 2019, highlighting confidence.
Notwithstanding the temporary suspension of estimates, we see the net cash level (worth 23% of the market capitalisation) and the historic NAV of 22p per share both underpinning the stock in the current challenging climate.
Eddie Stobart is a logistics and supply chain organization in the UK. From its headquarters in Warrington, operating 2,200 vehicles, 3,800 trailers and 24 distribution centres throughout the UK and Europe. Co. operates its business across the following core sectors: E-Commerce - covering online retailers and omni-channel retailers; Manufacturing, Industrial & Bulk - includes movement of raw materials and components used in manufacturing processes; Consumer includes the movement of manufactured products; and Retail covers the retail supply chain, operating from either a retailer's supplier or a retailer's own distribution centers, from where goods are transported to a retailer's outlets.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.