Luxury coach service Knutsford Express Limited, KEX, continues to record significant growth in passenger and cargo business, prompting the listed company to move to add to the more than $153 million of capital expenditure last year.
The company is set to expand its New Kingston terminal facility, which is bursting at its seams from rapid growth in both passenger and cargo business.
The increased passenger and cargo numbers are being driven in part by service expansion including new routes, more frequent schedules, and the buildout of Knutsford Connect from purely airport transfers to include car rental for passengers and a high-end, luxury transfer service for corporate clients.
CEO Oliver Townsend declined to disclose the cost of the planned expansion at the New Kingston location or how much the company would be doling out to acquire a fleet of cars for its rent-a-car and premium chauffeur pickup service.
“First, we concentrated on our rolling stock, now we are looking at our office facilities. A plan has been submitted to the authorities,” Townsend said, preferring also not to give a precise timeline for the project, which includes more space for cargo counters, passenger check-in, a larger waiting room, covered boarding areas and expanded bus bays.
This will come on the heels of a sustained build out of offices at Knutsford’s 11 operated stops on the country’s north and south coasts, including Ocho Rios, Falmouth, Port Antonio, Mandeville, Gutters, Luana, and Savanna-la-Mar and Negril and what appears to be a major expenditure on the newest addition to its service nodes, the Sangster International Airport depot in Montego Bay.
This fully solar-powered airport depot began serving customers last November. Townsend described it as correcting a “huge disconnect for arriving airline passengers” who needed to figure out transport from the airport to its Pier One terminal to catch a Knutsford bus to their onward destination in Jamaica.
In an interview with the Financial Gleaner, the company’s CEO said past and current expansion is financed from retained earnings and bank loans. KEX’s audited accounts showed a loan balance of $18.5 million for 2016 and $59.5 million in 2017, suggesting borrowing of up to $41 million to finance the expansion during the year.
The bus company received loans from National Commercial Bank at interest rates of between 8.5 and 10 per cent, and from National Export Import Bank of Jamaica at five per cent. Thirteen of the company’s coaches have been leveraged as collateral for the loans.
For the most recent reporting quarter ending November 2017, KEX grew total assets by 36 per cent to $636 million, with profits improving 14.4 per cent to $34.4 million. Revenues were also up 18 per cent over the corresponding quarter of 2016 to $208 million.
Knutsford Express began offering an express bus service between Kingston and Montego Bay on June 1, 2006, with the aim of adding “comfort and style” to a ramshackle public passenger service at a time when there was a fall-off in domestic flights between the cities. Since then, its fleet has grown from two leased buses to 30 coaches, which the company owns. Its staff has also grown from an initial seven to 150.
Knutsford cargo service is now relied on by many individuals and businesses to move goods between its service locations.
“We are a key cog in the operations of small and even some large businesses, which no longer need to stock up on inventories,” Townsend said, noting that some businesses opt to use KEX’s cargo service for just-in-time inventory management.
The company continues to review its operations, based on emerging need and customer feedback, he said.
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