Knutsford Express rolling out customised luxury service
Luxury bus company Knutsford Express Services Limited, which trades under the symbol KEX, is looking to the luxury and corporate market to boost earnings, atop the double-digit profit growth it is already churning out.
In highlights accompanying its first-quarter results for the period ending August, the company says its subsidiary "KE Connect Limited is being positioned to make a greater contribution to future results".
Evidence of the strategy is seen in the 29 per cent increase in assets, which moved from $648 million in the quarter ending August 2017 to $834 million in the comparable period for 2018.
Knutsford Express CEO Oliver Townsend says the increase was largely due to the build out of the luxury service and an unspecified increase in rolling stock. He says Knutsford wants to grow revenue by tapping corporate entities that use the regular service but sometimes have other needs and want customised solutions.
"It is in line with the strategy of diversifying our revenue streams and to respond to increasing demand from corporate clients who want the same premium level of service for varying numbers, be it one or two persons, or several coach-loads," Townsend told the Financial Gleaner.
Key to the buildout is a fleet of smaller high-end vehicles, including Chevy Suburbans, which feature heavily in corporate transport in the United States, the latest Lincoln Limousine, S Class Mercedes Benzes, in addition to small coaches.
Townsend says Knutsford wants to continue to meet the customer at the level of their needs. He adds that the brand has developed to the stage where cross-country travellers view it as an integral part of their travel arrangements. That pay-off, he added, comes from the reliable service KEX has invested in building over its 12 years of operation.
"We never rest on good achievements; we just keep adding to it by evolving with the needs of our customers. What was good for yesterday cannot be good for tomorrow; and what was good for last year will not work for next year," Townsend said, noting that KEX's customers constantly demand more, but also serve as referrals for new business through 'word of mouth'. That culture, he added, has become a main feature of the company's marketing efforts.
Townsend is also pointing to the advent of Jamaica's highway networks as a game-changer for Knutsford Express. He says in particular, the North-South Highway has helped in a profound way to increase the turnaround time on daily trips.
"It has helped us in terms of reliability and predictability. In the 'bad ole days', you wouldn't know if the Gorge (at Bog Walk, St Catherine) would be flooded or if there would be roadblock on Mount Rosser. Now, we can leave at a certain time and say with a high degree of certainty that we will arrive at a certain time," Townsend said.
He says the company has also spent the last six months concentrating on technological improvements and doubling of the number of telephone lines. The addition of a smartphone app and an online chat service have widened the customer base to millennials, who are said to be using Knutsford's fast ticketing and cargo services in greater numbers.
Townsend would not be specific about the volumes and earnings on the logistics side of the operation, but said the cargo service has moved from a small occasional offering to a unit with a good revenue stream.
"A lot of entrepreneurs, including microbusinesses, use Knutsford Express as a part of their supply chain. They are using our reliability and frequency to gain an advantage in business. Through us, they can promise and deliver on a same-day service," he said.
Regarding competition coming from the recent announcement of a pending relaunch of another luxury transport service - Corporate Express, operated by Constantine Hinds - Townsend said service quality was key to viability and that Knutsford was not fazed by the prospect of a rival.
"We are always thinking about competition, but we don't think about it the way normal people do. Our biggest competitor is really those drivers who can transport themselves comfortably. Our driving philosophy is to cause any person, whether they drive a Corolla or a Porsche, to park their ride and come with us," Townsend said
In the August first quarter, KEX grew profit 55 per cent year-on-year, from $56.58 million to $88 million; while revenue increased 23.5 per cent, from $237.28 million to $292.93 million.