Dx (group) Share Discussion Threads

[mrx9000] 18/5/2016 13:20

From Paul Scott, today...

"Planning application refused - this logistics company is committed to a very expensive new sorting hub in the Midlands. As its finances have deteriorated, external (therefore more expensive) funding was arranged.

Today it announces that the local authority rejected its planning application last night. The company is now considering its options.

In my view, this might be a blessing in disguise. My view on this share has hardened recently. I think that the core, most profitable business, the DX Exchange could now be in terminal decline. With a fixed cost base, it has big operational gearing. Customers are increasingly emailing documents, instead of using couriers. I don't see any reason why that trend would stop, let alone reverse. That leaves DX Exchange high & dry potentially.

Other business is low margin, and highly competitive. So this is likely, over time, to become just another struggling, and possibly even loss-making courier/parcels company. As such, the shares have little to no attraction in my view. Taking on a hugely expensive new depot seemed like overkill anyway, so hopefully the company might now drop its plans to do so.

Good money can be made from catching falling knives, providing you only pick companies with a good business model, sound finances, which have encountered temporary & fixable problems. I initially (wrongly) thought that DX Group fell into that category. However, I have revised that view, and now believe that this company is in structural, possibly terminal decline.

Also, when you look at its balance sheet, the deferred income is likely to unwind as the DX Exchange declines (because customers pay cash for an up-front subscription). Therefore, I think there is an increasing likelihood of a cash crunch here in the next few years."

[kmann] 18/5/2016 10:23

Doesnt really affect DX's operations, they were only going to lease the unit anyway.

I'll add after the dust settles.

[jbat] 18/5/2016 09:49

kMann - absolutely spot on. someone bought 100,000 and 235,655 this morning at a mere 20.75p - wish I had that much money to invest here!

[jbat] 18/5/2016 09:47

Structural decline in the market is nothing unexpected - we're well aware of it. The question is how DX responds to it.

From the DX website itself (hxxps://www.dxdelivery.com/media/248038/dx-market-overview.pdf)

"The structural decline in mail volumes is well-documented, with B2B and B2C mail communication transferring to electronic communication (otherwise known as ‘e-substitution’). The rates of decline vary across letter type, for instance transactional items (such as bank statements and utility bills), direct mail, publishing (newspapers and magazines)and social mail (including personal correspondence). The expected rate of decline is some 5% per annum over the foreseeable future. Overall, the Directors believe that this decline can be offset by increased volumes in the parcels market. DX̵7;s bespoke B2B mail service, DX Exchange, is exposed to the e-substitution trend and while continuing attrition is expected, this service remains a highly differentiated offering, providing valuable customer service."

[kmann] 18/5/2016 09:38

Odd decision, if you want job for life local employment.

1st Plans ALWAYS submit the "grand plan" knowing they wont get it, but then it gets watered down and accepted as a local victory.

Someone bought that dip in large amounts.

[blueliner] 18/5/2016 09:36

Paul Scott's [Stockopedia blogger] take, 'planning refusal probably blessing in disguise', but he's not keen on business model, suggests DX in possible structural terminal decline.
Bought a few more myself this am.

[aleman] 18/5/2016 09:29

There was a 99% vote against it in a referendum from a village which it will dominate. Nothing is guaranteed but I'd be surprised if this rejection gets overturned. The question is which idiot decided to waste time and money by pressing on against such overwhelming opposition. However, I'd be very surprised if there is not a plan B and it will be built elsewhere a year late.

[boonkoh] 18/5/2016 09:00

Meh, surprised such a big fall this morning. Planning permission is always fickle in the first round. Lots of emotions and councils thinking they have to make a "stand" for their voters. This will be approved in the end, with a month or two delay as they resubmit.

[mrx9000] 18/5/2016 08:58

Neither, just interested. If you have a planning meeting that decides on the future of a development than what better way to make money by putting a short on and decline the planning.

I like to see a resemblance of normality and the constant ramping, stating that this is going to 80p etc is not normal imo.

One has to make ones own mind up, at present this will present big delays and will no doubt bring the shares down a lot further just yet.

[jbat] 18/5/2016 08:52

It's a very bloody annoying delay, but it doesn't fundamentally clobber DX, it just delays their progress. Remember, they were going to lease it, not own it. I can understand the villagers concerns about the noise from the traffic, but the upshot of this now I expect is that DX will establish their hub somewhere else, and the jobs and business rates will go elsewhere. It's not like there aren't other sites they could use instead - it just needs rethinking.

[mrx9000] 18/5/2016 08:47

Back to the drawing board, an appeal would be a waste of time, will we see a breach of 20? I hope so.

[mrx9000] 18/5/2016 08:45

Nice to see a bit more quiet in the forum today without the constant ramping that has been going on.

[patrader] 18/5/2016 08:41

I assume this new hub was quite central to the expansion plans?

[kmann] 16/5/2016 10:57

Another share price catalyst, lookout for the RNS. All paid for too!

[kmann] 13/5/2016 16:29

Solid buying again. Another one shares mag and investors cronical are going to be late to the party.


free stock charts from uk.advfn.com


How many times have we seen these types of plays multibag? BUY for 80p

[kmann] 12/5/2016 16:14

That flatline chart going to start moving higher after holders reinvest their divi payouts.

More news to come. BUY 80p

[jbat] 12/5/2016 11:20

Oh FFS - my mistake. I was relying on the information posted on the Hargreaves Lansdown site. I shouldn't have bothered!

hxxp://www.hl.co.uk/shares/shares-search-results/d/dx-plc-ordinary-1p

The bloody thing is still showing the XD date as today!