DX results show Group’s “financial strength”

 DX Group has announced its final results for the year ended 1 July 2023.

Overview

• Revenue up 10%, driven by strong performances at both DX Freight and DX Express
• Group operating margin up to 6.7% (2022: 5.8%); target remains 7.5% -10.0%
• Capital investment of £10.9m (2022: £6.2m) in depot network expansion, parcel handling equipment, electric vehicles (“EVs”) and IT
• Net cash up 39% to £37.6m (2022: £27.0m)
• Reported basic earnings per share up 63% to 3.9p (2022: 2.4p)
• Proposed final dividend of 1.0p per share, giving a total of 1.5p per share for FY23 (2022: nil)

Operational Highlights
• DX Freight:
– Revenue up 10% to £282.8m (2022: £256.9m) and operating profit up 22% to £37.8m (2022: £31.1m)
– Divisional operating margin up to 13.4% (2022: 12.1%), driven by further improvements in productivity and operational efficiency
– Strong customer retention levels and significant new customer wins supported by continued achievement of high levels of customer service
– Two new depots opened at Paisley and West Bromwich, and two depots expanded at Plymouth and Heathrow
– Secured 15 new sites from the Administrators of Tuffnells Parcels Express in June 2023 –
a major development for the Group, with benefits for DX Express as well as DX Freight
o Over 700 former Tuffnells customers added; and over 350 former Tuffnells employees have joined DX

Outlook
• Q1 FY24 trading was in line with management expectations
• Final year of three-year c.£20-25m investment programme to be completed in FY24 together
with the construction of a new regional hub in Nottingham for c.£12mo Supports achievement of growth plans and margin targets
• DX expected to make further progress underpinned by a strong balance sheet

Paul Ibbetson, Chief Executive Officer of DX (Group) plc, commented: “The Group has delivered another strong performance, above our original expectations. Both divisions contributed increased revenue, margin and profit, which supported our return to the dividend list.
“The financial strength of the business, with its strong cash generation and balance sheet, has been key to our ongoing success, enabling us to continue to invest significantly in both divisions. We have invested across all areas of operations – including the depot network, parcel handling equipment, electric vehicle fleet and IT – and this will continue in the new financial year.
“We are mindful of the current economic headwinds, however, given the strong platform that we have established and the encouraging levels of new business that we have secured in the opening months of the new financial year, we look forward to another year of further progress.”