- Despite an increase in topline growth, Knutsford Express Services Limited (KEX) reported a marginal decline (0.5%) in earnings to J$66.38Mn for the first quarter ending August 31, 2025 (Q1 FY 2025/2026), owing to higher operating expenses.
- Revenues grew by 9.1% in Q1 2025/2026, moving from J$549.71Mn to J$599.71Mn. Growth was driven by strong demand for KEX’s core business of islandwide passenger services between 16 locations, courier services over 19 locations, along with revenues from its Drax Hall Business Centre and Café.
- However, the company grappled with cost pressures, as administrative and general expenses rose by 11.2% to $501.33Mn. These higher operating expenses reflected an increase in KEX’s workforce to meet increasing customer demand across its expanding product and service lines of business, along with the addition of five new coaches.
- With higher expenses outpacing revenue growth (+9.1%), KEX’s operating profit fell by 0.5% to $98.38Mn. That said, profit before taxation rose slightly by 2.3% in the first quarter, from J$82.39Mn to J$84.26Mn, as the growth in finance income (+109.4%) outpaced higher finance costs (+0.6%). Still, net earnings were tempered by the 14.1% increase in tax expenses. Consequently, net profit margins moved from 12.1% to 11.1%.
- Despite the falloff in earnings, management pointed out that its investment in the Knutsford Express Business Centre in Drax Hall, St. Ann, has already exceeded expectations, as the rapid expansion of the area known as “Greater Ocho Rios” has established a commercial hub of activity for the area.
- While KEX expects continued growth from this location, the company is also pursuing other opportunities for synergistic benefits to its core transportation business, courier and logistics for other locations across the island. Notwithstanding, KEX is likely to face increased competition from the JUTC given the company’s expansion of routes from Mandeville to Kingston and from Montego Bay to Kingston.
- At the close of market on Thursday, October 16, 2025, KEX’s stock price has depreciated by 8.2% year-to-date to $13.00. It currently trades at a P/E of 27.62x, above the Junior Market Other Average of 17.30x.
(Sources: KEX Financial Release and NCBCM Research)