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.
|23Dec16 11:10||RNS||Holding(s) in Company|
|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|
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September that the Initial Enforcement Order, put in place on the announcement of the investigation (5th July), had been revoked.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.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
Upgrade on positive year-end trading update
10 Jan 17
The group has announced a positive year end update, with a stronger finish to the year delivering sales slightly better than expectations. Operational gearing results in a 7.5% increase in EPS. Cash generation is significantly better than expected. As a result, we increase our price target from 205p to 254p, based on a fair value P/E of 12.0x for 2017. With healthy growth set to carry on, the shares should continue to show robust momentum, with the potential for a special dividend an additional positive.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.