DX Group has issued a profit warning, citing the shortage of HGV drivers as a key factor in driving up costs.
In a trading update the company warned that a driver shortage, pricing pressures, volume erosion at its secure delivery service DX Exchange, and the slow conversion of its new parcels business pipeline had contributed to a 5.3% revenue fall in the first four months of this year, compared with the previous quarter.
“The board now expects profits will be significantly below market forecasts,” DX said in a statement.
However the operator insisted that the business remained strong, pointing to a robust balance sheet, low levels of net debt and the recent acquisition of a number of new contracts, with some yet to start trading.
Petar Cvetkovic, DX CEO, said: “This announcement is very disappointing. However we continue to position the business for long term success, creating a more efficient operating structure to support our services under our OneDX programme.
“The fundamentals of the business remain robust and while trading conditions are challenging, we are building strong foundations for future growth.”
The company, which is based in Iver, Buckinghamshire, delivers around 170 million items a year to a range of private and public sector clients acorss the UK and Ireland.
The group bought some of the assets of CityLink following its demise last year and recently bought a 49.8% shareholding in Gnewt Cargo, a zero-emissions logistics company.
It is also planning to relocate its two Willenhall bases and 240 staff to a £36m new build hub on a 43-acre site in Essington in the Midlands. This has met with resistance from local residents.