DX (Group) PLC Trading Update (8668S)

TIDMDX.

RNS Number : 8668S

DX (Group) PLC

14 July 2020

14 July 2020

AIM: DX.

DX (Group) plc

("DX" or "the Group" or "the Company")

Trading Update

DX, a leading provider of delivery solutions, including parcel freight, secure, courier and logistics services, is pleased to provide an update on trading for the 52 weeks ended 27 June 2020. As an essential service provider, DX continued to maintain operations at all of its depots and service centres after the UK Government's COVID-19 'lockdown' measures came into effect, with the health and safety of all employees and customers remaining paramount.

Since the Company's last update on 28 May 2020, trading in both the Freight and Express divisions has continued to improve, and Group revenue for June was only 3% below previous forecast levels (set prior to the COVID-19 pandemic). This improved performance across both divisions mainly reflects recovery in volumes from existing customers but also some new business wins.

As a result, the Board expects that revenue and adjusted EBITDA for the full year (both on an IAS17 and IFRS16 basis) will be in line with current market forecasts(1) and that the Company will report an adjusted pre-tax profit(2) on an IAS17 basis. This will be DX's first full year adjusted pre-tax profit since the current management team initiated its turnaround plan for the business in spring 2018. The net cash position of GBP12.3m at the year-end (2019: net debt of GBP1.3m), was better than market expectations, although it has benefited from payment deferrals of GBP11.9m in total, including VAT and other agreed payment holidays.

Volumes are continuing to rise, supported by strong levels of customer service. Both divisions are experiencing a business mix slightly more weighted to B2C than previously anticipated. The Company's GBP10.0m capital investment programme, to be completed over the course of FY20 and FY21, is progressing as planned.

Full year results are expected to be announced in late September.

Ronald Series, Chairman of DX, commented:

"Having launched our turnaround plan two and a half years ago, we are delighted to report the Company's expected return to adjusted pre-tax profit. It demonstrates the hard work, expertise and resilience of our people. We have a clear vision for ongoing growth and remain wholly focused on the next stage of the Company's development."

Notes

 
 Note   The Board believes that the consensus market estimate 
  1      for revenue for the financial year ending 27 June 2020 
         prior to this announcement was GBP326.7m and that the 
         estimate for adjusted EBITDA was GBP3.4m (IAS 17 basis) 
         and GBP24.0m (IFRS 16 basis) 
 Note   Adjusted pre-tax profit excludes share-based payments 
  2      and amortisation of acquired intangibles. Prior to this 
         announcement the market estimates of adjusted pre-tax 
         profit were a loss of GBP0.9m (IFRS16 basis) and a profit 
         of GBP0.4m (IAS17 basis) 
 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Enquiries:

 
   DX (Group) plc                                    T: 020 3178 6378 (c/o 
                                                      KTZ 
   Ronald Series, Chairman                            Communications) 
   Lloyd Dunn, Chief Executive Officer 
   David Mulligan, Chief Financial Officer 
 
   finnCap (Nominated Adviser and Joint Broker       T: 020 7220 0500 
    to DX) 
   Matt Goode/Simon Hicks/Hannah Boros (Corporate 
    Finance) 
   Andrew Burdis/Camille Gochez (ECM) 
 
   Liberum (Joint Broker to DX)                      T: 020 3100 2000 
   Robert Morton/Euan Brown/William Hall 
 
   KTZ Communications                                T: 020 3178 6378 
   Katie Tzouliadis 
   Dan Mahoney 
 

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July 14, 2020 02:00 ET (06:00 GMT)