7th Feb 2017 07:56
LONDON (Alliance News) - DX Group PLC on Tuesday said it anticipates profit for the year to end June 30 will be "significantly below" current market forecasts and debt will be higher than expected.
The parcels, mail and logistics operator said challenging conditions have continued, including pressure on pricing, and said it has also experienced margin erosion due to changes in the revenue mix.
Although DX Group noted the "strong momentum and wins" in the Logistics business, the group said it had expected growth in higher margin revenue from its DX Courier and Freight activities but this has not come through. This has hit profitability due to the fixed cost nature of this network.
Meanwhile its plan to integrate five sites into one has experienced some short-term operational issues, meaning higher costs have been incurred, though DX Group said it remains confident in the benefits of this programme.
While material new contracts are being implemented and its pipeline of new business opportunities is "robust", DX said it will miss market forecasts for profit for the year to end June 30 and its debt will consequently be higher.
The group said it has taken the decision not to pay any dividends for the foreseeable future and has commenced a review into its operations.
By Hannah Boland; [email protected]; @Hannaheboland
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