Monday, October 1, 2018

Acquisition of Freight Forwarding and Customs Groups Serves Logistics Management Outfit Well

Financial Results Reveal Jump in Turnover and Dividends After Four Company Purchases
Shipping News Feature
UK – It seems the group policy of selective acquisition being practiced by freight and logistics management outfit Xpediator is working rather well according to its latest pronouncements. Interim results published last week showing finances for the six months to June 2018 demonstrate a doubling in earnings due to the influx of new revenue streams. Xpediator has snapped up a string of freight forwarders including Anglia (AFGL) and Benfleet Forwarding operations and import specialists ISL.

Listed on the London AIM market last year the Essex headquartered group now has country offices in nine CEE countries across 31 sites and the new income has prompted a 21% rise in dividends for shareholders after Group turnover increased by £29.8m of which £14.6m/49.0% was organic growth and £15.2m/51.0% came from acquisitions. Particularly strong performance came from Pall-Ex Romania which the company claims now consistently moves in excess of 45,000 pallets of freight per month (2017: 35,800 average freight per month). Alex Borrelli, Chairman, commented:

"The first half of 2018 has continued the progress made through 2017. All three divisions are growing well, underlying revenues have increased substantially, and demand for our freight management services across all our core markets is high. We continue to seek acquisitions in line with our strategy to add to our existing activities and facilitate our expansion internationally. During the period, we acquired AFGL, an international freight forwarding and courier business based in Essex, for up to £3.5 million in cash.

"In July, we acquired ISL for up to £12 million in a mixture of cash and shares, part financed through an over-subscribed placing which raised £7 million, before expenses. ISL has a strong management team and has 40,000 m2 of warehousing in the Port of Southampton, representing a significant commercial opportunity for Group expansion, and we expect to benefit from operational and cross-selling opportunities.”

Xpediator negotiates initial terms with the Directors of target logistics companies, deferring final payment based on actual future profits set against estimates. The Benfleet Forwarding purchase underwent a positive restructuring after its Far Eastern business development was impacted by increased customs security checks across the continent, whilst deferred consideration amounts for AFGL and ISL range up to £5 million.

Photo: Anglia Forwarding in Rainham was a key purchase for Xpediator this year.