REG - Xpediator PLC - Interim Results
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
13 September 2021
XPEDIATOR PLC
("Xpediator", the "Company" or the "Group")
CONDENSED INTERIM RESULTS
FOR THE SIX MONTHS TO 30 JUNE 2021
Xpediator Plc (AIM: XPD), a leading provider of freight management services across the UK and Central and Eastern Europe, is pleased to announce its unaudited condensed interim results for the six months ended 30 June 2021.
H1 2021 Financial Highlights
· Group revenue of £126.6m (2020: £99.6m).
· Adjusted profit before tax1 of £3.6m (2020: £2.1m) reflecting continued growth within key CEE markets, incremental revenue generated from customs clearance, full recovery from a COVID-19 affected market and execution of a clear and simplified business strategy.
· Adjusted earnings per share of 1.58 pence (2020: 1.03 pence).
· Basic earnings per share of 0.66 pence (H1 2020: loss per share of 0.25 pence).
· Interim dividend increased by 11% to 0.50 pence per share (H1 2020: 0.45 pence).
Divisional Overview
· Freight Forwarding revenue increased 28.5% to £100.8m (2020: £78.4m) generating operating profit of £4.1m (H1 2020: £2.6m), driven primarily by growth in CEE, enhanced sea freight rates and successful implementation of a UK customs clearance department.
· Logistics and Warehousing revenue increased by 22.0% to £22.9m (H1 2020: £18.7m) giving an operating profit of £0.4m (2020: £0.6m), resulting from continued strong performance from the Romania Pallex business, offset by start-up costs linked to the UK new build 200,000 sqft facility in Southampton and the UK Braintree facility turnaround.
· Transport Support Services revenue increased by £0.5m to £3.0m (2020: £2.5.m) and operating profit to £1.3m (2020: £0.9m).
Post Period Highlights
· UK strategic partnership with e-fulfilment leader Synergy Retail Support.
· Opening of 200,000 sqft new build warehouse extension in Southampton for Delamode International Logistics.
· Review and development of the Group digitalisation strategy and recruitment of a new Group Digitalisation Director.
· Further recruitment of key senior personnel to enhance and strengthen leadership.
· Well placed to achieve an improved performance in the second half of 2021 with adjusted profit before tax for the full year expected to be in excess of £8.5m.
· Healthy pipeline of potential acquisitions.
1 Profit before tax has been adjusted for exceptional items of restructuring costs and deferred consideration release of £398,000 (H1 2020 - £700,000) non-cash interest on deferred consideration of £nil (H1 2020 - £161,000), amortisation of acquisition related intangibles of £742,000 (H1 2020: £726,000), additional interest charge of £167,000 (H1 2020: £171,000) following the application of IFRS 16.
Alex Borrelli, Chairman, commented:
"These financial results show an all-round enhanced performance aligned to a clearer business strategy. All divisions performed well but particularly impressive was the performance of our Freight Forwarding division with Lithuania and Bulgaria reporting strong results.
As indicated by way of the trading update released in June 2021, the Group is expecting a further strong operational and financial performance in H2 2021. This is extremely pleasing and takes into account business strategy alignment, key personnel employed and cost reduction decisions taken in H2 2020.
Finally, I welcome Mark Whiteling as my successor as Chairman effective 22 September 2021.
Enquiries:
Xpediator plc
Tel: +44 (0)330 043 2395
Robert Ross, Chief Executive Officer
Email: info@xpediator.com
Mike Williamson, Chief Financial Officer
Cenkos Securities plc (Nominated Advisor & Broker)
Tel: +44 (0)20 7397 8900
Giles Balleny, Max Gould (Corporate Finance)
Alex Pollen, Michael Johnson (Sales)
Novella Communications (Financial Public Relations)
Tel: +44 (0)20 3151 7008
Tim Robertson
Fergus Young
About Xpediator:
Xpediator is a well-established international provider of freight management services. Established in 1988, the Group's international network of offices provides road, sea and air freight services, 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 its three main areas: freight forwarding, logistics & warehousing and transport services. With headquarters in Braintree, Essex and country offices in 9 CEE countries across 38 sites, the Group currently employs over 1,200 people and was successfully listed on London's AIM market in 2017.
For more information, please visit: www.xpediator.com.
Alternatively, do follow us on Twitter at @Xpediator or find us on LinkedIn at Xpediator Plc.
Chief Executive Statement
Introduction
We are pleased to present the Group's financial performance for the first six months of 2021. Whilst market conditions remain highly competitive, demand for the Company's freight management services has remained strong.
Our strategy remains focused around building a scalable and risk adjusted platform to support our freight management companies across the UK and Europe with a particular expertise in Central and Eastern Europe ("CEE").
H1 2021 Trading
The Group generated revenue of £126.6m during the six months ended 30 June 2021 (H1 2020: £99.6m), adjusted operating profit of £4.0m2 (H1 2020: £2.5m) and reported profit before tax of £2.3m (H1 2020: £0.3m).
2 Operating Profit has been adjusted for the exceptional items of £398,000 (H1 2020 : £700,000) and the amortisation charge of £742,000 (H1 2020 : £726,000)
Revenue generated in the CEE increased by 24.3% to £78.8m (H1 2020: £63.4m), whilst demand for services in the UK increased by 32.0% to £47.8m (H1 2020: £36.2m).
Net debt (excluding right-of-use assets debt) at 30 June 2021 was £1.6m (31 December 2020: net cash £6.8m). The negative movement is primarily a reflection of considerable advance supplier payments required in line with market supplier availability, increased freight rates, delays in client payments linked to acceptance of Brexit related charges and some delays in collecting UK receivables following a change in operational system, personnel and structures within the UK freight forwarding finance and shared service teams. This item is receiving significant focus, has already improved and is expected to be fully unwound by the year end.
The Directors are declaring an increased interim dividend of 0.50 pence (H1 2020: 0.45 pence) per share totalling £708,442 (H1 2020: £637,349) to be paid on 29 October 2021. This dividend has not been accrued in the consolidated statement of financial position.
Operational Review
Freight Forwarding
Revenue H1 2021: £100.8m H1 2020: £78.4m
Operating profit H1 2021: £4.1m H1 2020: £2.6m
The Freight Forwarding division includes businesses in the UK and CEE operating under the Delamode brand.
The division specialises in moving freight, primarily internationally by road, rail, air and sea, and continues to be the largest core service of the Group.
The division which accounts for 79.6% of the Group's revenue has continued to grow in 2021 with revenue in H1 2021 increasing by 28.5%, and resulting in operating profit increasing 54.1% to £4.1m (H1 2020: £2.6m).
Growth within Freight Forwarding has been principally driven by continued strong performance in Lithuania and Bulgaria. Other businesses have performed in line with expectations although future growth is expected in the Romania and UK following the appointment of new senior management.
Logistics & Warehousing
Revenue H1 2021: £22.9m H1 2020: £18.7m
Operating profit H1 2021: £0.4m H1 2020: £0.6m
The Logistics and Warehousing division includes businesses in the UK and Romania under the Delamode and Pallex brands.
Overall, revenue increased by £4.2m (22.0%) however operating profit decreased by £0.2m (37.3%). Whilst there has been a continued strong performance from Romania Pallex, this contribution to operating profit was offset by start-up costs linked to the UK new build 200,000 sqft facility in Southampton and the turnaround of UK Braintree and Fashion operations. Following the strategic partnership with Synergy Retail Support Limited, new customers acquisitions have been made in Braintree.
Logistics activity under the successful operation of the master franchise Pallex pallet distribution network in Romania contributed strongly during this period and is now moving on average approximately 78,000 pallets of freight monthly (H1 2020: 67,000 per month), servicing mainly manufacturers, retailers and importers in Romania and the surrounding region. Revenue and operating profit increased by 20.9% and 25.7% respectively versus H1 2020.
Warehousing activity in Romania has remained robust. Revenue and operating profit increased by 17.1% and 60.0% respectively versus H1 2020.
The Import Services business in Southampton UK was rebranded as Delamode International Logistics in H1 2021 with results in line with expectations whilst being impacted by additional costs associated with the 200,000 sqft new build warehouse that is now complete and operational. The outlook for H2 2021 is positive and in line with the seasonality of the business unit, the build completion and a strong sales pipeline.
The Delamode International Logistics warehouse in Braintree continues to be in the turnaround phase with additional attention and focus being placed on obtaining new contracts and improving operational efficiency.
Transport Support Services
Revenue H1 2021: £3.0m H1 2020: £2.5m
Operating profit H1 2021: £1.3m H1 2020: £0.9m
Transport Support Services, trading principally under the Affinity brand, provides bundled fuel and toll cards, financial and support services for hauliers in Southern Europe. Affinity is an agent of DKV, one of the world's largest fuel card providers, and supplies the DKV fuel card across the East and West Balkan region to a database of approximately 2,000 Eastern European hauliers and over 14,500 trucks. In addition, Affinity offers a "one stop shop" of transport services including ferry bookings, insurances and recently, VAT refund services.
As well as acting independently, Affinity's commercial model allows the Group to generate synergies as many of the hauliers who are customers of Affinity also supply haulage services to Group companies. This enables the Group to have a good understanding of its customers and suppliers and underpins the Group's ability to source transport especially when capacity is low.
Transport Services recovered in H1 2021 with revenue increasing by £0.5m (20.2%) and operating profit increasing by £0.4m (42.8%). This recovery reflects a return to pre-pandemic volumes and growth in the Balkans business.
Outlook
Xpediator Plc has performed well in H1 2021 with revenues and profitability for the year now expected to be above the expectations set at the outset of the year. Our mix of geographies and freight management services represents a unique combination and continues to provide our customers with solutions to access these markets and store their goods. We are confident in the future demand for our services and are focused on ensuring we have the right growth disciplines, infrastructure and personnel in place to support the profitable expansion of the Group going forward. In this regard the Group continues to review a number of acquisition opportunities, in line with its business plan and growth strategy.
As communicated in the trading update released on 25 June 2021, we believe the Group, which traditionally has earnings weighted to the second half of the year, is well placed to deliver full year adjusted profit before tax in excess of £8.5 million.
Robert Ross
13 September 2021
Chief Financial Officer Financial Review
Revenue
Revenue for the six months to 30 June 2021 was £126.6m, an increase of £27m or 27.1% on the comparable period (H1 2020: £99.6m).
Revenue increased within the Freight Forward business by £22.4m, Logistics and Warehouse revenue increased by £4.2m and Transport Services revenue increased by £0.5m.
Gross Profit
Gross profit increased by £4.3m mainly as a result of the increased turnover. Margins have seen a slight decline from 24.8% to 22.8%.
Operating profit
Statutory operating profit for the period was £2.9m (H1 2020: £1.1m).
Financing costs
The net interest expense for the period was £0.6m (H1 2020: £0.8m). The reduction of £0.2m was mainly due to the reduction in the non-cash interest charge following the settlement of all deferred consideration.
Tax
The tax charge for the period was £0.8m (H1 2020: £0.1m). This equates to an effective tax rate of 34.6% (H1 2020: 32.4%).
Adjusted profit before tax
A reconciliation between reported profit before tax and adjusted profit before tax is shown below:
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
Profit before tax (as reported)
2,271
302
3,934
Exceptional items (See note 12)
398
700
1,377
Unwind and add back of discount on deferred consideration
-
161
140
Amortisation of intangibles relating to acquisitions
742
726
1,464
Discount on deferred consideration
-
-
(52)
Additional incurred interest charge - IFRS 16 3
167
171
376
Total adjustments
1,307
1,758
3,305
Adjusted profit before tax
3,578
2,060
7,239
3 The additional incurred interest charge - IFRS 16 represents the difference between the cash rental payments and the accounting charges for depreciation and interest.
Adjusted profit after tax
A reconciliation between reported profit after tax and adjusted profit after tax is shown below:
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
Adjusted profit before tax
3,578
2,060
7,239
Actual tax charge
(786)
(98)
(874)
Tax Impact on:
Amortisation of intangibles relating to acquisitions
(141)
(138)
(278)
Additional incurred interest charge - IFRS 16
(32)
(32)
(71)
Total tax impact on adjusted items
(959)
(268)
(1,223)
Adjusted profit after tax
2,619
1,792
6,016
Statement of Financial Position
Total Assets: The Group had total assets of £148.7m as at 30 June 2021 (31 December 2020: £138.2m).
Total Liabilities: The Group had total liabilities of £117.0m as at 30 June 2021 (31 December 2020: £107.0m).
Net Assets The Group had net assets of £31.7m as at 30 June 2021 (31 December 2020: £31.1m).
Net (Debt)/Cash Reconciliation
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
Cash at Bank
11,194
11,586
12,720
Confidential invoice discounting facility
(10,715)
(3,777)
(3,732)
Overdraft
-
(1,070)
-
Bank Loans
(2,062)
(2,419)
(2,230)
Lease liabilities - right-of-use-assets
(29,160)
(26,212)
(32,240)
Total Debt
(41,937)
(33,478)
(38,202)
Net Debt
(30,743)
(21,892)
(25,482)
Net (Debt)/Cash excluding right-of-use-assets
(1,583)
4,320
6,758
Net debt (excluding right-of-use assets debt) at 30 June 2021 was £1.6m (31 December 2020: net cash of £6.8m).
As reflected in the increased usage of the confidential invoice discounting facility, the negative movement is primarily a reflection of considerable advance supplier payments required in line with market supplier availability, increased freight rates, delays in client payments linked to acceptance of Brexit related charges and some delays in collecting UK receivables following a change in operational system, personnel and structures within the UK freight forwarding finance and shared service teams.
This item is receiving significant focus, has already improved and is expected to be largely back to normal by the year end.
Board and Executive Management Changes
On 19 January 2021, the Group announced Michael Williamson as the new CFO from 1 March 2021. He joined from international freight forwarding company Rohlig Logistics where he was the Global Director of Finance & Controlling and Regional CFO of Northern Europe.
On 6 September 2021, the Group announced Mark Whiteling as the new Non-executive chairman who will join on 22 September 2021. Mark has extensive experience in the B2B and logistics/distribution space having been Interim Chief Executive and Chief Financial Officer at Premier Farnell Plc, as well as Chief Financial Officer at Autobar Group Limited and Tibbett & Britten Group Plc. His most recent executive experience was as Chief Financial Officer at Interserve Plc leading the financial restructuring of that business. Mark is currently the Senior Independent Director for Smiths News Plc as well as Chair of the Audit Committee. He has also been the Senior Independent Director of Hogg Robinson Group Plc and was a Non-Executive Director at Future Plc.
Dividends
The Directors are declaring an interim dividend of 0.50 pence (H1 2020: 0.45 pence) per share totalling £708,442 (H1 2020: £637,349). The dividend will be payable to shareholders on the register on 15 October 2021 with the ex div date being 14 October 2021. The dividend will be paid on 29 October 2021.
Michael Williamson
13 September 2021
Condensed income statement
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
Note
£000
£000
£000
Gross billings
177,676
155,908
342,981
Revenue
1
126,623
99,637
221,226
Cost of sales
(97,694)
(74,976)
(165,640)
Gross profit
28,929
24,661
55,586
Other operating income
546
873
1,250
Impairment loss on receivables
(287)
(592)
(853)
Administrative expenses
(26,294)
(23,875)
(50,680)
Operating profit
2,894
1,067
5,303
EBIT
Exceptional items included in administrative
expenses above
12
398
700
1,377
Operating profit before exceptional items
3,292
1,767
6,680
Finance income
57
4
95
Finance costs
(171)
(120)
(324)
Right-of-use asset interest charge
(509)
(488)
(1,000)
Non cash finance costs
12
-
(161)
(140)
Profit before tax
2,271
302
3,934
Income tax
(786)
(98)
(874)
Profit for period
1,485
204
3,060
Profit/(loss) attributable to:
Owners of the parent
930
(346)
2,031
Non-controlling interests
555
550
1,029
Profit for period
1,485
204
3,060
EPS attributable to the owners of the parent
Basic earnings/(loss) pence per share
3
0.66
(0.25)
1.46
Diluted earnings/(loss) pence per share
3
0.64
(0.25)
1.46
Adjusted basic earnings per share
3
1.58
1.03
3.84
Adjusted diluted earnings per share
3
1.54
1.03
3.84
Condensed Statement of Comprehensive Income
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
Profit for the period
1,485
204
3,060
Other comprehensive income: items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
(660)
656
547
Total comprehensive income for the period
825
860
3,607
Total comprehensive income attributable to:
Owners of the parent
305
265
2,542
Non-controlling interests
520
595
1,065
Total comprehensive income for the period
825
860
3,607
Condensed Statement of Financial Position
Unaudited
Unaudited
Audited
30 June
2021
30 June
2020
31 December 2020
Note
£000
£000
£000
Non-current assets
Intangible assets
5
22,466
24,573
23,443
Property, plant and equipment
6
3,109
2,471
2,696
Right-of-use assets
7
28,160
25,284
31,599
Investments - unlisted
1
1
1
Trade and other receivables
286
1,541
252
Deferred tax
719
699
707
Total non-current assets
54,741
54,569
58,698
Current assets
Inventories
55
255
59
Trade and other receivables
82,750
56,605
66,723
Cash and cash equivalents
11,194
11,586
12,720
Total current assets
93,999
68,446
79,502
Total assets
148,740
123,015
138,200
Equity
Share capital
8
7,132
7,131
7,132
Share premium
13,139
13,139
13,139
Equity reserve
121
1
1
Translation reserve
(44)
681
581
Merger reserve
3,102
3,102
3,102
Retained earnings
6,831
4,161
5,901
Total equity before non-controlling interests
30,281
28,215
29,856
Non-controlling interests
9
1,468
1,181
1,332
Total equity after non-controlling interests
31,749
29,396
31,188
Non-current liabilities
Provisions
1,477
1,748
2,153
Trade and other payables
229
108
132
Interest bearing loans and borrowings
10
1,720
2,074
1,896
Lease liabilities - right-of-use assets
11
22,233
19,740
25,376
Deferred tax
1,545
1,748
1,697
Total Non-current liabilities
27,204
25,418
31,254
Current liabilities
Provisions
732
-
-
Trade and other payables
71,071
55,856
64,828
Deferred consideration
-
681
-
Interest bearing loans and borrowings
10
11,057
4,122
4,066
Overdrafts
-
1,070
-
Lease liabilities - right-of-use assets
11
6,927
6,472
6,864
Total current liabilities
89,787
68,201
75,758
Total liabilities
116,991
93,619
107,012
Total equity and liabilities
148,740
123,015
138,200
Condensed Statement of Cash Flows
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
Profit before tax
2,271
302
3,934
Adjustment for:
Depreciation
4,227
3,669
7,168
Amortisation
989
878
1,730
Finance costs
680
769
1,464
Finance income
(57)
(4)
(95)
Share based payment charge
121
(15)
(15)
Deferred consideration adjustment
-
-
(344)
Disposal of EshopWedrop subsidiaries
-
-
270
Loss on disposal of intangible assets
6
-
339
Loss/(profit) on disposal of property, plant and equipment
-
5
(787)
8,237
5,604
13,664
Changes in working capital:
Decrease/(increase) in stock
4
(137)
59
(Increase)/decrease in trade and other receivables
(16,062)
3,831
(4,998)
Increase/(decrease) in trade and other payables
6,341
(3,987)
6,735
Increase in provisions
56
74
402
Net cash (used)/generated from operating activities
(1,424)
5,385
15,862
Continuing operations
Cash flows from operating activities
Interest paid
(513)
(121)
(948)
Tax paid
(613)
(353)
(848)
Net cash from operating activities
(2,550)
4,911
14,066
Cash flows from investing activities
Purchase of tangible fixed assets
(1,022)
(350)
(860)
Proceeds from sale of intangible assets
-
-
397
Purchase of intangible assets
(38)
(355)
(489)
Cash proceeds from sale and leaseback
-
-
2,900
Net cash acquired from acquisitions
-
-
(3,650)
Cash paid on deferred consideration of acquisition
-
(3,711)
(4,368)
Interest received
57
4
43
Net outflow from investing activities
(1,003)
(4,412)
(6,027)
Cash flows from financing activities
New loans
7,167
1,437
1,350
Loan repayments
(176)
-
(386)
Dividend paid
-
-
(636)
Transactions with non-controlling interests
-
169
-
Non-controlling interest dividends paid
(384)
(227)
(546)
Repayments on Leases
(3,601)
(3,593)
(7,587)
Net cash inflow/(outflow) from financing activities
3,006
(2,214)
(7,805)
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
(Decrease)/increase in cash and cash equivalents from continuing operations
(547)
(1,715)
234
Cash and cash equivalents at beginning of period
12,720
11,951
11,951
Effect of foreign exchange rate movements
(979)
280
535
Cash and cash equivalents at end of period
11,194
10,516
12,720
Condensed Statement of Changes in Equity
For the six months to 30 June 2021 (unaudited)
Share Capital £'000
Share Premium £'000
Equity Reserve £'000
Translation Reserve £'000
Merger Reserve £'000
Retained Earnings £'000
Total £'000
NCI
£'000
Total Equity £'000
Balance at 1 January 2021
7,132
13,139
1
581
3,102
5,901
29,856
1,332
31,188
Share option charge
-
-
120
-
-
-
120
-
120
Dividends paid
-
-
-
-
-
-
-
(384)
(384)
Total contributions by and distributions to owners
-
-
120
-
-
-
120
(384)
(264)
Profit for the period
-
-
-
-
-
930
930
555
1,485
Exchange differences on foreign operations
-
-
-
(625)
-
-
(625)
(35)
(660)
Total comprehensive income for the period
-
-
-
(625)
-
930
305
520
825
Balance at 30 June 2021
7,132
13,139
121
(44)
3,102
6,831
30,281
1,468
31,749
For the six months to 30 June 2020 (unaudited)
Share Capital £'000
Share Premium £'000
Equity Reserve £'000
Translation Reserve £'000
Merger Reserve £'000
Retained Earnings £'000
Total £'000
NCI
£'000
Total Equity £'000
Balance at 1 January 2020
6,854
11,987
16
70
3,102
6,094
28,123
887
29,010
Acquisition of subsidiary
-
-
-
-
-
-
-
(232)
(232)
Transfer on acquisition of non-controlling interest
-
-
-
-
-
(158)
(158)
158
-
Share option charge
-
-
(15)
-
-
-
(15)
-
(15)
Dividends paid
277
1,152
-
-
-
(1,429)
-
(227)
(227)
Total contributions by and distributions to owners
277
1,152
(15)
-
-
(1,587)
(173)
(301)
(474)
(Loss)/profit for the period
-
-
-
-
-
(346)
(346)
550
204
Exchange differences on foreign operations
-
-
-
611
-
-
611
45
656
Total comprehensive income/(loss) for the period
-
-
-
611
-
(346)
265
595
860
Balance at 30 June 2020
7,131
13,139
1
681
3,102
4,161
28,215
1,181
29,396
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD TO 30 JUNE 2021
General information
The financial information included in this condensed interim statement of results does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The unaudited accounts for the six month period ended 30 June 2021 have been prepared on a consistent basis and using the same accounting policies as those adopted in the financial statements for Xpediator PLC for the year ended 31 December 2020, except as noted below for new standards adopted. The statutory accounts of Xpediator PLC for the year ended 31 December 2020 are available on the Xpediator Plc website, www.xpediator.com. The auditors reported on those accounts: their report was unqualified and did not draw attention to any matters by way of emphasis.
The interim condensed financial statements were authorised for issue by the board of directors on 13 September 2021.
Basis of preparation
Xpediator Plc (the 'Company') is a company incorporated in England. The consolidated condensed interim financial statements of the Company for the six month period ended 30 June 2021 comprise the Company and its subsidiaries (together referred to as the 'Group'). The condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the United Kingdom. They are unaudited but have been reviewed by the Company's auditor and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2020.
The preparation of the condensed interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expenses. Actual results may differ from these estimates.
Accounting policies
The financial statements have been prepared on the historical cost basis except for the revaluation of certain financial instruments that are measured at revalued amounts or fair values at the end of each reporting period.
Going concern
The Directors have concluded that it is appropriate that the financial statements have been prepared on a going concern basis given the cash balances as at 30 June 2021, and funding facilities in place across the group, which it does not envisage will be withdrawn thus there are sufficient funds available to meet its liabilities as they fall due. The financial statements have therefore been prepared on a going concern basis.
The directors believe that based on the current budgets and forecast cash flows, there is sufficient resources to meet its liabilities as they fall due.
1) Turnover analysis by Country & Segment
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
United Kingdom
47,806
36,204
83,194
Lithuania
38,917
29,388
63,988
Romania
18,541
15,153
33,640
Bulgaria
13,821
12,135
25,635
Other
7,538
6,757
14,769
Total Income
126,623
99,637
221,226
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£000
£000
£000
Freight Forwarding
United Kingdom
34,813
25,770
56,889
Romania
6,439
5,016
11,305
Lithuania
38,917
29,388
63,988
Bulgaria
13,821
12,135
25,635
Other
6,765
6,088
13,179
Total Income Freight Forwarding
100,755
78,397
170,996
Logistics & Warehousing
United Kingdom
12,993
10,434
26,305
Romania
9,878
8,313
18,182
Total Income Logistics & Warehousing
22,871
18,747
44,487
Transport Solutions
Romania
2,224
1,824
4,153
Other
773
669
1,590
Total Income Transport Solutions
2,997
2,493
5,743
Total Income
126,623
99,637
221,226
2) Segmental Analysis
Types of services from which each reportable segment derives its revenues
During the period, the Group had three main divisions: Freight Forwarding, Logistics & Warehousing and Transport Solutions. All revenue is derived from the provision of goods and services.
• Freight Forwarding - This division is the core business and relates to the movement of freight goods across Europe. This division accounts for the largest proportion of the Group's business, generating 79.6% of its external revenues contributed in 2021 (H1 2020: 78.7%)
• Logistics & Warehousing - This division provides warehousing and domestic distribution and generated 18.1% of the Group's external revenues in 2021 (H1 2020: 18.8%).
• Transport Support Services - This division focuses on the reselling of DKV fuel cards, leasing, ferry crossings and other associated transport related solutions. This division accounts for 2.3% of the Group's business in terms of external revenue (H1 2020: 2.5%)
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team comprising the Divisional COOs, the Chief Executive Officer and the Chief Financial Officer.
No single customer accounted for more than 10% of the Group's total revenue.
Measurement of operating segment profit or loss, assets and liabilities
The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS.
Inter-segment sales are priced at market rates and on an arm's length basis, along the same lines as sales to external customers. This policy was applied consistently throughout the current and prior period.
Segmental Analysis for the period to 30 June 2021
Freight Forwarding
Logistics & Warehousing
Transport Solutions
Unallocated
Total
2021
2021
2021
2021
2021
£'000
£'000
£'000
£'000
£'000
Gross billings
100,755
23,352
53,569
-
177,676
Less recoverable disbursements
-
-
(50,572)
(50,572)
Total revenue
100,755
23,352
2,997
-
127,104
Inter-segmental revenue
-
(481)
-
-
(481)
Total revenue from external customers
100,755
22,871
2,997
-
126,623
Depreciation & amortisation (excluding right-of-use assets depreciation)
(520)
(803)
(24)
(151)
(1,498)
Segment Profit before central overhead allocation (excluding exceptional items)
4,081
387
1,272
(2,448)
3,292
Allocation of central overheads
(706)
(341)
(42)
1,089
-
Segment Profit after central overhead allocation (excluding exceptional items)
3,375
46
1,230
(1,359)
3,292
Net finance costs
(623)
Exceptional items
(398)
Profit before income tax
2,271
Segmental Analysis for the period to 30 June 2020
Freight Forwarding
Logistics & Warehousing
Transport Solutions
Unallocated
Total
2020
2020
2020
2020
2020
£'000
£'000
£'000
£'000
£'000
Gross billings
78,397
19,116
58,395
-
155,908
Less recoverable disbursements
-
-
(55,902)
-
(55,902)
Total revenue
78,397
19,116
2,493
-
100,006
Inter-segmental revenue
-
(369)
-
-
(369)
Total revenue from external customers
78,397
18,747
2,493
-
99,637
Depreciation & amortisation (excluding right-of-use assets depreciation)
(514)
(719)
(24)
(21)
(1,278)
Segment Profit before central overhead allocation (excluding exceptional items)
2,648
617
891
(2,389)
1,767
Allocation of central overheads
(642)
(145)
(25)
812
-
Segment Profit after central overhead allocation (excluding exceptional items)
2,006
472
866
(1,577)
1,767
Net finance costs
(765)
Exceptional items
(700)
Profit before income tax
302
Segmental Analysis for the period to 31 December 2020
Freight Forwarding
Logistics & Warehousing
Transport Solutions
Unallocated
Total
2020
2020
2020
2020
2020
£'000
£'000
£'000
£'000
£'000
Gross billings
170,996
45,595
126,390
-
342,981
Less recoverable disbursements
-
-
(120,647)
-
(120,647)
Total revenue
170,996
45,595
5,743
-
222,334
Inter-segmental revenue
-
(1,108)
-
-
(1,108)
Total revenue from external customers
170,996
44,487
5,743
-
221,226
Depreciation & amortisation (excluding right-of-use assets depreciation)
(793)
(1,461)
(49)
(342)
(2,645)
Segment Profit before central overhead allocation (excluding exceptional items)
6,795
2,619
2,311
(5,045)
6,680
Allocation of central overheads
(1,210)
(1,004)
(67)
2,281
-
Segment Profit after central overhead allocation (excluding exceptional items)
5,585
1,615
2,244
(2,764)
6,680
Net finance costs
(1,369)
Exceptional items
(1,377)
Profit before income tax
3,934
3) Earnings per share
Unaudited
Unaudited
Audited
6 months to
6 months to
Year to
30 June
2021
30 June
2020
31 December 2020
£0004
£000
£000
Weighted average number of shares - basic
141,633
136,867
138,889
Weighted average number of shares - diluted
145,034
136,867
138,944
Profit/(loss) for the period attributable to equity holders of the company
930
(346)
2,031
Profit for the period attributable to equity holders of the company excluding exceptional, non trading and certain one-off items (see note 12)
2,237
1,412
5,336
Earnings/(loss) per share - basic (pence)
0.66
(0.25)
1.46
Earnings/(loss) per share - diluted (pence)
0.64
(0.25)
1.46
Adjusted basic earnings per share (pence) (excluding exceptional items)*
1.58
1.03
3.84
Adjusted diluted earnings per share (pence) (excluding exceptional items)*
1.54
1.03
3.84
*Earnings per share adjusted for exceptional, non-trading and certain one-off costs (see note 12)
4 All numbers presented as £000's except number of shares (presented as actual thousands) and Earnings per share (presented as pence)
4) Dividends
The Directors are declaring an interim dividend of 0.50 pence (H1 2020: 0.45 pence) per share totalling £708,442 (H1 2020: £637,349). The dividend will be payable to shareholders on the register on 15 October 2021 with the ex div date being 14 October 2021. The dividend will be paid on 29 October 2021.
5) Intangible Asset
For the period from 1 January 2021 to 30 June 2021 (unaudited)
Customer Related
£'000
Licences
£'000
Goodwill
£'000
Technology Related
£'000
Total
£'000
Cost
At 1 January 2021
12,258
3,234
14,160
510
30,162
Additions
-
38
-
-
38
Disposals
-
(161)
-
-
(161)
Exchange differences
-
(20)
-
-
(20)
At 30 June 2021
12,258
3,091
14,160
510
30,019
Amortisation/Impairment
At 1 January 2021
3,871
751
1,845
252
6,719
Amortisation for the period
692
247
-
50
989
Disposals
-
(155)
-
-
(155)
At 30 June 2021
4,563
843
1,845
302
7,553
Net Book Value at 30 June 2021
7,695
2,248
12,315
208
22,466
For the period from 1 January 2020 to 30 June 2020 (unaudited)
Customer related
£'000
Licences
£'000
Goodwill
£'000
Technology Related
£'000
Total
£'000
Cost
At 1 January 2020
12,057
3,248
14,166
510
29,981
Acquisitions
-
355
-
-
355
Acquired through business combinations
-
-
155
-
155
Disposals
-
(155)
-
-
(155)
Exchange differences
-
256
-
-
256
At 30 June 2020
12,057
3,704
14,321
510
30,592
Amortisation/Impairment
At 1 January 2020
2,620
660
1,845
150
5,275
Amortisation for the period
676
152
-
50
878
Eliminated on disposal
-
(154)
-
-
(154)
Exchange differences
-
20
-
-
20
At 30 June 2020
3,296
678
1,845
200
6,019
Net Book Value at 30 June 2020
8,761
3,026
12,476
310
24,573
For the period from 1 January 2020 to 31 December 2020 (audited)
Customer Related
£'000
Licences
£'000
Goodwill
£'000
Technology Related
£'000
Total
£'000
Cost
At 1 January 2020
12,057
3,248
14,166
510
29,981
Additions
-
489
-
-
489
Acquired through business combinations
424
-
221
-
645
Disposals
(223)
(579)
(227)
-
(1,029)
Exchange differences
-
76
-
-
76
At 31 December 2020
12,258
3,234
14,160
510
30,162
Amortisation/Impairment
At 1 January 2020
2,620
660
1,845
150
5,275
Amortisation for the period
1,362
266
-
102
1,730
Disposals
(111)
(182)
-
-
(293)
Exchange differences
-
7
-
-
7
At 31 December 2020
3,871
751
1,845
252
6,719
Net Book Value at 31 December 2020
8,387
2,483
12,315
258
23,443
The goodwill included in the above note, relates to the acquisitions of Pallet Express Srl in January 2016, Easy Managed Transport in March 2017, Benfleet Forwarding Limited in October 2017, Regional Express Limited in November 2017, Anglia Forwarding Group Limited in June 2018 , Import Services Limited in July 2018, International Cargo Centre in January 2020 and Nidd Transport Limited in October 2020. This is the total value of intangible assets with an indefinite useful life allocated to each respective cash generating unit.
6) Property, plant and equipment
For the period from 1 January 2021 to 30 June 2021 (unaudited)
Freehold Property
Fixtures, fittings and equipment
Motor Equipment
Computer Equipment
Total
£000
£000
£000
£000
£000
Cost
At 1 January 2021
258
2,666
1,024
2,745
6,693
Additions
60
444
30
488
1,022
Disposals
(8)
(44)
(83)
(45)
(180)
Exchange differences
(8)
(50)
(115)
(65)
(238)
At 30 June 2021
302
3,016
856
3,123
7,297
Depreciation
At 1 January 2021
97
1,462
671
1,767
3,997
Charge for the period
15
234
19
241
509
Eliminated on disposal
(8)
(44)
(83)
(45)
(180)
Exchange differences
(8)
(42)
(71)
(17)
(138)
At 30 June 2021
96
1,610
536
1,946
4,188
Net book value 30 June 2021
206
1,406
320
1,177
3,109
For the period from 1 January 2020 to 30 June 2020 (unaudited)
Freehold Property
Fixtures, fittings and equipment
Motor Equipment
Computer Equipment
Total
£000
£000
£000
£000
£000
Cost
At 1 January 2020
269
2,330
759
2,335
5,693
Additions
14
168
46
122
350
Disposals
-
(11)
(9)
(14)
(34)
Exchange differences
(9)
41
34
37
103
At 30 June 2020
274
2,528
830
2,480
6,112
Depreciation
At 1 January 2020
60
1,078
594
1,445
3,177
Charge for the period
21
199
11
169
400
Eliminated on disposal
-
(11)
(9)
(14)
(34)
Exchange differences
40
21
17
20
98
At 30 June 2020
121
1,287
613
1,620
3,641
Net book value 30 June 2020
153
1,241
217
860
2,471
For the period from 1 January 2020 to 31 December 2020 (audited)
Freehold Property
Fixtures, fittings and equipment
Motor Equipment
Computer Equipment
Total
£000
£000
£000
£000
£000
Cost
At 1 January 2020
269
2,330
759
2,335
5,693
Additions
20
280
145
415
860
Additions acquired with subsidiary
2,104
61
107
58
2,330
Disposals
(2,104)
(36)
(9)
(92)
(2,241)
Exchange differences
(31)
31
22
29
51
At 31 December 2020
258
2,666
1,024
2,745
6,693
Depreciation
At 1 January 2020
60
1,078
594
1,445
3,177
Charge for the period
38
405
77
395
915
Eliminated on disposal
-
(36)
(9)
(92)
(137)
Exchange differences
(1)
15
9
19
42
At 31 December 2020
97
1,462
671
1,767
3,997
Net book value 31 December 2020
161
1,204
353
978
2,696
7) Right-of-use assets
For the period from 1 January 2021 to 30 June 2021 (unaudited)
Property Premises
Equipment
Total
£000
£000
£000
Cost
At 1 January 2021
41,378
2,247
43,625
Additions
798
39
837
Disposals
(1,412)
(83)
(1,495)
Translation
(690)
(19)
(709)
At 30 June 2021
40,074
2,184
42,258
Depreciation
At 1 January 2021
11,223
803
12,026
Charge for the period
3,404
314
3,718
Eliminated on disposal
(1,412)
(83)
(1,495)
Revaluations
(146)
(5)
(151)
At 30 June 2021
13,069
1,029
14,098
Net book value
At 30 June 2021
27,005
1,155
28,160
For the period from 1 January 2020 to 30 June 2020 (unaudited)
Property Premises
Equipment
Total
£000
£000
£000
Cost
At 1 January 2020
32,143
1,197
33,340
Additions
93
506
599
Disposals
-
(6)
(6)
Translation
640
25
665
At 30 June 2020
32,876
1,722
34,598
Depreciation
At 1 January 2020
5,623
332
5,955
Charge for the period
3,042
227
3,269
Eliminated on disposal
-
(2)
(2)
Revaluations
98
(6)
92
At 30 June 2020
8,763
551
9,314
Net book value
At 30 June 2020
24,113
1,171
25,284
For the period from 1 January 2020 to 31 December 2020 (audited)
Property Premises
Equipment
Total
£000
£000
£000
Cost
At 1 January 2020
32,143
1,197
33,340
Additions
8,678
678
9,356
Additions acquired with subsidiary
252
396
648
Disposals
(316)
(24)
(340)
Translation
621
-
621
At 31 December 2020
41,378
2,247
43,625
Depreciation
At 1 January 2020
5,623
332
5,955
Charge for the period
5,767
486
6,253
Eliminated on disposal
(244)
(20)
(264)
Revaluations
77
5
82
At 31 December 2020
11,223
803
12,026
Net book value
At 31 December 2020
30,155
1,444
31,599
8) Share Capital
Unaudited
Unaudited
Audited
30 June
2021
30 June
2020
31 December
2020
£000
£000
£000
Allotted, issued and fully paid
Ordinary shares of £0.05p each
141,633
141,633
141,633
Ordinary shares of £0.05p each
7,082
7,081
7,082
Deferred Shares of £1 each
50
50
50
Total authorised Share Capital
7,132
7,131
7,132
The deferred shares are non-voting shares and have no rights to any distribution or dividend payments.
On 5 February 2021, the Group launched a new Company Share Option Plan ("CSOP") to certain employees. The award value is between £5,000 - £30,000 (depending on seniority within the business) divided by closing share price on the day before grant of CSOP options with an exercise price equivalent to 110% of the closing share price on the day before grant. These options vest three years from the award date and are subject to meeting a performance criteria of an average earnings per share (EPS) growth of 10% per annum, from 1 January 2021 to 31 December 2023. As at the reporting date, there were potentially 2,932,584 of shares options that could be exercised.
On 3 March 2021, the company awarded 2,430,291 to Robert Ross and Mike Williamson under a long term investment plan (LTIP). For both EPS growth and TSR, one quarter of the awards will vest once a compound annual growth rate (CAGR) in excess of 10% has been achieved and will only vest 100% once a compound annual growth rate of 25% has been achieved. Between 10% and 25% CAGR, the awards will vest pro rata.
9) Non-Controlling Interests
Non-Controlling interests held in the group are as follows:
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
Delamode Baltics UAB 20.0% 20.0% 20.0%
Delamode Estonia OÜ 20.0% 20.0% 20.0%
Delamode Bulgaria OOD 10.0% 10.0% 10.0%
Affinity Leasing IFN 0.05% 0.05% 0.05%
Delamode Distribution UK Limited 49.0% 49.0% 49.0%
10) Loans
Unaudited
Unaudited
Audited
30 June
2021
30 June
2020
31 December
2020
£000
£000
£000
Current
Bank loans & invoicing discount facility
11,057
4,122
4,066
Other Loans
Loans 1- 2 years
359
340
351
Loans 2- 5 years
1,186
1,135
1,159
Loans due after five years repayable by instalments
175
599
386
Total Loans due after one year
1,720
2,074
1,896
Bank loans and overdrafts are secured by a fixed and floating charge over the Group's assets.
11) Leases liabilities - right-of-use assets
Unaudited
Unaudited
Audited
30 June
2021
30 June
2020
31 December
2020
£000
£000
£000
Current
Current balances
6,927
6,472
6,864
Other loans
Leases 1- 2 years
6,395
5,774
6,508
Leases 2- 5 years
9,805
12,080
12,317
Leases due after five years repayable by instalments
6,033
1,886
6,551
Total Leases due after one year
22,233
19,740
25,376
12) Exceptional Items
The Group incurred non-recurring costs totalling £398,000 (H1 2020: £700,000) due to: redundancy, restructuring and Southampton new site costs of £398,000 (H1 2020: £893,000), Anglia deferred consideration £nil (H1 2020: credit of £244,000), closure of the Buzzbrand business £nil (H1 2020: £51,000).
Adjusted earnings per share has been calculated as follows:-
Unaudited
6 months to
Unaudited
6 months to
Audited
Year to
30 June
2021
30 June
2020
31 December
2020
£000
£000
£000
Profit/(loss) for the period attributable to the owners of the parent
930
(346)
2,031
Exceptional items
398
700
1,377
Amortisation of intangibles relating to acquisitions
742
726
1,464
Unwind and add back of discount on deferred consideration
-
161
140
Discount on deferred consideration
-
-
(52)
Additional incurred interest charge - IFRS 16
167
171
376
Adjusted profit for the period
2,237
1,412
5,336
INDEPENDENT REVIEW REPORT TO XPEDIATOR PLC
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2021 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of cash flows, the condensed consolidated statement of changes in equity and the related notes.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Use of our report
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The condensed interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the condensed interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Financial Reporting Council for use in the United Kingdom. A review of the condensed interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2021 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
Crowe U.K. LLP
Statutory Auditors
London
United Kingdom
13 September 2021
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