Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on DX (GROUP) PLC. We currently have 21 research reports from 3 professional analysts.
|06Dec16 10:59||RNS||Result of AGM|
|01Dec16 07:00||RNS||Reappointment to the Board|
|22Nov16 07:00||RNS||HMPO Contract and Trading Update|
|21Nov16 07:00||RNS||Re: Annual General Meeting|
|15Nov16 07:00||RNS||Posting of Accounts & Notice of AGM|
|04Nov16 04:40||RNS||Second Price Monitoring Extn|
|04Nov16 04:35||RNS||Price Monitoring Extension|
Frequency of research reports
Research reports on
DX (GROUP) PLC
DX (GROUP) PLC
Successful HMPO tender improves forecast certainty
22 Nov 16
DX has confirmed that it has won the retendering of the HMPO contract. We understand that it was a highly competitive process so retaining the contract is especially pleasing and provides greater confidence looking forward. We leave forecasts unchanged but with materially increased certainty on being achieved. The successful retender highlights that the quality of service DX has delivered over the previous contract periods has been respected. The only disappointment in today’s statement is the announcement that the decision on the resubmission of planning permission for the central hub has been delayed until mid-February. Today’s announcement de-risks FY17 and FY18 earnings and net debt forecasts and highlights the attractiveness of the prospective 2.5p dividend in each year. We leave forecasts unchanged meaning DX is trading on just 3.6x FY17 earnings and yielding c.14% on last night’s 17.75p closing price. A conservative 7x short term recovery multiple would equate to a 35p share price offering 97% upside, this would still only equate to 4.0x EV/EBITDA.
Positive conclusion to the CMA investigation
21 Oct 16
DX has confirmed that the UK Competition and Market Authority’s (CMA) review in to the acquisition of The Legal Post (Scotland) Limited and First Post Limited is now closed and no further action will be taken. This follows the announcement on the 16th September that the Initial Enforcement Order, put in place on the announcement of the investigation (5th July), had been revoked. The announcement had been perceived as a precursor to today’s positive conclusion and DX had already resumed integration of the acquired assets. Confirmation that no further action will be taken draws a line under the process. Forecasts remain unchanged as the positive impact to FY17 and FY18 numbers had been factored into estimates at the time of the initial acquisition announcement in May and were not changed on the announcement of the CMA investigation. DX potentially offers deep value trading on sub 4x PER, on current year earnings, and yielding 13% with just c. £6m net debt forecast for FY17.
Deutsche Post DHL to acquire UK Mail for a 43% premium
28 Sep 16
UK Mail has announced a recommended cash offer by Deutsche Post valuing the business at c. £243m equating to 440p a share. This is a 43% premium to last night’s closing price of 307.5p and a 43.2% premium to the weighted average price over the previous three months. The offer assumes UK Mail shareholders will receive the interim dividend of 5.5p. Deutsche Post DHL has received irrevocable undertakings of c. 60% from shareholders and UK Mail management. On current year consensus UK Mail forecasts, the 440p offer price equates to a PER of c.20x earnings and c.10x EV/EBITDA. This compares with Deutsche Post trading on c. 13.5x PER and 7.7x EV/EBITDA
FY16 results: Difficult year but results in line
21 Sep 16
FY16 has been a difficult year for DX but FY results are in line with PBT forecasts and the company has confirmed it will pay a final dividend of 1.5p taking the FY total to 2.5p, an 11% yield. Revenue of £287.9m (£297.5m) was down 3.2% YoY and broadly in line with our expectations of £291.9m. PBT at £11.5m was significantly below last year, as expected, but in line with our £11.6m estimate and a lower tax rate than forecast meant earnings came in 4.7% above forecast at 4.9p. FY17 is shaping up to be an important year with several milestones that could improve the earnings visibility of the business. These include the announcement on the winner of the HMPO contract and developments on the new hub. The current valuation reflects the issues the business has faced during the year and concerns on the rate of decline at the Exchange business. The FY17 PER is 4.5x and, assuming a flat dividend of 2.5p, the shares yield c. 11% on a balance sheet with just 0.5x EBITDA of gearing.
Positive update from the CMA
16 Sep 16
DX has announced an update from the UK Competition and market Authority’s (CMA) review in to the acquisition of The Legal Post (Scotland) Limited and First Post Limited. The Company announced the acquisition on the 10th May, this was followed with the CMA announcing that it would review the deal on the 5th July, at that time the CMA put in place an Enforcement Order. Whilst the review is on-going and a final decision has yet to be made, the CMA has revoked the Initial Enforcement Order based on evidence it has received to date. We view this announcement positively as it allows DX to continue with the integration of the acquired assets with the company’s existing operations in Scotland. There is no change to forecasts on today’s announcement as the impact of the acquisition had been factored into numbers when initially announced back in May. FY16 results are expected later this month and a trading update (8th June) confirmed that they will be in line with expectations. Current consensus expectations for EBITDA range from c. £18m to £19.0m and an outcome between this range would be reassuring taking into account the difficulties faced during the year.
Exceptional trading continues
08 Nov 16
Keywords has announced that the strong trading in localisation and audio services has continued into H216. In particular, the Synthesis business acquired in April continues to benefit from exceptionally strong trading. Full-year results are now expected to be materially ahead of consensus and we upgrade our FY16e EPS by 13%. Erring on the side of caution, we have not changed our FY17 estimates significantly. Nevertheless, we believe the company does have a platform to sustain double-digit earnings growth, and hence medium-/long-term prospects for further share appreciation remain good.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
Focused on the long term
08 Dec 16
These are rare events but it is nice to see a management use its public listing advantageously to trade short-term dilution in EPS for the optionality of asymmetric upside in the long term. With over £10m already in the balance sheet, ABD has successfully raised £5.4m gross in a placing and expects to raise another £1m from an offer. We were not surprised to learn that the placing was over 3.5x oversubscribed. How many listed UK companies are positioned to take advantage of the digital revolution in the automotive industry? The additional investment in new people, facilities, products & services should be dilutive to FY2017-18 EPS but this is small price to pay to establish the leading supplier of integrated test, measurement and simulation solutions to the autonomous vehicle industry. Our forecasts assume that growth will accelerate from FY2019. We raise our target price to 575p based on 15x FY2019 EPS, equivalent to Ricardo, the only other UK stock which has embraced the optionalities offered by the technological changes in the automotive industry.
07 Dec 16
Severfield’s (SFR’s) H117 results were well ahead of the previous year; margin performance and order book development cause us to raise our FY17 profit expectations. This combination has also proved to be a catalyst for share price outperformance following the results. Revenue growth and further margin development towards management’s stated aim of doubling FY16 PBT by 2020 can sustain further progress.
N+1 Singer - Waterman Group - Encouraging AGM statement in line with expectations
09 Dec 16
This morning’s AGM Statement confirms that trading in the first four months of the year to 31st October was in line with expectations. Revenue was slightly above the prior year period and cash collection has remained strong. The Group has reiterated its commitment to maintaining a progressive dividend policy. The statement is encouraging and we therefore leave our forecasts unchanged. We note the attractions of a 5% dividend yield and consider the shares inexpensive at 4.5x FY’17 EV/EBITDA.