Xpediator Plc (LON: XPD) to sell its subsidiary EshopWedrop to Inert Logistics for £0.3m

Summary

  • ESWD, a commercial B2C logistics service, has been bought by Inert Logistics for a total consideration of £0.3 million
  • ESWD is being removed from its portfolio as it does not fall in line with the Group’s strategy
  • The Group anticipates higher profitability and therefore might continue with its progressive dividend policy in the near term

 

Xpediator Plc (LON: XPD), the leading provider of freight management services across the UK and Central and Eastern Europe, is all set to its subsidiary EshopWedrop Holdings (ESWD) to Inert Logistics for £0.3 million.

ESWD has been a loss making entity in recent times as it recorded a net loss of approximately £0.5 million for the FY2019. The book value of ESWD’s assets stood at around £0.7 million. On acquisition, Inert Logistics will pay £0.3 million in equal annual installments over the next three years. On the flip side, the sale of ESWD would lead to annualised cost savings of £0.35 million. Although its sale will result in a net loss of £0.4 million at present.

Xpediator CEO Robert Ross said that ESWD is being removed from its portfolio as it does not fall in line with the Group’s strategy, however, it is based on a good concept. Moreover, the logistics subsidiary was undergoing losses. The consolidation of portfolio companies would allow the group to focus on core propositions and achieve future growth.

 

Also read: How will MJ Hudson Group perform post-acquisition initiatives taken lately?

 

Recent acquisition

Earlier in October, Xpediator acquired Nidd Transport Ltd, the UK-based international groupage freight forwarder and operator. Xpediator bought Nidd Transport for a total consideration of £4.6 million.

Nidd has a strong network across North of England and in European countries like France, Spain, Portugal, and Germany. This acquisition complements the Group’s core functions and provides it with immediate cross-selling opportunities. The acquisition is expected to enhance Group’s earnings immediately as Nidd generated an operating profit of £0.5 million during the FY2020. In addition, Nidd has cash balances of £2.0 million. Nidd’s acquisition would help the company in creating a strong foothold in Italy, Germany, and central and eastern Europe.

The demand for freight forwarding services has gone up manifolds since the Group is entering new markets. The company anticipates revenues in 2020 to exceed by approximately £10 million in comparison to the previous year. However, the first half of the year saw lower incomes due to pandemic which led to reduced traffic volumes.

Brexit & Outlook

Brexit seems to be a favourable preposition for Xpediator as change in border controls would lead to an increased workload and higher revenues. Despite the ongoing disruption in specific areas due to the pandemic, the outlook for 2021 remains positive. The Group anticipates higher profitability and therefore might continue with its progressive dividend policy in the near term.

 

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