DX, a leading provider of delivery solutions, including parcel freight, secure, courier and logistics services, reports that its business turnaround initiatives are starting to gain momentum.
Commenting on the Company’s full year results issued today, Ron Series, Chairman of DX’s new Board of Directors, said: “The Group’s performance is slightly ahead of market expectations, with revenue modestly ahead and the underlying loss lower than we anticipated. This reflects the growth in our Logistics business and the initial benefits of our turnaround plan.”
DX announced a 3% rise in revenue to £299.5m, up from £291.9m in the previous year. The Group made an underlying loss for the year of £4.9m against a profit of £7.2m in 2017, although this result was better than analyst forecasts. Reported losses for the year were down to £19.9m, from a loss of £82.3m in 2017.
Last October saw a new leadership team take charge, with DX’s major shareholders backing the move with significant new equity investment.
CEO, Lloyd Dunn, in March 2018 said, “DX is a sleeping giant. Following a careful review of the business, there is a great foundation to build upon.”
Since coming into the business, Lloyd Dunn has implemented a wide-ranging restructuring, strengthened the Group’s divisional management teams, and devolved responsibility and accountability to the Group’s general and regional management.
Commenting on results, Lloyd Dunn, said: “I am pleased with the progress we have made since the new Board was appointed to lead DX’s turnaround. While the Group’s overall financial results for the year do not yet reflect the benefits of our work, we are seeing encouraging signs of business improvement.
“I have every confidence that we have the right plan and the right team in place to restore DX to a path of long-term, sustainable profitable growth.”
Ron Series added, “We are encouraged by prospects for continuing progress over the new financial year, and retain our confidence in meeting both the short and long term goals we have set ourselves.”
Preliminary Results Key Points
Summary
• Year of significant change with a fundamental business turnaround commenced under a new leadership team
• Encouraging signs of business and financial improvement have started to come through
Financial
• Revenue of £299.5m (2017: £291.9m) – slightly ahead of market expectations
• EBITDA1 loss of £4.9m (2017: profit of £7.2m) – smaller than market expectations
• Exceptional (non-recurring) items of £5.7m (2017: £80.7m) – principally related to non-cash impairment charges to intangible assets
• Loss before tax after exceptional items of £19.9m (2017: loss of £82.3m)
• Loss after tax of £19.5m (2017: loss of £81.1m)
• Loss per share 8.1p (2017: 40.3p)
• Balance sheet significantly strengthened – following equity fundraising and redemption of loan notes
• Net debt at 30 June 2018 of £1.1m (2017: £19.1m) – ahead of market expectations
1 Earnings before interest, depreciation, amortisation, exceptional items and share-based payments charge.
Operational
• New Board appointed in October 2017
• Group re-organised into two divisions, DX Freight and DX Express, ending ‘OneDX’ strategy
o initial focus of turnaround initiatives is on loss-making DX Freight
• General and regional management across each division is at the heart of the turnaround strategy
o increased responsibility and accountability
o new appointments, including sales people, have strengthened the teams
• Three-year investment programme in core IT and management systems started
• DX Freight – revenue of £137.8m and EBITDA loss of £14.2m
o significant growth in Logistics business
• DX Express – revenue of £161.7m and EBITDA profit of £29.3m
o DX Exchange attrition was in line with expectations
• Group remains well positioned to make further progress with its turnaround strategy and trading since the start of the new financial year has been encouraging