Knutsford Express Services Limited Q2 Profit Skyrockets to $58.8Mn

• Knutsford Express Services Limited (KEX) Limited recorded a net profit of $58.8Mn for the second quarter that ended November 30, 2022. This represents a 2665.9% increase in profitability when compared to the $2.1Mn recorded over a similar period in 2021.
• This added to the positive Q1 results influencing a 965.5% increase in the bottom line for the first six months.
• Revenue for the quarter was up by 65.4% yoy to $398Mn. Similarly, the YTD showed a 71.8% increase in revenues for the company. This was driven by increased local and international travel, and its courier services. Additionally, one of its key initiatives, The Knutsford Centre in Drax Hall is now creating rental income to supplement its core business.
• Despite a 38.3% increase in administrative expenses for H1 - owing to the strong revenues - operating profit skyrocketed to $187.57Mn from $20.87Mn, representing a 798.6% increase.
• KEX’s stock price has increased by 40.5% since the start of the calendar year. The stock closed Monday’s trading session at $12.49 and currently trades at a P/E of 25.5x which is above the Junior Market Other Sector Average of 21.6x.
• Given further improvements in tourism that are expected this year, we expect that the company should continue experiencing improved top and bottom-line growth in the coming quarters. However, one risk to the outlook is the possibility of a global recession that could depress travel and weigh on the company’s performance in the near term.

(Sources: JSE and NCBCM Research)