DX warns profits will be below forecasts
Parcels, mail and logistics operator DX has warned that it expects “profits will be significantly below current market forecasts”. In a statement issued on Friday (13 November), DX noted that “trading conditions in the new financial year remain challenging” and said that while it “continues to make satisfactory progress towards its
long term goals under the OneDX programme, trading patterns in the first half to date have
deteriorated”.
The DX statement continued: “In particular, the DX Exchange operation is experiencing a higher than expected level of volume erosion and there have been increased cost base pressures, mainly arising from driver resourcing issues (where there is an industry wide shortage).
“In addition, the new business pipeline in our parcels operation, while healthy, is converting more slowly. This means that while revenues for the first four months are 5.3% down against the prior period, the Board now expects that profits will be significantly below current market forecasts. The balance sheet remains robust, with low levels of net debt (30 June 2015: £1.8m).”
DX added that there were grounds for optimism: “The company has signed a number of major new customer accounts in the period to date, including accounts which have yet to start trading, and management remains focused on opportunities for long term relationships providing commercially acceptable returns.”
Petar Cvetkovic, Chief Executive Officer of DX, commented: “This announcement is very disappointing. However we continue to position the business for long term success, creating a more efficient operating structure to support our services under our OneDX programme. The fundamentals of the business remain robust and while trading conditions are challenging, we are building strong foundations for future growth.”
The problem of “driver resourcing issues” is one that other players in the UK logistics business have been highlighting. On 6 November, Karen Dee, Director of Policy with the Freight Transport Association (FTA), warned that: “Skills shortages are presenting a huge challenge to the logistics sector currently which could have far-reaching effects on the UK economy.”
