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Profit from a Brexit winner

This cash-rich logistics business is perfectly placed for a post-pandemic recovery
Profit from a Brexit winner
  • Niche expertise means post-Brexit disruption plays into this company's hands
  • Well-placed to profit from increase in non-EU freight
  • Undervalued versus sector peers

It’s not often that a cash-rich company is priced on a PE ratio of 10 and offers a decent dividend yield after upgrading profit guidance. But that’s the tantalising prospect on offer at this UK-based company that has been providing international freight management services for more than 30 years.

One consequence of the Covid-19 pandemic is that more companies will look to protect the flow of their goods and shorten supply chains. Another, is that more companies will outsource their logistic services, so that they have greater flexibility adjusting demand through the natural peaks and troughs of business cycles. Both themes are great news for this international freight management service provider.  It makes money by shipping goods between the UK and nine Central and Eastern European countries. The group is also well placed post-Brexit to benefit from greater flows of non-EU trade through the ports of Southampton and Felixstowe.

It’s worth noting that although there has been post Brexit disruption for hauliers transporting freight, this is playing into the company's hands. That’s because it holds both External Temporary Storage Facility and Authorised Economic Operator certification, so is in a strong position to win new customers who have struggled to deal with the post-Brexit administration and compliance required to transport freight across Europe. 

 

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