- COVID-19 containment measures continue to adversely impact passenger travel and Knutsford Express’s bottom-line. For the 9-months ending February 2021, the company reported a net loss of $60.63Mn (EPS: -$0.13) relative to a net profit of $103.18Mn (EPS: $0.21) over the same period last year.
- The deterioration reflects a 50.7% ($468.86Mn) decline in revenues to $456.37Mn. Revenues contracted as the ongoing pandemic continues to affect passenger travel negatively given ongoing curfews, reduced disposable incomes as well as passenger fears around public transportation. Leveraging the available opportunities, the company expanded its courier services as the demand for e-commerce rose amid the pandemic.
- A 35.5% (or $282.89Mn) reduction in administrative expenses also helped to mitigate the impact of lower revenues on its bottom line.
- Knutsford’s investment in other revenue-generating measures, such as the recent opening of another courier outlet at Sovereign Centre, is expected to provide some relief to the company’s top and bottom-line. It should also benefit from new business initiatives such as the investment in its Drax Hall Business Centre (Phase 1) development, which is now fully tenanted, and the expected completion of Phase 2 in the first quarter of the upcoming financial year.
- A vaccine-led recovery in key source markets and the rollout of the local inoculation program augurs well for international travel and a rebound in local economic activity. These factors will be key determinants of the company’s rebound prospects.
- Following the 36.2% decline in the company’s stock price in 2020, it has declined by a further 5.9% since the start of 2021 and currently trades at a P/B of 4.5x which is in line with the Junior Market average.
(Source: Knutsford Express Financials & NCBCM Research)