Dx (group) Share Discussion Threads

[momentos] 13/2/2023 08:51

They kind of have Wally, as identified by Effortless cool at 3167.

The dilutive effects of share options amounting to c 15% of the company have been hugely reduced by the co paying the tax/NI out of cash and issuing less (approx half) new shares.

[wallywoo] 13/2/2023 08:43

I was wondering why they haven't started the share buyback programme. It has been sanctioned for a while, and DX has money in the bank.All makes sense now, expect this to be under pressure until the dark clouds move away.

[markie7] 13/2/2023 08:39

£50? Hahaha. And this is what the suspension was about all this time? Topped up just now, fundamentals will revalue this in due course.

[stemis] 13/2/2023 08:33

As ever, MMs happy to take shares on the cheap off jittery PIs. A 2p drop is equivalent to £12.5m. If anyone thinks the exposure on this is even a fraction of this, I've got some daily customer service reports to sell you...lol

PS - my expectation is that this will be settled out of court with a non material payment by DX. and confidentiality agreement. The legal costs would be the largest number in this for both parties.

[momentos] 13/2/2023 08:30

The news is that the suspension etc was about something so low rent it's scarcely believable...

[my retirement fund] 13/2/2023 08:12

Managed to grab a few early doors.

[qs99] 13/2/2023 07:09

A non issue in my view as someone has said above what could £50 bribes have bought in the real world ffs?

And for dx shares to be suspended for a year. Village!

Results next week are more important for share price imo DYOR

[ls24] 13/2/2023 00:08

Have a look at it pre 2016 before connect bought it for £135m

[stemis] 12/2/2023 15:02

Tuffnells isn't a business I know but clearly quite a few of DX. management have come out of the business and there remain some historic relationships between the employees of the two.

For background, Tuffnells was formerly owned by Smiths News (distributor of newspapers, magazines, books and consumables) and sold in April 2020 for £15m in deferred payments (whilst at the same time providing the purchaser with a £10.5m loan secured on it's freeholds). Since it's sale, when it was losing money, it has had a checkered time, making a LBT of £3.9m in 2020, a PBT of £5.3m in 2021, but, according to it's 2021 accounts "the Group has suffered from difficult trading conditions during 2022 and it is anticipated that an operating loss will be incurred for the year ended 31 December 2022. The directors have implemented a profit recovery plan and are forecasting to return to profitability for the year ended 31 December 2023. The directors forecast that with careful active cash management during this turnaround period, the Group will continue trading within it's current banking facilities.".

Group net assets at 31.12.21 were only £1.8m (net tangible liabilities of £0.3m) and net debt was £1.3m. Turnover was £178m, so about 40% of that of DX. Looks like a struggling business.

[stemis] 12/2/2023 13:45

Interesting flesh on a matter which is already in the public domain. However rather than being inside information on major contract bidding, turns out to be DX middle managers offering £50's to a depot employee for daily service reports.

I don't blame Tuffnels for trying to make something out of it but not sure what "damages and ... all profits arising from its use of confidential data" will amount to if the said employee didn't pass any.

I find it hard to believe any claim will be material and, as to reputational damage, I imagine any that might occur has already done so after a 9 month suspension and the loss of the CEO and Chairman...

[qs99] 12/2/2023 13:28

I think the £50 also says enough about where the damages could be here! DYOR and roll on next trading update

[ls24] 12/2/2023 12:32

Having worked at both the local employee could only access local depot information on customers and the transfer of customer knowledge happens every day in Parcel distribution as employees move from one to the other. IF someone was thick enough to pay £50 via a driver to access data that they already probably have had, all 3 being ex TPE, then they deserve whatever they get

[qs99] 12/2/2023 11:37

Not sure this is new news really

DYOR

[simon gordon] 12/2/2023 07:22

Sunday Times - 12/2/23:

£50 bribes and a man named ‘Pat’: Corporate spying row erupts at DX Group

A traffic clerk at a London warehouse was asked to leak confidential corporate information to a rival in exchange for a £50 payment from a delivery driver, according to an extraordinary corporate espionage claim lodged in the High Court.

In the claim filed last week, Sheffield-based logistics firm Tuffnells alleged that DX Group employees Tom Middlewood, Jim Sinden and Joe Trappitt — all former employees of Tuffnells — conspired to obtain daily customer service reports.
Tuffnells, which started out in 1914 delivering business packages by horse and cart, claims that on October 7, 2020, Middlewood phoned Katie Bush, a former colleague who worked at Tuffnells’ depot in Belvedere, southeast London, and asked her to find a quiet spot out of earshot of her colleagues.

Middlewood called back six minutes later and asked Bush to begin providing Tuffnells’ confidential data in exchange for a weekly fee of £50, to be paid by “Pat”, a delivery driver who would be waiting “round the corner”.

But Bush took the call alongside her manager Chay Kinslow, Tuffnells claims.
Two days later, at the urging of Tuffnells, Bush called Middlewood to find out more, this time recording the call. Sinden picked up and explained the plan.

DX, a £176 million Aim-listed logistics group that works with retailers including B&Q, suspended Middlewood and Sinden that month, only to reinstate them within weeks, Tuffnells claims. It alleges that Middlewood was even promoted a year after the allegations were reported to the firm. The defendants’ social media profiles indicate that they work at DX.

Tuffnells also claims that between January 2017 and the dates they left Tuffnells, at least one of the defendants leaked confidential information to DX, which made or arranged payments to be made to them. Tuffnells is seeking damages and demanding DX account for all profits arising from its use of confidential data.

A spokeswoman for DX said it would respond to the claim in due course.

Last September, as part of a subsequent corporate governance investigation, DX confirmed it had uncovered evidence that confidential information was obtained and an “isolated̶1; offer of payment had been made by employees. The company’s board said insufficient disciplinary action was taken. Chief executive Lloyd Dunn stepped down ahead of the findings being released.

The decision, by DX chairman Ron Series, to reopen the investigation drew scorn from activist investor Gatemore Capital, the firm’s largest shareholder, which deemed it unnecessary. Series was replaced by Gatemore’s choice, Mark Hammond, in November.

Grant Thornton resigned as DX’s auditor early last year, citing concerns that the company had breached the law. This led to DX’s shares being suspended after it failed to file its annual report on time. The shares began trading again in October.

DX said Grant Thornton’s reasoning did not accurately reflect the situation.

[momentos] 07/2/2023 18:47

All the original "major players" in the turnaround back in 2017 now have their piece of the pie and a lumpy reward. Lloyd Dunn, Ron Series, Gatemore, Hargreave Hale. Over 50% shares in issue.

I suppose the big question is how impatient they are to realise that gain (merger? PE sale?) or whether they are along for the ride....

[momentos] 07/2/2023 16:26

They have pretty much resolved the position in early November where 89m options existed, effectively 13.5% of the company. About 31m shares issued (5% dilution) & ?£7-8m cash used.

[stemis] 07/2/2023 16:03

Hopefully, once the interims are released, the company get round institutions and get some buying interest to pick up loose holdings. I'm expecting an interim dividend announcement of 0.5p which should help

[momentos] 07/2/2023 16:02

The dilutive effect since November is pretty chunky, but almost over....

17/11/22 Ibbetson 6.7m options, Others 7.6m options, Issued 7.1m shares, tax paid £900k (at least), Outstanding 75m options.

30/11/22 Mulligan 3.3m options, Others 2.5m options, issued 2.4m shares, tax paid $420k (at least), outstanding 69m options.

06/01/23 Small amounts but outstanding options noted at 59.3m shares.

12/02/23 Dunn 26.5m options, issued 13.6m shares, tax paid not confirmed but presumably c£4m, outstanding 32.3m options.

07/02/23 Undisclosed 14.4m options, issued 7.7m shares, tax paid not confirmed but ?£1m, outstanding 17.9m options.

Presumably all this means we can get rid of the rest for about 8m shares issued (1.25% dilutive) and about 2m cash....

[stemis] 07/2/2023 15:58

Yes, that's what I was referring to.

[effortless cool] 07/2/2023 15:53

SteMiS, I think the exercise price is value neutral for other shareholders. A low price is more beneficial for cash flow, however.

[stemis] 07/2/2023 15:38

Ok, I see it, cheers. Presumably it is in the company's interest that the options are exercised at as low a price as possible, since the tax gain and therefore the cash settlement are kept to a minimum.

[momentos] 07/2/2023 15:28

Looking at the last Annual report, the main "live" beneficiary of any of these share awards, particularly the "Recovery Plan" ones is the FD David Mulligan.

Lloyd Dunn looks fully settled with the 12th January share issue. The clock will be ticking on Ron Series (and presumably no further vestings). The clock expired on Paul Goodson last week ("Restricted Share Award") and for Russell Black (RSA) in October. Total RSA awards were only ever 1.7m options...

Anyway... the numbers very much suggest this was Ron Series exit settlement, with a little bit of RSA stuff thrown in.

I suspect any seller is still our friendly Canadians - I doubt Dunn or Series can trade currently with 3 weeks to go on interims for a period when they were employed.