Trading Update
18/07/2023 07:00
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RNS Number : 2701G DX (Group) PLC 18 July 2023
AIM: DX.
DX (Group) plc
("DX", "the Company" or "the Group")
Trading Update
Trading for FY23 in line with management expectations;
growth prospects enhanced by addition of Tuffnells depots
DX, the provider of delivery solutions, including parcel freight, secure
courier and logistics services, is pleased to provide an update on trading for
the second half of the Group's financial year ended 1 July 2023.
The Group performed well over the period, and trading was in line with
management's expectations. Revenue for the financial year is expected to be
approximately 10% ahead of the prior year at £470 million (2022: £428
million). The Group continued to generate strong cash flows and net cash at 1
July 2023 was up by 39% to £37.6 million (2022: £27.0 million), which is
slightly ahead of management's target. This was after capital expenditure over
the financial year of £10.9 million (2022: £6.2 million) and the payment of
an interim dividend of £3.0m (2022: nil).
Both DX Freight and DX Express contributed increased revenue and achieved
margin gains. The Group remains on track to attain its targeted operating
margin of 7.5%-10.0% within the next two years (2022: 5.8%).
A key focus over the second half has been on the Group's network, which has
been expanded and reshaped, particularly in the important regions of the
North-West and South-East. In addition, DX has continued to invest in its
fleet (including electric vehicles), equipment and technology, in line with
its capital allocation policy.
The agreement to take over 15 former Tuffnells Parcels Express Limited
("Tuffnells") depots and to take on volumes from former Tuffnells customers,
as reported on 29 June 2023, is a major development for the Group. Management
estimates that the annualised value of the additional volumes secured from
former Tuffnells customers is approximately £35 million to date. The process
of absorbing the Tuffnells depots is now under way and the depot network will
be further optimised over the next eighteen months.
Despite the current economic headwinds, the Board remains encouraged about
growth prospects for the Group, and the recent additional volumes secured
should enhance profitability in the new financial year and beyond. As ever,
consistent high customer service levels remain integral to the Group's
continued success. The Board will provide a further update on trading with the
announcement of full year results, expected in early October 2023.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR. The person responsible for making this announcement is Simon Blunt,
Company Secretary.
Enquiries:
DX (Group) plc T: 020 3178 6378 (c/o KTZ
Paul Ibbetson, Chief Executive Officer Communications)
David Mulligan, Chief Financial Officer
Liberum (Nominated Adviser and Joint Broker to DX) T: 020 3100 2000
Nick How/William Hall/Lucas Bamber
finnCap (Joint Broker to DX) T: 020 7220 0500
Matt Goode/Simon Hicks (Corporate Finance)
Andrew Burdis/Charlotte Sutcliffe (Corporate Broking)
KTZ Communications T: 020 3178 6378
Katie Tzouliadis/Robert Morton
About DX (Group) plc:
DX is a well-established provider of a wide range of delivery services to both
business and residential addresses across the UK and Ireland. First
established in 1975 as a Document Exchange service to the legal sector, DX now
provides one of the widest ranges of overnight delivery services in the
market, as well as logistics services. Items that DX transports range from
confidential documents and valuable packages to large, awkward-to-handle
freight, unsuitable for automated conveyor.
DX Freight comprises DX 1-Man, DX 2-Man and Logistics. The Division
specialises in the delivery of irregular dimension and weight freight ("IDW").
DX Express comprises DX Parcels and DX Exchange and Mail. The Division
specialises in the express delivery of parcels and documents.
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