An industry price war, thrifty customers and the rise of document-sharing services such as Dropbox weighed on full-year figures from DX (DX). But new contracts, cost-cutting and a major restructuring programme enabled the parcels and documents distributor to maintain cash profit at £33.7m.
Buckinghamshire-based DX's focus on lucrative niches such as two-man jobs and bulky consignments - together with the closing of rival City Link in December - helped it land new contracts worth around £20m annually. Management also integrated the group's brands and management teams, cut staff costs and introduced a new routing and scheduling system.
Sales in the main parcels and freight division fell 6 per cent as management exited unattractive contracts and battled with fierce competition. On the bright side, mail and packets revenue climbed 4 per cent to £116m as new customers and higher volumes of UK passport deliveries offset problems in the DX Exchange business, which delivers credit cards, legal briefs and other sensitive documents. The upshot was stronger cash generation, enabling DX to slash net debt by 85 per cent to just £1.8m.
Broker Numis Securities expects pre-tax profit of £27.9m in the year to June 2016, giving EPS of 11.2p (from £26.7m and 10.9p in full-year 2015).
| DX (DX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 81p | MARKET VALUE: | £161m | |
| TOUCH: | 80.5-81.8p | 12-MONTH HIGH: | 119p | LOW: 76p |
| DIVIDEND YIELD: | 7.5% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | nil | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 164 | 160 | na | na |
| 2012 | 207 | -7 | na | na |
| 2013 | 306 | -22 | na | na |
| 2014† | 312 | -56 | -70.2 | 2** |
| 2015 | 298 | 25 | 9.9 | 6 |
| % change | -5 | - | - | +200 |
Ex-div: 8 Oct Payment: 16 Nov *Includes intangible assets of £199m, or 99p a share †DX floated in February 2014 **Figures for the four months to 30 June 2014 | ||||
