DX prioritises turnaround at DX Freight
DX Group, the parcels operator that floated on the AIM market earlier this year, has prioritised the turnaround of DX Freight, the delivery business it acquired in 2012.
The group showed a four per cent rise in sales to £304.2m for the year to 30th June, while EBITDA was flat at £34.4m.
Petar Cvetkovic, chief executive officer, said: “Over the next three years, our main focus continues to be on the turnaround of DX Freight, the underperforming delivery business we acquired in 2012. Hand in hand with this, we are streamlining and developing DX’s distribution network.
“Our goal is to create a ‘OneDX’ culture and service offering, underpinned by enhanced technology and unified systems. This transition puts us in a better position both to grow profitably and to provide Customers with the outstanding service delivery that we are constantly striving for.”
Revenue from parcels and freight was similar to last year at £163.6m (2013: £162.6m). There was strong growth in parcels, especially tracked parcels.
However, revenue was affected by a decision to withdraw from lower margin freight business and untracked courier services.
“While the decision has a short term negative impact on revenues, it is in line with our strategy to focus on market segments where we can make more of a difference to our customers.”
Revenue from mail and packet deliveries was down three per cent to £116.1m reflecting a decline the Document Exchange service which is being affected by electronic substitution.
The group has launched a secure email offering, eDX, and a secure paper shredding service exclusively for its Document Exchange customers. “While we expect attrition to continue, this service remains important to us and is a highly differentiated offering,” said Cvetkovic.
DX has also been consolidating its network closing 12 sites. It is bringing together DX Express and DX Freight in large co-located sites. Three such sites were opened last year and a further site opened since the year end.
Having floated in February, the company’s profit and loss account includes a number of exceptional items relating to the change in shareholding, notably redemption of a mezzanine instrument owned by its former shareholders. As a result, it reported a loss for the period of £55m. The result of flotation is that consolidated net assets have risen from £84m to £182m.
Cvetkovic said: “Our recapitalisation and admission to AIM in February has marked an important point in DX’s development. We are now very well placed financially and operationally to pursue our long term growth strategy, underpinned by a strong balance sheet and good cash flows.”