Knutsford Express Services Limited (KEX) is looking to further expand its transport business through the addition of several new vehicles to its expansive fleet, a move which is to be complemented by new offerings in its real estate and courier segments.

The transportation company, which moves people and packages across the island, has been spending big in recent times on improving its service with $266.69 million spent on capital expenditure during the 2024 financial year (FY) ending May 31. Four-fifths of this investment was made in new vehicles, with the company adding three new double-decker coaches to beef up its capacity to serve its large and diverse client base.

“We’re really expanding and renewing the fleet. We’re looking at our business to see how we can add more value to our customer segments. We’re really engaged in looking at improving our offices to better serve our customers more efficiently and productively. We still have a lot of work to do in a lot of areas. We know about it; our team knows what we need to do and we’re busy rolling out initiatives in this area,” said Oliver Townsend, Knutsford Express founder and chief executive officer, in an interview with the Jamaica Observer last Thursday.

The move by Knutsford Express comes amidst its record revenue haul of $1.96 billion for its 2024 FY, a 19 per cent improvement over May 2023 and well above the $1.15 billion earned in May 2019. This increased revenue came from an increase in carrying passengers across the island as well as its courier business, which is its fastest-growing business segment. That courier business has seen the company open multiple depots across the island to handle packages for its business customers who want a way to deliver goods to their customers across the country.

Knutsford Express has even tested some new concepts in recent times, but Townsend noted that more information will become available in the coming months as certain things are finalised.

“The development is underway. We’re going to have a small business centre which will be a little different from what we’ve done in Drax Hall, but we will be a key person in that development and offer opportunities for other businesses in it. We expect that to be finished next year,” Townsend added on the Mandeville property currently being developed.

Knutsford Express purchased land in Mandeville during the 2022 FY for $51.17 million and spent an extra $15.94 million during the 2023 FY on improvements to the property. The company has spent $61.57 million so far on construction activities on the property which will become a hub for its transportation services and allow for it to generate rental income from businesses which will occupy the space at a later date. The Mandeville development also comes at a time when the May Pen to Williamsfield leg of Highway 2000 has been completed, a move which the CEO notes will improve trip planning for the company and improve business along the south coast.

“We needed a hub in that area, and it ended up becoming a development. We whetted our appetite so to speak and we feel really good about it. On the back of that, we’re attempting to see how we can provide value to our core business and in so doing, create hubs that add a lot of value to the communities and towns we’re in. It helps us to be more efficient and not contribute to growing traffic by being in ideal locations and creating a hub for us to expand the local economies,” the CEO explained on the positives the company has seen from its real estate venture.

The company’s real estate segment, which currently comprises its Drax Hall, St Ann investment property, brought in $63.34 million in income for 2024 and had a profit before taxation (PBT) of $35.54 million which translates to a 56 per cent margin for the company. The commercial suites has businesses such as Blake’s Water store, EyeQ Optical and Lizmel’s pharmacy operating there along with the company’s own Super Hub.

Although Townsend is still evaluating the next steps ahead, he did note, “The real estate business has done well for us, and we still see green shoots in it in strategically doing stuff there.”

Despite all the positives going for the company, it begs the question as to how Knutsford Express managed amidst the recent United States travel advisory which has been blamed for the decline in air traffic arrivals in 2024. Townsend responded, “I think the travel advisory has had an impact on travel to Jamaica. What I would say is more so for persons who are not very familiar with Jamaica. For new persons thinking of coming to Jamaica, that segment would definitely have been more impacted by the travel advisory. We do move visitors, but I would say is that the majority of passengers we carry are very familiar with Jamaica and wouldn’t have been as impacted as packaged tourists going to resorts. It has had an impact on Jamaica and it’s not good for us.”

Knutsford Express’ operating expenses jumped by a quarter from $1.33 billion to $1.66 billion as its staff costs jumped 35 per cent to $674.59 million. This massive jump was not only attributed to the company having more business activity, but a decision to add an extra 35 members of staff to its 295 staff roster during the year. This is crucial as the company not only invests more into safety and its people, but serve its growing customer footprint.

This higher expense resulted in the company’s operating profit marginally moving up from $407.86 million to $421.99 million. Despite the flat growth in operating profit, higher finance income and flat finance expense pushed its consolidated PBT up 12 per cent to $387.74 million. However, the expiration of the company’s tax remission resulted in its tax line jumping 86 per cent to $78.28 million and producing a net profit of $309.46 million, a figure that’s comparable to the $304.36 million earned in 2023. Earnings per share was $0.62.

Knutsford Express’ total assets grew 12 per cent to $1.96 billion with non-current assets rising to $1.39 billion and cash at $110.07 million. Total liabilities decreased five per cent to $660.38 million with total debt at $273.84 million. Shareholder’s equity grew 23 per cent to $1.30 billion.

KEX’s stock price closed Monday at $10.10, which leaves the stock down 20 per cent year-to-date with a market capitalisation of $5.05 billion. The company will consider a dividend at its board of directors meeting on October 7. Knutsford Express broke its four-year dividend hiatus in September 2023 when it paid a $0.13 dividend totalling $65 million, the largest ever dividend paid.

“We’re redoubling our investments and efforts on the core business and on initiatives that will improve our customer’s satisfaction. We’re really concentrating on ourselves and not getting too fanciful and looking in different directions. We have some work to do,” Townsend closed as they look to bring in more double-decker coaches.