Coming off a financial year with an 11 percent decline in revenue and a 78 percent drop in profit for the year, Knutsford Express had the second-worst quarterly performance following the $70 million losses incurred in the April quarter this year, as dislocations caused by the impact of the COVID virus the company’s operations severely.
Knutsford Express
Revenue dropped 62 percent or a huge $203 million from the $325 million recorded in 2019 to just $122 million in the first-quarter ending August 2020. Drastically reduced trips and services due to the restrictions put in place by the government to contain the spread of COVID-19 was a key factor affecting business and the financial results. Knutsford incurred a loss of $26 million for the August 2020 quarter, before finance income and expenses, 146 percent lower than the profit of $57 million earned the 2019 first quarter.
Unfortunately, the company continues the very poor practice of grouping direct operating and administrative costs together, therefore preventing investors from properly assessing the operation and the contribution the operating facility makes to overhead cost. For the quarter, administrative and operating expenses fell at a much slower pace and amounts than the fall in revenues, with expenses dropping 45 percent from $267 million in 2019 August quarter to $148 million in 2020. Depreciation charges accounted for $29 million up from 426 million in 2019.
Finance income in the 2020 quarter pulled in $4 million compared to $2 million collected in 2019, while finance costs declined from $7 million in 2019 to $3 million in 2020.
Knutsford’s New Kingston depot
The US operation generated a mere $638,000 in revenue and contributed $4 million to the loss, but that is down from the prior year with a loss of $9 million from revenues of $7 million.
Cash flows from operating activities brought in $9 million, down from $78 million at the end of August 2019. After spending $35 million on the acquisition of fixed assets and borrowing $15 million, it resulted in an increase in cash of $13 million at the end of the period, pushing funds on hands to $52 million, down from $194 million at the end of 2019. The company also has investments amounting to $97 million. Current assets stood at $194 million at the end of August 2020 down 51 percent from $393 billion in August of the previous year. Current liabilities stood at just $76 million to be more than adequately covered by current assets. At the close of August, shareholders’ equity stood at $744 million down from $827 million at the close of the corresponding period in 2019.
Going forward, as activities pick up locally and visitor arrivals numbers grow, the company stands to benefit from increased patronage and improved profitability. At the same time, the loss incurred in the quarter is lower than the depreciation charge that is positive as it means no drain on cash. The company should recover from the downturn experienced during the year, but it may not be until 2021 that investors will get a truer sense as to the level of rebound in profit as well as the stock price, that may be possible. “We expect an improved performance in the next quarter,” the Directors, stated in their report accompanying the quarterly.
Earnings per share ended with a loss of 5 cents for the quarter. Knutsford Express currently trades on the Junior Market of the Jamaica Stock Exchange at $6.55.
