09 October 2017

Logistics Company Sees Rally in Shares as New Funding and Management Team Acquired  

Freight and Parcel Group Looking for Turn Around with New Team at the Helm

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Shipping News Feature UK – The troubled few months endured by the DX Group seems to be resolving itself after Gatemore Capital Management, its main UK-headquartered investor, agreed to lead a £24 million financing for the logistics company. Details of the merger with John Menzies were published in June this year and Gatemore currently holds a 23.8% stake in DX, an freight delivery outfit which directly competes in the UK market with organisations such as the Royal Mail and DHL with parcel and logistics services. The news has seen DX shares rise by 15% in early trading.

Gatemore has committed £11.05 million, including the rollover of its £2 million unsecured bridge loan, to the financing which takes the form of three-year loan notes. Lloyd Dunn, who joins as CEO today, has personally committed £5 million into this financing, and the three other incoming directors are also personally investing. Hargreave Hale, an existing DX investor, has also committed £7.5 million.

Today’s announcement and the subsequent board appointments will mark the successful end of an eight-month campaign by Gatemore to install these four independent nominees to the DX board. It is expected that Ron Series will take over as Chairman and that Lloyd Dunn, now CEO, and Paul Goodson and Russell Black will join the board once the Company’s 2017 accounts are signed off by the current board, possibly within two weeks.

Gatemore nominated this slate of directors due to their extensive experience in logistics. Ron Series and Lloyd Dunn are credited with the remarkable turnaround of Tuffnells, DX’s main competitor in freight. From 2002 to 2014, under their leadership, Tuffnells more than doubled its turnover and a increased its operating profit by 1100%, bringing Tuffnells up to sector-leading operating margins of over 9%.

Gatemore has previously stated that returning to profit in DX’s freight division is key to achieving a successful turnaround and Liad Meidar, CIO and Managing Partner at Gatemore Capital Management, said:

“Today marks a new start for DX. We are thrilled to see Lloyd Dunn taking the reins as CEO and are looking forward to having the four nominees join the board very soon. They have all shown tremendous commitment and confidence in the future of this business with their significant participation in this financing.

“DX now has a healthy balance sheet and is poised to return to historic levels of profitability over the coming years under this new team. The enthusiasm amongst everyone who has been working on this is palpable.”

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