Express & Star

Zero profits at struggling DX Group

Parcels delivery and logistics firm DX has reported zero profits for the year to June 30 amid an "especially challenging" period for the group that saw it suffer under pricing pressures, higher competition and a shortage of qualified drivers.

Published
DX Group made no profit in the last year

The company, which employs around 500 people at its major depots in Willenhall, saw its plans to build a £35m super-hub at Essington rejected by councillors after bitter opposition from local people.

Its latest full year figures show adjusted pre-tax profit, excluding exceptional items, was zero compared to £11.5 million in 2016, while revenues rose 1.4 per cent from £287.9 million to £291.9 million.

But the company clocked a pre-tax loss of £82.3 million when accounting for exceptional items including a £72.4 million goodwill impairment charge.

The company said it has completed a boardroom shake-up that includes seeing former Tuffnells Parcels Express chair Ron Series replace retiring DX chairman Bob Holt, and Lloyd Dunn take over as the firm's chief executive.

Bob Holt 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 ... 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.

"I am confident that the new team will ably drive the turnaround of the business, and a recovery in its financial performance."

New chairman Ron Series said: "The new team has significant experience, both of the industry and of business turnaround situations, and we are taking a positive and determined approach to DX's turnaround."

The company has seen a 20 per cent increase in new business and major new contracts with Avon and IKEA, while it retained its contract with the Home Office to deliver documents for the department including the Passport Office.

As well as its trading troubles DX was also engaged in talks over a prospective merger with John Menzies' distribution business but were unable to agree terms.

It's profits also suffered from pricing pressures, a deteriorating margin and operational difficulties relating to a major site integration programme.