Knutsford profit more than doubles in 3Q
BY JULIAN RICHARDSON Assistant Business Co-ordinator email@example.com
LUXURY coach provider Knutsford Express Services disclosed that it more than doubled third quarter net profits in its first quarterly earnings report since going public.
Knutsford posted a net profit of $8.9 million for the third-quarter ending February 28, 2013 compared to $3.7 million over the same three months the year prior. Revenues for the period under review were $90.6 million or 79 per cent higher than levels a year earlier, attributed to significant increases in its two core business segments -- passenger ridership and courier services, which contributed $75 million and $15 million respectively to total sales.
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 transportation company successfully raised nearly $100 million through an initial public offer (IPO) of 20 million shares or 20 per cent of the firm last December.
The listing on the Jamaica Stock Exchange Junior Market allowed the company to qualify for a five-year break on income tax. Knutsford posted $9.9 million profit before tax for the third quarter under review, an increase of 28 per cent over the comparative period last year.
Total assets have grown by 73.2 per cent to $216 million at the end of February.
Incorporated in 2006, Knutsford Express launched 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, having acquired competitor SouthCoast Express last year.
The company had projected that its future performance would be boosted by the maturation of routes acquired from SouthCoast and greater efficiencies. The impact of the acquisition was reflected in the strong third-quarter performance, according to the directors' report.
"Our Southcoast service which began on June 1, 2013 continues to grow and has started to contribute positively to the company's profit-making position with a 30 per cent growth in ridership in the third quarter as compared to the second quarter of the present financial year," the report said, adding, "This has been buoyed by the relocation of our Mandeville office to Main Street and our St Elizabeth office from Santa Cruz to Luana."
Knutsford's administrative and general expenses for the period under review was $80.3 million or 90 per cent higher than year earlier levels. Its investment in renewable energy should yield 40 per cent reduction in electricity costs, according to the IPO prospectus, which added that the fuel cost to revenue ratio should also fall with the addition of more fuel-efficient vehicles.
At the same time the company said in the directors' report that efforts to improve its customer service has had a positive impact.
"We continue to train, reinforce and strengthen our key customer service management positions which have led to increased commendations from passengers and the general public," reported the company.
"Our more robust engagement in social media, with active management of our Facebook pages, Twitter account and online text chat boxes, have made customer contact easier, more efficient and better for our customers," the company added.