Compare with Marlborough Special Situations the monster small cap fund who have clung on all the way down from 100p. I wonder if they are behind this buying spree, quoted in the weekend Torygraph as having confidence in the turnaround ... and maybe buying the way up rather than just holding on.
Is that an option for you, before the price recovers much further, or is an add a risk too far?
My average price is a lot lower than yours and it is brave to increase your exposure to a struggler, but the effect of even a small slice at 11p would be pretty powerful.
What persuaded me today to add a few, apart from the strong buying, was the thought that a renewed dividend of say 1p within the next 12 months would mean a forward yield of 9% ... and that is why we are holding isn't it, a recovery to paying dividends again? The fact that this is AIM listed and so excluded from IHT if held for 2 years under current rules is a bonus. I will have DX in mind tomorrow for another add unless an even choicer bargain crops up, with the last of my ISA cash and the offload of a turgid low yielder retail stock perhaps.
Beginning to think the failed Menzies tie up may not be such a bad thing. Gatemore may have been right after all. In twice over the last couple of years average SP around 33p (ouch) but holding out for further recovery which is beginning to look quite possible.
agreed that was my reaction but we are now into the third day of it, someone has picked up maybe 3-4 million shares in total which is still hardly strategic but is a sizeable stake for someone like a small cap or special situations fund.
high volumes again and still going this afternoon, someone buying up a series on the open market 100,000 at a time. The sp responding with another +1p. If this is a new stakebuilder they will have to declare an accumulated position soon or could it be Gatemore increasing its already dominant holding backing its belief in the turnaround potential of the business?
Other logistics stocks also improving to a lesser extent. Could the outlook for consolidation in the sector be the reason? Or are we just bouncing back from a really gloomy patch and DX getting attention from a specialist who invests in recovery situations?
Some pretty determined buying activity overnight / this morning but no news I can see to explain why. If it was the new CFO buying in we would have had an RNS?
If there are material events affecting outlook the business is obliged to tell the market. In the absence of any notice we can assume it is speculative buying or stakebuilding, a vote of confidence, but even 1 million shares at just 10p is unlikely to be institutional interest.
Welcome plan to clear debt and raise enough cash to cover current plans, so good news but hardly "great" results ... but I get your enthusiasm that DX appears to have been well rescued and can now look forward. Not much to take away on the outlook of the business, it appears to have potential to be sustainable or at least turnaround-able but operating costs have to be reduced.
Early days for the new team but this is a solid start.
The equity release is approx 2 new shares for every old share. An offer of 20-30p a share last Summer would need to be 7-10p this Summer. Has Gatemore bought into a goldmine or did it turn down a quick windfall?
Hard to value the post-equity business ... not much debt not much net assets once goodwill is written off, £300M turnover but not much profit no dividend / 600 million shares at say 7-8p each. To get back to 15p by my maths that would require the business to deliver £5M positive net earnings and feel strong enough to restore a small dividend. Do-able, I give them a 50:50 chance, but I want to hear how they are going to cut £10-20M costs out of the business please. Or gain £10-20M new business.
Do both and we are back to the 30p level we turned Menzies down at.
with new mgt it is no surprise that there was an element of 'kitchen sinking'
but the big stand outf or me were...
1 - great CASH flow
2 - that preference holders happy to convert to equity
3 - new equity ONLY 4m
4 - new equity to be raised at above the current share price
5 - directors and mgt to participate in the new equity
6 - major sharehodlers supportive
7 - one business making > 15m a year, the other loss-mkaing
if the new mgt team can stem the losses at DX F then we have a business making c.15m+ profit with net CASH and a MV of only 50m!! This might take 2 or 3 years to achieve but every chance the price will at least double over that time.
the tipping point is the chart which has clearly formed a double bottom on good volume and positive news flow. It will be a slow burner but with good CASh flow and chart support there is actually limited downside and the chance of significant upside.
Be interested what the results will be, but they do seem to be having a high staff turnover since winning the Avon contract. Once highlighted as a breakthrough for DX looks like being a low margin, hassle and causing staffing problems which could also mean they may not be making any money from this adventure at the moment.
Working capital is the issue. They're just not generating the profits across the board to give support to loss-making DX. Logistics are improving (as well they might) but there are still major hurdles to be overcome. Very competitive market with DHL and PO being the big-hitters. Don't see a quick fix here. Maybe hive-off DX to let it sink or swim according to its own performance, rather than pulling the entire ship down under water???
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