Embattled courier firm DX (Group) PLC (LON:DX.) said it endured an “especially challenging year” as it swung to a massive loss, with everything that could go wrong seeming to do so.
The AIM-quoted group experienced numerous issues during the year including legal disputes, a police investigation, a shortage of qualified drivers and difficulties at one of its sites.
READ: DX (Group) refinances and brings in parcel veterans to deliver turnaround
Revenues for the 12 months ended June 30 edged 1.4% higher to £291.9mln (2016: £287.9mln) although that was largely driven by its recent Legal Post and First Post acquisitions which helped to offset declines in the existing business.
However, the problems mentioned above put a big dent in margins, leading to an adjusted profit before tax of exactly £0.
Once exceptional charges were factored in – such as a £72.4mln goodwill write down – DX reported a loss of £82.3mln for the 12 months ended June 30, compared to an £82.7mln profit generated last time around.
Hopes pinned on new management
Trading in the first few months of the new financial year hasn’t improved much either, with the company continuing to be bogged down by “both external and internal challenges”.
However, DX did say that its future prospects have been “significantly transformed” by the appointment of a new management team which was unveiled earlier this month.
The firm has turned to parcel veterans Lloyd Dunn and Russell Black - the founders of Nightfreight, a business it bought five years ago – to try and revive its fortunes.
Ron Series has also been appointed as the firm’s new chairman. He worked with Dunn to bring Tuffnells Parcels Express back from the brink of bankruptcy before agreeing a sale to Connect Group PLKC (LON:CNCT).
At the same time, DX announced it had raised £24mln which it said was “critical” for the company’s short term future.
Challenging year but confident in turnaround
"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,” said outgoing chairman Bob Holt.
"However, the company's prospects have been significantly transformed, with the appointment today of a new leadership team and a major new financing agreement.”
He added: "I am confident that the new team will ably drive the turnaround of the business, and a recovery in its financial performance."
DX shares were down 5.9% in early deals to 10p.