Shares in Xpediator (XPD:AIM) are back in action after the transport group announced its third acquisition since joining the stock market last summer.
The small cap business is strengthening its position in road, sea and freight activities through the earnings-enhancing acquisition of Anglia Forwarding for up to £4.2m.
The news triggers a 3.3% rise in the value of its shares to 63p. The stock had hit an all-time high of 66.9p on 25 May, representing a 178% gain on the 24p IPO (initial public offering) price in August 2017.
Read this recent story from Shares to learn why Xpediator’s shares having been doing so well.
The company hopes the acquisition of Anglia, an international freight forwarding and courier business, will provide synergies via warehousing and fulfilment services.
Anglia’s presence at Felixstowe is attractive as Xpediator can take advantage of one of the few purpose-built freight and independently-operated terminals in the UK.
POTENTIAL POST-BREXIT BOOST
Cantor Fitzgerald analyst Robin Byde says Anglia’s specialist customer clearance skills could be useful post-Brexit.
He believes Anglia’s links with United Shipping - a worldwide association of agents - will help Xpediator target freight services to the US and China.
Byde has hiked Xpediator’s sales forecasts by 8% to £180m for the year to 31 December 2019 and lifted adjusted operating profit forecasts by 6% to £7.3m.
Xpediator plans to consolidate its exports to the Rainham cross dock facility, which will be managed with Cargo Marketing Services under a joint venture.
The company will pay £1.5m for Anglia plus £700,000 once the deal completes reflecting its surplus working capital position. There is also a deferred cash consideration of up to £2m depending on how much profit the acquired business makes over the next two years.
In the year to 31 July 2017, Anglia generated sales of £13.5m and operating profit of over £400,000.
