Xpediator lifts expectations after strong start to year
Freight management service provider Xpediator said on Tuesday that demand for its services across all three divisions had been “strong” in the first five months of the year, with the parts of the transport, and logistics and warehousing divisions, that were impacted by the Covid-19 pandemic now all trading positively.
The AIM-traded firm, which was holding its annual general meeting, said that as with a number of other logistics businesses, its trading was seasonal, with the majority of profit made in the second half.
That said, given the current positive trading trends, its board said it now believed it was “well-placed” to exceed market forecasts for the financial year ending 31 December.
Xpediator said its financial performance as a whole was not impacted by the Covid-19 pandemic, explaining that where trading was reduced in some areas, other parts of the business outperformed, in particular the freight forwarding division.
That division was continuing to perform “well”, with demand consistent with expected trading patterns.
European freight forwarding and logistics had continued to perform “strongly” alongside Affinity Transport Services, which the company said were both delivering like-for-like sales increases, particularly against the months in 2020 which were impacted by the pandemic.
The Pall-Ex business in Romania had performed “particularly well”, with a record number of pallets handled during the first quarter.
Xpediator said it had benefited profitably, as expected, from Brexit, reporting that while cross-Channel freight forwarding volumes had been lower, reflecting the decisions by some clients to find alternative sourcing arrangements than the UK, the additional paperwork associated with new customs control processes had led to additional revenue, with the net result for the group a positive one.
The programme to rebrand and integrate “key areas” of the firm had progressed “significantly”, the directors reported, with the UK business now largely operating under the Delamode International Logistics brand, and the businesses that were not said to be looking to incorporate that brand within their trading names.
Additionally, the individual divisions were said to be now “well-advanced” in unifying their operating companies under single IT and finance platforms.
The group said its fashion logistics business, which came under “significant pressure” as a result of the coronavirus crisis, was working to reposition itself to focus on the luxury end of the fashion market.
A strong sales pipeline, including “some of the world's best-known fashion brands”, indicated that the business was moving in the right direction, although that remained subject to the continued re-opening of high streets across the UK.
Xpediator also announced that, as part of its focus on “port-centric” warehousing and logistics in the UK, it had completed a new purpose-built 200,000 square foot facility at the Southampton container port.
The new space would both increase capacity, and be more efficient and margin-enhancing, the board claimed.
“We believe the actions we are taking across the business are bringing the group closer together, resulting in individual teams working together better and utilising a more efficient and scalable base, all of which support our objective of becoming a leading international freight management and logistics provider,” said chief executive officer Robert Ross.
“While the majority of the group's profit is earned in the second half of the financial year, we have made a strong start to 2021 which positions us well for the full year and beyond.”
At 0846 BST, shares in Xpediator were up 5.94% at 66.74p,