Member Info for Frogjumper

"They've announced plans to develop a European express offering ...."

This is smoke and mirrors. They undoubtedly have potential customers who would use them if they had a European service but don't because it's too much trouble having one operator for the UK and another for Europe. All it probably means is that they're going to make a deal with another operator to have their express items delivered on the European mainland. Their investment in this will be extremely low as will be their profit because the partner will take most of the revenue. So, at best, the European service is a means of winning UK business, not an opportunity in itself.

Gatemore is an activist investor and doing what activist investors do. I don't have any inside knowledge of DX but I doubt that Lloyd has yet lost operational control of the business and he won't as long as he's in post. But something not relating to the operation seems to have gone wrong (the governance issue) and I wonder if this will lead to his departure. But, as I've previously suggested, he's difficult to replace and this might explain why the matter appears to be in some sort of stalemate.

"a man with no logistics experience. ? Doesn't make a lot of sense to me. !"

Also a major and vocal shareholder who saw the backs of the previous management and was probably central to Lloyd and Ron joining DX. Makes a lot of sense to me.

"I agree to a point in freight but DX are trying to be so much more than that."

This is a key difference between us. I don't think DX are trying to be much more than a freight business. What they're doing is milking the document exchange business whilst they build a successful freight business. They have no major ambitions in express beyond having some services that might be useful to freight customers. Lloyd is trying to replicate the successes he had in freight with Nightfreight and Tuffnells. It's a sensible strategy because the logistics market is very mature with lots of competition and low margins. Find a niche that you're successful in and build within it without other distractions.

" I'm sure there are many in the management teams at far more successful logistics companies such as Wincanton, Clipper, DHL, DPD,UPS, Evri etc. etc who would be more than capable of taking this on."

I've been around the logistics industry for many years and my opinion is that the Irregular Dimension and Weight (IDW) sector occupied by DX and Tuffnells requires specialist expertise that these other logistics operators lack. If you think differently then perhaps you don't realise how the logistics market is segmented. Plenty of firms have tried to enter the IDW sector and failed. Lloyd has demostrated his ability in turning around the business when his predecessors (who also knew quite a bit about the logistics industry) failed. He's not the Messiah but he doesn't have to be. He only needs to be a good manager of a business in the IDW sector.

"Lloyd Dunn and Ron Series have presided over what must be one of the most serious corporate governance failures there is and I'm really at a loss to understand why they are still in post."

I suspect that the reality of the situation is that the business would suffer massively without Lloyd Dunn's leadership. There aren't many people who understand how to run this sort of freight business.

Hi Pianista, apologies that I misinterpreted your motives, it's just that I thought I perceived a habit of yours to contradict any moans made about DX.

"Just have to accept it and play the game." That's rather defeatist. It's not as if it's a lot of effort to write a short letter to the FCA. Perhaps it would be fruitless but you don't know until you try.

Pianista: Why do you always sound like an apologist for DX? Do you work for them? Here's a link to an instance where the FCA has taken action against a director not in the FS industry: https://www.fca.org.uk/news/press-releases/former-redcentric-cfo-sentenced-five-and-half-years-imprisonment. And I don't know how serious the governance issue is but if DX has been playing down the seriousness then they would be misleading the market. I don't need proof in order to refer the matter to the FCA, it would be for the FCA to obtain the proof. All I need is a reasonable suspicion.

"what direct evidence of its seriousness will you be providing to the FCA?" It would be enough to say that the management played down the seriousness of the governance issue, instilling a false sense of confidence in the business and persuading the shareholders not to sell their shares.

@Crazyyear. I wouldn't say DX has a dodgy history. It's had the ups and downs that are not unusual for a firm of its size as it has tried to reposition itself away from its declining core businesses towards new markets.

I think that if I was one of DX's senior managers I would be looking at leading a management buyout. I would be confident that I could continue growing the business and profitability so that my stake would grow substantially. My difficulties would be finding PE firms willing to support the MBO and persuading the existing investors to accept the price I'd be willing to pay them for their shares. Perhaps DX has been trying to do this over the past few months. It wouldn't be first time DX was taken private. Candover bought it in 2006, two years after its first IPO.

"- they were left with very little time to sort things out, when GT resigned without warning so late in the day," No they weren't left with very little time, particularly as GT would have given them plenty of warning about what they were going to do. DX was playing poker and lost.

I wouldn't put it past DX. They've demonstrated that they're pretty incompetent about such matters.

@Unhooked. I can imagine a conversation between DX and a potential investor:

Investor: What's this disciplinary issue about then?
DX: Well, we didn't tell our auditor so what makes you think we'll tell you?
Investor: OK, in that case I'm not interested. Bye.

Pianista: "Meanwhile, it doesn’t look like the company have been actively considering alternatives to a forced delist, e.g. a voluntary delist or a sale of the company." I don't see how you can reach that conclusion. I think it's likely that they have been considering alternatives but none of them have worked out. I don't think they've been sitting on their hands doing nothing and they've had plenty of time to talk to every potential auditor there is.

What needs to happen to get an EGM?

"Well, here's another nice mess you've gotten me into, Stanley!" except in this case Stanley looks more like Laurel.

It really is all very strange. Here we have a business that Lloyd has led through a successful turnaround and that under his leadership should continue to improve. And yet it seems to be stuck in some maelstrom from which it can't escape. As I've said before, without him the business is likely to lose direction. It seems to me that the solutions to the "disciplinary issue" and the future strategic direction of the business are somehow mutually exclusive.

Port, I was only reflecting ATPM's comment that they would look to monopolise the market and suggesting that they wouldn't be allowed to. And it's the CMA's responsibility to define the relevant market and they could come up with something very different to DX's market shares. DX's merger with Legal Post was subject to a CMA investigation and both of these businesses were minnows compared to their common competitor, Royal Mail.

Of course, any attempt to monopolise the IDW sector by buying Tuffnells (or vice versa) might fall foul of the competition authorities. I don't see it being allowed myself.

Haven't they been trying to turn round Express for donkey's years? I suspect the reason they split the reporting into Express and Freight is to be able to demonstrate the more substantial turnaround in Freight that would otherwise be masked by the poor express and document exchange performance.