Cordel losses improve in third quarter

Transport technology specialist Cordel Group reported total third-quarter revenue of £0.74m in a trading update on Monday - a year-on-year increase of 18%.

The AIM-traded firm said that growth was driven by its continued investment in its sales pipeline, and a marketing campaign around clearances and gauging.

Its cost of sales for the three months ended 31 March was £0.18m, a 5% increase from the same period in the prior year.

Total expenses for the quarter meanwhile decreased 13% to £0.58m, while its EBITDA loss was £0.02m, which was a significant improvement from the £0.2m it recorded in the same period a year earlier.

“The Amtrak contract signing was the third quarter highlight, together with continuing progress in the UK with both existing contracts and new opportunities,” said interim chief executive officer John Davis.

“We have confidence in the full year outlook and will carry our largest ever backlog into the 2024 fiscal year commencing 1 July.”

Cordel Group's year-to-date performance also showed positive results, with total revenue rising 34% in reported currency and 31% at constant currency.

Total expenses decreased by 6% in reported currency and 11% at constant currency.

The company's cash balance and receivables as at 31 March were £0.63m, which was further enhanced by the £1.7m gross placing after the end of the quarter.

Cordel also noted that it signed a significant contract with Amtrak in March, which was expected to have a positive impact on the company's full-year revenue and cash flow.

“Our breakthrough win with Amtrak sets us up for long term success in the all-important US rail market,” said chairman Ian Buddery.

“Following our recent successful capital raise we are investing in our team and products, to achieve the full potential of our position and deliver shareholder value growth.”

At 0927 BST, shares in Cordel Group were up 10.4% at 6.9p.

Reporting by Josh White for Sharecast.com.