DX Group results and board changes
DX Group has today (20 October) released its preliminary annual results and confirmed that the proposed changes to the composition of its Board of Directors have come into effect. Ron Series has assumed the role of Chairman from Bob Holt, who is retiring from the Company. Lloyd Dunn, who became Chief Executive Officer in a non-Board capacity on 9 October, now joins the Board, and Russell Black and Paul Goodson both join the Board as Non-executive Directors. Paul Murray is retiring as a Non-executive Director although will remain with the Company in a consultancy role over a three month period. Ian Gray continues in his role as a Non-executive Director until the Company’s AGM in 2018.
The company also announced a revenue for the year ended 30 June was £291.9m, up from £287.9m in 2016, and an EBITDA of £7.2m (compared to £18.0m in 2016).
DX reported a loss before tax of £82.3m (compared to £82.7m in 2016).
Bob Holt, the outgoing Chairman of DX, said: “The year to 30 June 2017 and the first few months of the new financial year have been an especially challenging period for the Group, and DX’s full year results, and current trading, reflect this.
“However, the Company’s prospects have been significantly transformed, with the appointment today of a new leadership team, headed by Ron Series as Chairman and Lloyd Dunn as CEO, and a major new financing agreement. This agreement, which raises £24m of new funds, is supported both by our major institutional shareholders, including Gatemore Capital and Hargreave Hale, and by DX’s new Board Directors.”
In his Chairman’s Statement, Holt added: “The Group’s profitability for the year was severely impacted by a number of factors. These included pricing pressures and margin deterioration from an adverse change in revenue mix, with higher margin operations underperforming. The effect of this was magnified by the relatively fixed cost nature of certain networks. The Group also experienced operational difficulties relating to a major site integration programme.”
Commenting on both the results and board changes, Liad Meidar, Managing Partner & Chief Investment Officer at Gatemore Capital Management, said: “We are happy to see the new board installed and the Company fully financed following our 8-month campaign to affect change at DX Group. Appropriately, they have decided to take substantial non-cash write-offs, positioning the Company for a fresh start.
“For FY 2017, the Company posted EBITDA of £7.2 million. This includes an EBITDA loss of £18.3 million for the freight division. We could not have a stronger team leading the turnaround of this part of the business. Ron Series and Lloyd Dunn turned around DX Freight’s main competitor, Tuffnells, and brought it from loss-making to over 9% operating margins. We do not see any reason why this cannot be achieved again over time.”