Dx (group) Share Discussion Threads

[dlku] 13/11/2015 12:05

indeed

£40m needed for a new depot. smacks of a rights issue.
another one that should never have floated.

[dlku] 13/11/2015 11:44

freakin disaster

[value viper] 13/11/2015 11:43

that is a disgrace to put this update out 7 weeks after last update saying on the mend etc, Numis should quit out of principle with their 110p target a few weeks ago
something wrong here and mkt is being very unforgiving , rightly so - wtf
reeks of mismanagement , rant over

[speedsgh] 13/11/2015 11:25

Proft warning + notice of reduction in full year dividend to 2.50p (2015: 6.00p). Shares down over 50% in the last hour!

Trading Update -

DX, the leading independent parcels, mail and logistics operator, announces an update on trading for the financial year to 30 June 2016.

As previously reported, trading conditions in the new financial year remain challenging, with pricing pressure a significant factor. While the company continues to make satisfactory progress towards its long term goals under the OneDX programme, trading patterns in the first half to date have deteriorated.

In particular, the DX Exchange operation is experiencing a higher than expected level of volume erosion and there have been increased cost base pressures, mainly arising from driver resourcing issues (where there is an industry wide shortage). In addition, the new business pipeline in our parcels operation, while healthy, is converting more slowly. This means that while revenues for the first four months are 5.3% down against the prior period, the Board now expects that profits will be significantly below current market forecasts. The balance sheet remains robust, with low levels of net debt (30 June 2015: £1.8m). The Board anticipates the dividend payout for the full year to amount to 2.5p per share.

The company has signed a number of major new customer accounts in the period to date, including accounts which have yet to start trading, and management remains focused on opportunities for long term relationships providing commercially acceptable returns.

Petar Cvetkovic, Chief Executive Officer of DX, said:
"This announcement is very disappointing. However we continue to position the business for long term success, creating a more efficient operating structure to support our services under our OneDX programme. The fundamentals of the business remain robust and while trading conditions are challenging, we are building strong foundations for future growth."

[a0148009] 24/9/2015 10:30

Bought on the Final Results Monday Company proactive improving margins, efficiency and growth although concede that business very competitive.
Ex dividend 8th October 4p paid 16th November forecast annual dividend 6p covered
1.8x.

AO

[speedsgh] 23/9/2015 10:57

River & Mercantile appear keen on DX. They have increased their holding by 23%+ to 12m+ shares which takes them above 6% threshold.

Holding(s) in Company -

[topvest] 21/9/2015 21:02

Yes, think this is a value trap. Paul Scott had a write up today which I agree with, except for the point about the hub move. Moving boxes around is very tricky on this scale. Moving the main hub is risky and could prove catastrophic if not handled well. This sector has a history for botched hub moves and system changes. Avoid in my view given that their profitable DX product is in terminal decline and we have no real feel for the rest of the Group and how profitable it is.

[dlku] 21/9/2015 11:48

"Trading conditions in the second half remained challenging"

Doesn't inspire one to buy it and they warned once already

[speedsgh] 21/9/2015 11:44

Final Results -

> Revenues from ongoing activities of £297.5m (2014: £304.2m)
- progress with new customer wins offsetting programme to exit commercially unattractive contracts
> Adjusted EBITDA steady at £33.7m (2014: £33.7m)
> Adjusted PBT of £26.7m (2014: £27.7m) / Statutory PBT of £24.8m (2014: loss of £55.7m)
> Adjusted EPS of 10.9p (2014: 10.7p) / Statutory EPS of 9.9p (2014: loss of 70.2p)
> Strong cash generation from operating activities of £27.7m (2014: £23.8m)
> Net debt reduced to £1.8m at year end (2014: £12.2m)
> Significant capital expenditure of £9.9m (2014: £8.7m) - to support OneDX programme
> Proposed final dividend of 4p, taking the total for the year to 6p (2014: 2.0p - in respect of the four month period post AIM admission)

"Trading conditions in the second half remained challenging and given these tough conditions the performance of the business for the year has been satisfactory. The group continues to generate strong cash flows, which supports our investment programme, including our proposed major new hub, and our progressive dividend policy.

"Looking forward, our OneDX programme remains a key focus and we have a solid strategy supported by a robust balance sheet. Trading conditions continue to be tough but we are well placed to take advantage of any improvement and we have started the year in a positive manner. The Board remains confident of our strategy to deliver long term growth."

[dlku] 28/7/2015 00:30

40p support on fibinacci

[speedsgh] 07/5/2015 10:22

Some interesting snippets in this interview...



Mike Sturrock has taken a logistics organisation rich in data but poor in using that data, and transformed it. DX Group is now integrating its customer intelligence into its deliveries as well as implementing end-to-end traceability of items and flow control in its hub facilities to maximise throughput, minimise forklift movements and optimise delivery vehicle routing...

[petewy] 20/4/2015 16:30

Thank. Speed. On my watch list but you swung it on divs.

[speedsgh] 20/4/2015 13:06

Reckon yield hunters have been reading the first part of the IC's AIM100 review (ranks 100-51) over the weekend...

"Shares in DX Group (DX) have endured a rocky ride since the logistic operator listed in February 2014 at 100p. Although earnings have largely been in line with consensus expectations, the struggles of peers such as Royal Mail and UK Mail, triggered by pricing pressures in a declining UK parcels market, have weighed on sentiment.
But while letter delivery and document exchange services are falling out of favour, work behind the scenes at DX shows that these issues are being addressed. For example, the group is midway through its ‘OneDX’ integration and investment plan designed to better integrate operations and develop more services in faster-growing niches such as last-mile city delivery. Money has been poured into improving operational efficiency, too, namely by upgrading IT facilities and investing in the group’s distribution network.
Activities such as shedding unprofitable freight activities have already helped to lift margins to about 11 per cent. Analysts at Cantor Fitzgerald are bullish that they will continue to widen as the benefits of ‘OneDX’ trickle through, and also note that a strong balance sheet creates plenty of headroom for more earnings-enhancing acquisitions.
Moreover, despite some heavy investment to improve the business, free cash generation has been so strong that DX is expected to treble* the dividend to 6p. At the current depressed share price of 82p, that gives a whopping yield of 7.1 per cent with cover of 1.9 times. The shares, meanwhile, trade at a hefty discount to peers on just seven times 2015 earnings. Buy."

NOTE: IC comment of dividend trebling is slightly misleading. DX Group only listed in Feb 2014 + therefore only paid a final dividend of 2.00p last FY. They have already paid an interim div of 2.00p in the current FY + are forecast to pay a final div of 4.00p giving 6.00p full payout for the current FY. Digital Look are currently forecasting 6.25p payout in 2015/16 giving a forward yield of 7.05% on the current 88.75p offer price.

[petewy] 08/4/2015 16:48

Has the TNT deal affected the price?

[topvest] 24/3/2015 20:50

Paulypilot - spot on. Good post. I've been tempted a few times to buy these but won't because their main business is undergoing technological obsolescence. The other group activities are marginal profitability entities.
To quote Warren Buffett if this is not a share that you are happy to hold for ten years, then don't even think of owning it for 10 minutes.
Dangerous in the extreme to bet against technological obsolescence in my view.
Management are very good, but they are running to stand still.
HG Capital are no mugs either and they IPOd the business at £1 for a very poor return versus their other investments and probably for exactly the reason stated above.

[speedsgh] 24/3/2015 15:27

Nice to see some heavyweights taking up the slack...

Holding(s) in Company -
J O HAMBRO above 10%

Holding(s) in Company -
HARGREAVE HALE above 11%

[m.t.glass] 12/3/2015 12:42

Announcement says seller 468,058 shares sold, taking them below 5%

[speedsgh] 05/3/2015 14:43

... to an extent they are following the same path trodden by CNCT (ex-Smiths Group). Remains to be seen how successful they are in both cases but you are also being paid handsomely to wait with both.

[joe say] 05/3/2015 09:12

That's precisely their tactics/business model and thus why email substitution is not the end of the world.

Yes they will lose circa 3% pa here but in developing new products that decline can be dampened for that business stream alone. The key therefore (imo) is to develop new lines that fill that gap and expand their available market.

[bsharman3] 04/3/2015 09:10

Businesses should not stand still and await decline in their markets. The management here should look to diversify and grow into other markets. The yield is good and the rating is already much lower than their peers. It's up to management to perform.