Senior Analyst at Gimme Credit - High Yield Corporate Bonds - specialising in Metals and Mining, Chemicals, Energy, Aerospace and Defence, Automotive and Retailing
The other day, I was chatting with my colleagues, discussing the time lag between economic downturns and the demise of companies. Recent figures from XPO Logistics perfectly illustrate this situation, with competitor Yellow Corp falling into Chapter 11. XPO Logistics was quick to take advantage, buying 28 prime location service centres, which dovetail perfectly with the existing portfolio. While ongoing capital expenditure saw cash flow fall from $1.2 billion to a shortfall of $810 million, this includes a long-term #investment in the company’s Less Than Truckload (LTL) network. The company is forecasting double-digit price increases due to reduced competition, and the eventual sale of the European division will see the company refocus on the more profitable North American #market. An opportunistic purchase, improving #sales and margins, bodes well for the future.
