Period ended 28 Dec 2019 | Period ended 28 Dec 2019 | 6 months ended 31 Dec 2018 | Change | |
IFRS161 | IAS171 | IAS17 | IAS17 | |
Revenue | £170.1m | £170.1m | £157.0m | + £13.1m |
EBITDA2 | £10.4m | £0.1m | £(2.5)m | +£2.6m |
Underlying results from operating activities2 | £0.4m | £(1.0)m | £(4.4)m | +£3.4m |
Reported results from operating activities | £(0.3)m | £(1.7)m | £(5.1)m | +£3.4m |
Adjusted loss before tax2 | £(1.7)m | £(1.2)m | £(4.6)m | +£3.4m |
(Loss) before tax | £(2.4)m | £(1.9)m | £(5.3)m | +£3.4m |
Adjusted (loss) per share2 | (0.3)p | (0.3)p | (0.9)p | +0.6p |
(Loss) per share – basic | (0.5)p | (0.4)p | (1.0)p | +0.6p |
Net debt2 | £8.4m | £8.4m | £3.5m | +£4.9m |
Cash flow from operating activities | £3.5m | £(4.9)m | £(1.4)m | -£3.5m |
Discussion of the results for the period ended 28 December 2019 is on a comparable IAS 17 basis unless stated otherwise.
Financial Key Points
· Benefits of the turnaround strategy are continuing to come through
o Group revenue rose by 8% to £170.1m, driven by strong growth and ongoing turnaround at DX Freight division
o EBITDA positive for H1 2020; £2.6m improvement to £0.1m (2018: loss £2.5m, 2017: loss £4.4m)
o Adjusted loss before tax2 decreased by 74% to £1.2m (2018: loss of £4.6m)
o Adjusted loss per share2 reduced by 67% to 0.3p (2018: loss of 0.9p)
o Net debt of £8.4m (2018: £3.5m) as a result of the seasonal increase of working capital, which is expected to largely reverse in H2 2020, and increased capital expenditure
Operational Key Points
· DX Freight division:
o Strong improvement with revenue up 11% to £86.9m and EBITDA loss down 65% to £1.9m
o Performance driven by new commercial processes, improved customer service and productivity gains
o 1-Man, which specialises in IDW (‘awkward’) freight, performed especially strongly, with revenue up 18% to £56.5m
o Basic mechanisation was introduced across the network, including the main hub, which will increase capacity and improve productivity
o Post period, new depot opened at Ipswich, with further site openings and improvements planned over the coming year
· DX Express division:
o Revenue up 5% to £83.2m and EBITDA decreased by 6% to £10.9m, as expected
o DX Courier and DX Secure revenue grew by 10% and 6.5% respectively
o Attrition in annuity income at DX Exchange slowed to 6% (2018: 8%)
o initiative to provide ‘one-stop’ mail delivery service to legal customers to be launched soon
o Roll-out of new ‘Estimated Time of Arrival’ functionality commenced; will improve DX Secure’s market proposition
Outlook
· The Board is monitoring the situation regarding the coronavirus and its potential effects on the UK economy and the supply chain of customers, and consequently on DX volumes. It believes it prudent to expect a slight softening in volumes in the remainder of this financial year
· DX is nonetheless expected to make further significant operational progress in H2 and to return to pre-tax profit
Ronald Series, Chairman, commented:
“The hard work of the last two years is continuing to pay off, as the significant improvement in these first half results show. The key factors driving the improvement are higher levels of customer service and operational gains from better delivery productivity and more efficient trunking and sortation across the network.
“We have initiated a £10m capital investment programme, which will be spent over this financial year and the next to support further growth of the business. The programme will be fully funded from existing resources.
“Trading in the second half is marginally ahead of the same period last year. The potential effects of the spread of coronavirus on customers’ supply chains are, as yet, hard to predict but it is prudent to expect a slight softening in volumes. Nonetheless, we expect the Group to return to pre-tax profit this financial year and it remains well positioned to continue to grow profitably in FY21 and beyond.”
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