Member Info for portswigger

Let's get away from the Audit issue for a bit.While confined to barracks because of the weather over the weekend I did a little research on a few shares etc.

As regards Dx its interesting that current vacancies for freight including Ikea stand at just shy of 180 and vacancies in express are at 95. It's not a clear picture but it tells us the direction of travel is still the same. Ikea interests me because I know Dx have close tie up and Ikea now are working towards
if they haven't already achieved a 24 hour delivery in London and 48 Hour delivery in the rest of the UK. And that puts quite a bit of pressure on Dx. DX have 18 Ikea vacancies which is the most I have seen for a while. With the recently announced Euronics deal I think the trading outlook particularly in freight looks very rosy.But it's all irrelevant until they get out of the audit mess.

The letter from GT is really very strong and doesn't make great reading for any other potential auditor.

I really don't think this as simple as getting another auditor and all will be OK.

Although, I am not 100% on the implication of "privilege is claimed over the inquiry/investigation in the governance matter"as per RNS. This is the sticking point for GT. Dx have obviously claimed privilege which means in my view that they don't have to disclose information that GT thinks is essential to the completion of the audit. If a new auditor takes the same view then we have a huge problem (Someone who may know more about privilege please feel free to comment). I'm very concerned as it may boil down to point of law and all its implications with a tight timeframe.

Is this what is meant by the Russian influence in British Politics Sister. ??. I thought it was all to do with money for influence for Russian Business interests. I was wrong all along.!!

Sorry off topic, but need to some light relief from the DX Saga.

I think you are right to draw that conclusion FJ. I think the Dx Directors (inc Gatemore) stance is very poor but not unusual on the AIM. Essentially they are saying to their shareholders that they don't agree with the points GT have raised but they aren't going to tell us why and what it relates to in any useful detail. It's a childish "because I said so" position and it isn't good enough.

I think this is very bad news. There has obviously been a complete breakdown between DX and auditor.. Dx don't think they have done nothing much wrong and the auditors don't feel they cancomplete the audit in this instance. They both can't be right .They must be poles apart. It's a worry for any Auditor who may be thinking of taking this onboard. And to hide behind privilege basically means they don't want this in the public domain. I really don't know how the DX directors can allow what is a personnel matter to cast such a shadow over the company. !

I'm inclined to side with the auditor as they know the audit legalities inside out and auditors don't resign without very good reason.

It's hard to believe that a simple disciplinary matter results in the resignation of an auditor and a share being suspended. There is some huge ineptitude somewhere. Gatemore who now will now everything in detail have come out in full support of Dx so it is highly unlikely that Lloyd would be pushed. I still have a nagging inkling that ex HR Director K Leatherland is integral to it in one way or another.

It's good to get different opinions. I am sure there very many good logistics people who could replace him.I think though as Lloyd led the turnaround and was appointed with influence from Gatemore they would been keen to retain him especially with his record and as his enthusiasm seems unabated. Just about a week to wait until the fog starts to clear.

Yep, that wouldn't be good. My view is that if it is something that made it untenable for Lloyd to stay I think he would have gone by now. Don't forget this investigation has been been going on in one form or another for over 8 months now and the incident what ever it is happened before July 2021.

This could play out a number of ways. What we can assume is that beneath the noise is DX is a growing profitable company and as far as we know on a sound financial footing There are experienced PLC people at the helm and whether you like Gatemore or not we can be rest assured
that they will look after their Investment. I am not unduly concerned about a public spat between GT and DX and it shouldn't be made of than it is notwithstanding a auditor resigning is cause for concern. For me its a bump in the road. Is there a risk we will lose money if we delist..... possibly but I took that risk when I became a shareholder. nothing has changed.

No not all all. It just means you can't trade them on the AIM. You still own the shares and will have to trade in a different way. If the company delists because of bankruptcy etc its a different story and it is game over. I wouldn't worry about that at this stage. Dx as far as we know has no issues as a going concern and will still trade even if it has to forcibly delist. Better Brains than mine in the industry may wish to contribute but as I understand it's not a massive problem especially as the company is trading and profitable.

I don't know FrogJumper. Dx must be doing something right. The business has been turned round in 4/5 years to profitability and if it wasn't for the corporate governance issue I think most share holders would be pretty happy with the company performance and strategy. I don't know what may happen, anything is within the realms of possibility and I think a lot depends on Gatemore and how they see things and what comes out of the review . I think though there will be a lot of uncertainty this year whilst that review goes on and because of that I will probably look to reduce my exposure. I hope the five new depots that are planned to open before year end in July open as any delay would probably sow a seed of doubt in my mind. I'd be very surprised of there was a forced delisting.

In theory we are looking at a delist on the AIM if no Annual Report is produced in that timeframe. DX can ask for any extension but there is no guarantee it will be approved. Dx would obviously have to give guarantees on transparency for any other auditor to take it on knowing what information is in the public domain. This really needs to be DX's number 1 priority.

Valid Points. I suppose I am slightly confused.

The investment case for the Freight side of the business is compelling. It's increasing, it's profitable and a major competitor according to DX has exited the the arena recently. So the opportunities seem to be there to exploit and completely dominate.

There has however been and continues to be investment in Express... not only Exchange but Courier B2C. Courier has declined whilst exchange has increased in the last update. Do DX see both of those expanding... well they must do otherwise what is the point of the investment. So what is point in expanding into a market ( courier) in which effectively you can't compete. Lloyd makes some very bold and positive statements like someone in No 10 with messy blond hair (Dare I say) but the reality may slightly different. Dx really communicate info about DX express strategy as a whole and not breaking down between the divisions which is disappointing although exchange is now separate. In order to be successful it has to be a niche as they haven't got the pockets deep enough, infrastructure or resources not to be. As part of the wider strategy.. I wonder why you would expand into a area like courier b2c where its difficult to make money and you can't really compete..

1) As a marketing exercise to increase visibility
2) Suppliment the other more profitable aspects of the business
3) make the company more attractive to suitors with a variety of revenue streams
4) etc, etc

I'm not convinced about a takeover until there is more clarity and more importantly when Gatemore put their cards on the table. DX have also recently said they are considering acquisitions. Some think a takeover is the natural exit for Dx especially with Lloyd having 10% and he couldn't really sell on the open market but he could certainly sell to meet institutional demand. Like everything with DX at the moment it's all a bit foggy.

First things First though. We need the audit doing ASAP... let's hope the that is the focus.

Yes SweetC.. they all talk a good game but the reality is very different. There are no guarantees in any delivery service offered and there is the small print and covid implications that some companies hide behind for inefficient service from time to time. The reality is though that specifically in B2c express Dx can't compete with the big boys as they simply don't have the resources and infrastructure. Thats why I think there is a wider strategy at play. If you wanted to send a parcel with DPD, UPS,DHL you could drop it off at your local supermarket, Ryman, Matalan , Bargain Booze etc where the carrier can pick up any amount of parcels. If you want to do the same for DX they would have to drive to you to pick up. Imagine the extra costs just in one parcel. It just doesn't make economic sense.

No not at all I stopped using DX in November last year.. Coverage in Scotland, Ireland, South West and more rural parts of the country wasn't good for me on 1/2 day deliveries. Depot/Driver coverage in these areas is light. The businesses I mention are substantially bigger... DPD for example have 15000 staff and over 10,000 vehicles I believe in the UK . DPD UK turned over £1.5bn last year to DX £380M approx. They are worlds apart with far superior coverage and profitability and have far deeper pockets. Hence my question. How do Dx compete on b2c express. After all DX have reported a slow down in b2c activity for them.

FrogJumber.. If you've been around the express market for a while I'd be interested in your comments on the following. This has been troubling me for a while.

Particularly in relation to express b2c. I used them for a while to support my investment but stopped because essentially they are more expensive that most. DPD, UPS,DHL etc and the geographical coverage is nothing like as good.
I appreciate that Express uses a lot of self employed drivers and sub contracts so that may explain the higher costs to some degree.
DX only offer a collection service so the stem miles must be substantial eating into a already low margin and highly competitive business.
So the question is how do you make any money as operational efficiencies will only get you so far.
If DX want to provide the best how on earth do they do it profitably with a limited geographical coverage in many parts of the UK/Ireland and in ruralish parts of the country despite supplements for certain areas. The growth in DX is underpinned by the strength and profitability of the Freight Division. Without that they would be a different beast altogether.To do this organically will take substantial amount of time and I don't think they can compete with the carriers already mentioned.which is why I think there is a wider strategy at play.

Quite Right Pianista. As regards the exchange portal DX obviously see some growth and benefit following the trial and proof of concept update so we have to trust them. If it isn't going to attract new clients and increase revenue what is the point of doing it.Cybersecurity is very complex/ever changing environment so I only hope they have very good team or external partner dealing with the security aspects of it.

Meanwhile, back at the sharp end Dx continue to invest in technology. I think this is a promising development in differentiation for DX. The announcement isn't really going to excite anybody reading it but if it works and it is widely taken up I think this is one of best things DX have done in time I have been a shareholder.

Yes, so no RNS is needed. However, it is an important person going at a time when the corporate governance issue was going on. The corporate governance issue did involve a disciplinary so K Leatherland would have been involved as Head of HR in some capacity. We'll find out soon enough.