(Sharecast News) - DX Group announced its plans to build a major regional hub in the East Midlands on Wednesday.
The AIM-traded company said the proposed hub, along with a new depot serving the local area, would be a significant investment of around £12m, covering site acquisition and development costs.
It said it would finance the project using its existing cash resources, adding that it had already obtained detailed planning permission, and expected to finalize the site acquisition within the next two months.
The new regional hub would be situated on a 4.5-acre redevelopment site located near Nottingham at New Stanton Park Industrial Estate.
Covering a footprint of 25,000 square feet, the board said the facility would primarily cater to DX's parcel freight activities.
The expansion would substantially increase the regional capacity and enhance operational efficiency by reducing stem mileage.
DX said the construction phase was projected to finish during the second quarter of 2024, and would incorporate advanced features such as a raised dock and mechanisation.
At the same time, the existing freight depot in Nottingham would be transformed into a dedicated two-man supersite as part of the development.
DX said the investment aligned with its strategic vision to make property investments that support the continued growth of its operations.
Additionally, the investment complements its ongoing three-year investment programme, currently in its second year, which had a budget ranging from £20m to £25m.
That programme was primarily focussed on expanding the group's depot network, acquiring handling equipment, and enhancing IT capabilities.
"The purchase of this site in Nottingham will enable us to create a major new regional hub and depot for our parcel freight operations and is in line with our plans to make strategic property investments," said chief executive officer Paul Ibbetson.
"The investment will increase our capacity, drive efficiency improvements as well as enhance customer service.
"Further site openings and upgrades are planned as we continue to invest in developing the group's network in line with our growth plans."
At 1305 BST, shares in DX Group were up 0.6% at 31.18p.
Reporting by Josh White for Sharecast.com.
