Morning folks,

I'm planning to look at Headlam (LON:HEAD), Spectra Systems (LON:SPSY) and DX (Group) (LON:DX.) today.


DX (Group) (LON:DX.)

  • Share price: 8.65p (-9%)
  • No. of shares: 200.5 million
  • Market cap: £17 million

Resumption of trading in DX Shares

Lots of drama on the open here as this logistics/parcel distribution outfit finally returned to trading.

The shares had been suspended since March, leaving shareholders to chew over dribs and drabs of news from the company as it negotiated the terms of a potential reverse takeover with John Menzies.

In a July trading update, covered here, trading was reportedly in line with expectations, and the bank was supportive of the £19 million net debt position. The CEO and the CFO simultaneously stepped down from their positions after presiding over huge percentage declines in the share price.

That brings us up to last week, when the John Menzies deal fell through (link) over a failure to agree terms, leaving DX to work on its business transformation alone:

This approach has the support of both DX's major shareholder and its bankers, with discussions on new financing options for DX already underway.

The "major shareholder" in this case is Gatemore, who were previously shareholder activists in French Connection (LON:FCCN) (looks like they've sold up and moved on from that now).

"New financing options": does this mean an equity raise? Maybe the bank is supportive in the short-term, but needs DX to raise more capital for it to remain supportive? That's pure speculation on my part, but is how I'd interpret that paragraph.

With the takeover not happening, the shares are back trading. They plunged >30% on the open but are only c. 10% lower now.

Full-year results "will include the aborted costs of the Transaction and certain other expected non-recurring exceptional items, principally a non-cash goodwill impairment".

Lots of red ink then. More losses on the way.

I probably shouldn't spend any more time on this, because in my opinion this is uninvestable, and is only worth gambling money at this stage.

If you are Gatemore, you can at least get high-quality information from the Board and can…

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