Xpediator PLC (LON:XPD), a provider of freight management services, has told investors that Chinese freight volumes have started to improve over the last couple of weeks.
In a trading update that focused on the impact of the coronavirus (COVID-19) outbreak, the company said so far this year activity levels have remained broadly in line with management expectations.
As previously indicated, the company expects to announce profit before tax of just over £5.0mln for 2019 on turnover of £212mln (up 19% year-on-year). It is the board’s intention to recommend a final dividend in respect of the reporting period but it has yet to determine the amount.
Warehouse use has been good and is expected to continue across all areas of operations, Xpediator said. The asset-light freight forwarding division has the ability to flex supply requirements against demand in a timely fashion, the company noted.
Some supply issues on equipment have been experienced and therefore buying and selling prices have increased to reflect this. Other than that, the company said it is not possible to give meaningful guidance on how trading in 2020 is likely to pan out but said it is benefitting from its diverse operations across the UK and Europe which has already helped it offset challenges in some areas with higher activity in other markets.
At the end of 2019, the company had net cash of £6.9mln and sufficient headroom within the business to manage the anticipated working capital requirements.
Like many companies during the coronavirus pandemic, the company has reduced costs in areas where activity has dropped off and is seeking the agreement of staff for furloughing arrangements and temporary pay reductions.
“The board are confident Xpediator is well placed to manage its financial and commercial commitments during this extraordinary time and can emerge well-positioned for growth when market conditions return to normality,” the company said.
