Postal firm DX confident that doubling its size is in the bag
DX, the postal business bought last year by private equity firm Candover Partners, is confident it can double in size over the next few years as deregulation of the postal industry gathers pace.
The firm – originally known as Document Exchange – was started nationally in the mid-1970s on the back of a major postal strike. The legal profession and law societies decided that they needed an alternative postal network. With a network of branches across the UK, DX is now one of the biggest competitors to Royal Mail.
Speaking on a visit to Edinburgh to open the firm’s newly refurbished postal facility in Rutland Square, chief executive James Greenbury admitted that DX was “still relatively small” compared to Royal Mail.
“They have GBP 6 billion of revenue and we have around GBP 170 million,” he said. “However, no business I’ve ever run has done nothing less than double over the course of the time that I’ve been running it. So, as a minimum we would be looking to double the size of the business.”
DX, which has more than 27,000 private and public sector customers, stands to benefit if Royal Mail staff press ahead with the first national postal strike for 11 years.
Earlier this month, some 69,000 members of the Communication Workers Union – 77 per cent of those voting – backed a strike over pay and cost efficiency plans.
“There seems to be a sense that it will turn into industrial action, which will have an impact on businesses,” said Greenbury.
“We are a long-standing participant in the market and any time there is a strike we do get quite a substantial boost to the business as more people join us as customers.”
As well as legal practices, DX services surveyors, accountants, estate agents and other professional services firms. Its new Rutland Square facility can count all of the major Scottish law firms among its users.
Greenbury said: “We are investing in Scotland and benefit from having a dedicated team on the ground.
“We understand that it is a very distinctive market. For example, the firm operates a specific same-day postal service between Glasgow and Edinburgh. That’s a feature of the Scottish market, with its own legal system, that we try to reflect.”
Although DX is focused primarily on next-day business mail services, its clients have access to a special delivery product that covers both business and residential addresses.
Asked if the company was planning to move further into the non-business market, Greenbury said: “We have had some discussions over the years with a view to allowing consumers to access our network. We will over time expand the product range.”
Candover paid almost GBP 350m last July to secure DX. The venture capital heavyweight also bought Secure Mail Services, which delivers cheque books and credit cards to consumers, for an undisclosed sum.
