Investing for growth
The AGM update from Xpediator provides further strong evidence of investment in management better able to support the Group’s rapid growth in revenues. The Group’s enhanced infrastructure should enable further acquisitions sourced from a strong pipeline of bolt-on opportunities. They can again be rapidly integrated and enhanced post-deal. Trading YTD has performed in-line with expectations, benefitting from strong progress within Freight Forwarding.In addition to hiring two senior managers during Q1, the roles of the current CEO and CFO are to change. Stephen Blyth, CEO, is to become Executive Chairman and Stuart Howard, CFO, will assume the role of CEO from September. The Group is currently searching for a new CFO and until appointment Stuart will remain as CFO. Stephen will continue to focus on the strategic direction of the Group and, aided by Head of M&A and Integration Simon Youd, he will be responsible for M&A. Prior to joining Xpediator, Stuart had wide experience of CEO and COO roles within both financial services and private equity, so he is well qualified.
Today’s RNS confirmed that the Group is trading in-line with market expectations, benefitting from strong progress within the Freight Forwarding division. As such, we maintain our expectation of 16% y-o-y top-line growth, believing the bias towards H2 trading (responsible for c.56% of annual revenues) warrants our ‘no change’ stance.
We continue to anticipate further M&A activity this financial year, with the statement confirming a strong pipeline of bolt-on opportunities. Our expectation is that management will look to widen the geographical and product/service footprint of the Group, paid for by a combination of the existing cash resources and strong cash flow.
A high Free Cash Flow yield such as 10.9% for XPD is often an indicator of significant undervaluation in a company’s shares, in this case due to Brexit fears. Our valuation/share of 74p shows to what extent such worries appear overdone with the stock at 45p.
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.