Parcel and freight delivery company DX (LON: DX.) has come to a settlement with rival firm Tuffnells Parcels Express. This is one of the things that has held back the share price this year despite the strong trading.
Tuffnells Parcels Express made a claim relating to confidential competitor information it says was obtained by DX. Past and current management of DX were previously at Tuffnells and helped ot turnaround its performance.
AIM-quoted DX says that it has not admitted liability and the details of the settlement are confidential. It should not have any impact on the 2022-23 figures or thereafter.
In the year to June 2023, pre-tax profit is forecast to improve from £20.6m to £25.4m and a total dividend of 1.5p a share is expected to be paid for the financial year.
Net cash could be more than £35m by the end of June 2023, which is nearly one-quarter of the market capitalisation. The cash pile should continue to rise even with expected capital investment and the dividend payment.
The share price edged up 0.5p to 26p, which is seven times prospective 2022-23 earnings, falling to just over six next year. The forecast yield is 5.9%.
Past corporate governance problems still hang over the business, but settling with Tuffnells Parcel Express is a good sign. Confirmation of the progress made when the 2022-23 figures are published should further help to spark a re-rating.
