Knutsford Express Reports Net Loss Owing to Pandemic Effects

• For the year ended May 31, 2021, Knutsford Express Services Ltd (KEX) reported a net loss of -$95.98Mn (EPS: -$0.19) down from the net profit of $33.56Mn recorded in the previous year. 
• The ongoing pandemic continues to affect passenger travel negatively as a consequence of the continuation of government implemented curfews. Consequently, there was a 38.3% fall in revenues, which along with an impairment loss on goodwill and motor vehicles, resulted in the net loss. 
• The overall impact of the decline in revenues was tempered by a 26.6% reduction in admin and general expenses. Due to the lower operating activities, KEX saw reduced salaries, wages and related expenses, staff training and welfare, travelling, advertising and promotion, fuel, insurance and toll fees. Finance costs also declined on the back of lower interest expense on right-of-use asset and bank charges. 
• With containment measures still in place and new variants of the virus emerging and fueling the need for social distancing and the fear of travelling, we expect revenues to remain depressed possibly resulting in further net losses in the near term. However, as vaccination rates increase, this should facilitate a relaxation of restrictions, greater business activity, higher employment and more confidence around travelling in the medium to long-term. This would also support a gradual rebound in KEX’s operating performance. 
• Knutsford Express’ stock price has declined by 2.9% since the start of the year and closed Thursday’s trading session at a price of $6.50 per share.

(Source: KEX Financials & NCBCM Research)