RE: Trading update - even better than expected13 May 2021 13:41
An interesting update. As I thought it's freight that's shooting the lights out. The best statement for me is the anticipation that Dx will significantly exceed expectations for adjusted profit before tax and improvement in cash flow. So increases in t/o, margin and profitability. One new depot opening on average every two months is a statement and all things seem rosy. It will be interesting to see the split of the new depots in either express or freight. Perhaps both.
I wonder what Express trading inline with expectations really means. it's a unbelievably low margin business. Two things really cross my mind.... Is the growth a fattening up process for what may lay ahead. ?.
If they approach a potential customer saying we offer freight, IDW, Express/Volume and secure etc then they offer a complete service that is far as I am aware no-one can complete with. Therefore express is just part of a wider market share strategy and low margins in that sector are not a massive concern.
If trajectory continues like this then I should think a change in dividend policy isn't that far away.