Rapid recovery in revenues and margins
Xpediator has delivered a healthy trading update, breaking several revenue records during H2 2020. Furthermore, the outlook for FY21 remains promising, reflecting recovery to more normal levels in Transport Services, a full-year impact of the Nidd acquisition, the turnaround of underperforming businesses, and new ventures.Today’s report highlights the progress management has made since the nadir in operating margins in H2 2019. Group revenues of c.£221.0m for FY20 suggests record revenues are set to be delivered within Freight Forwarding and Logistics & Warehousing: an overall uplift of 3.6% y-o-y.
The £6m PBT forecast for FY20 highlights an improving margin, albeit this represents a shortfall from FY18. In our opinion management actions, plus recovering markets, can take the Group to peak margins over the next 18-24 months: delivering a marked increase in profitability.
Robert Ross, CEO, states that ‘For Xpediator, 2020 has demonstrated the strength of being a diversified business….and we are moving forward into 2021 with confidence.’ We concur and our fair value for the shares at 50p / share is nearly twice the current price, supported by an attractive yield and net assets/cash.
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.
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