Investment drives year of strong growth for DX Group

The AIM-traded company said that upward trajectory was mirrored in a 20% EBITDA hike over the 12 months ended 31 July, reaching £60.2m.

Its adjusted and statutory profits observed similar growth, escalating 26% to £31.4m and 36% to £30m, respectively.

Furthermore, adjusted profit before tax observed a noteworthy uplift of 33%, pegging it at £26.8m.

DX said its growth was fuelled by vigorous performances across its divisions - DX Freight and DX Express.

The group's operating margin escalated to 6.7% compared to 5.8% in 2022, with a future gaze fixed on a target margin between 7.5% and 10.0%.

Investment was pivotal in steering the group in 2023, with capital investments surging to £10.9m, up from £6.2m year-on-year.

The board said that was channelled into an extensive depot network expansion, upgrading parcel handling equipment, adopting electric vehicles, and fortifying its IT infrastructure.

DX reported a 39% net cash increment, raising the figure to £37.6m, up from £27m in the prior year.

There was also a 63% increase in reported basic earnings per share, culminating at 3.9p, with shareholders set to benefit from a proposed final dividend of 1.0p per share, totalling 1.5p per share for 2023, a notable rise from 2022’s nil.

Looking ahead, DX said first-quarter trading had adhered to management expectations.

The final year of a roughly £20m to £25m, three-year investment programme was set to finish with the construction of a new regional hub in Nottingham, with a budget of around £12m.

“The group has delivered another strong performance, above our original expectations,” said chief executive officer Paul Ibbetson.

“Both divisions contributed increased revenue, margin and profit, which supported our return to the dividend list.

“The financial strength of the business, with its strong cash generation and balance sheet, has been key to our ongoing success, enabling us to continue to invest significantly in both divisions.”

Ibbetson said the firm had invested across all areas of operations - including the depot network, parcel handling equipment, electric vehicle fleet and IT - with that set to continue in the new financial year.

“We are mindful of the current economic headwinds; however, given the strong platform that we have established and the encouraging levels of new business that we have secured in the opening months of the new financial year, we look forward to another year of further progress.”

At 0828 BST, shares in DX Group were up 1.53% at 43.66p.

Reporting by Josh White for Sharecast.com.