DX delivers the goods as it narrows losses and improves sales

 
Joe Curtis
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DX cut net debt down from £25.6m to £3.5m (Source: Getty)

DX Group hailed “encouraging progress” in its half-year results today as it narrowed losses and boosted revenue.


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The results

Revenue rose seven per cent year on year to £157m while its loss before tax dropped from £14.1m in the same period in 2017 to a loss of £5.3m for the six months to the end of December 2018.

Net debt plunged from £25.6m in the second six months of 2017 to £3.5m over the latest period, while free cashflow improved to minus £2.4m, from minus £6.3m the year before.

DX’s basic loss per share also fell to 1p, much improved on 2017’s 7.2p.


Why it’s interesting

The logistics firm saw shares rise almost three per cent to 10.5p in early morning trading as its largest shareholder, Gatemore Capital Management, welcomed the results.

Gatemore’s chief investment officer, Liad Meidar, called the numbers “a further sign that DX Group is heading in the right direction”.

“We remain confident in management’s ability to implement its plan to deliver long term growth, and look forward to continuing to work with the team,” he added.

DX is 16 months into a turnaround plan set by a new board after its freight business began to struggle.

While the freight division remains loss-making, revenue rose 16 per cent to £78m over the latest period, as DX reviewed pricing and boosted the sales team.

It has also shifted focus to B2B clients, while preparing for the arrival of 7.5 tonne vehicles that will expand capacity and reduce the number of drivers DX employs.

DX reiterated plans to hit targets this financial year as it stays on track to return to positive underlying earnings, saying it has been “encouraged by the positive early signs from the turnaround initiatives”.

What DX Group said

Chairman Ronald Series said: “DX's turnaround continues to progress encouragingly, and the Group's results are in line with management expectations.

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“A fundamental element of our turnaround strategy is devolving accountability to our local depots and service centres and this has now been implemented across the group.

“Alongside this, we have restructured our sales teams, introduced new pricing policies and are focusing on operational efficiencies and service levels across both divisions.

“These initiatives are now beginning to bear fruit and DX remains well positioned for further performance improvement. Trading in the second half has improved over the same period last year and we remain confident of achieving our targets for the full year.”