Knutsford Express to acquire Florida bus company
KNUTSFORD EXPRESS Services Limited (KEX), the luxury passenger and courier transportation company, plans to acquire a United States-based bus company as part of the effort to expand its locally based crosscountry bus service.
“KEX has advised that the company has successfully raised $150 million via a private bond to fund expansion plans locally and overseas, including the acquisition of a small bus charter company in Florida,” stated the company in a notice to shareholders posted to the Jamaica Stock Exchange.
The company did not disclose the name or financial details of the company or a timeline for the close of the transaction.
Chief Executive Officer of Knutsford Express Oliver Townsend told the Financial Gleaner that the company’s strategic plan is “to follow opportunities where, over time, we can continue to have strong growth and have, over time, 20 to 25 per cent of our revenue and earnings coming from diversified sources, including overseas prospects”.
He added that, “We will continue to expand on the back of our core operational strengths in transportation wherever they may exist.”
The new notes will still see the company operate with a low debt profile. Up to August, KEX held roughly $71 million in notes ($31.2 million payable in the year and $40 million over a longer term). It represents less than 10 per cent of the company’s total shareholders’ equity at $714 million.
KEX becomes the latest market-listed company to announce or finalise an acquisition in Florida in a month. In December, GraceKennedy announced plans to acquire 49 per cent of Majesty Foods, a Florida-based patty maker, while Access Financial Services finalised the acquisition of Embassy Loans, a quick-loans company in Florida.
In the August first quarter 2018, the company’s revenues increased 23.5 per cent to $293 million due to continued passenger demand. Its net profit grew 55 per cent to $88 million from $56.58 million a year earlier. This resulted in earnings per share of $0.18 versus $0.12.
During the quarter, KEX stated that more passengers were utilising its mobile app and online booking platform while it increased the seats in its reservation centre to accommodate more patrons.
In late 2018, a former competitor announced plans to re-enter the transport market as Corporate Express, a company operated by Constantine Hinds. At the time, Townsend told the Financial Gleaner that KEX’s greatest competitors were those who opt to drive themselves cross-country rather than utilise the service.
KEX holds $834 million in total assets and $714.2 million in shareholders’ equity.
The company started operations on June 1, 2006, with a commitment to providing worldclass service to persons travelling between the two major cities, Kingston and Montego Bay, including connections to the Donald Sangster International Airport and the Norman Manley International Airport.
With more than 20 coaches in its fleet, the company provides connections on the south coast with stops in Savanna-la-Mar, Westmoreland; and Mandeville, Manchester.
On the north coast, connections can be made at stations located in Falmouth, Trelawny; and Ocho Rios, St Ann. There are also regular scheduled connections between Kingston and Negril via both the north and south coasts. Travellers also have the opportunity to connect to St Mary and Portland from Kingston and Montego Bay through the company’s express stops in Annotto Bay and Port Maria, and from its full-service station at the Errol Flynn Marina in Port Antonio.