Business

Knutsford Express lists today

Wednesday, January 15, 2014    

Print this page Email A Friend!


LUXURY coach provider Knutsford Express Services Limited lists on the Jamaica Stock Exchange (JSE) Junior Market today, after successfully raising nearly $100 million from its initial public offering (IPO).

The twenty million shares, issued at a price of J$5.11 per share and offered in December, were over-subscribed.

Knutsford operates its bus services along Jamaica's two major corridors for ground travel. Its offering comprises scheduled coach transportation, courier service, private hire, and special event shuttles.

The funds raised from the issue will be used for working capital support, acquisition of a new coach, and upgrade of the existing fleet of 14 buses, as well as payment of the IPO expenses.

"As anticipated, the Knutsford Express IPO was a success," said Chorvelle Johnson, president and CEO of the lead broker, Proven Wealth Limited. We were confident in Knutsford Express because it is an excellent company with a strong reputation for customer service. They have a stellar management team and the company has an exceptional track record."

Following the IPO, Knutsford Express passed a resolution to capitalise $26 million to ensure its fully paid, subscribed participating voting share capital met the minimum requirement of $50 million, which is a pre-condition for listing of the shares on the Junior Market.

The transportation company was incorporated in 2006, launching with 28 departures weekly between Montego Bay and Kingston, the island's two major cities. The company now has 105 departures weekly and has expanded its reach to Falmouth, Negril, Savanna-la-Mar, and Mandeville.

It consolidated its operations and acquired routes across the south coast of Jamaica with its acquisition of Southcoast Express earlier this year.

"In taking this significant step to list on the Junior Stock Market, we were confident that the Proven Wealth team would help us to achieve our goals and they have done just that," said Oliver Townsend, Managing Director and Chairman of Knutsford Express. "We are on the way to achieving our ultimate goal, which is to expand our business while maintaining the level of service to which our customers have grown accustomed."

The company's prospectus revealed that Knustford has grown annual revenues by an average of 27 per cent the last five years up to $203.2 million for the 2013 financial year. Net profit stood at $51.1 million at the end of the review period.

At the end of the 2013 financial year, the company's asset base was $133 million, with annual growth of 52 per cent over the last five years attributed to increase in its coach fleet. Total liabilities, consisting mainly of trade payables and bank debt, have risen from $15 million to $50 million over the period, the prospectus indicated.

Interim results for the first quarter ending August 31, 2013, show revenues for the period amounting to $71 million, a 31 per cent increase over the corresponding period last year.

The company projects that its future performance will be boosted by the maturation of routes acquired from SouthCoast and greater efficiencies. Its investment in renewable energy should yield 40 per cent reduction in electricity costs, according to the prospectus, which added that the fuel cost-to-revenue ratio should also fall with the addition of more fuel-efficient vehicles.

ADVERTISEMENT

POST A COMMENT

HOUSE RULES

 

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper – email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT
ADVERTISEMENT

Poll

Did the NWC prepare adequately for the current drought?
Yes
No


View Results »


ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT