Member Info for Frogjumper

If I could sell my shares I would do so immediately because I don't see any reason to trust the Board. They must be hiding something substantial and I suspect that it involves senior management. I can't imagine they would continue this smoke and mirrors strategy for any reason other than protecting someone important who is still there. It's just not the way companies normally deal with this type of issue, having a bust up with their auditors, losing two NEDs and leaving the market to speculate on the reasons.

Something that particularly annoys me is that shareholders such as Gatemore and the CEO, with seats on the Board, know what's going on but other shareholders don't. The departure of the NEDs and the auditor means that we don't have anyone guarding our interests, a real corporate governance problem if ever there was one.

If Thursday is the cutoff DX is taking it to the line!

Still no news from DX!

Perhaps K Leatherland is a sacrificial lamb or scapegoat?

"CEO was purely there to work with investors and grow the business with huge success ". Isn't that what most CEOs do? I guess that DX's management has been concentrating on growing the business. Gatemore has criticised their engagement with investors.

There are other capable leaders out there ... Name one who has Lloyd's knowledge of the irregular dimension and weight market! DX is a specialist business that requires specialist knowledge. Many other "capable leaders" have failed at DX.

My fear is that the resolution of this issue includes Lloyd's departure. He's the CEO and the buck stops with him. It would be a disaster.

Well Pianista, you continue to be a bull and I'll be a bear. I fear this isn't going to end well.

Pianista, which "heads have rolled"? All we know is that two non-execs have resigned and that the head of HR left. The HR person leaving might have nothing to do with the issue. And the non-execs might have resigned because they agreed with GT rather than DX management. A safer assumption is that GT believe that they uncovered a serious issue. In my experience, auditors don't make noise about trivial matters and they certainly don't resign audits without very good reasons for doing so. The decision to resign will almost certainly have been made after a lot of effort to reach agreement with DX and the involvement of comprehensive review processes within GT. GT faces a considerable reputational risk if the audit market concludes that it doesn't audit companies correctly. This situation reminds me of Boris Johnson denying there were parties at No. 10!

Hello Portswigger, I don't read much into their claims to be investing in express. Many companies will claim to be investing when spending money doing every day things. Express businesses are always opening new depots when they realise that their old ones are in the wrong places or the leases run out; every truck or van they buy counts as investment etc. DX's exchange portal won't have cost them much as they will have almost certainly partnered with a technology provider that has its own reasons for being involved. I very much doubt that there's any real organic growth in the exchange business because mail volumes are only going one way. I guess they might obtain revenue growth in exchange by playing with their pricing models. Real growth has to come from freight . I agree that they definitely need to resolve the audit issue. Doesn't an involuntary delisting involve bans on directors? Perhaps another strategic option is for DX to be taken privare again?

@Portswigger. I think DX has always had a problem with b2c express deliveries. Many years ago the company most definitely presented itself as a b2b operator. Its network was based around its document exchanges and these tend to be in town centres where there are other interesting multidrop customers such as travel agents and opticians. They would also be able to do some deliveries and collections along the routes to and from the exchanges without incurring huge costs. The merger with SMS brought a b2c network that delivered UK passports to almost all parts of the UK but I guess that the loss of the passport contract has reduced the scope of that network. I think they'll always find it hard going in the b2c express sector unless they can develop some USP that allows them to dominate a niche (such as the secure delivery proposition of SMS). The freight business is an example of such a niche because most carriers have problems transporting items such a beds, furniture, ladders etc and Lloyd appears to have been able to apply his experience to a achieve a turnaround in the former Nightfreight's fortunes. Let's hope he sticks around and continues to build on this success. What do you mean by a "wider strategy"? Apart from building the freight business and milking the exchange/express business while it still exists I would think their best hope would be a merger or takeover, either as target or buyer. A merger with Tuffnells would be interesting.

Sisteract, I've been around the express market for long enough to know that "global delivery partner" often doesn't mean what you think it does. A lot of it is smoke and mirrors.

I don't see the portal is going to do much to tie in customers. They have to become dependent on it to achieve that and that won't happen until there's a critical mass of users. The customers are probably already using an number of different methods to send information securely and the DX system will have to replace these. I fear DX is too late with this initiative, probably 10-15 years too late.

Yes, Pianista, I know what you mean and the thought did cross my mind when I wrote my comment. Perhaps they're just trying to put out some positive news in the middle of the current negativity, hoping it will support the share price at the end of the suspension. They're providing this service free of charge to customers so it's not going to increase revenue and will, presumably, increase costs.

This isn't the first time DX has launched electronic document exchange services. Previous attempts have failed. I don't see why it should succeed this time because their customers will already have means of sending and sharing documents securely. I suspect the main reason for the launch is to boost the share price.

I've been following DX for over 20 years, firstly when they were owned by Hays and then through the first IPO, followed by the subsequent PE spell and the second IPO. It's been a story of many ups and downs or swings and roundabouts.

I think that DX's problems stem from the way Hays demerged the business in 2004. Hays owned DX, a logistics business and an office services business. It would have been best to have demerged these together, producing a diverse business that would have been able to sit out storms. Instead, possibly because Hays thought that none of the businesses would reach scale themselves, they sold off the logistics and services businesses separately, leaving DX with mail and express operations in the first IPO. The IPO was full of talk about how DX was going to exploit the opportunities presented by the liberalisation of the mail market across Europe but they failed to do this, partly because the market didn't liberalise as fast as expected and partly because DX shunned the opportunities that were available and were addressed by the likes of Whistl and UK Mail.

Candover's acquisition and merger of DX and SMS in 2006 provided protection from the stock market. The document exchange and SMS's passport delivery contract were both highly profitable but the express business was always a headache and it was only when Petar Cvetkovic's team arrived in 2010 that things started to buzz. Petar understood the express market very well and led a strong turnaround. However, it appears they got overconfident and mistakenly purchased Nightfreight in 2012 and floated DX in 2014. Nightfreight wasn't an express business and it needed a different skill set to run it well, something that its management had lacked for many years. Things didn't go well for DX and in desperation it tried to merge with Menzies Distribution, only to fail. Gatemore got involved around this time and Lloyd Dunn became CEO. You'd think that if there's anyone who knows how to run a business containing Nightfreight it's Lloyd, having founded Nightfreight and also been CEO of Tuffnells, its most similar competitor. Whilst he's been CEO the business looks to have turned round again and he's almost certainly the right person at this time.

Who knows what's going on at DX at present? It's a mystery. It's not the first time there have been allegations of nefarious goings-on. Back in 2017 the City of London Police Economic Crime Directorate started a preliminary investigation into the company's document exchange business after an allegation was made but did not proceed to a full investigation. Nothing was said in public at the time about the reasons for the investigation, just as nothing is being revealed now about what's going on at DX now.