DX Group crashes on warning of 'significantly' lower profits

Shares in DX Group tanked on Tuesday as the parcel delivery company warned profit for the 2017 financial year will be “significantly” below expectations and ruled out paying dividends for the foreseeable future due to continuing “challenging” trading conditions.

The company said that although its pipeline of new business opportunities is “robust”, it anticipates that profits for the year ended 30 June will be “significantly below current market forecasts”, with net debt higher than expected.

DX said it will not pay any dividends for the foreseeable future and has started a review of the company's operations in a bid to drive revenue and improve its financial performance.

The company is experiencing “challenging” trading conditions, including pressure on pricing and margin erosion from the ongoing change in mix of revenues.

It said that while there has been “strong momentum and wins in the logistics business”, the expected growth in higher margin revenue from its courier and freight activities has not come through, which has affected profitability.

In addition, Secure business had not experienced the volume growth that it achieved last year.

The integration of five sites into one has endured some short-term operational issues, resulting in temporary higher costs, although the company remains confident about the medium and long term benefits of the programme.

Shares in DX Group were down 61.94% to 6.85p at 1225 GMT.