- Firms see no sign of a slowdown in demand
- New business continues to roll in
- Plenty of opportunities for future growth
Shares in logistics and shipping companies rallied on strong results, suggesting talk of a slump in economic activity may be premature.
Distribution firms DX Group (DX.) and Wincanton (WIN) climbed 11% and 8% to 27.7p and 399p respectively, while Braemar (BMS) also added 8% to 350p in early trading.
SUPPLY CHAIN KEEPS ON TRUCKING
Trading at DX Group reached a seven-year high with sales for the 12 months to the start of July up 12% to £428 million and adjusted operating profit up 51% to £24.9 million.
DX Freight reported a 15% increase in revenues to £257 million and a jump in operating margin from 10.3% to 12.1% thanks to productivity gains.
The firm added ‘a significant number’ of new client wins and opened four new depots to support the increase in volumes.
Wincanton posted a 9% increase in revenues to £754 million for the six months to the end of September and a 13% increase in EBITDA (earnings before interest, taxes, depreciation and amortisation) to £57.4 million.
The company also reported good new business momentum with several contract renewals and extensions and a ‘healthy’ pipeline of new business opportunities, particularly in public and infrastructure markets.
FULL STEAM AHEAD IN SHIPPING MARKET
Ship broking and chartering group Braemar registered a 46% increase in first half revenues to £69.4 million, led by a 68% jump in chartering, for the six months the end of August.
The firm saw ‘significantly higher trading activity and transaction volumes’ during the half, with the result that profits were ‘materially ahead’ of its original expectations.
Underlying operating profits almost doubled from £5.6 million a year ago to £10.9 million helped by a £3 million foreign exchange tailwind, making Braemar a big beneficiary of the strong US dollar.
Chief executive James Gundy said the outlook for the group ‘remains very positive’ and the company had entered the second half ‘with a high degree of confidence’.
