New chief and funding for DX
Delivery group DX, which has a major depot in Willenhall, has appointed a new chief executive.
The group, which recently dropped plans to sell the site in Ashmore Lane Way where more than 500 people work, has been seeking fresh funding because of reduced profitability.
It has also announced it has reached agreement on fundraising of £24 million to address the short term cash position of the company via loan notes principally from Gatemore and Hargreave Hale with conditional conversion rights.
The net proceeds of the fundraising will be used to address the working capital shortfall and capital expenditure and restructuring costs for the group, which has its headquarters in Slough.
The new chief executive Lloyd Dunn, new chairman Ron Series and directors Russell Black and Paul Goodson will join the board when the final results for the year to the end of June are announced. The new directors are subscribing for £5.25 million of the loan notes,
They bring significant collective experience in managing and improving the performance of freight operations, which is central to the proposed turnaround of DX's performance.
Current chairman Bob Holt said: "I am delighted to announce details of DX's refinancing and new leadership team. As of today, Lloyd Dunn will be taking the helm as chief executive officer and, on completion of the first tranche of the fundraising, he will join the board along with Ron Series, who will join as chairman, and Russell Black and Paul Goodson, who will join as non-executive directors.
"These changes together mark a new chapter for DX and provide firm foundations for the turnaround of the group. I would like to thank our shareholders, bankers, staff and customers, for their ongoing support during a difficult time for the group, and I view the future for DX with renewed confidence."
Mr Dunn, who has 38 years experience in the transportation industry, said: "We believe that this refinancing is a critical step in the exciting opportunity to turn DX around. Together with Russell Black and Paul Goodson, and alongside DX's major institutional shareholders, Gatemore and Hargreave Hale, we are pleased to be directly participating in this fundraising, and we look forward to leading the wider DX team as we translate the opportunity that we see into sustainable revenue and profit growth for all stakeholders."
There were fears DX might move out of the Black Country area after its plans for a major new £36 million hub at Essington were blocked by local councillors earlier this year.
The idea had been to move the Willenhall workforce to the new site and recruit up to 150 new staff, but following bitter opposition from local people South Staffordshire planners refused permission for the scheme.
The company said at the time that it might have to look at alternative sites around Rugby or Coventry because it needed a bigger, more modern, facility.
The company's Crestwood House site in Birches Rise, Willenhall, has also been retained.
DX is hoping for a turnaround after a tough year that has seen previous chief executive Petar Cvetkovic and finance chief Daljit Basi leave the business.
It had to deliver a profits warning after tough trading earlier in the year and a £40 million merger with John Menzies' distribution business was scrapped. The company also had to reveal an accounting error that will knock £1.8 million of DX Group's profits for the last year.
