DX Group has suffered a setback after learning its long standing deal to provide a secure delivery service to Her Majesty’s Passport Office (HMPO) will end next year.
In a statement to the stock market, loss-making DX Group said that following a tender process its bid, which was based on ‘commercially realistic terms’ had proved unsuccessful.
It means its contract will expire in January of next year after a transition period with the new, as yet unnamed, provider.
The timing of the contract’s end means that its results for the year ended 30 June 2019 – where it expects to remain loss making in regards the bottom line – will not be affected.
Group division DX Express has provided secure services for HMPO since 2004. It remains under pressure as fewer physical documents are sent, and management have been working to reposition the Exchange part of the division as an exclusive member’s network to offset this.
Read more
- DX Group targets a return to operating profit this year as revitalisation plan delivers
- DX Group turnaround gathers pace as firm trims annual loss
- DX Group settles with GMB in employment status case
Ronald Series, chairman of DX, said: "Having held this contract for 14 years, we are disappointed not to have been successful in our bid, which we believe was based on commercially realistic terms.
“Over its tenure, DX set new and higher service standards for this important contract, and we are proud of what has been achieved for HMPO.”
Series added that the group’s turnaround strategy remained on track regardless.
“We also believe the company is well-positioned to achieve market forecasts for profitability in the next financial year, even after the non-renewal of the contract.
“This reflects the significant progress that has been made with DX's turnaround and the momentum in the business," he added.
Asked who the successful company in the tender was, a Home Office spokeswoman said: “We are unable to comment while the procurement process is ongoing.”
DX Group's shares were down more than 5.5% as this article was published, having opened at 15.3p per share.
