The wellbeing and safety of our people, customers and suppliers is Xpediator’s first priority. From the beginning of the pandemic, we have followed the operational guidelines provided by the respective governments in each market we operate, changing working practices to incorporate social distancing across our offices, depots and warehouses. Where possible individuals are working remotely from their homes. With the significant effort of all our people, we are continuing to operate effectively whilst also taking the appropriate actions to limit the spread of this virus.
So far this year activity levels have remained broadly in line with management expectations, with high demand from some sectors and other areas slowing. In response, we have sought to allocate resource to match demand across the business. While it is hard to make any predictions under these extraordinary circumstances, based on very recent trends, the Board believes that demand for our freight management and warehouse services, both in the UK and Europe will remain sufficiently robust overall but will be more volatile in any given month, and that we have the systems and protocols in place to meet this demand.
As previously guided, we intend to announce our audited final results for the year ended 31 December 2019 in April 2020 and expect to report turnover increasing 19% to £212 million (2018: £179.2 million) and profit before tax slightly above £5.0 million.
Trading in the first three months of 2020 has been in line with our expectations. Although trading patterns have been different, for example, revenues from Chinese customers understandably reduced in the first two months, however, this has been offset by higher than expected demand from other sectors such as our European road freight forwarding and Pall-Ex in Romania, and over the last couple of weeks, Chinese volumes have started to improve. Warehouse utilisation has been good and is expected to continue across all areas of operations. The freight forwarding division is of course asset-light and has the ability to flex supply requirements against demand in a timely fashion. We have experienced supply issues on equipment and therefore buying and selling prices have increased to reflect this.
However, given current material uncertainties, it is not practical to give longer-term guidance at this time until there is greater clarity around the duration and full effects of COVID-19 on our customers, suppliers and our markets. We are benefitting from our diverse operations across the UK and Europe which has already helped us offset challenges in some areas with higher activity in other markets. However, there are challenges to navigate such as obtaining international drivers, general increases in costs and more complex border checks.
We are an asset-light business and do not own a large fleet of trucks, we have low fixed overheads and typically act as a broker to our clients’ sourcing capacity from the market as it is required. As of 31 December 2019, the Company had net cash of £6.9 million (unaudited) and has sufficient headroom within the business to manage anticipated working capital requirements.
In addition, we are conducting a comprehensive review of our business and have reduced costs in specific areas where activity levels have fallen or are likely to reduce as a result of the disruption caused by COVID-19. Cost savings are expected to come from furloughing staff, agreeing temporary pay reductions and reducing other overheads.
The Board are confident Xpediator is well placed to manage its financial and commercial commitments during this extraordinary time and can emerge well-positioned for growth when market conditions return to normality. The Board continue to intend to propose a final dividend for the year ended 31 December 2019, but the amount is yet to be determined given the fundamental uncertainties that currently exist in the market.
The Board is closely monitoring the situation across the business and will make further announcements as and when appropriate.