Trading recovering for delivery group DX

DX – an essential service provide – has issued its first update since April 16 on the impact of the coronavirus crisis on the business which has continued to maintain operations at all its depots and service centres since the Government’s lockdown measures came into effect.

It has two DX Freight sites employing 500 – including its main hub – in Willenhall and a DX Courier site at Bloomfield Park Industrial Park, Tipton.

It said that trading in both DX Freight and DX Express has been better than the board anticipated, although group revenue is still approximately 10 to 15 per cent below expected seasonal levels at this point in time.

As a result of the improvement and taking into account the outlook for the remainder of the financial year, the board now expects the group to generate a small profit before tax in the second half of the current financial year, which runs to June 27, and for revenue and adjusted earnings before tax for the full year to be ahead of current market forecasts.

In responding to lockdown conditions, the company has adapted to the increased demand for business to customer deliveries and its business mix shows a stronger weighting to business to customer activity than normal.

After an initial steep decline following lockdown restrictions, business to business activity has improved over the period as customers have adapted to conditions in their respective markets.

Operationally, the company has benefitted from reduced road traffic and from customers being at home to receive deliveries, which has allowed for slightly improved delivery productivity.

DX said it is continuing to manage costs tightly, whilst re-introducing some costs into the business as volumes have recovered.

Chairman Ronald Series said: “This period has demonstrated the resilience of the business, and trading since mid-April has recovered more quickly than we anticipated at the beginning of the UK’s lockdown, although it is still 10 to 15 per cent below the levels we would expect at this point in the year. Our teams have responded very flexibly to the changed environment, including a shift to more B2C deliveries, and we have continued to provide customers with an excellent level of service during this challenging time.

“We remain well-positioned to deliver further recovery in volumes, and will continue to control costs carefully.”

Liad Meidar, managing partner of Gatemore Capital Management, which is a significant shareholder in the company, said: “We welcome today’s positive news, which is testament to the board and management for DX’s ability to continue operating as an essential service throughout the lockdown period and challenging trading environment caused by Covid-19.

"Looking ahead, with the successful turnaround now complete and the right team in place, we are confident that profits at DX will grow significantly as the company returns to healthy operating margins.”