Liad Meidar has stepped down from the board of parcel and freight delivery company DX (LON: DX.) He is founder and managing partner of DX’s largest shareholder Gatemore Capital Management and joined the board in December 2021.
Gatemore Capital Management was behind the appointment of the new management that turned around the business, although chief executive Lloyd Dunn left the board last month after corporate governance issues. These problems appear to have been sorted out. Gatemore has reduced its stake to 24.3%, having been 35.6% at one point.
DX recently published interim figures and it intends to recommence dividend payments. A total dividend of 1.5p a share is expected for 2022-23. Share buybacks are also planned.
This is because the business is highly cash generative and will be adding to its cash pile even after ongoing capex requirements of £8m-£10m a year.
Freight sales continue to grow strongly, and more depots are opening. DX Express is even back to a growth path following lockdowns.
The corporate governance dispute meant that the auditor would not sing off the accounts. DX has finally got around to publishing full year accounts for 2020-21 and the recent interim figures were for the six months to 1 January 2022, but the shares remain suspended at 30p.
Pre-tax profit was £12m and net cash £16.8m in 2020-21. finnCap estimates 2021-22 pre-tax profit of £20m -likely to be published in November – rising to £25m this year. This forecast is upgraded, and the shares are suspended at nine times forecast 2022-23 earnings and provide a 5% yield.
That should provide a floor for the share price. It is unclear whether Liad Meidar has left the board because he feels that the governance issues have been sorted out or there is another reason. It is possible that Gatemore wants to further reduce its stake while not being hampered by dealing rules relating to directors.