Xpediator Plc (XPD.L) is a well-established international provider of freight management services. Established in 1988 by CEO Stephen Blyth today the Company’s international network of offices provides regular and direct services linking Eastern Europe, the Balkans and the Baltics with Western Europe, together with logistics and warehousing in the UK and Romania. The business offers integrated freight management within the supply chain logistics and fulfilment sector, through their three main areas: freight forwarding, logistics & warehousing and transport services. With headquarters in Braintree, Essex and country offices in eight CEE countries across 22 sites, the Group currently employs over 690 people and was successfully listed on London’s AIM market in August 2017.
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On February 22nd, 2018, XPD published a trading update and said that 2017 had been a transformational year, during which it successfully listed on AIM, raised an aggregate of £7.8m in new equity investment (before expenses) and completed the acquisition of three complementary and earnings accretive businesses – EMT Logistics, Benfleet Forwarding and Regional Express. All three of the Group’s operating divisions – Freight Forwarding, Transport Services and Logistics & Warehousing – generated organic revenue growth in FY 2017 compared to the prior year. Group revenues for FY 2017 will be up by approximately 59% to £116m (2016: £72.8m) reflecting c£10m of revenue contribution from the three acquisitions completed during 2017, and positive performances from all three of the Group’s trading divisions. Trading profit is also expected to be significantly ahead of the previous year despite investment in strengthening the Company’s key operating functions to support the current and future growth of the business. Trading results for FY 2017 are expected to be in line with market expectations. CEO Stephen Blyth said the results “are solid foundations for Xpediator to continue to grow and achieve our objective of becoming a European leader of the mid-market freight management sector.”Final results will be announced in May 2018.
Although XPD only listed in August 2017, the quality of the company, strategy and earnings ensured the stock was flagged across a series of key VectorVest metrics. In early March 2018, the VectorVest RT (Relative Timing) metric leapt higher, alerting members to a growth opportunity. RT is a fast, smart, accurate indicator of a stock’s price trend, and despite the stock currently trading close to year highs at 61p, XPD still logs a current rating of 1.75 on this metric, which is excellent on a scale of 0.00 – 2.00. Other high scoring metrics include a GRT (Earnings Growth Rate) of 20%, which VectorVest considers to be very good. Probably due to its short time as a listed entity, XPD only scores a fair 0.95 RS (Relative Safety) rating, (scale of 0.00 to 2.00), but trading at 61p the value opportunity is clear to see against a current VectorVest valuation of 69p per share.
Summary: The never-ending VectorVest quest to find ‘under the radar’ quality growth companies today identifies newly listed XPD as a company of great quality and growth potential. Having used the funds raised at the listing to acquire and successfully integrate three companies into the group, XPD is now well positioned to expand into its key European markets. Underscored by substantial growth in revenues and trading profits in its first year as a listed company, XPD looks likely to become one of the big stock market successes in 2018. Buy.
Dr David Paul
April 26th 2018
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