Dx (group) Share Discussion Threads

[deanroberthunt] 20/11/2015 13:47

Nope, you got it right first time round...

[loverat] 20/11/2015 13:27

Always interests me on these boards to read that a company is the best thing since sliced bread at 80p and a day later after a profit warning, the worst stock at 20p and imminently bust.

As usual when the dust settles the truth is more likely to be somewhere in between and therefore the majority of posts can probably be dismissed as self serving.

[garydav2] 20/11/2015 13:17

I'm sorry for holders who have held. I too bought on Paul Scotts tip and won't be doing that again. Luckily through averaging down sold on the bounce at 26.8 on Monday for a small profit.
Good luck to all holders.

[keya5000] 20/11/2015 13:12

Lol....

You sometimes have to take the rough with the smooth and this is looking a tad rough at the moment.

[dlku] 20/11/2015 12:12

I think there were a lot of Folks buying this last friday thinking they will be enjoying a berni inn steak and a pint with their profits

The result: lost £1500 in an afternoon and £5,000 in a week


Moral of the story : The first cut is the cheapest

[prosthetic head] 20/11/2015 12:11

12p you said deano

and they damned you

[deanroberthunt] 20/11/2015 12:06

Paul Scotts punt has gone a tad pete tong

[dalailama] 20/11/2015 12:04

Presuming Pauly Pilot has sold his shares?

[youcancallmeal] 20/11/2015 11:17

You're welcome, jonwig.

In my opinion the biggest problem with these boards is that a high percentage of posters treat stocks like either their favourite or most hated football team, and overreact to posts that contradict their feelings. I say feelings because all too often their views are not based on data. Clearly company accounts are not enough by themselves but they should be read in depth as a pre-requisite, especially for longer term investments (although I would still do so even if day trading).

[cyberbub] 20/11/2015 10:51

Been keeping an eye on this drop. Personally I think it's still too risky at the current market cap. They may also be forced to do a placing to shore up their balance sheet, but I doubt they would get it away above 15p. But after a placing they might be OK, *if* they are ruthless and take radical action such as either closing the 'DX locations' network, or somehow rationalising the way it works to reduce the high fixed costs.Just my view. NAI

[deanroberthunt] 20/11/2015 10:33

and to be honest if trading deteriorates rapidly from here, with the balance sheet on the raggerty edge, it could go pear shaped very quickly.

[mammyoko] 20/11/2015 10:21

Priced to go pop on 13% yield. Don't think the balance sheet is saying this is in imminent danger of going pop but more sellers than buyers and weakness in small caps means this could fall further today. 16.50p closing?

[jonwig] 20/11/2015 08:50

The series of posts from "EEzyMunny" and "youcancallmeal" are exactly the stuff I've been missing from posts here which are largely content-free and self-serving.

Thanks, both of you.

[joe say] 20/11/2015 08:43

Says it all really - a warning sign if ever there was

[eezymunny] 20/11/2015 08:43

The point is that DX profits always looked anomalous in a very competitive sector.

We don't know the divisional profit breakdown - I can't find it disclosed in Admission Doc or any annual report (shudda been in the Admission Doc if you ask me!). If you just guesstimate that the "normal" delivery stuff (ie all except DX Exchange) makes say 3.5% op margins and is 77% of the last year turnover that's an op profit of c. £8m. That means that the DX Exchange might have made op profit of c. £17m on turnover of c. £68m (so costs of £51m).

DX Exchange is in decline as we know ("the DX Exchange operation is experiencing a higher than expected level of volume erosion and there have been increased cost base pressures"). Deferred income dropped about 15% last year. That may or may not be an indicator of the rate of decline of DX Exchange. If revenues drop 20% this year and fixed costs remain stable then you get revenue of £54m and op profit of just £3m (ie a massive drop of £14m). That would explain why forecasts have been so dramatically slashed.

The danger here is that DX Exchange continues to decline at that rate so that next year, with another 20% revenue fall you have revenue of £43m and an op loss of £8m (ie wiping out all the profits of the other biz. After that it just gets worse.

Clearly these are just broad brush guesstimates and a lot can change. Costs can be cut (but that's hard if you look at the nature of the Exchange biz - with 4200 drop off points to be serviced regardless of volume). DX Exchange could be closed down completely. That would leave the other biz running and potentially make the equity cheap here (£8m profit vs £40m market cap) but as I said it's too scary for me.

Can't say I'm particularly bearish because my numbers are just guesstimates and we lack the info necessary to say anything with accuracy but thought useful to share my thoughts for anybody searching for reasons for the dramatic fall. Good luck if you hold. Hope things improve.

[deanroberthunt] 20/11/2015 08:24

Quelle Surprise!

It would have been more of a surprise if they had dIku

[youcancallmeal] 20/11/2015 00:01

Hi cashmachine, watch the blood pressure there, friend! I mean this purely in a constructive and pleasant way, but if someone wants to post negative comments then does it really matter? If you don't agree with someone you can either ignore it or rebut their specific points. Either they make a good point and might change your mind or a bad point in which case they are unlikely to influence anyone.

[marketgem] 19/11/2015 23:57

It's clear there are a few people intentionally trying to deramp the Dx here. This is not for the weak. Happy to hear good arguments both ways though. For those able to see the potential there are some big contracts out here. The U.K. Has a huge smart meter programme and this is going to be using the likes of Dx. All homes have to have a smart meter by 2020, think about the scale of logistics here. The energy companies deliver to hubs/pick up boxes and engineers will take them away. The same projects are expected in other utilities. I believe Dx is already involved and these projects scale up next year so there's plenty of work and it will have good margins. Anybody know the link with Dx and bybox now?

[youcancallmeal] 19/11/2015 23:55

Arg. Thanks, EezyMunny. There was something nagging at me when I posted that (hence my pre-emptive "rusty" mitigation!). With this business it is low margin so I agree with you.