Knutsford Express revving up

One of Knutsford Express buses.

Jamaica’s intra island transport company, Knutsford Express, is enjoying extraordinary times, with a sharp increase in revenues and profits but the company’s management is not sitting on their laurels as they actively seek areas for future growth and profits.
In the latest quarter to August, revenues jumped a strong 37 percent, to $237 million and spawned a 57 percent rise in profit of $57 million. Of interest is the continued growth, on top of previous year’s increases. For while revenues in the August 2016 quarter rose 21 percent with flat profit, by the second quarter revenues climbed 37 percent over the 2015 levels, to $176 million and profit rose 19 percent to $30 million.
Revenues rose 33 percent for the third quarter to $203 million and profit almost doubled to $53.7 million, thanks partially to an $8.5 million gain on sale of fixed assets. Excluding the one off gain, profit would be up 63 percent for the quarter. Expenses increased 25 percent, quite a bit slower than revenues, helping in the growth in profit. Knutsford, unfortunately does not break out direct operating expenses from administration cost but data shows that certain direct cost not counting labour cost, to be around a third of revenues. Increased revenues would have added close to 50 percent of the increase in overall cost.

Knutsford’s New Kingston depot

By the end of 2017 fiscal year revenues climbed 29 percent over 2016 and profit by 28 percent, just below the 35 percent increase for the nine months to February. Operating revenues for the last quarter of the just concluded fiscal year was in line with the amount generated in the third quarter.
When the company went public, it had 54 employees in 2013, up from 47 in the previous year, climbing to 100 by May 2016, and remaining there to May this year, resulting in some economies of scale.
IC is forecasting revenues to pass the $1 billion mark for the first time, by the end of the fiscal year with profits ended up around $280 million or 50 cents per share, with the next fiscal year’s earnings hitting 90 cents per share. The stock trades on the Junior Market of the Jamaica Stock Exchange around $15 with a PE ratio of 27 and 16 times 2019 earnings versus 14 for the market currently.
Knutsford generated $73 million in cash flow for the quarter and expended $69 million on the acquisition of fixed assets to end up with $85 million in cash and bank balances and investments $92 million. The company owes $55 million in loans and boast net worth of $539 million.

About IC